THOMPSON: INTRO 1071-A WILL HELP PROTECT OUR MOST VULNERABLE HOUSEHOLDS
Deputy Comptroller for Budget Marcia Van Wagner, representing New York City Comptroller William C. Thompson, Jr., provided testimony today in support of Proposed Intro 1071-A, The Sale of Water Liens, at a joint hearing of the New York City Council Finance and Community Development Committees.
The proposed change would improve upon the water lien sales program by broadening protections for homeowners, for whom the past year has brought little good news.
The testimony is below:
Testimony of Deputy Comptroller Marcia Van Wagner at a meeting of the New York City Council Finance and Community Development Committees - October 19, 2009
Good morning and thank you, Chairman Weprin, Chairman Vann and members of the Finance Committee and the Community Development Committee, for inviting Comptroller Thompson to speak today about Intro 1071-A regarding the sale of water liens. He is unable to appear here himself and sends his regrets.
Almost exactly two years ago, I appeared before you to express Comptroller Thompson's concerns regarding proposals by the Department of Environmental Protection to make more stringent their procedures for collecting water rates. These proposals were spurred by a persistent shortfall in collections of water and sewer fees compared to the growing expenses of the water system. The Comptroller was concerned that the DEP's proposals were not designed in a sufficiently sensitive manner given the many stresses on New York City households stemming from a softening economy and the foreclosure crisis.
At that time, I conveyed the Comptroller's belief that an appropriately-designed water lien sales program was a sensible approach to improving collections, provided that the relevant accounts were accurate. My testimony also noted that lien sales are most appropriate for multi-family dwellings where resorting to water-shutoffs would unfairly penalize innocent tenants. In the end, the Council agreed that independent water lien sales were an acceptable enforcement mechanism.
Intro 1071-A improves upon the water lien sales program by broadening protections for homeowners, for whom the past year has brought little good news. It exempts homeowners receiving Enhanced STAR benefits; allows homeowners more time to address outstanding water bills, both by extending the public notice period and by limiting eligible accounts to those unpaid for three years; and requires that homeowners receive more timely and complete information regarding delinquent accounts and the consequences of lien sales. Furthermore, it requires the DEP to be proactive in identifying those homeowners eligible for home exemptions that would make them ineligible for inclusion in a lien sale. The Comptroller fully supports these measures.
The water system's fiscal health is also of great concern to Comptroller Thompson. Analysis by the City Council finance staff suggests that the impacts of these provisions on DEP collections will be minimal.
Indeed, over the past several years Comptroller Thompson has advocated for several ways to improve the fiscal health of the water system. Chief among these, as you know, is his proposal that the City rebate the Water Board's rental payments back to the water system, resulting in containment of water and sewer rate increases and moderation in the growth of the system's crushing debt service costs.
The Comptroller has also urged the Water Board to use the current review of the system's rate structure-which they initiated in response to his advocacy-as an opportunity for honest and thoroughgoing reform of the way costs are distributed among users of the system. Furthermore, the specter of gas drilling in New York City's watershed threatens to reverse the progress the City has made in preserving the quality of its west-of-the-Hudson water supply. The Comptroller along with many other officials has called for a ban on drilling in the watershed.
Because the members of the Water Board who in 2008 were most vocally in support of ratepayer equity and the ban on gas drilling in the watershed appear to have been pushed off the Board, the Comptroller also initiated a bill, introduced by Assemblyman Brennan and Senator Perkins, that would change the composition of the Water Board to lessen the Mayor's lock on its proceedings.
The challenges facing the water system are enormous and touch on every person in our city. One of the key issues as we address these challenges is that we not finance the system by placing unmanageable burdens on our most vulnerable households. Intro 1071-A is one step in achieving this balance.
Thank you for allowing the Comptroller to share his thoughts on this important piece of legislation. I am happy to answer any questions you may have.