Leah Rae of the Journal News is reporting that Port Chester officials are finding it is not a simply matter to charge residents a sewer fee. New Rochelle Mayor Noam Bramson is seeking to institute a similar fee in New Rochelle.
Rae reports that like New Rochelle, sewer costs were paid by the City as part of the overall municipal budget. The latest idea in municipal finance, driven by Andrew Cuomo's Property Tax Cap (actually, a law to cap property tax growth at 2% or the rate of inflation), is to shift municipal costs out of the budget, supported primarily by property taxes, and into fees which can be assessed non-profits and other businesses and residents that do not pay property taxes.
Like New Rochelle, Port Chester gets its water from a Suez/United Water subsidiary company.
Rae explains this brings up two issues for Port Chester: (1) customer privacy; (2) service fees charged by the water company.
As a privacy matter, she says United Water is regulated on what consumer information they can share and how they can apply revenue they charge customers. These are matters that would have to be addressed by the New York State Public Service Commission and possible other agencies.
The fees, according to the article are about $300,000 or $50 per customer. Port Chester, with a population of around 29,000 is less than 40% of the size of New Rochelle with a population of 77,000. $50 per customer in New Rochelle translates into roughly $700,000 in fees.
She also notes that Port Chester could base sewer fees on estimates but reports that the New York State Comptroller has already determined that relying on estimates rather than actual usage would require the village to count those fees under the property tax cap.
The Mayor's budget committee projected about $2.5 million in fees from charging residents based on waste water as a way to close what they have identified as a $29 million budget hole over the next three years. The Mayor has yet to explain whether the $700,000 in servicing fees from United Water would come out of those fees, significantly reducing the net revenue from the new fee, or be in addition to those fees, brining the total cost to residents to $3.2 million.
The Mayor's GreeNR plan views charging residents for waste water is a way to reduce water consumption. If the Mayor cannot get around the privacy issues and relies on estimates then the fees will not only count towards the property tax cap but have the opposite effect intended by the Mayor with regard to GreeNR. Low-use customers would be subsidizing high-use customers and those high-use customers would be motivated to use even more water under the new plan since the total cost would be spread to low-use customers.
We have seen this before from the Mayor.
His GreeNR plan proposed Green Liens where people would borrow money from a bank to pay for retro-fitting their homes to make them more energy efficient and the loan would lumped into the property tax on the house. This was proposed despite the fact that Fannie Mae and Freddie Mac had already issued an advisory statement to banks that they would consider green liens as a lien on the house and would certify such loans. The two quasi-government agencies account for 70% of the mortgages in the United States.
His GreeNR Seal plan would have certified homes as "green" but the Mayor was unable to explain the liability for the City if a home certified as green was acquired by a buyer who then determined the house had asbestos or some other serious problem.
His later lines program would have cost residents selling homes about $15,000 if the pipes from their home to the sewer lines were found not to be meet new higher building standards. The Mayor projected that half the homes in New Rochelle would not meet the new standards.
The list goes on but the story is the same -- the Mayor propounds "sustainable" fees and regulations without accounting for the full costs, leaving residents on the hook for millions upon millions of costs.