March 22, 2024

The Preliminary Budget for Fiscal Year 2025, The Preliminary Capital Plan for Fiscal Years 2024-2028, Fiscal 2024- 2033 Preliminary Ten-Year Capital Strategy and The Fiscal 2024 Preliminary Mayor’s Management Report

Good morning, Chairman Gennaro and members of the Environmental Protection, Resiliency, and Waterfronts Committee. I am Rohit Aggarwala and I’m the Commissioner of the Department of Environmental Protection (DEP) and the City’s Chief Climate Officer. I am here today with my colleagues—Chief Financial Officer Joe Murin and Chief Operating Officer Kathryn Mallon—to discuss DEP’s budget, capital plan, and performance.

DEP protects the public health by providing high-quality drinking water, managing wastewater and stormwater, protecting against coastal inundation, and reducing air, noise, and hazardous materials pollution. This year we continued providing the highest quality services to our customers and communities, while keeping our harbor waters cleaner than they have been in 150 years. We are exceptionally proud of the work DEP’s 5,600 men and women do 24/7 to keep our city running, but we are not complacent. We are constantly looking for ways to do more and better serve our neighborhoods.

You have been able to review our budget documents, so I will not go over them, although I am happy to answer questions on them. Instead, I’d like to review a few ways we have invested the $4.1 billion dollars we received from ratepayers last year and address a few topics that I know are of concern to New Yorkers and to members of this committee.

Protecting Our World-Renowned Water Supply

First, our water supply remains safe, reliable, and delicious. We perform hundreds of thousands of tests each year and our recently released 2023 Water Quality Report shows that we continue to do that core job with excellence.

We have several major projects underway to serve the water supply:

• The Delaware Aqueduct—As many of you know, the Delaware Aqueduct, which carries roughly half of our daily water supply, has been leaking since the 1990s. DEP has been undertaking a $1.5 billion effort to build a bypass for the leaking section. We hoped to start using the new bypass tunnel last fall, but testing indicated that we needed new pumps to ensure construction-worker safety, so the project was delayed. We are highly confident repairs will begin this fall, which will be one of the largest capital projects in DEP’s history. Starting to use the new tunnel requires us to shut down the Delaware Aqueduct for about six months, but we have been preparing for this shutdown for several years to ensure there is no interruption of water supply either to the city or the upstate communities we serve.
• Hillview treatment facility—We expect to start work in FY25 on a massive upgrade to the buildings where we undertake the final treatment for most of the city’s water at Hillview Reservoir in Yonkers.
• Kensico-Eastview Tunnel—In FY25, we are also planning to begin work on the tunnel that provides critical redundancy to our water supply system by creating a second tunnel between the Kensico Reservoir and our Catskill/Delaware Ultraviolet Treatment Plant. This is expected to cost well over $1 billion.
• Water Tunnel No. 3—We continue to make progress on the two final items, shafts 17B and 18B in Queens, which will allow us to place the Brooklyn-Queens leg of Tunnel 3 into service in 2032. I visited that site recently and am pleased to report that we are still on schedule for 2032.

Preventing Water Main Breaks

Water main breaks are disruptive, and while we’ve had a few significant ones this year, I’m proud to report that in FY24 we are on track to have the fewest number of water main breaks on record. While water main breaks occur in all water systems with some randomness, our success in reducing them is not just luck. We are using system data and improved technology to catch small leaks and weak spots before they become major breaks. When system data identifies potential weak spots, we send out our “pipe doctors” overnight to investigate. Their specialized sound equipment acts like a stethoscope to pinpoint leaks before they become disruptive and expensive water main breaks. This proactive work has paid off; we’ve reduced leaks by 42% so far this fiscal year.

Further, we are working on a data-driven, risk-based approach to water main replacements that we hope to be ready to integrate into our capital plan over the next year or two. An important finding from this work is that vulnerability is not solely due to aging infrastructure. We found that water mains from the 1950s and 1960s are often twice as likely to break as water mains from the 1800s.

Replacing Lead Service Lines

Across the United States, people are understandably concerned about lead service lines. To be clear, there are no lead water mains in our system. However, we estimate that between 110,000 and 370,000 homes in New York City may have lead service lines—lines that are owned by the homeowner that connect to our water mains. Further, an unknown number of homes have internal plumbing that is lead or has lead solder.

DEP carefully manages and treats the water to minimize any lead leaching from these internal pipes. Nonetheless, we recognize that lead service lines should be replaced. Later this year, the federal Environmental Protection Agency will finalize its revised Lead & Copper Rule, which will essentially require all cities, including New York City, to remove all lead service lines.

Last year, we initiated a NYS grant-funded program to locate and replace lead service lines in disadvantaged communities. We expect that these replacements will get underway in FY25. Further, we’re currently developing a proposal for how we would manage replacements to comply with the new Lead & Copper Rule. I will note the Council’s support for our efforts to get New York State to treat us fairly when it comes to funding like the federal funding for lead service line replacement. In 2022, New York City applied for nearly $58 million in federal lead service line grants for six disadvantaged communities in the Bronx and Queens that demonstrated severe financial hardship. The award criteria used by New York State arbitrarily restricted New York City to $24 million total, representing just 23% of statewide funds. In 2023, we applied for funding for seven communities we received an additional $24 million to spread over four areas—again, a portion of the funds that is far less than our share of New York State’s population or New York State’s disadvantaged communities. As a result of these arbitrary restrictions, we expect that New York City residents will bear the bulk of the cost of changing out lead service lines.

Facing Climate Change

All New Yorkers know the challenges we face from climate change. Nowhere is it more apparent than with the increased rain and flooding we have seen this past year alone.

Climate change is bringing sudden, intense rainfall more frequently than ever before. In fact, New York City experienced rain every three days in 2023, and the National Oceanic and Atmospheric Administration (NOAA) has recently reclassified the city as a “humid subtropical” climate. The storm on Sept. 29th was the second most intense rainfall ever recorded in the five boroughs, exceeded only by Ida in September 2021.

DEP is taking climate change very seriously, but it is not an issue that we can solve quickly. Here’s a sample of what we have been doing:

• Coastal flooding—As many of you know, as part of PlaNYC last year, DEP took responsibility for coastal protection and created the new Bureau of Coastal Resiliency within DEP. We have hired a new Deputy Commissioner, Laurian Farrell, to lead this bureau. She is building and training a team, because, as soon as this summer, DEP will be the agency to coordinate the first operating floodgates, which are under construction as part of East Side Coastal Resilience. Very quickly, this new bureau will have simultaneous planning, construction oversight, and maintenance responsibilities.
• Catch basin cleaning—I have spoken in the past about our new data-informed catch basin inspection program, which targets more frequent inspections in areas that are most likely to need cleaning. This new schedule has allowed us to increase catch basin cleanings by 22% through the first four months of FY24 while seeing a 45% decrease in the resolution time to clear a clogged catch basin. Now, when someone calls in a 311 complaint about a clogged catch basin, we address it in an average of 2.1 days. We have also begun installing a new catch basin design that includes a second grate on the sidewalk, so the basin can function even if leaves cover the main grate during a storm.
• Bluebelts—In his state of the city address, Mayor Adams committed to a five-borough Bluebelt strategy, and we are working to make that real. We are particularly working closely with the Parks Department on several potential Bluebelts in all five boroughs. This fiscal year, we inaugurated the Mid- Island Bluebelt in Staten Island, and we are making significant progress on the daylighting of Tibbets Brook in the Bronx.
• Rain gardens—DEP added nearly 1,000 green infrastructure assets to our network in 2023. We’re now at more than 13,000 citywide green infrastructure assets, 10,500 of which are rain gardens and right-of- way assets. Rain gardens were originally placed in targeted locations to reduce combined sewer overflows, but we are now deploying them across the city.
• Cloudburst projects—We’ve had great support for cloudburst projects, which design public spaces to retain water during major storm events. I’m pleased that our first cloudburst project, at the South Jamaica Houses of NYCHA, will break ground this summer. We have another four in design that will enter construction over the next two years, and six more that we are seeking funding for. We’ve had great success seeking federal money for these. We have been selected and are awaiting award for $123 million for cloudburst projects already and are applying for more funding for additional neighborhoods, including East Elmhurst and Central Harlem.
• Stormwater management has been a priority for this administration, and our teams have been doing great work. Among our achievements this last year is the completion of an innovative 3D computer model of every one of our pipes in the city. Unlike a traditional static map, this model allows us to examine scenarios and identify bottlenecks that can cause flooding. We’ve also engaged in a partnership with Rebuild by Design to create a panel of New Yorkers who will provide advice and feedback on how we create resilience across the city.

Protecting New York Harbor

Finally, roughly $9 billion of our capital plan and 36% of our expense budget is dedicated to pollution control, the processing and treatment of wastewater. Because of our successes, New York Harbor now has dolphins, whales, and seahorses regularly. A few highlights of our work and investments in treatment:

• We’re well underway in the construction of four new anaerobic digesters at our Hunts Point treatment plant. We are in the early stages of a major project to bring advanced technology to our wastewater treatment plants, which allows our skilled staff to in-source work that we currently contract out.
• We’re pleased to have released the City Council-mandated study on the feasibility of a new wastewater treatment facility on Rikers Island. This study demonstrated that a new treatment plant on Rikers is both feasible and beneficial to DEP and the city, both in terms of financial benefits and especially environmental benefits.

Protecting New Yorkers’ Quality of Life

While water consumes the majority of our budget and staff at DEP, we also take our air, noise, hazmat, and asbestos enforcement role very seriously.

We are pleased with the results thus far on our noise camera program, which now has 10 cameras. These cameras don’t work well everywhere—for example, near highways—but we are optimistic about their potential, and we have been pleased to work with several Council Members on locations for these cameras in their districts. We will be looking into other technology-based approaches to noise enforcement.

We are proud of the work we have done on air quality and idling. We’re on track to process 100,000 citizen-enforced idling violations this year, up from 12,000 in 2021. Such a massive increase in throughput has led to some delays, but I am pleased with how we have ramped up to get this done. Most importantly, we’ve had some success work with companies to convert to their fleets to electric vehicles as a result of this program, and I’m optimistic that more will follow. The program does require improvement and, we believe, legislative changes, but we’re looking to expand participation by investing in a user-friendly app to allow citizens to report violations more easily and without the time and expertise that is currently required.

Improving DEP’s Business Processes

We have also been doing internal work to improve DEP functions so we can do more, faster, and more efficiently. A few highlights:

• Over the last two years we’ve reduced our procurement timelines by 50% compared to procurement rates during the Covid years. Our commitment rate—the rate in which we get projects underway—last year was 103%. We got every budgeted project underway, and even a few extra done ahead of schedule. We plan to be close to that rate again this year.
• Cybersecurity is a prime concern of ours, and we’re in the process of buiding additional system improvements that will help ensure continuity of our IT functions in the event of a disruption at our headquarters in Queens.
• Our DEP police, who protect our critical water infrastructure upstate, will be launching a new class at DEP’s Police Academy in Kingston, New York. It’s not often appreciated how important our 200 DEP police officers are to protecting the water infrastructure that every New Yorker relies upon. We have a significant vacancy rate among officers and this new class will help.

Finally, I’ll note that we have undertaken an exciting effort with the Partnership for New York City, the Environmental Tech Lab. Modeled on their Transit Tech Lab partnership with MTA and DOT, this effort uses a structure process to identify new technology solutions that DEP could use, source solutions to those problems from startups around the world, and test them at DEP. I’m pleased that our first year partnership identified a technology to pilot and another technology so compelling that we skipped the pilot and are moving straight into procurement.

Managing Water Rates

As you know, DEP’s water functions are almost exclusively funded by revenue collected from water bills. In FY24, we expect to collect roughly $4.17 billion in revenue from our water customers.

Most things cost more in New York City than anywhere else, but our water rates are well below those of many large American cities. And we work hard to keep it that way. Of course, the system needs to be funded, and we can only keep rates low for everyone if everyone pays their bills.

Last year, we offered an amnesty program to allow people with outstanding balances to save money on interest if they made down payments and entered into a payment plan. We think the program was very successful. It brought in nearly $105 million dollars, while helping customers get payments back on track without penalty.

This year, we are focused on enforcement, because we still have roughly $1.3 billion in unpaid water bills. When people don’t pay their bills, they pass the burden on to their neighbors who do. We have programs that can help those who are truly struggling to pay. It’s unfair for customers who have the means to simply ignore their bills, so we have started issuing shutoff notices to these properties. I was with the mayor on Wednesday when we issued one of 2,400 water shutoff notices sent this week. We will continue to do so. We’ll also be instigating legal action, and alerting condo and co-op owners if their boards and management companies are not paying.

Anyone who owes money should reach out to our Bureau of Customer Service. We will work with you.

Council Members, I also invite your support to improve enforcement. As you know, we no longer have the ability to sell liens on properties for unpaid bills, which means that shut-offs are our only enforcement option.

Looking Forward

I’m proud of the work that this agency has done during the Adams Administration and am excited about what the future holds for DEP. The 5,600 men and women at DEP manage our drinking water, protect our harbor, and are beginning to protect the city against climate change. We have much to do, and we appreciate your support.

Thank you for the opportunity to testify today. My colleagues and I are happy to answer any questions that you have.