Appeals Court Strikes Down Mayor de Blasio’s Controversial Water Bill Credit

February 2017

In 2016, the City of New York illegally raised water rates by 2.1%, while it simultaneously granted a $183 bill credit to all one, two and three family homeowners. An enormous swath of New York City real estate owners and renters were denied that credit, and when they were, the Rent Stabilization Association (RSA) and several of its members called on Herrick.

Working together with RSA, which represents the interests of 25,000 New York City property owners and approximately one million units, our litigators fought the New York City Water Board’s egregious sidestep of New York State's Public Authorities Law.

Less than two months after Mayor de Blasio announced the controversial bill credit, we secured a temporary restraining order, followed by an order from the New York County Supreme Court invalidating the rate increase and bill credit.

And yesterday, the New York State Appellate Division, First Department ruled 3-1 in favor of our clients, saying that the New York City Water Board lacked a rational basis to award the credit in the manner that it did. In securing this victory, Herrick litigators Michael Berengarten and Jared Newman:

  •   Preserved a $46 million water system surplus from being misdirected by the City. 
  •   Prevented the City from raising water rates on all ratepayers in FY 2017, saving an additional $76 million (required to fund the credit). 
  •   Stopped the City from squandering $122 million in arbitrary bill credits, made regardless of economic need and without any rational water-related purpose. 

Michael told Reuters, "Board members are appointed by the mayor, and [they] abdicated their responsibilities to achieve the mayor’s political goals." The New York Times, The Wall Street Journal, The Real Deal and other outlets also reported on the impact of our win.

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© 2017 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.