THOMPSON PROPOSAL TO REVAMP WATER BOARD INTRODUCED IN ASSEMBLY, SENATE
New York City Comptroller William C. Thompson, Jr. announced [yesterday] that his proposed legislation to amend State law to change how appointments are made to the New York City Water Board has been introduced in the New York State Assembly (A-8943) and the New York State Senate (S-5876).
"I applaud Assembly Member James Brennan and State Senator Bill Perkins for taking swift action to introduce this legislation, which, when passed, will ensure that the Water Board no longer will be under the sole and undue influence of the Mayor," Thompson said.
At a news conference earlier this month, Thompson stood with Assembly Member Brennan and Council Member David Weprin to unveil the legislation, which is available at www.comptroller.nyc.gov.
"The current structure simply isn't working and is draining money from the pockets of City residents," Thompson said. "Furthermore, the culture of the Board discourages appropriate decision-making, sufficient independent monitoring, and accountability. We must take action to offset the Mayor's iron grip influence on the New York City Water Board. I urge both houses of the State legislature to move forward and pass this legislation as soon as possible."
"A more representative board would assure integrity to the decision-making process for just and reasonable rates. Issues like improper subsidies from water ratepayers to the General Fund of the City would get a real vetting," Brennan said.
The bills have been referred to the Committee on Corporations, Authorities and Commissions in the Assembly and the Committee on Rules in the Senate.
Under Thompson's proposal, the Mayor would continue to appoint four members of the seven-member Board. However, one member each would be appointed by the City Comptroller, the Public Advocate, and the Speaker of the City Council. Thompson's legislation also stipulates that the chairman should be elected by other Board members, instead of named by the Mayor.
"While the Mayor would continue to appoint a majority of the Board, these new, independent members would ensure that new and ongoing challenges would be addressed freely and impartially," Thompson said. "Just as important, this bill would respect all existing legal agreements and bondholder covenants, protecting the high investment ratings that are so important to cost-effective borrowing for the water system."
Last month, the Water Board voted to impose a 12.9 percent water rate hike. Due to go into effect on July 1st, this increase will raise an average single family homeowner's annual water bill from $571 to $903 in just four years - a whopping 58% increase, or about five times the rate of inflation.
"The Water Board's plan to seek another 12 percent rate hike in Fiscal Year 2011 demonstrates that it intends to continue to squeeze money from ratepayers," Thompson said. "It is imperative that changes be made to the Water Board with sufficient time to address next year's water rate-setting process. Since the City continues to ignore recommendations made by my office, other elected officials, and advocates, it's time for us to take steps to rectify the situation on behalf of New Yorkers."
The Water Board leases the water and sewer infrastructure from the City. Rental payments are based on a formula that, until recently, reimbursed the City for water-related debt service on bonds issued before the Water Authority was created. Since 2005, however, the formula has led to rental payments in excess of the underlying City expense.
Thompson indicated that this formula is forcing water ratepayers to subsidize the City's General Fund, because "excess rent" flows into that fund and is used as general revenue. In Fiscal Year 2009, such "excess rent" will total $106 million, and this is predicted to swell to more than $200 million by Fiscal Year 2013.
Over the last two years, Thompson proposed rebating the "excess rent" back to the Water Board to offset the cost of running the water system. In Thompson's plan, the "excess rent" would have been split equally for two purposes: one half for pay-as-you-go capital spending, which reduces costs over the long term, and the other half for other water system expenses, which would lessen the need for rate increases.
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