Records Reveal New York’s Growing Mountain of Water Debt

On October 25, 2019, two days before her quarterly bill was due, Marie, 54, woke up to find that no water was coming out of her faucets. 

She had known she was about $800 behind on water bill payments, but hadn’t realized that her water would be shut off. “I thought I had until at least the next bill was due, on October 27,” Marie told New York Focus. 

When Marie called to have the water turned back on, Veolia, the private company that manages Buffalo’s water services, demanded she pay at least half of what she owed on the spot, Marie said–more than $400. She borrowed the money from her aunt.

Since her mother died a few years ago, Marie, who asked to withhold her last name, has struggled to make water payments that total about $300 each quarter for service to her own apartment and her mother's in their double decker house. “There was no possible way I could do more than I was doing” to catch up, Marie said.

Marie is now $1,600 behind on her water payments and faces the threat of another shutoff. When Covid-19 hit last March, her tenant stopped paying rent, and she lost all of her income and became unable to pay the water bill: “I worry about having the money to buy toothpaste, how am I going to find the money to pay for water?”

Her case is not unusual. Records obtained by New York Focus reveal a growing mountain of water debt in New York. In two of the state’s largest water systems, tens of thousands of customers are in millions of dollars in debt.

The state currently has a moratorium on water shutoffs, but that expires at the end of the month. A coalition of advocates for water affordability is pushing the legislature to extend the moratorium—and to strengthen its protections for New Yorkers in water debt.

Presented with data obtained by New York Focus, Rob Hayes, the Director of Clean Water at the Environmental Advocates of New York, said that it showed the depth of the crisis facing New Yorkers behind on water payments.

“If the current law expires, tens of thousands of families will lose protections that might be keeping them afloat right now. With so many people behind on their water bills, it is clear that state leaders need to extend and strengthen New York’s shut-off moratorium,” Hayes said.

A Growing Mountain of Water Debt

The cost of water has risen dramatically across the country over the past two decades, as federal spending cuts to aging water infrastructure left ratepayers to foot the bill. While no comprehensive study has been taken of rate increases in New York state, water affordability advocates say costs have risen in step with national trends.

Records obtained by New York Focus through Freedom of Information Law requests show that the scope of the state’s water debt crisis is greater than previously known.

Nearly ten percent of households served by Suffolk County Water Authority are at least 30 days behind on water payments. 32,789 out of approximately 360,000 residential customers owe the Authority a combined total of about $9 million, averaging about $270 per household.

Of the 186,400 residential customers served by the Monroe County Water Authority, 6,547 residential customers are at least 30 days behind on water payments, owing a total of $1,510,699, and an average of about $230. 

Alicia Simson, the internal auditor for the Suffolk County Water Authority, told New York Focus that the problem has sharply worsened during the pandemic. Water customers in Suffolk County hold about double the amount of arrearages, meaning accumulated missed payments, than they did a year ago. When the moratorium is not in effect, Suffolk County customers face shutoffs for falling two payment cycles behind or owing $200 or more in bills.

New York City has seen an increase in both the number of people who had outstanding water bills and the amount they owed in the past year, a spokesperson for the city’s Department of Environmental Protection said. The department has not responded to New York Focus’s requests for data.

Most water systems in New York don’t shut off service for nonpayment, instead taking out liens on customer properties or pursuing unpaid bills in other ways. But in Buffalo, where shutoffs are permitted, Marie is one of thousands of people who lost access to water for nonpayment before the pandemic.

According to a forthcoming report from the Partnership for the Public Good in Buffalo, a community think tank, water was shut off in occupied residences 2,518 times in 2019. Over 300 of those residences were shut off for owing less than $500. 

In cities like Buffalo where shutoffs are permitted, the mounting debt spells trouble for water access after the moratorium ends if structural changes are not made to address the affordability crisis.

“Misinforming customers of their rights”

Last June, Gov. Andrew Cuomo signed a utility shutoff moratorium, which prevented both public and private utilities from shutting off service. Advocates praised the law for providing some of the strongest shutoff protections in the nation, and in particular for requiring utilities to give customers the option to enter into interest-free payment agreements, while pointing out that it did little to address the underlying water affordability crisis in the state.

The moratorium marked an unprecedented intervention by the state into the internal operations of local water utilities, which have long been left to regulate themselves (with the exception of privately-owned water utilities). Activists want to capitalize on the moment and encourage more state-level oversight of local water systems, including more systematic data collection, and eventually more investments in water infrastructure to relieve costs for low-income customers.

The state Department of Public Service (DPS), the state agency tasked with regulating utilities, issued a rule requiring water systems to submit plans for how they would comply with the moratorium. Most water utilities have not submitted plans to the DPS, including Suffolk County and Monroe County.

Spokespeople for both water systems noted that customer rights to enter into payment plans can be found on the back of their water bills.

DPS also required utilities to provide copies of the notices they sent to customers informing them of their rights to enter into payment plans, which allow customers in arrears to negotiate “affordable” debt repayment schedules with the water utilities. But only a handful of the state’s more than 1,000 public and private water systems have actively notified customers of this right under the moratorium.

Even the few plans that were submitted by water systems often don’t comply with the requirements of the moratorium, Hayes said.

Two months after the moratorium was enacted, a coalition of advocates wrote to the DPS, saying that many of the state’s largest water systems were not complying with the moratorium — specifically, they were flouting the deferred payment agreement clause —and that they were “misinforming customers of their rights”. The letter asked DPS to take further steps to conduct outreach to water utilities and to provide form letters for them to use to inform customers about their rights under the moratorium.

The DPS did not take actions to meet any of these demands, except to encourage utilities to comply with the moratorium in further guidance the agency issued later in the fall.

A Statewide Solution?

The legislature is currently considering an extension of the shutoff moratorium and the consumer protections it contains, in a budget provision backed by Cuomo. 

Advocacy groups including the Environmental Advocates of New York, Food and Water Watch, and the Natural Resources Defense Council are urging that the provision go beyond extending the current moratorium to implement stronger enforcement mechanisms and protections for people who are left with hundreds or thousands of dollars in debt.

In addition to extending the shutoff moratorium to last for the duration of the state of emergency plus 180 days, advocates want the bill to require water systems to notify customers of their right to enter into an affordable payment plan along with every water bill they receive. 

The organizations are also demanding protections for customers with debt including a ban on interest and reconnection fees, sales of debt to a collection agency, or reporting of debt to a credit agency.

“Gov. Cuomo put forward a good baseline, but his proposal is missing key policies to ensure that no New Yorker is penalized for missing a utility bill,” Hayes said. “Many utilities are also distributing notices and payment plans that fail to comply with the law. We need state leaders to require more rigorous enforcement and force utilities to offer New Yorkers their full set of rights.”

In the long term, advocates hope that consumer protections for water customers enacted during the pandemic are made permanent, and the DPS assumes a larger role in addressing the state’s water affordability crisis. The coalition is demanding that the moratorium on shutoffs become permanent and the DPS require utilities to regularly report data on shutoffs on unpaid water bills.

In the federal stimulus bill passed in December, Congress allocated $638 million in federal relief for unpaid water bills across the country. The American Rescue Plan, passed earlier this month, added $500 million for water bill assistance. The Department of Health and Human Services (HSS) has not yet released the funds to states or provided guidance on how the funds should be allocated, and New York state has not yet adopted a plan for allocating the funds, according to Larry Levine, a senior attorney at the Natural Resources Defense Council. 

“We are pushing for HHS to allow states to ‘piggyback’ the program on existing customer assistance programs for energy utilities, in order to get it rolled out quickly and ensure that the funds are able to reach customers of all water and wastewater utilities across the state,” Levine told New York Focus. 

Additionally, Levine said, the federal assistance creates the opportunity for HHS to attach strong consumer protections to the funds, something that the Natural Resources Defense Council and other groups have been pushing HHS to do. 

Advocates in New York are encouraging the state to build on this federal funding and establish a permanent water affordability program. One vision for such a program would be to require utilities to tie water rates to income, so that customers aren’t required to spend more than a certain percentage of their income on water payments. 

In the meantime, Marie is “conscious of every drop of water” she uses as her bills stack up. “It’s a horrible thing to not know if you will have to live without water,” she told New York Focus.

This story has been updated to clarify that a ban on property liens was not included in the original water shutoff moratorium.