May 28, 2002

Contact: (718/595-3601)

Water Rate Increase for Fiscal Year 2003

PUBLIC NOTICE IS HEREBY GIVEN pursuant to Section 1045-j(9-a) of the Public Authorities Law, that after public hearings were held on April 17, 18 and 19, 2002, in accordance with the provisions of such law, the New York City Water Board ( the "Board") has, at its meeting held on May 3, 2002, adopted a resolution approving increases in water rates to users of the Water Supply System of the City of New York, including rates charged to users of the system within the City of New York, and rates charged to municipalities and water districts outside of the City for water provided which exceeds the allowance quantities of water set forth in Section 24-360 of the Administrative Code of the City of New York, for the fiscal year commencing July 1, 2002, from those rates currently in effect, and making certain billing policy and regulatory program changes, as follows:

Effective July 1, 2002, the water rate for all in-City customers, flat-rate and metered, will increase by 6.5 % over the rate in effect in Fiscal Year 2002, and the wastewater rate will remain at 159% of the applicable water charge.

Effective July 1, 2002, the rate charged for water provided to municipalities and water districts outside of the City which exceeds the allowance quantities of water set forth in Section 24-360 of the Administrative Code of the City of New York will be equal to the in-City metered rate of $1,925.13 per million gallons.

Certain billing policy and regulatory programs have been changed or clarified, including the following:

1. Termination of Service Because of Non-Payment
   The termination of service eligibility criteria have been expanded as follows: termination of service will be authorized if there exists: i) at least one delinquent charge open and unpaid for at least one year and total delinquent charges amounting to at least $1,000, or ii) at least one delinquent charge open and unpaid for at least three months and total delinquent charges amounting to at least $10,000.

2. (2) Denial of Access Regulation
   This addition to the Rate Schedule and administrative procedure consists of two parts: i) the imposition of a denial of access fee amounting to $50 after DEP has issued an appropriate demand for access notice and the owner has failed to provide or facilitate access; and, ii) after the imposition of the fee and the issuance by DEP of a second demand for access notice, if the owner continues to fail to provide or facilitate access, DEP may commence termination of service pursuant to the "Denial of Access Regulation."

3. Backbilling Limitation - Complaint Filing Period
   The Board modified its backbilling limitation to provide a 4-year limitation with respect to upwardly adjusting previously unbilled or underbilled charges. This will provide consistency with a recently enacted State law mandating a 4-year complaint filing period, a conforming change that was also made in the Rate Schedule.

4. Payment Agreements
   The Board authorized the Executive Director and the Commissioner to grant a variance to the standard Payment Agreement terms of 25% down payment and 3 -year amortization.

5. Suspension of Leak Forgiveness Program During Drought Emergencies
   The Board rejected making this change. Instead, it will instruct DEP to conform administration of the program to the existing language of the regulation which is more restrictive than current administrative practice.

Copies of the New York City Water Board Water and Wastewater Rate Schedule are available for inspection by the public during regular business hours at the offices of the New York City Water Board, 59-17 Junction Boulevard, 8th Floor, Flushing, New York 11373.