May 5, 2025

Proposed Increase of 3.7% is Lowest in 4 Years, Made Possible by Strong Revenue Collections and Lien Sale Reinstatement

If Approved, the Cost of Water in New York City Would Remain Well Below the National Average

The New York City Department of Environmental Protection (DEP) on Monday proposed a 3.7% increase in the Fiscal Year 2026 (FY26) water rate during a presentation to the New York City Water Board. The proposed rate increase is supported by the agency’s strong revenue collection activities, making Fiscal Year 2025 so far one of the agency’s most successful financial years. While the cost of most goods and services is higher in New York City than elsewhere, the proposed rate would keep the cost of water in the city well below the national average.

The proposed rate is subject to review and approval by the New York City Water Board. There will be a public hearing in each of the five boroughs in late May and early June during which residents will have the opportunity to provide their input on the proposed rate to members of the Water Board.

“DEP’s smart investments and effective management, combined with strong revenue collections, has put the drinking water, stormwater and wastewater systems in a solid financial position. When everyone pays their fair share, we are able to keep water and sewer service costs for New Yorkers well below the national average,” said DEP Commissioner Rohit T. Aggarwala. “This proposed FY26 water rate, guided by our careful, long-term planning, will preserve the systems’ stability and enable continued investment and growth.”

Revenue

The lien sale process for outstanding water and sewer debt has been an effective tool for managing past due water and sewer bills. With the lien sale reauthorized for FY25, the system has already benefitted from improved revenue collections. DEP has collected over $130 million as of late April in response to pre-sale warning and actual lien sale notices.

That, along with DEP and the Water Board’s proactive customer outreach, has helped to get more customers with outstanding debt into payment agreements and into good standing. Almost 25% of all outstanding debt is in a payment plan with DEP, an increase of almost $200 million since December 2022.

Additionally, DEP’s expanded use of water service shut-offs for large debtors in 2024 resulted in over $18 million in payments collected, and another $21 million committed from customers entering into payment agreements. The legal referral program has also expanded, with over $24 million in accounts receivable referred to outside counsel and nearly $4 million collected so far in FY25.

DEP continues to focus its collections efforts on unlocking payments and resolving disputes with large debtors.

Capital Investments

Large-scale capital improvements that will continue to be funded by the proposed increase include the ongoing construction of the following projects: the $1.6 billion combined sewer overflow retention tanks for the Gowanus Canal, the $2 billion repair of the Delaware Aqueduct, and the build-out of a $2.6 billion comprehensive drainage system for Southeast Queens.

DEP is on track to reach or exceed $3 billion of capital commitments this year as part of a $33.3 ten-year billion capital program. The capital plan includes $3.8 billion of newly approved funding from earlier budget cycles, including:

• $3.2 billion of new Newtown Creek funding and $253 million for work involving the Gowanus canal
• $238 million for state of good repair work on system wastewater facilities
• $31 million for pumping station resiliency
• $40 million for cloudburst stormwater management work in Montebellier Park in Southeast Queens
• $86 million for wastewater system work related to the anticipated Jamaica neighborhood rezoning

Historic Drought

The City responded decisively to drought conditions earlier in the fiscal year, with water supply to the city continuing without interruption. Between November 2024 and January 2025, the City's water supply system was under drought alert conditions for the first time in 20 years. During the drought watch and subsequent drought warning, DEP launched a public engagement campaign to alert the public about the drought and encourage water conservation. Construction activity and reservoir management was adjusted to accommodate changing conditions. The drought was lifted on January 3, 2025. Strategic decision-making by DEP, conservation efforts by New Yorkers, and favorable weather conditions have together contributed to the replenishment of the city's reservoir system—ensuring a stable water supply for millions of residents and eliminating the risk of a water shortage.

Rental Payment

The City’s financial plans include a forecast for rental payment requests from the water and wastewater system pursuant to the terms of the Water Board’s lease of city water and wastewater infrastructure. The projections include $303 million in FY26 from water rate proceeds.

NYC Water Rates are Below the Average of Large U.S. Cities

New York City water rates are more than 18% below the average for the 30 largest U.S. cities, as measured using typical single-family residential water usage of 70,000 gallons/year.

Source: Amawalk Consulting Group, charges for all cities reflect rate schedules in effect on February 1, 2025.

What the Proposed Rate Would Mean for an Average Customer

If the proposed 3.7% water rate increase is adopted by the Board, customers would see the following changes to their bills:

• A typical single-family homeowner will see an increase from $1,181/year to $1,224/year for water and sewer bills—an increase of $3.60/month (based on an average consumption of 70,000 gallons of water per year).
• A typical multi-family unit with metered billing will see an increase from $877/year/unit to $909/year/unit—an increase of $2.67/month (based on an average consumption of 52,000 gallons of water per year).

Keeping Our Water Affordable

DEP’s world-class drinking water remains one of New York City’s best bargains, and the agency is committed to maintaining a rate and billing structure that keeps costs reasonable for customers facing affordability challenges. DEP therefore recommends that the Water Board reauthorize and enhance customer affordability programs to increase credits and expand eligibility:

• Home Water Assistance Program: Credit increased by nearly 10%, from $145 to $159, to benefit 96,500 low-income households.
• Multifamily Water Assistance Program: The program offering a $250 credit to be expanded to reach 20,000 more affordable residential units—for a total of 65,000.

DEP also recommends the reauthorization of the Multi-family Conservation program, which guarantees a full-year per apartment unit rate for buildings with meters and water efficiency fixtures, and the Leak Forgiveness program, which provides leak forgiveness customers experiencing unusual and above-normal levels of water consumption.

Improving Customer Service

The rate schedule includes several proposed administrative policy amendments designed to simplify and ease costs for a series of customer billing terms. These include:

• Increasing reimbursements for customer-installed meters for the first time since 2010, with a proposed 50% increase in the reimbursements amount
• Providing customers that are out of compliance with the plumbing code in a way that could provide them access to unmetered water with a new 30-day warning and cure period before penalty charges are assessed
• Creating more flexible terms for the Leak Forgiveness and Meter Bill Cap programs to enable more applications and credits
• Easing the process for customers with medical exemptions from service terminations to obtain and keep their certifications
• Increasing denial of access fee from $250 to $500 but ensuring it is now fully refundable under most circumstances once access is granted

Rate Hearings

The Water Board is responsible for considering and adopting water and wastewater rates following the proposal and subsequent public hearings. The Water Board will be holding in-person public hearings in each of the five boroughs on the proposed rates:

• Monday, May 27 at 6:00pm: Staten Island (Bernikow JCC, 1466 Manor Road)
• Wednesday, May 28 at 6:00pm: Brooklyn (Saint Francis College, 179 Livingston Street)
• Thursday, May 29 at 6:00pm: Queens (JFK Jr. School, 57-12 94th Street
• Monday, June 2 at 6:00pm: Bronx (Mercy University, 1200 Waters Place)
• Tuesday, June 3 at 2:00pm: Manhattan (NYC OMB, 225 Greenwich Street, 8th Floor)

The public is welcome to submit written testimony or comments to the Water Board by email at nycwaterboard@dep.nyc.gov, or by mail to NYC Water Board, 59-17 Junction Blvd., 8th Floor, Flushing, NY 11373. Following the public hearings, the Water Board is scheduled to meet on June 6, 2025, at 8:30 a.m. to consider and adopt an FY26 budget and water and wastewater rates; the new rates would become effective on July 1, 2025.

DEP manages New York City’s water supply, providing approximately 1 billion gallons of high-quality drinking water each day to nearly 10 million residents, including 8.5 million in New York City. The water is delivered from a watershed that extends more than 125 miles from the city, comprising 19 reservoirs and three controlled lakes. Approximately 7,000 miles of water mains, tunnels and aqueducts bring water to homes and businesses throughout the five boroughs, and 7,500 miles of sewer lines and 96 pump stations take wastewater to 14 in-city treatment plants. DEP also protects the health and safety of New Yorkers by enforcing the Air and Noise Codes and asbestos rules. For more information, visit nyc.gov/dep, like us on Facebook, or follow us on X, formerly known as Twitter.