Testimony of Rohit T. Aggarwala, Commissioner NYC Department of Environmental Protection before the NYC Council Committee on Finance

November 13, 2025

Good afternoon, Chair Brannan and members of the Finance Committee. I'm Rohit Aggarwala, Commissioner of the Department of Environmental Protection and the City's Chief Climate Officer. I'm joined by DEP CFO Nerissa Moray, and Deputy Commissioners Albert Kramer and Beth DeFalco.

We appreciate the opportunity to speak about the City's annual lien sale. Thanks to the thoughtful reforms passed by the Council in 2024, the 2025 sale was the most transparent and straight-forward ever for property owners-especially those who are struggling. Homeowners were given more notice, more options, and more help. DEP also went above and beyond to help property owners avoid the sale entirely.

Our water system depends on people paying their water bills. When some people don't pay, everyone else must make up the difference-or DEP must invest less in the system. If DEP lacks the ability to enforce against non-paying water user, the reality is that some people will take advantage of that loophole. That would ultimately mean higher water rates for every other New Yorker or fewer investments in the infrastructure that keeps our city safe and resilient. That's simply not fair.

Why Paying Your Bill Matters

DEP provides the clean drinking water that every New Yorker depends on, treats our wastewater, and manages stormwater across the five boroughs. We're responsible for a ten-year, $33 billion capital plan-including City Water Tunnel No. 3, the new disinfection facility at Hillview Reservoir, and stormwater projects in every borough.

All of this is funded almost entirely by the $4.5 billion New Yorkers pay each year in water bills. The Water Board sets rates to cover our costs, and the Water Finance Authority issues bonds backed by those payments. There is no general tax revenue, and very little in state and Federal funding. It is a closed system: water bills fund the water system.

So if collections fall short, we have two choices: raise rates or cut investment. There's no outside money to fill the gap.

Helping New Yorkers Pay

The good news is that most New Yorkers pay on time, and we work hard to help those who struggle. DEP offers multiple affordability programs:

• The Home Water Assistance Program, serving nearly 100,000 low-income homeowners, provides annual credits of up to $159.
• The Multi-Family Water Assistance Program, which helps affordable housing, saves properties up to $250 per unit each year.
• Leak Forgiveness and discounted prepayment programs help those facing unexpected bills.

In the past year, we expanded eligibility for these programs to tens of thousands more homes and apartments. And if someone does fall behind, we offer flexible payment agreements-up to 10 years to repay, often with no money down. That's more generous than almost any water utility in the nation. Our goal is always to help people stay in good standing before enforcement ever becomes necessary.

Why the Lien Sale Works

When a property owner doesn't pay, DEP has few enforcement tools. We can shut off service for single-family homes, but we avoid doing that for multi-family properties because we don't want to punish tenants. Our other option is to sue-or to use the lien sale.

It is important to note that the lien sale is about enforcement, but not punishment. Entering a payment plan - again, with no money down-removes a property from the lien sale list. We also remove customers who have legitimate disputes or other hardships.

Leading up to this year's sale, DEP, DOF, and HPD carried out a record amount of outreach: nearly 500,000 mailings, 77,000 phone calls, and 6,500 door knocks, plus dozens of community events with Council members.

And it worked. Only 0.1% of all DEP customers ultimately had a lien sold-just one in a thousand. Yet the process brought $374 million in overdue revenue into good standing-$180 million in payments, $172 million in payment agreements, and $22 million from the sale itself.

That's the point: the threat of the lien sale works. It motivates payment, keeps rates fair, and maintains the integrity of the water system.

Fairness and Accountability

Without enforcement, people stop paying-and not only because they can't afford to, but because they realize there's no consequence if they don't. We had one case where a household stopped paying their water bills for several years while at the same time putting in a swimming pool. They only paid when we threatened a water shut off.

When lien sale authority expired in 2006, DEP lost $100 million in one year. This led the Water Board to plan for a 18.5% mid-year rate hike in 2007 to make up for that lost revenue. Happily, the lien sale was reauthorized, revenues stabilized, and the rate hike was avoided.

Similar issues emerged recently. During the years without lien sale authority after 2019, unpaid water bills doubled-from $600 million to $1.2 billion. Restarting the sale in 2025 helped reverse that trend and allowed us to keep this year's rate increase to just 3.7%, instead of the 8.5% we expected. That's real savings for every New Yorker, including renters who benefit from lower operating costs in apartment buildings.

Here's What is at Stake

The Office of Management and Budget financial impact statement estimates that the legislation under consideration today could reduce DEP's annual revenues by $105-$150 million. To make up that loss, we'd have two options:

Option 1: Cut capital investment

A recurring loss of $105-$150 million in annual revenue translates to about $1.75-$2.5 billion less in capital investment. While some projects are federally mandated - like Hillview Reservoir or the Gowanus Canal cleanup-others are not.

Unfortunately, that means cuts would likely fall on stormwater and flood-protection projects-the kind that we know New Yorkers are demanding, including:

• The $2.78 billion Southeast Queens sewer upgrades;
• The $390 million Bushwick sewer expansion;
• The $146 million Jewel Streets flood relief project in East New York; and
• The $51 million Dyker Heights drainage project.

These are the very projects that protect New Yorkers from the floods and extreme weather we know are coming more often.

Option 2: Raise rates

Alternatively, if we believe that our current capital plan must be kept intact, we expect to need to raise rates to make up for revenue shortfalls. To make up for the revenue this set of legislation may put at jeopardy could require a mid-year rate increase or an additional increase over and above the 7% forecast for FY 2027.

We take this issue seriously enough that we have convened a meeting of the New York City Water Board, which sets rates, for next week. While we have not yet decided what to ask for, this would be the first step in setting in motion a mid-year rate hike to make up for lost revenue. This is a prophylactic step in case the Council moves forward with this suite of legislation, but we hope it will not be necessary, in which case we will terminate the meeting process.

On the Proposed Legislation

We support the Council's goals of transparency and fairness, and we've worked closely with you to make those real in last year's reforms. But we are deeply concerned that several bills being considered today-particularly Intro 1407, and the proposals to transfer lien authority to a land bank (Intros 1420 and 570)-would effectively undermine the lien sale.

Requiring Council approval for each sale or putting enforcement in the hands of an outside entity would create conflicts of interest and uncertainty that could destabilize the entire system. Some advocates have even endorsed these bills by saying they would "end the lien sale." If that's the case, we must plan and budget as though the lien sale no longer exists-which would mean higher rates or slower climate resilience investments.

We do, however, support reasonable improvements such as those in Intros 1411 and 1419, which enhance reporting and notification. DEP is always willing to make this process clearer, more compassionate, and more accountable-so long as it still works.

In Closing

Thank you for the opportunity to comment on this legislation. I look forward to your questions.