Ten Ways to Save the DEP – #2: Introduce Stormwater Fees

Almost any effective CSO mitigation plan that the city can possibly come up with will involve the creation of large multi-billion dollar retaining tanks and force our water/sewer rates to skyrocket. So here comes our out of the box thinking: How can we mitigate the negative effects of CSO without spending billions of dollars restructuring our sewer system?

The Citizens Action Committee (CAC), made up of industry experts, recommended that the city use water and sewer rates to incentivize owners to retain water on site. Currently, New York property owners do not pay to dump stormwater but by levying such charges the city can effectively incentivize owners to retain water on site and eliminate CSO occurrences, as the CAC recommended. More importantly, the administrative costs to the city would be minuscule compared to the billions that would be spent building huge tanks. As a bonus, on site retention can also have other environmental benefits (for example, green roofs mitigate the effects of urban heat island).

In recognition of the above, the mayor’s PLANYC Sustainable Stormwater Management Plan 2008, Initiative 10 states:

The City’s current water rate structure is comprised of a charge for consumption of water and an additional 159 percent for all sewer, stormwater, and wastewater services. Because this rate structure fails to reflect the true costs of stormwater generation and can lead to distortions, the City is currently undertaking a yearlong study to consider improvements. The City is analyzing its current expenditures, reviewing the rate and credit programs of other municipal water systems, and estimating the impacts of alternative stormwater rate structures on ratepayers and revenues. This effort will be coordinated with other ongoing efforts to map impervious areas in the City and to overhaul the program for water bills.

The “yearlong study to consider improvements” that the plan refers to is Booz Allen Hamilton’s (BAH) rate study, the results of which were released last week. (You may remember BAH from many of the other studies they performed for the DEP in the past. They are, after all, the DEP’s favorite go-to accounting firm when using the Water Board to bypass the contract bidding process.) The first thing worth mentioning is that this “yearlong study” took more than a year. Shocker.

But that’s not as important as the results. So let’s look at the results. The DEP paid BAH over a million dollars to “[analyze] its current expenditures, [review] the rate and credit programs of other municipal water systems, and [estimate] the impacts of alternative stormwater rate structures on ratepayers and revenues.” I would have thought that BAH would calculate the administrative costs involved and the feasibility of enacting a stormwater fee. Then they would project the savings as a result of on site stormwater retention and avoidance of the creation of stormwater retention facilities. I expected graphs indicating the relationship between the different possible stormwater rates and expected consumer response. (If we charge 5% of the water rate we need $2 million to implement the program but it’ll take us 20 years to recover that two million. If we charge 30% of the water rate  we need $2 million to implement the program and we’ll recover the costs in less than a year. Something like that.) In short, how large (or small) a fee would you have to implement to start seeing a savings.

What BAH did instead was what every college student does when the deadline is up and they haven’t done any of their work. They reiterated the question. Don’t get me wrong–they did it well. They included five pages of meaningless charts (fancy, but meaningless) showing which cities use which rate structures. But they didn’t address the crux of the problem. There is nothing in the report about the effectiveness of such a program, what it would cost the DEP to implement it and how much can be saved by stormwater avoidance.

The only thing BAH actually put forth in their conclusions (slide 30 of this presentation) is the following: “New billing system must be in place in order to fully implement a City-wide stormwater rate structure and credit program.” It’s subtle. Did you catch it? It sounds to me like BAH’s pitch to sell the DEP a new rate program, one that would no doubt take another few years and another few million dollars.

In summary, we hope that the good people at the DEP and the Water Board go ahead with stormwater rates and are not put off by the BAH report. To quote the mayor’s office in Appendix K to the Sustainable Stormwater Management Plan, Environmental Entrepreneurs, a national community of over 850 prominent business leaders who believe in protecting the environment while building economic prosperity, had the following to say about stormwater rates:

We strongly urge the City to include in the Plan a firm commitment to restructure the water rates to implement a separate stormwater fee, varying based on the imperviousness of a site, as soon as possible. We understand that a rate restructuring study is now underway and urge that the consultants conducting that study be asked not whether a separate stormwater fee is practicable – because we know it is, based on the experience of many jurisdictions around the country – but rather how to implement such a fee structure in New York City as soon as possible.

Again, special thanks to the good folks at SWIM for fighting for this one. We’ve even heard DEP Deputy Commissioner of Environmental Planning and Analysis Angela Licata advocating for stormwater fees at a few Water Board hearings.

Ten Ways to Save the DEP – #1: Better CSO Notification Procedures

Like most older sewage systems, New York City’s sewage system is what’s known as a “combined sewer system.” This means that the system was never built to accommodate clean rainwater and dirty wastewater separately and therefore, when it rains, the clean rainwater is dumped into the sewer outfalls together with our dirty wastewater.

Top: Combined Sewer System. Bottom: Separate Sewer System.

In the image above you can see a perfect example of how NYC’s older sewer system (top)  differs from newer, “separate sewer systems” (bottom). As you see, during dry weather, all that happens in both cases is that wastewater goes to the publicly owned treatment works (POTW). But when it rains, new systems keep the wastewater and rainwater separate and send only the wastewater to the POTW while the clean rainwater goes to the river.

In NYC, when it rains, a mix of rainwater and wastewater goes to both the POTW and to the river. As a result, after heavy rains our sewer outfalls often experience what is called a “combined sewer overflow” or CSO. During a CSO it is dangerous to boat, swim, fish or conduct countless other activities around the heavily polluted water.

The existence of CSOs is in itself a problem that the DEP has to deal with. But it is a problem that will take years and years and billions and billions of dollars. What can we do to mitigate the dangers of CSOs right now?

CSO Outfall Sign at Wallabout Bay

The answer is better CSO notification procedures. NYC currently has about 500 CSO outfalls according to the New York Water Environmental Association. In 1999, the city began putting signs up at their CSO sites like this one at Wallabout Bay. The signs say “IF YOU SEE A DISCHARGE DURING DRY WEATHER PLEASE CALL! 311.” Now, I ask you: if you hadn’t read the first three paragraphs of this post, would you know what this means? I wrote the first three paragraphs of this post and I’m still not sure what this means!

Here’s another problem: If it just rained last night and this afternoon your son or daughter wants to go swimming in, say, Paedergat Basin, how are you supposed to know whether or not they are about to climb into a toxic cesspool?

Thanks to pressure from our friends over at SWIM (Storm Water Infrastructure Matters), the DEP (with a little help from HydroQual Environmental Engineers) recently created a web page where you can check on the status of CSO sites around the city. I include a link here so that you can take a look yourself and decide if this is sufficient for a system that has 500 CSO outfalls that your child can be swimming in, that your husband can be fishing in or that the entire family can be taking a boat ride in.

We live in an age obsessed with notifications. The federal government requires notifications on every single pack of cigarettes and bottle of alcohol. The mayor requires calorie counts to be posted in every donut shop in NYC. Why are we more concerned with what we put inside our bodies than with what we put our bodies into? A large, easy to read sign near every single CSO outfall into New York that says something to the effect of “IF YOU SEE WATER COMING OUT OF THIS PIPE, DO NOT SWIM HERE. ALL WATER COMING FROM THIS PIPE IS TOXIC AND DANGEROUS TO YOUR HEALTH” is the best way to keep us safe from the unfortunate, unavoidable effects of CSO.

Ten Ways to Save the DEP

One of the first actions of Mayor Bloomberg’s third term was to appoint Caswell F. Holloway as the new DEP Commissioner. Commissioner Holloway has his hands full. The Water Board is blaming conservation for projected double-digit increases in water/sewer rates. Environmental groups and the New York Times are focusing in on raw sewage in the Hudson River. Gas drilling is about to begin in the watershed and the Delaware Aqueduct may spring a leak at any time! Yet no one is proposing affordable  solutions. And so, in the coming weeks, WaterWatchNYC will be rolling out a list of “Ten Ways to Save the DEP,” ten steps that we think the DEP, the Water Board and the Mayor should take in order to save money and the environment.

Former DEP Commissioner Albert Appleton

This is not the first time that a Mayor or the  Water Board  faced daunting challenges.  Back when Mayor Dinkins appointed Albert Appleton as the DEP Commissioner in 1990, the agency was beset with  problems. NYC  was  coming out of a Stage III Emergency drought (little did we know that another drought was only a year and a half away), spending was out of control and water and sewer rates were rising at unprecedented levels (from Fiscal Year 1989 to the second half of Fiscal Year 1990, the combined water/sewer rate went up over 40%!). New Yorkers were clamoring  for additional sources of water. The federal government was pressuring NYC to begin filtering its drinking water and the environmental lobby was suing the city to build huge sewer treatment plants.

Commissioner Appleton approached each problem in a novel manner without significantly increasing the financial burden on New Yorkers by thinking outside the box. He did not take existing policy as a given. At every turn he challenged the status quo. In his own words: “Essentially what we did was change the department’s policy from one of building new facilities as needed and managing the existing system within the resources the budget bureau gave us, to a much more proactive, integrated financial-environmental infrastructure strategy.”

He questioned every solution proposed by the DEP’s engineering department and the federal government. When the federal government mandated that NYC start filtering our drinking water, Commissioner Appleton’s priority wasn’t the cheapest and most effective way of building and operating filtration plants. His priority was the cheapest and most effective way of improving the quality of our drinking water.

There is a subtle difference here, but that subtle difference is magnified when you examine the actual outcome. Appleton didn’t build a single water treatment facility. He purchased the land around our reservoirs and ensured that from the very first stages of our water delivery system, the water is clean. At a minimal cost, Commissioner Appleton eliminated the need for billions of dollars of spending.

Appleton’s solution to the drought was no less courageous.  Rather than spend tens of billions of dollars to build new reservoirs, the city spent only $250 million to replace over one million toilets. Now we have more water than we know what to do with. (As of this writing our reservoirs are at 93.6%, over 20% greater than normal.) NYC was told to spend billions and the commissioner said I’ll just prevent this from even becoming an issue and save money in the process.

I bring this up in my introduction because Commissioner Appleton and his approach to creative financial and environmental problem solving is a perfect example of what we need to see from the DEP. All the existing problems can be solved on the cheap by daring to think outside the box. We are currently facing many of the same problems that Appleton faced when he took office (out of control spending and consistent double digit rate increases just to name a few). If there’s one thing Commissioner Appleton has taught us it’s that whether the problem is financial or environmental, all it takes to be one step ahead is thinking outside the box and a little creative problem solving.

And by the way, when Appleton left office, the DEP was in the middle of a three-year freeze on water/sewer rate hikes. All is not lost.

The Water in Our Parks vs. the Water in Our Sinks

Prospect Park's Fallkilll Falls

I recently came across a membership request postcard from the Prospect Park Alliance touting the restoration of their beautiful Fallkilll Falls. An interesting piece of trivia about Prospect Park is that its whole water system — lakes, waterfalls, beaches, islands — is entirely man-made. It’s a pretty fantastic feat of engineering (it was designed by Frederick Law Olmsted and Calvert Vaux and its construction began in 1866), but it involves a dirty little secret.

The vast and impressive Prospect Park waterway, including its two pools, its stream through the Ravine, the 60-acre Lake and the Lullwater that connects the Ravine to the Lake, all starts with the waterfall at Fallkill Falls. Have you ever wondered where all the water in Prospect Park Comes from?

The answer may surprise you. Since the entire system is man-made, it isn’t a naturally occurring system boosted by rain and other features of Brooklyn’s natural habitat and climate. Instead, the water actually comes from a pipe that has a valve that can be opened or closed, much like the faucet of your kitchen sink.

Actually, it’s more like your kitchen sink than you realize: Fallkilll Falls and your kitchen sink actually get their water from the same source. The only difference is that New York City charges you for your water use but they don’t charge Prospect Park. That’s right, the cost of water in New York City has to be high enough to offset the cost of every single drop of water in Prospect Park (and many other parks in the city, for that matter) as well as its strain on NYC’s water infrastructure.

Now don’t get me wrong. I’m not advocating cutting off all water to New York City’s parks. New York is a beautiful city and much of it has to do with the beauty of our parks. The water in Prospect Park used to be supplied by a well until it was determined that it would be cheaper to use free water than to maintain the well. But in the end, don’t we all benefit if we can enjoy the beauty of our parks without it driving up the cost of our water?

A Prediction

Now that New York City’s mayoral election is officially over (though, unofficially, it was over before it started), it is safe to discuss what we at WaterWatchNYC expect of the DEP and the Water Board in the near future.

We have already heard about how water consumption continues to drop drastically in NYC. If I remember correctly, at the last Water Board hearing it was announced the consumption is down another 6-7% so far this year. We’ve also heard a little bit about Booz Allen Hamilton’s preliminary findings in their water/sewer rate study and we know that they were the ones that suggested last year’s disastrous Theft of Service and Denial of Access penalties.

With this in mind, here is what we predict is going to go down at the next Water Board hearing: Because New Yorkers are using less water, the DEP has less money to work with.  Therefore, we can expect to see another double digit rate increase. However, because Booz Allen has made it their job to come up with ways of increasing the DEP’s revenue at the expense of us New Yorkers it is likely that the rate increase will be limited to a figure around 12%. While this sounds like good news, and while the DEP and Water Board will certainly present this as good news, the reality is that the only reason the rate increase will be able to stay that low is because we expect the DEP to implement (at the recommendation of Booz Allen, of course) new fees in addition to the rate increase. Look out for new connection fees and fixed service fees as well as serious increases in all existing fees.

Lindsey Ganson Appointed Acting Water Board Treasurer

At a special meeting of the Water Board this morning, the Board members approved the appointment of Lindsey Ganson, Chief of Staff of the DEP, as Acting Treasurer of the Water Board. Ganson was hired as former DEP Commissioner Emily Lloyd’s Chief of Staff in early 2008. We wish her much luck and hope for much success in her new position.

As a side note, the Water Board also approved the DEP’s consulting contract with Appleseed regarding the “economic impact… of DEP’s operations and investments in the upstate watershed.” We’ve been critical of the DEP’s actions upstate in the past and we look forward to the results and findings of this report.

William Kusterbeck No Longer Water Board Treasurer

As of late last week (UPDATE 9/9/09: effective the afternoon of Thursday, September 3), William Kusterbeck is longer the New York City Water Board Treasurer. Details surrounding his departure are, as of now, unknown. We will keep you posted as the story develops.

Mr. Kusterbeck has been treasurer since 1985 and worked for the DEP for six years before that. His positions in the DEP have included Director of Rates and Revenue and Director of the Office of Planning.

Regardless of the details surrounding his departure, we at WaterWatchNYC wish to commend Mr. Kusterbeck for his 30 years of service to our city. He oversaw cash-strapped budgets during droughts and worked hard to reel in the out of control spending of recent years. His dedication to serving the public will be sorely missed.

Water/Sewer Rates Going Up Today

As it does on every July 1, the DEP’s water and sewer rate goes up today. The new rate is $6.76 per hundred cubic feet (hcf) of water, or $2.61 per hcf as a water charge and $4.15 per hcf as a sewer charge (159% of the water charge). One hcf is approximately equal to 748 gallons.

One of the most popular links on this blog during the last 12 months was a graph of the DEP’s Water/Sewer rate from 1980 to 2009. An updated version of the graph, from 1980 to 2010, can be found here.

Conservation or Economy?

At last Friday’s Water Board meeting, it was announced that the 6% drop in water consumption has increased to above 7%. While the DEP, Water Board and this blog have in the past attributed this reduction in water use to conservation, we would now like to explore the possibility that something else is going on here.

While we are sure that some of this reduction in consumption is due to conservation, the possibility was raised on Friday that more than just conservation may be at play here. As the economy continues to suffer and more and more businesses close their doors, it stands to reason that less water will be used. Therefore, it makes sense to say that this unprecedented drop in water consumption should not be entirely attributed to conservation, but some “credit” should go to the weak economy.

This makes the DEP’s job of predicting future water consumption extremely difficult. In the past, the DEP could safely predict an annual 1% drop in water consumption due to conservation. Now that the economic climate is affecting water consumption, the DEP must predict how much longer and to what degree consumption will continue to drop above and beyond the 1% per year figure. And when consumption starts picking up again, the DEP must predict how long it will take and how much consumption will increase.

In the past we have been hard on the DEP. I don’t mean to say that we won’t continue to be hard on them. Hopefully, our past and future criticism of the DEP will enable changes that benefit both New York residents and the DEP. But we do have to recognize that every now and then the DEP is thrown a curveball and we hope they continue to do their best to deal with those curveballs as they come.

DEP Lays Out Specifics on Amnesty Program

We’ve been tracking the DEP’s new Denial of Access and Theft of Services regulations for a long time. The last thing the DEP told the public about these new regulations was that there’d be a 120-day amnesty period beginning July 1 during which time customers found to be stealing water and/or denying access will not pay the full amount demanded by the new regulations.

The DEP recently released the specific numbers that they intend to use during the amnesty program, and I must say, they are quite reasonable. The new regulations authorize the DEP to charge customers found to be stealing water and/or denying access for water consumption at the 90th percentile. The attributed consumption and charges are detailed in this post. (Be aware though, that since Fiscal Year 2010’s water rate increase was only 12.9% and not the originally announced 14%, the actual costs for this attributed consumption is slightly lower than is listed.)

During the amnesty period, customers are only going to be charged at the 50th percentile, which is the following for commercial properties:

Meter Size -       Annual Attributed Consumption Rate (Gallons per Year)

5/8″ and less                                                                                50,000
3/4″ or more and less than 1.5″                                                   80,000
1.5″ or more and less than 3″                                                    280,000
3″ or more and less than 4″                                                       550,000
4″ or more and less than 6″                                                    1,300,000
6″ or more and less than 8″                                                    2,300,000
8″ or more and less than 10″                                                  4,600,000
10″ or greater                                                                       38,000,000

and the following for residential units:

First Dwelling Unit                                                                         70,000
Each Additional Unit                                                                      60,000

In dollars, this comes to:

Meter Size -                                                          Annual Attributed Cost

5/8″ and less                                                                            $       452
3/4″ or more and less than 1.5″                                                        723
1.5″ or more and less than 3″                                                        2,530
3″ or more and less than 4″                                                           4,971
4″ or more and less than 6″                                                         11,748
6″ or more and less than 8″                                                         20,786
8″ or more and less than 10″                                                       41,572
10″ or greater                                                                            343,417

and:

First Dwelling Unit                                                                            $633
Each Additional Unit                                                                           542

I expressed my frustration when I thought it was too high; it would be unfair of me not to express satisfaction at these extremely reasonable figures.