In a stunning development, homeowners may soon get socked with an extraordinary water-rate hike of up to 18 percent – on top of the 11.5 percent increase that kicked in only three months ago, The Post has learned.
Officials said the special rate boost could be enacted as early as Jan. 1, because water and sewer revenues in September plummeted $31 million below projections.
“That’s a troubling indicator,” declared Steve Lawitts, the Water Board’s executive director. “It is troubling to see your year-to-year collections going down.”
The precipitous drop is something of a mystery, because revenues in July and August were on target, up 10.5 percent.
“That’s where you’d expect them to be after an 11.5 percent increase,” Lawitts explained.
If the worrisome trend continues, he said, the agency’s $2.2 billion budget could be short $200 million by the end of the fiscal year on June 30.
Lawitts said officials would be monitoring collections day-to-day this month, and if the numbers don’t pick up, the board would meet in early November to consider a rate hike starting Jan. 1. The precise increase would depend on the projections.
If the $200 million shortage figure holds, that would translate into an almost unthinkable 18 percent hike in the middle of the fiscal year.
“We have an obligation to our bondholders to generate sufficient revenues to pay our debt service and our operating and maintenance costs,” Lawitts said, suggesting there’s not much leeway.
Officials said the shortfall was due entirely to “not being able to collect” from deadbeat property owners, not new spending needs.
Records show that the number of customers delinquent for 30 or more days jumped 1 percent in September, a significant figure considering the city has made a concerted effort for more than two years to collect past-due accounts. As of September, the unpaid pile stood at $561 million.
In May, homeowners got hammered with an 11.5 percent hike – the largest in 15 years.
That boosted the average bill for a one-family home to $699. Another 18 percent clubbing would make the average bill a painful $824.
The Water Board warned last year that double-digit hikes of 11.5, 11.4 and 11.3 percent loomed for each of the next three years. But no one anticipated that the agency would come back looking for more money this soon.
Mid-year rate increases are extremely rare. The last one was in 1991.
Some insiders speculated that the Water Board was floating the possibility of a huge rate increase to pressure legislators to pass a long-stalled bill permitting the city to sell “stand alone” liens when homeowners default on their water bills.
“They’re trying to squeeze the City Council,” one source said.
Legislators are reluctant to grant the authority on liens, saying they want assurances that the flawed billing system will be fixed first. Lawitts insisted the two issues aren’t connected.
“While we do need a lien sale, this [possible rate hike] is out of necessity,” he said. “It is not a calculation.”