Deadbeats at EDC

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The city’s Economic Development Corporation owes a bloated $4.5 million in unpaid water bills spanning the past 22 years, the city comptroller announced this week.

Comptroller William Thompson’s audit found that the EDC, a quasi-public entity that promotes economic growth, failed to contact the Department of Environmental Protection (DEP) to ask why it wasn’t being billed for water and sewage use.

Thompson said DEP was unaware that the Army Terminal had been leased to EDC, and EDC never asked why it wasn’t receiving the bill.

“It is unconscionable that the Economic Development Corporation would not pay these bills or collect the costs from its sub-tenants since 1986,” Thompson said.

“During this time, the city has made it incredibly difficult for average New Yorkers to pay their bills. A single family homeowner has watched the city’s water bill skyrocket by 464 percent over the last 22 years, while the terminal has watched its bill go up from zero to… zero!” he continued.

Under the lease agreement it has with the city to operate the 97-acre terminal in Sunset Park, the EDC is responsible for the payment.

Janel Patterson, an EDC spokesperson, Thompson’s $4 million estimate over 20 years is likely “grossly inaccurate due to incorrect assumptions on occupancy, water rates, etc.”

Still, she said, DEP is working with EDC and tenants of EDC properties to ensure that a resolution is reached on all properties, “as expeditiously as possible.”

She said that “going back decades,” water bills for EDC-managed property were not sent on “a consistent basis.”

“Under the Bloomberg Administration, this problem was identified, and for more than a year, DEP and EDC have been working to resolve the issue,” she said, adding that a resolution was reached on the terminal issue in April.

“In the course of rectifying the long-standing issues with DEP billing, it was agreed that the reasonable solution was for the agencies to make back payments for the past two years and to pay quarterly from now on,” Patterson said.

The DEP, which manages the New York Water Board, recently sent EDC a bill for $479,000, covering water and sewage for the past two years.

This is not the first time that EDC failed to make sure its tenants paid water and sewage bills, Thompson said.

Last year, in another audit, the comptroller discovered that Astoria Studio Limited Partnership II, also overseen by EDC, did not pay $335,000 in water and sewer charges for more than a decade.

The reason once again: Astoria failed to ask DEP why it wasn’t being billed, according to Thompson.

Once auditors uncovered this, DEP dispatched an inspector to the property and then billed Astoria’s account $135,237 for water and sewer use from April 2002 to April 2006.

In both of these cases, the city has lost millions of dollars in revenue because New York Water Board rules preclude DEP from billing customers for water and sewer use that is more than four years old.

“New York City taxpayers have lost the benefit of countless dollars as a result of the city’s lax oversight,” Thompson said. “These agencies simply must do a better job, because their failure means your tax dollars.”

Meanwhile, homeowners are expected to see their water bills increase in the near future, courtesy of a 14.5 percent rate hike.

Updated 3:48 pm, October 19, 2011
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