State of New York Department of Public Service
Three Empire State Plaza
Albany, NY 12223-1350

Re: United Water New Rochelle Case 14-W-0006

Aug. 20, 2014:  This statement is made in opposition to the proposed rate increases requested by United Water. The undersigned represents the Town of Eastchester, which receives its water supply from United Water. I have personally appeared before you and submitted written statements in 2005 and 2009 opposing the then sought increases by United Water.

The Public Service Commission ratified the rate increases with little or no adjustment. This was a grave disappointment to the residents of the municipal consortium created to oppose the obscene increases sought by United Water.

The current application by United Water seeks an increase in excess of 23% over a three-year period. In addition, the plan also includes a surcharge increase in excess of 20% and additional hydrant charges. I submit to the Public Service Commission that these increases are unnecessary, unjustified, and excessive. Counsel for our municipal consortium has submitted a detailed argument regarding several points, but the underlying problem is that the rate increase is simply too much.

Unfortunately, the shareholders of United Water have been prioritized over the ratepayers and taxpayers of our Town. I do not believe that anyone would object to a reasonable return on their investment but a benchmark of 8-10% is ludicrous and frankly offensive in this current economic state. The Town of Eastchester is earning less than 1% on our general fund sitting in competitive commercial banks. Your average rate payer is earning about the same in his/her certificates of deposit and mutual fund/stock portfolio (which may fair only slightly better). United Water's counsel and representatives constantly state that they have tax rate impositions, operational increases and street opening fees that are greater than the rate of inflation or the Consumer Price Index rates. So do we!

Let me restate that your function as the Public Service Commission is to protect the interest of the public and not the interests of private shareholders who are not forced to purchase or retain United Water stocks. Ratepayers have no choice. There is no alternate water company to supply water to Eastchester.

The Governor and the state legislature have imposed a tax levy cap upon our municipal governments which this year was 1.66%. The 2015 tax levy cap is 1.56%. The tax levy cap was imposed without any unfunded mandate relief in any form whatsoever from Albany. There is absolutely no reason whatsoever why you should not impose the same 1.56% cap upon United Water's proposed annual rate increases. It is your responsibility and charge as representatives of the public and appointees of the governor. United Water often uses the shield of being a "quasi-governmental agency" when it benefits United Water. It is time they are subject to the same laws and regulations as the municipalities and residents they serve.

Why not compel United Water to merge with other municipal water districts or private water districts as a prerequisite for a modest rate increase. There is no other company to provide water to our town. United Water is clearly a monopoly and you are our only source of protection and control.

Regarding the requested fire hydrant maintenance charge increase, it is important to note that the charges levied by other water companies in neighboring towns is a fraction of what United Water is requesting. The Town of Harrison (similar in size and population and a non-United Water municipality) fire hydrant charges are approximately $300 per hydrant per year. Pursuant to the proposed increase presently sought by United Water, our hydrant charges will be almost $1,400 per hydrant per year. Maintaining a fire hydrant in Harrison can be no different than that in Eastchester, so why the price difference? Other than random hydrant flushings (which are few and far between) United Water has little or no hydrant maintenance activity in Eastchester.

Further regarding the hydrant maintenance charge increase, United Water's application needs to be checked and scrutinized so overcharging does not occur within the municipalities that opted out of paying hydrant maintenance costs directly (thereby shifting the payment to rate payers directly by monthly surcharges). Eastchester did not elect to pass on the hydrant charges to our rate payers for the following reasons, including but not limited to: first, the loss of a portion of the income tax deduction for real estate taxes on everyone's annual return; second, the law did not address the relationship of the Fire District (which contributes a portion of the payment made by the Town of Eastchester to United Water); thirdly, it is important not to overburden schools, hospitals and churches in our community with added surcharges; fourth, no clear method of allocation or proration was proposed in the law ( the number of hydrants does not equal the number of meters); fifth, individual rate payers do not possess the means or the ability to stand up to United Water on their own; and lastly, possible abuses could occur during the implementation of the shift of payment to rate payers directly rather than municipalities.

I concur with Legislator Sheila Marcotte on that final point above. United Water utilizes a "per meter" method of surcharging rate payers for the pass along costs of hydrant maintenance. Using a very conservative number of approximately 7,500 meters in our town and applying $10 per meter per month (current ranges charged in New Rochelle vary between $8 - $12 per meter per month) Eastchester rate payers would have been handing over approximately three quarters of a million dollars to United Water when the actual bill from United Water to the Eastchester Town government is little more than two thirds of that amount. It appears to be a back door windfall for United Water once again.

Governor Cuomo has appointed you to protect the interests of the citizenry of this state. With that responsibility comes the power and authority to reject unjustified rate increases from United Water. On behalf of the 32,000 residents of Eastchester, I implore you to protect the rate payers from United Waters proposed increases.

Supervisor Anthony S. Colavita
Town of Eastchester

Pictured here:  Anthony S. Colavita, Supervisor, Town of Eastchester
Photo courtesy Office of Anthony S. Colavita 

Editor's note: MyhometownBronxville does not fact-check statements in letters to the editor, and the opinions do not necessarily reflect the thinking of its staff. Its objective in publishing letters to the editor is to give air to diverse thoughts and opinions of residents in the community.