For the first time in over a decade, New York City is putting water shutoffs on deck as possible penalties against building owners who refuse to pay their utility bills, Mayor Adams announced Monday.
The beefed-up enforcement against utility scofflaws comes as the city estimates it is owed more than $800 million in overdue water bills, Adams and Department of Environmental Protection Commissioner Rit Aggarwala said in a press conference unveiling the initiative. Roughly half of that debt piled up over the course of the COVID-19 pandemic, when many collection efforts were put on ice due to state-level emergency orders, Aggarwala told reporters.
Under the new initiative, property owners who have been delinquent on their water bills for at least 180 days will face shutoff threats, according to Adams administration officials.
The process isn’t automatic.
Rather, delinquents will be issued final notices informing them they have to address their debt within 14 days or see their taps plugged, officials said.
“We don’t want to shut off anyone’s water. The goal is to keep water on, but we can’t overburden taxpayers who are following the rules,” Adams said at City Hall, noting that the per-gallon rate for water goes up when lots of consumers don’t pay their bills.
The city has not used shutoff threats as an enforcement mechanism since 2009, Aggarwala said. The reason is that the primary enforcement tool used by the administrations of former Mayors Michael Bloomberg and Bill de Blasio was selling liens on property utility debts to private investors — a controversial system that expired last year.
Meantime, state emergency orders that suspended enforcement expired last year, paving the way for the city to reintroduce shutoffs.
Initially, officials said the city will only focus on leveling shutoff threats against “high-value” properties.
One such property is the D&D Building in Midtown Manhattan, where Adams said Department of Environmental Protection workers showed up Monday morning to plaster final shutoff notices on the front door.
The office building, which is owned by billionaire real estate mogul Charles Cohen, has failed to pay more than $420,000 in water bills to the city, officials said.
“Those are real dollars, and we have to recoup them,” Adams said.
A few hours after the final shutoff notices went up, Adams said managers at the D&D Building called the Department of Environmental Protection hotline to say they intend to pay up before the deadline.
Other properties that will face shutoff threats in coming days include 50 office buildings that owe the city a combined $7 million in water bills, Aggarwala said. He said there are also two single-family “mansions” that together owe more than $100,000.
Officials declined to provide addresses or other identifying information on the other utility delinquents, citing privacy concerns.
As a carrot to the stick, the administration is extending a utility debt forgiveness program that will cancel interest fees for property owners who settle their debts in full by May 31. Those who can’t pay their full debt by then will get 75% of interest fees canceled if they pay half of what they owe by the deadline.
The debt forgiveness program, which the administration first launched in January, has already brought in more than $80 million from delinquent water utility accounts, saving property owners $12 million in late fees, according to officials.
While the focus of the shutoff action is initially expected to be on owners of expensive real estate, Aggarwala said enforcement will eventually target all overdue accounts. He added that there are tens of thousands of buildings across the city that with overdue debt.
“We are starting with buildings where we believe there’s an ability to pay, but we will be working down that list,” Aggarwala said.
The effort comes on the heels of Adams rolling out his executive budget proposal for the 2024 fiscal year.
From a budgetary perspective, Adams said at Monday’s news conference it is ”extremely important” to ramp up collections on utility bills.
“We have to use the projections of our water bills as part of our overall analysis of how we balance the budget,” he said. “It impacts our ability to provide goods and services to the people of the city.”