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PR- 452-07
December 6, 2007


Combined with a Payment Incentive Program, Agreement will Prevent Proposed Rate Increase

Mayor Michael Bloomberg and City Council Speaker Christine Quinn today announced an agreement on legislation authorizing lien sales for the collection of overdue taxes and water bills, including for the first time, the authority to initiate lien sales to collect water and sewer fees from residential properties that do not also owe back taxes. Passage of this critical revenue collection measure will forestall a previously proposed mid-year water rate increase. In conjunction with the legislation, the Mayor and the Speaker agreed to implement a one-time Payment Incentive Program (PIP), relating to water and sewer charges. This program will be available across all residential property tax classes, featuring elimination of late payment charges and capping the water use charges (utility charges) per dwelling unit. It will be open to all customers with abnormal spikes or other irregularities in their billing histories. In addition, account holders with a remaining substantial balance after the PIP adjustment will be eligible to enter into a payment agreement, extending payment over five years. In recognition of the current mortgage and foreclosure climate, Mayor Bloomberg and Speaker Quinn also announced creation of a formal Safety Net Referral Program for water and sewer customers.

"Today's announcement will give the Department of Environmental Protection and the Department of Finance  the tools needed to further improve collection rates, and will prevent a significant mid-year water rate hike," said Mayor Bloomberg. "For too long our hands have been tied, but now we can effectively enforce collections and stop passing the burden caused by a small percentage of irresponsible rate payers onto the more than 85% of New Yorkers who pay on time and maintain their accounts. We've made improvements in billing and efficiency and together with our partners in the City Council, we'll continue to provide New Yorkers with the best municipal water system in the Nation."

"This agreement strikes the right balance between the need for a fair collection policy with the need to protect the most vulnerable New Yorkers from losing their homes," said Speaker Christine C. Quinn. "We can now crack down on unscrupulous owners who take advantage of the system, while establishing important protections for the consumers who follow the rules. But most importantly, we will avoid a mid-year rate hike. I'd like to thank my colleagues in the Council and Mayor Bloomberg for working through a very tough negotiating process."

Authorization of independent water and sewer lien sales puts New York City on par with other American cities that use this enforcement method, as well as other methods such as service shut-offs, to achieve revenue collection rates between 95 and 99 percent, a much higher rate than the current collection rate of approximately 85 percent. Independent lien sale authorization comes at the same time that DEP has broadly expanded its use of service shut-offs to compel payment from overdue customers.

"DEP has worked intensively over the last year to improve customer service and collections. Having effective enforcement tools - and particularly lien sales - is critical to achieving the changes we have undertaken," said DEP Commissioner Emily Lloyd. "Over the next three years, we will be introducing additional improvements, such as Automated Meter Reading (AMR), which will help us to serve the citizens of New York City even better. We are grateful to the Council for their collaboration and to the Mayor for his leadership."

"Today's agreement will permit us to continue our efforts to effectively collect and enforce the property tax revenues due to the City, while protecting our most vulnerable citizens," said Finance Commissioner Martha Stark. "It's an important agreement in that ensures we have the tools that other large cities have, and will increase our rates of collection significantly."

The agreement on water liens reflects more than 18 months of cooperative effort between DEP and the City Council. During that time, DEP overhauled its customer service, billing, and collection operations, including a major reorganization of the staff of the Bureau of Customer Service (BCS). Many of these changes are based on an extensive analysis conducted by the consulting firm Booz Allen Hamilton and completed in August. The City Council has held numerous oversight hearings to share with DEP the concerns of its constituents and to monitor the agency's progress. Going forward DEP will be reporting to the Council key performance indicators quarterly and on revenue collection monthly.

"I am glad that we were able to come to an agreement on the water lien issue," said City Council Finance Chair David Weprin. "We have managed to avoid a mid-year rate increase and at the same time we have found a way to protect single family home owners, seniors, and low income families. It is my hope that those individuals that would have been affected by a lien sale because of their past due water bills will find a way to work with the DEP to resolve their outstanding obligations."

"I am gratified that I and my Council colleagues have averted a massive mid-year water rate increase. By taking to task those high-rise residential and commercial buildings that have exploited the system and are persistent non-payers, we are sparing the low-density neighborhoods of our city from what would have been an economic catastrophe," said Environmental Protection Chair James Gennaro. "Regarding the water lien sale authority the Council will grant to DEP, I will personally and vigorously monitor DEP's exercise of this authority to ensure that it is wielded fairly and effectively."

Among the important improvements in the operations of BCS' is the complete redesign of the dispute resolution process so that many problems can be solved soon after they occur. Already, account holders can file disputes using a new, standardized form available on DEP's web site and at all borough walk-in centers. In addition, many disputes will now be able to be settled by call center representatives and account holders will also have the right to a dispute hearing before a newly created Ombudsmen Unit. As another means of settling disputes quickly and avoiding the accrual of high balance accounts, DEP and the Council have agreed that going forward, DEP will only retroactively re-bill for two years when estimated bills are adjusted based on actual reads.

Independent water and sewer lien sales will be available for the collection of overdue fees from accounts that are at least one year overdue and owe at least $1,000. Lien sales for overdue property taxes, as in the past, will require three years of delinquency for class 1 properties. The lien sale authority will apply to all property tax classes, but will exclude homeowners receiving Senior Citizen Homeowners Exemption, Disabled Homeowners Exemption or the New York State Personal Income Tax Circuit-breaker tax credits. Lien sale authority for overdue water and sewer charges will also exclude single family properties, where DEP will use service shut offs to collect from delinquent accounts. The new lien sale bill provides strict guidelines and criteria for the sale of water and sewer liens, including a longer notification period, extended from 60 days to 90 days, with extensive public outreach, including town hall meetings.

The Payment Incentive Program announced today for overdue water and sewer accounts applies to all overdue residential properties whether they ultimately face service termination or lien sale. For customers with accounts that have been overdue for a long time, the elimination of late payment charges can equal a discount of more than a quarter of their outstanding balance. DEP has already initiated a PIP for approximately 8,200 single family residential customers. Under the terms of this 90-day offer, late payment charges will be eliminated for account holders who pay their overdue bills in full.

The Safety Net Referral Program draws on a network of existing City and not-for-profit programs, including the Department of Housing, Preservation and Development's recently announced Center for NYC Neighborhoods, which assists homeowners at risk of mortgage foreclosure throughout the five boroughs, and the Human Resource Administration's Home Energy Assistance Program (HEAP), which can help homeowners pay for heating fuel, equipment and repairs with annual or emergency grants. Customers who qualify based on means, age, and/or debt ratio can access the network of citywide assistance programs by calling 311 or the New York City Department of Environmental Protection (DEP) customer service call center at 718-595-7000.

Over the next three years, DEP will continue to implement significant changes that will improve customer service. This past July, DEP field tested two automated meter reading (AMR) systems. Based on those results, installation of the citywide system will begin this spring and be completed by the end of December 2010. In other cities, AMR has been extremely effective in increasing the accuracy of bills and reducing the number of disputes. To further reduce billing disputes, by June 2008, DEP will introduce on an interim basis a redesigned customer bill to present billing, consumption and account information more clearly. By June 2010, DEP will introduce a new customer information system (CIS) capable of interfacing with the automated meter reading system and providing the basis for a complete bill redesign.


Stu Loeser/John Gallagher   (212) 788-2958

Anne Canty/Michael Saucier   (Department of Environmental Protection)
(718) 595-6600

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