Mayor Promises to Continue Fight Against Water Rate Ruling

In Matter of Prometheus Realty Corp. v. New York City Water Board, the Appellate Division, First Department of the State Supreme Court ruled 3 - 1 that the city’s water board lacked a rational basis to award the credit to owners of one- to three-family homes, while leaving other property owners ineligible.

Last April, Mayor De Blasio promoted the one-time credit, to be funded with a water board surplus, to cut annual water and sewer bills by 17 percent to 40 percent for about 664,000 homeowners. His proposal also included a 2.1 percent rate increase, and was to take effect last July 1.

In its decision, the appeals court said the credit “cannot be reconciled” with the city’s budgetary needs, and the water board had no basis to conclude that small homeowners were “more needy” than other property owners or paid too much relative to them.

Following the ruling, Mayor De Blasio held a press conference to discuss the ruling and next steps. At the press conference, the mayor emphasized the dissenting opinion. In the dissent, Justice Marcy Kahn said the water board had authority to help “overburdened” lower and middle-class homeowners, including the elderly, facing rising water rates. And the De Blasio administration plans to rely on the argument in the dissenting opinion to pursue an appeal with the state’s highest court, the Court of Appeals.

At the press conference, Corporation Counsel Zachary Carter also spoke in support of the dissent. He stated, “The dissent applied the correct legal standard and that is that unless the decision of a regulatory body is arbitrary and capricious, the court has to defer to that decision. If the court had a different view of what was rational that doesn’t count under the prevailing Court of Appeals laws. They don’t have to agree with the particular rationale, they just have to decide that that rationale that was offered was not arbitrary and capricious.”