Fluoridation Costs Increase Water Bills in NYC

PRIOR HISTORY:

 [***1] 
 

Proceeding pursuant to CPLR article 78 (transferred to this Court by order of
the Supreme Court, entered in Albany County) to review a determination of
respondent Commissioner of Environmental Conservation concerning certain water
rates to be charged by petitioner.

DISPOSITION: The determination is confirmed, without costs, and petition dismissed.

COUNSEL: Paul A. Crotty, Corporation Counsel (Gail Rubin of counsel), New York City,
for petitioner.

 

Dennis C. Vacco, Attorney-General (Kathleen Liston Morrison of counsel),
Albany, for respondents.

JUDGES: Cardona, P. J., White, Spain and Carpinello, JJ., concur.

OPINIONBY: Casey

OPINION:

 [*1005] 

 [**138] 

Casey, J.

When upstate municipal corporations or water districts buy water from the New
York City water supply system, they must pay New York City the fair and
reasonable water charges or rates for the water that they take (see, Administrative Code of City of NY
§ 24-360 [a], [b]). Upon the application of either party, the rates will be fixed
by respondent Department of Environmental Conservation (hereinafter DEC) after
hearing all interested parties (see, Administrative Code

 [**139]  of City of NY
§ 24-360 [b]).

 [***2]  These charges or rates may not exceed the
charges or rates charged by New York City to persons using water in

 [*1006]  the City (see, Administrative Code of City of NY
§ 24-360 [c]). The charges or rates are determined on the basis of the actual
total cost of the water to New York City, after deducting from the total
costs all construction costs and expenses of operation, maintenance and
carrying charges incurred in connection with the distribution and delivery of
the water within New York City limits (see, Administrative Code of City of NY
§ 24-360 [c]).

In 1992, petitioner approved an increase in the rate
for upstate users to $ 165.23 per million gallons (hereinafter /MG) for phase
II (eff July 1, 1993) of a two-year phase period. Westchester County
challenged petitioner’s proposed rate based on a report prepared by its own
consultant, which would reduce the
rate from $ 165.23/MG to $ 153.71/MG. In the hearing conducted by DEC, an
Administrative Law Judge determined the rate to be $ 158.31/MG and phased it in
over two years, 87% in the first year and increasing that by 13% in the second
year. Respondent Commissioner of Environmental
Conservation (hereinafter
 [***3]  the Commissioner) determined that the rate set by the Administrative Law Judge
was fair and reasonable, as were the percentages of the phase-in, so that the
rate charged by petitioner to upstate communities which take water from the New
York City water supply system should be $ 137.73/MG effective July 1, 1992 and
$
158.31/MG effective July 1, 1993. Petitioner commenced this CPLR article 78
proceeding seeking to annul certain portions of the Commissioner’s
determination.

Initially, petitioner claims that the Commissioner’s use of fiscal year 1988 as
a basis for estimating fiscal year 1990 chemical costs was
not supported by substantial evidence and was, therefore, improper. Because
the cost of
fluoride increased 150% and the cost of chloride increased 12% from fiscal year 1988 to
fiscal year 1989, the Administrative Law Judge concluded that such drastic
increases were isolated and unusual instances and provided no reasonable basis
for estimates of
future chemical expenses. As a result, the Administrative Law Judge made a
downward adjustment from the fiscal year 1989 costs of $ 3,391,081 to the
fiscal year 1988 costs of $ 1,839,040. Petitioner objects to this adjustment
and contends
 [***4]  that there was a reasonable basis to conclude that fiscal year 1989 chemical
costs were
a well-considered estimate of future expenses.

The record demonstrates, however, that petitioner spent $ 2,625,000 on chemical
costs in fiscal year 1992 and $ 3,391,081 for the fiscal year 1989, a figure
that is substantially higher than the costs in 1992. Petitioner further argues
that the decision

 [*1007]  to rely on fiscal
year 1988 chemical costs, rather than fiscal year 1989 costs, or fiscal year
1988 costs raised to a reasonable approximation of fiscal year 1990 costs, was
entirely unjustified by the record and arbitrary and capricious. However,
having determined that the unusually high increase of costs between 1988 and
1989 was an
isolated event, it was reasonable for the Commissioner to use fiscal year 1988
chemical costs as the basis and add only 5% to the computation to account for
inflation over that period. We conclude, therefore, that the Commissioner’s
adjustment of chemical costs was supported by substantial evidence (see, Matter Marinelli

Constr. Corp. v State of New York, 200 AD2d 294, 296).

Furthermore, we believe that the Commissioner acted within the scope
 [***5]  of his authority in phasing in the increased rate. The Commissioner has been
given the power to fix fair and reasonable charges or rates to be charged by
petitioner to upstate communities after hearing all
interested parties (see, Administrative Code of City of NY
§ 24-360 [b]). This rate increase was the first increase in 20 years and was
admittedly substantial. Petitioner cannot complain of spreading the
implementation over a two-year period when petitioner itself proposed to
implement the increase
over two years by imposing 87% of the rate in the first year and increasing
that by 13% in the second year. Therefore, the Commissioner acted reasonably
and within his power in fixing the rate for the 1992 fiscal year at $ 137.73/MG
and $ 158.31/MG for the 1993 fiscal
year and

 [**140]  in exercising his discretion in phasing that rate in over a two-year period.
Accordingly, the determination is in all respects confirmed.

Cardona, P. J., White, Spain and Carpinello, JJ., concur.

Adjudged that the determination is confirmed, without costs, and petition
dismissed.

http://actionpa.org/fluoride/lawsandcourts/ny-fluoride-costs-go-up.html