March 8, 2021

Good Morning, Chair Constantinides and Members of the Committee on Environmental Protection. I am Vincent Sapienza, the Commissioner of the NYC Department of Environmental Protection (DEP). I am here to speak about the FY22 preliminary budget and FY21 Preliminary Mayor’s Management Report or PMMR. I’d first like to briefly highlight some pandemic-related issues that DEP continues to manage.

COVID-19 Operational Challenges

DEP has felt the impact of the pandemic, and we’ve made significant operational adjustments over the last twelve months. Our focus has been to ensure that all critical services are uninterrupted. Our dedicated staff, the majority of whom work outdoors in all weather, continued to provide one billion gallons per day of high-quality drinking water, to manage wastewater and stormwater, and to reduce air, noise, and hazardous materials pollution. They deserve our collective gratitude for their perseverance and for the frequent double shifts, nights, and weekends they worked to cover for their ill and quarantining colleagues. I’d like to note that some of the operational challenges spurred opportunities for improvement, which I’ll speak about shortly.

COVID-19 Fiscal Challenges

Water revenues for FY21 to date have decreased by about 7% compared to FY20. One reason is that commercial water consumption has declined, which reduces the amount billed. Another reason is delinquent accounts, or accounts that have been unpaid for more than 30 days. On December 31, 2020, there were 16,000 more delinquent accounts than there were on December 31, 2019. Much of the increase in delinquencies is from Tax Class 2 and 4 multi-family properties, which is probably indicative of rent collection challenges.

I want to be clear that DEP continues to offer payment assistance programs to all ratepayers who qualify, and we offer payment plans to anyone in need. I encourage any account holder who is struggling to contact our Bureau of Customer Service, who can work with you to develop a manageable payment plan to minimize interest and penalties.

Though DEP is not currently at risk of running an FY21 deficit due to prudent planning last April, the continuing revenue shortfall has real impacts. Most of our operating costs are fixed, such as for chemicals, residuals disposal, and labor. Expenses related to property taxes that we pay to upstate municipalities for city-owned reservoirs and surrounding lands continues to grow, now at $167M. So FY21 budget modifications primarily had to come from our capital program. We deferred about $1.2B in FY20 capital work, and we have since re-sequenced other projects in our ten-year plan.

I want to highlight DEP’s significant capital obligations for unfunded federal and state environmental mandates, including the Gowanus Canal Superfund, the Filtration Avoidance program, Hillview Reservoir upgrade, nitrogen removal, and Citywide combined sewer overflow (CSO) reductions. We have reached out to both EPA and DEC to ask for temporary relief on certain regulatory milestones for these massive, overlapping projects. Those conversations are ongoing. Without relief, some planned capital work for maintaining a state-of-good-repair at our drinking water reservoirs, wastewater treatment plants, and for new water mains and storm sewers may be delayed. I also want to mention that other municipalities face these same pressures, and Boston, Philadelphia, Washington D.C., and Baltimore all recently raised their annual water billing rates between 6.7% and 9% to meet obligations. Portland, Oregon is doing five consecutive 7.4% rate increases to meet EPA mandates.

COVID-19 Achievements

Some of the challenges created by the pandemic hastened improvements to our public services, and we began to do many interactions virtually. Our superb staff in the Bureau of Information Technology worked non-stop to develop online tools to support many functions while our borough offices were closed to the public. Our IT bureau also configured laptops so that some of our support staff could perform functions like procurement and vendor payments via teleworking.

As the Council is aware, DEP worked with DOHMH and several experts to establish a coronavirus wastewater testing program last spring. Since last summer, we’ve been testing wastewater from each of our 14 treatment plants every week to quantify viral fragments. This testing program gives DOHMH an additional piece of information for identifying potential outbreaks around the city.

DEP also aided other City agencies during the peak of the pandemic when disinfectant was hard to find. Our lab staff produced more than 17,000 gallons of hand sanitizer, which was distributed to other agencies, to the Visiting Nurse Service, and to the public in city parks last spring. Other DEP employees volunteered at command centers and to make calls to identify critical PPE needs around the city.

I’d like to highlight a few non-COVID related achievements:

• There were fewer water main breaks in FY20 than in any year on record. We have long had one of the most reliable water main systems in the country, and we now average just five breaks for every 100 miles of water main, while the national large city average is 25 breaks per 100 miles.
• We built 3,000 rain gardens in calendar year 2020—a record number of installations.
• We addressed air quality and noise complaints faster than in the past, in part because we now have staff scheduled on evening and night shifts to respond to these complaints.

Looking Forward

Despite the challenges from COVID-19, our commitment to our mission has not wavered. We continue to provide critical services to protect public environmental health in the city. I am proud of the work that all of our staff have done to continue to serve New Yorkers throughout the pandemic.

We look forward to our future endeavors, including assessing Rikers Island as a potential site for a future centralized Wastewater Resource Recovery Facility (WRRF). I congratulate the Council, and Chair Constantinides in particular, for re-envisioning the vast potential of Rikers for all New Yorkers.

Thank you for the opportunity to testify today. I am happy to answer any questions that you have.