Will City’s Water Board Explore a New Stormwater Fee?

Sure, New York City is an expensive place to live. But hey, the sun and the air and the rain are free, right?

Well, at least the sun and the air are. Rain turns out to be pretty costly.

In older-built parts of the city, rain is what can overwhelm combined sewers and trigger releases of untreated wastewater into your nearby bay or river. That necessitates billions of investment to try to reduce such overflows. In areas with newer infrastructure, rain sweeps up chemicals and doggy-doo and carries then out to your local creek or canal. So, the city is now mapping out a comprehensive strategy for dealing with separate stormwater. Taken together, downpours mean dollars.

But the manner by which the city pays for the expense of dealing with rain has little to do with the way such costs are generated.

The city’s water and sewer system is funded through water rates. Households and businesses are charged a fee for how much water they use. Then the city multiplies that charge by 159 percent to cover the costs of sewer treatment, and adds the two figures together to generate the bill.

Some businesses—like, say, parking lots—generate a lot of stormwater runoff but use very little drinking water. That means they contribute a lot to the cost of handling stormwater, but pay very little toward covering that cost. And in turn, that gives the owners of such territory little incentive to install green infrastructure or other means to retain or detain some of that rainwater.

That flaw in the way the city pays for the water system is not its only critique. While increases in the water rate have slowed in recent years and New York City water is much cheaper than some cities’, many landlords and homeowners identify water rates as a threat to affordability. And, ironically, even as New Yorkers use far less water than they used to—in 1979, the city used 213 gallons per person per day, and in 2017, just 115 gallons daily per capita—they are paying more for each drop because of the enormous cost of some of the capital projects the city has had to undertake to meet federal environmental mandates.

Hence the call by environmental advocates over many years to revise the way the city’s water rate works. The S.W.I.M. Coalition—a group of advocates like Riverkeeper and Natural Resources Defense Council—wrote to the Water Board in May asking for change. “It is crucial that the city restructure the water rate such that those who generate stormwater pollution pay their fair share of the cost,” their letter read. “This is an inequitable system in which properties with large impervious areas but only a few bathrooms (such as a big box retail commercial site with a large parking lot) are essentially treated the same as a one- or two-family residential property with a vegetated yard.”

Last month came a ray of hope: At the meeting setting water rates for fiscal year 2019, Water Board Chair Alfonso Carney said he’d been impressed with the comments calling for a study of a possible stormwater fee and added, “Obviously we’re going to look at that” and promised a meeting dedicated to that topic. “The question is whether we can do it and how we can do it I we decide we can.”

Board member Adam Freed, who has made similar calls in the past, endorsed “a look at separating a stormwater charge for a more equitable rate related to stormwater and to be able to incentivize more sustainable stormwater management.”

Freed works for Bloomberg Associates, which was involved with the city of Detroit’s move in 2015 to a stormwater drainage fee (a policy that has since been scaled back after an outcry.) Based on that experience, he said: “This is hard and this is both a policy issue and an operations issue and a data issue. So, recognizing the complexity and appreciating that these elements need to come together, having the study happen now that can look at what an equitable stormwater rate may be and how can we catch up with those municipalities who leapfrogged us because they didn’t have the complexities and challenges we did in new York is something that I would love to see us continue to do.”

A month later, the date for that meeting is not yet firm. According to a spokesman for the Department of Environmental Protection, which operates the water and sewer system, the Water Board’s 2018-2019 calendar is not yet set. “The Board at its discretion may discuss the appropriateness of a stormwater fee at one of its meetings,” writes Ted Timbers, the spokesman.

DEP itself is planning to issue later this year a request for proposals for a rate study that would include the stormwater fee, Timbers notes.
There have been moves in this direction before. In 2009, DEP told the Water Board it would propose a stormwater fee by the following year, but it never materialized. The reason, says Timbers, is that DEP realized its computerized billing system was not capable of processing such a charge. But that system is being replaced beginning in 2019—a project expected to take two years.

“It’s long past time to bring the city’s water rates into the 21st Century, to equitably fund the investments we need for the future. The city must charge everyone fairly for managing runoff that flows from private property into the overburdened public sewer system,” says Larry Levine, senior attorney at NRDC. “The current system penalizes many properties, like multi-family affordable housing, gives many others a free ride, and fails to reward anyone for using green infrastructure to reduce runoff. DEP and the Water Board need a transparent, inclusive process to design a fair rate structure now.”

In 2011, the city did launch a pilot program charging stand-alone parking lots with no water service a fee based on their total area. The number of lots subject to the charge has dropped from 535 to 520 to 505 over the past two years—likely because the owner sold the lot to a residential developer.

More important than the dwindling scope of that pilot, perhaps, is what the city’s most recent green infrastructure report declared: “To date, zero parking lot owners have implemented green infrastructure practices to become exempt from the stormwater discharge fee.”