About $1.2 billion worth of unpaid water bills is threatening the operations of the New York City Department of Environmental Protection, the agency responsible for sewage management and flood protection.
At a City Council budget hearing on Tuesday, the agency’s commissioner Rohit Aggarwala testified that about 100,000 building owners haven’t paid a bill in more than six months. The combined debt alone of this group amounts to nearly $1 billion, he said. During the pandemic, NYC's water bill debt ballooned by 50%. But this recent trend isn’t restricted to the five boroughs; cities in states like New Jersey and Oregon also reported shortfalls in water bill collection.
In an effort to collect unpaid tabs and avoid rate hikes, the mayor’s office announced the launch of a three-month water bill amnesty program at the end of January. The plan offers relief to nearly 200,000 customers by forgiving up to 100% of the interest owed on their unpaid water bills if they pay just a portion. Roughly 85% of these debtors are residential building owners.
The interest forgiveness could total up to as much as $150 million. Some property owners may even be eligible to have part of their outstanding balances paid for and avoid enforcement actions. The program ends on April 30, 2023.
“Customers must understand that there are consequences to not paying for their water,” Aggarwala said. “Being lenient to those who can pay but choose not to means that we will have to raise rates on those who do pay their fair share.”
The amnesty program aims to make it easier for New Yorkers to repay their water debts. Aggarwala said the agency depends almost exclusively on water bill revenue to fund services, operations, maintenance and capital improvements. The department must collect nearly $4 billion in order to deliver more than 1 billion gallons of water and treat 1.3 billion gallons of wastewater this year.
Falling behind in payments isn’t necessarily a low-income or single-family homeowner issue. About 1,000 Manhattan buildings south of 96th Street are delinquent, according to the mayor’s office. Part of the trend also predates COVID-19, as about 10,000 property owners have not paid at all in more than four years. Nearly 1 in every 4 customers has an outstanding water bill, according to the city’s Water Board, which approved the program.
The amnesty program offers three options: 100% forgiveness on interest if the bill is paid in full, 75% forgiveness if half of the principal is paid, and 50% forgiveness if a quarter of the bill is paid. All customers in the amnesty program who have a remaining balance must also enter into a payment plan with the DEP.
“While most everything here costs more than anywhere, our water rates are well below those of many large American cities,” Aggarwala said. “We know we must manage our operations to keep water rates as low as possible. We must also ensure that revenue comes in reliably.”
When the 90 day amnesty period ends next month, the DEP will begin enforcement actions, though the department hasn’t clarified what those steps might be. But if the city’s water bill debt continues to grow or go unpaid, it could lead to additional rate hikes for everyone and threaten investments in the city’s water infrastructure.
Water rates rose nearly 5% in 2023 to $4.30 per 100 cubic feet, or roughly a cent per gallon, which averages out to $40 per month for an apartment. In California, the average water bill is almost double that amount. The average annual water usage for a New York City household is about 70,000 gallons.
“The amnesty program will not last forever,” Aggarwala said. “We will begin pursuing enforcement action against those ratepayers who still owe and who have not reached out to the DEP for assistance.”
Customers are urged to take advantage of the program by visiting the DEP’s water amnesty site. To streamline the process and assist more customers, the DEP recently expanded its call center to include extended hours during evenings and Saturdays.
