90% of Scarsdale Residents Will Subsidize 10% for Water Use

In my continuing analysis of the proposed Scarsdale water rate changes for 2018, I decided to examine the rate changes using household consumption data I obtained from the village. What I found was disturbing.

The net effects of a 12.28% increase to the base water rate (1-50 units consumed) and a 3.76% reduction of the excess rate (> 50 units consumed) yields an additional $105,592.65 for water-related capital projects. This calculation was based on residential water consumption for the last four billing periods. However, the cost of the excess rate reduction alone is $127,080.00. Thus, the amount of money awarded to excess water consumers because of the rate reduction is actually GREATER than the amount we are collecting to fund important capital projects.

While it is true that excess water users also participate in the base rate increase, I have already pointed out in previous posts that the combined effects of an increase in the base rate and a decrease in the excess rate has created an overall regressive adjustment to water charges. The regressive nature of the proposed water rate changes can be clearly observed in the plot lines of the following two graphs:

Based on residential water consumption for the last four billing periods, 631 households that consume the most water will see a reduction in their water bills while 4,792 households (87%) will subsidize this rate reduction with an increase to their own bills. (107 households break even.)

There is a much simpler way to raise the same $105,592.65 that the village-proposed rate changes combine to achieve. Keep the excess rate where it is now ($9.975 per unit) and lower the increase in the base rate from 12.28% to only 5.57% or $3.01 per unit. The additional 6.71% of the proposed increase to the base rate is purely a subsidy for the excess rate decrease and seems unwarranted if we need additional funding for water projects. This is a case where ALL residents should share the cost. Under my plan, no household would see an increase of more than $8 per bill if their consumption matches last year.

At the April 10, Board of Trustees meeting, Trustee Finger suggested that we could "fix" the rate problem I identified next year. However, given the obvious subsidy effect that has been unearthed by combining rate and consumption data, I would urge the Board of Trustees to fix this issue now before it is voted upon and approved for 2018.

As I have stated previously, here are my concerns about the rates as proposed:

1) The change from 2017 to 2018 is regressive. Low volume users pay an increase that is six times the state cap for property taxes and the most excessive consumers of water will pay almost 4% less than last year.

2) The March 14 water rate change letter from the village focuses on a message of shared sacrifice when in fact only those who consume less than 97 units in a billing period are participating in the sacrifice. The cost of infrastructure repairs should be shared by all residents regardless of the amount of their water consumption.

3) My initial research suggests that Scarsdale may actually be the most excessive per-household consumer of water in the entire NYC system. While this will go largely unnoticed by the NY metro public as long as our reservoirs remain near capacity, we risk aggressive retaliation in the next drought. No one outside Scarsdale will have much sympathy for us and rationed water will affect all of us including those of us who have been conservative users of water all along. As a community we need to put our house in order and demonstrate that we really deserve the sustainability image we aspire to cultivate.

To reiterate my proposed solutions:

1) Keep the $9.975 excess rate of last year and raise the base rate by only 16 cents to $3.01. This will mean that all consumers of water at 50 units or more will only pay $8 more per billing period than they did last year. This plan even preserves a reduction of the base rate multiplier for excess users from 3.5X to 3.314X.

2) Later, as we restore our capital reserves, we should abandon the two tier pricing system. We should consider at least three tiers and the top excess rate should not apply until a much higher level of consumption. Careful thought will be needed to be sure the introduction of a lower intermediate rate doesn't create its own conservation disincentive so I am not prepared to propose the exact rates or consumption thresholds now without further study of consumption patterns.

3) Expand our guidance and approaches for water conservation to be sure that all types of water consumption have avenues for conservation. For example some Scarsdale residents use a cover for their pools. Such an approach can reduce evaporation by 30 - 50%. The village letter to residents did offer a number of good suggestions for reducing the water needed for irrigation.

4) Water wells may be a suitable alternative for large irrigation systems or even pool use since this water is usually treated anyway. While this does not reduce consumption it still reduces stress on our municipal water system.

Scarsdale has been inching toward increased sustainability. Restoring 2017's excess rate of 9.97 corrects what may simply have been a misunderstanding of the multiplicative effects of a reduced multiplier for the excess rate. Fixing this before the Board of Trustees vote on the 2018 budget is low hanging fruit and we eliminate the moral hazard and terrible optics of a rate reduction to the largest consumers of water in a year when we are trying to restore our capital reserves.

Brice Kirkendall-Rodriguez is a media and technology professional. In Scarsdale, he is the President of the Old Scarsdale Neighborhood Association, Assistant Cub Scout Master, and member of multiple committees in the Scarsdale Forum.