March 18, 2025

The Preliminary Budget for Fiscal Year 2026, The Preliminary Capital Plan for Fiscal Years 2026-2029, and The Fiscal 2025 Preliminary Mayor’s Management Report

Good morning, Chair Gennaro and members of the Environmental Protection, Resiliency, and Waterfronts Committee. I am Rohit Aggarwala, the Commissioner of the Department of Environmental Protection (DEP). I am joined today by several members of DEP’s senior staff, including Chief Financial Officer Nerissa Moray and Acting Chief Operating Officer Tasos Georgelis. We are here today to discuss the Preliminary Budget for Fiscal Year 2026, the Preliminary Capital Plan for Fiscal Years 2026-2029 and the Preliminary Mayor’s Management Report (PMMR) for Fiscal Year 2025.

I am pleased to say that New York City’s water system is in good shape. We continue to provide some of the nation’s best drinking water and do so reliably and cost-effectively. The harbor continues to get cleaner. Our record on minimizing water main breaks, sewer backups, and similar disruptions is good and our response times to resolve these issues are excellent. Our revenue collection is improving. Our revised 10-year capital plan is a healthy $37 billion. Of course, like all entities, we face challenges, including a 13% vacancy rate, the impact of inflation, uncertainty on Federal policy, and climate change. We continue to work to improve our operating efficiency and our response times on permits and approvals. In addition, there are specific program areas, such as lead service line replacements and citizen idling enforcement, where we need the council to act.

Budget Overview

Now I will turn to an overview of DEP’s expense and capital budgets. As of the FY26 Preliminary Budget, DEP’s expense budget is $1.641 billion. The FY26 expense budget reflects the agency’s and city’s priorities, particularly regarding new initiatives for improving air quality and addressing flooding challenges. DEP received:

• $849,683 in FY25 and $1,345,508 in FY26 for the Indirect Source Rule to reduce emissions from trucks going to and from warehouses, which we discussed at a hearing last month;
• $3 million ($500,000 in FY26, $1.5 million in FY27 and $1 million in FY28) for Stormwater Resiliency Mapping as part of City of Yes; and
• $488,279 in FY26 and $120,000 in FY27 for Flood Sensor Expansion.

The backbone of any organization is its workforce. I am tremendously proud of the work DEP staff perform each day. We continue to work diligently to attract and retain staff. DEP’s authorized headcount for FY26 totals 6,307, which is just 27 positions (0.4%) less than FY25. The reduction represents grant-funded positions that are added to the budget each fiscal year. We have 5,600 employees, which implies a 13% vacancy rate. Roughly 1,000 of our employees work north of the city.

I am happy to report that we have received an additional $3.8 billion to our capital plan to address critical mandated work as well as much needed state of good repair for our wastewater treatment plans. Most of this is for complying with mandates related to ambient water quality. Our capital program now totals $37 billion from FY25 through FY35. This represents a tremendous investment to our utility so we can ensure we continue to deliver the water quality New Yorkers deserve while complying with mandates and maintaining our infrastructure.

Protecting and Ensuring a Reliable Water Supply

DEP’s highest priority is to provide high-quality drinking water to half of the New York State, including not only the entire city but also roughly a million and a half residents of Westchester, Putnam, and Orange counties. We recently published our annual Drinking Water Supply & Quality Report, which, among other things, reports on the results of the more than 650,000 analysis our scientists performed on more than 46,000 samples taken from our watershed, our reservoirs, and our distribution system within the city. In addition, 2.9 million robotic monitoring measurements were taken from the upstate reservoirs. We keep a very close eye on water quality.

As I testified here last year, a key to our water quality is the Filtration Avoidance Determination (FAD) that governs watershed protections and allows us to avoid the cost of building and operating a filtration plant for the 90% of our water that comes from the west-of-Hudson watershed. As I mentioned, the FAD is up for renewal in 2027, and we believe it will need to evolve significantly in order to continue to be successful, because climate change, evolving regulations, and a resurgence of wildlife are posing new threats that cannot be addressed with old solutions. On that basis, DEP this year announced the end of its program to purchase land far from the reservoirs, in order to focus our land acquisition efforts on important—and more expensive—land adjacent to our reservoirs. DEP has its own Police Department. Our specialized officers patrol the watershed and our critical infrastructure every day. We struggle with retention because we can’t offer the same pension benefits as other police in New York State, who can retire after 20 or 25 years of service regardless of age. DEP officers must be 63 years old before they can retire because they have the same pensions as civilians. Our Police are pursuing state legislation that would erase this disparity by allowing DEP Police to have a police pension like other police departments in the state.

We maintain a system made of thousands of miles of pipes across the watershed and in front of every building in the city. The main components of this system were built more than 100 years ago. To keep them up and running for the next hundred years, we must invest in the resilience of the system. We have several major projects underway, as reflected in the capital plan, including:

• $1.1 billion for work at the Hillview Treatment Facility
• $1.7 billion for work at the Kensico-Eastview Tunnel
• $1 billion for the Ashokan Century Program, a multi-year capital program to comprehensively upgrade the water supply infrastructure at the Ashokan Reservoir.

Additionally, we are preparing for the culmination of the Delaware Aqueduct repair work. We had expected to do the repair last year but had to pause because of the drought. We are working to be able to resume that repair this year, but doing so will depend on several factors, including the weather. While we exited drought conditions in January, the current storage is still lower than usual for this time of year. We need absolutely full reservoirs in the Croton system in order to proceed with the repair again this October, so we are monitoring levels closely.

My colleagues, Deputy Commissioners Paul Rush and Beth DeFalco, testified in December about the drought. As they discussed, we learned a great deal from the experience and, among other priorities this year, we are working to update our drought protocols. Since our previous drought was in 2001, our drought protocols did not take into account much that has changed in 25 years, including automatic meter readers, our new billing system, and social media. We will take our time with this but intend to update these before the end of the year.

We have done a very strong job of maintaining our in-city distribution system of 7,000 miles of water mains. We have one of the lowest rates of water main breaks in the country. DEP has averaged between 5 to 6 breaks per hundred miles for the last few years, which is well below the national average of 25 breaks per hundred miles. When breaks occur we work to fix the problems as quickly as possible. In FY 24, on average, we were able to restore service after a watermain break in just over four hours.

Lead Service Lines and Sewer Backups

Two topics I know to be of interest to the committee are lead service lines and sewer backups. Pursuant to Local Law 1 of 2023, we published in January our report on sewer backups, backwater valves, and other ways to prevent SBUs, Protecting Your Home: Tools to Prevent Basement Sewer Backups and an Evaluation of Backwater Valves. The report found that DEP has done an excellent job of reducing dry-weather SBUs, which are caused by fatbergs or failures. These have been reduced by 75% since 2010 due to ongoing maintenance efforts. However, due to climate change, wet-weather SBUs—which are caused by too much stormwater trying to get into the sewers—are increasing. Our research identified about 74,000 properties that may be at elevated risk of SBUs, including about 59,000 one- or two-family homes. It also identified that backwater valves can be effective but are problematic in many situations, because they require annual maintenance and coordination among users of a building, which is especially challenging in multi-family homes. The report identified other solutions, such as toilet and drain plugs, that are easy and inexpensive to install, do not require maintenance, and do not post the risk of causing a backup internally. Pursuant to the law, we are currently developing a program, including looking for a federal program that could support it.

Importantly, the study also found that nearly one in three SBUs are caused by internal plumbing issues, such as rooftop downspouts being attached to the property’s sewer line. In response to this finding, we are working to expand public outreach through initiatives like the NYC Accelerator, the Rainfall Ready Campaign, and the flooding information sessions that we began holding last year. We invite the Council’s partnership to continue these sessions and share information with homeowners.

Another topic of interest is lead service lines. As I testified here last year, we believe that lead service lines should be eliminated, but we also believe that the food-grade additives we use in our water protect most users with lead service lines from exposure.

There are no lead lines in the DEP water distribution system and NYC tap water is safe to drink, but we recommend that anyone with lead plumbing or a lead service line run their water for a minute first thing in the morning before drinking it. This is a simple precaution to flush water that has been sitting in an internal lead pipe for many hours. Anyone who is concerned about the water in their home can request a free lead test kit through 311 or the DEP website.

We have been aggressively pursuing state and federal funding to replace homeowners’ lead service lines. We have received $72M in grants and interest-free loans for replacements. We have focused our replacement programs on environmental justice communities that have high concentrations of lead service lines and a median household income of less than $47,600.

In addition, we are committed to facilitating the replacement of lead service lines throughout the city, with an emphasis on executing no-cost replacements for privately owned water service lines in underserved communities. While many replacements are part of our no-cost initiative, others are necessitated by aging infrastructure. Lead service line replacements fall into various categories, the neighborhood replacement program funded by the Bipartisan Infrastructure Law, and proactive replacements during water and sewer main construction work. DEP is partnering Department of Design and Construction (DDC) to offer lead service line replacements to homeowners when we are doing water main work in their streets. We have replaced over 700 LSLs since 2019 and expect to replace approximately 2,500 LSLs in the near future.

Our neighborhood replacement program suffers from the fact that there is no requirement to replace lead service lines if a free replacement is offered. As a result, our federally-funded efforts are less effective than they should be; only 50% of eligible homeowners are signing up. The legislation the Council considered last year would address this and would require homeowners to replace their lead service lines at the time of sale, when new homeowners are likely to be making upgrades anyway. I urge the Council to act at least on those two provisions of that bill.

Meeting the Challenges of Climate Change

I have testified at length on multiple occasions on the challenge that climate change presents to DEP. Last spring, we released the 2024 Stormwater Analysis, which is the first building block in the development of a master city-wide stormwater plan. That document identified 86 locations around the city that will require resilience projects, for an estimated cost of $30 billion. We have continued work on that effort, including several key projects:

• Six sewer or storm sewer projects, including the $390 million project on Knickerbocker Avenue in Bushwick that we recently announced;
• Four Bluebelt projects now in advanced planning, with sufficient funding in this budget to realize Mayor Adams’ announced goal of a five-borough bluebelt program;
• A cloudburst project in Montbellier Park in southeast Queens; and
• Several pump station upgrades to keep sewage and stormwater moving despite larger flows and higher sea levels.

As you know, in 2023, DEP established a new Bureau of Coastal Resilience (BCR). We hope to work with the Council this year to amend the Charter to officially establish this bureau under DEP’s purview.

We reached a major milestone in coastal resilience work last month, when BCR formally took responsibility for the first 12 flood gates at the East Side Coastal Resilience project. Now, BCR is responsible for the operations and ongoing maintenance of that critical infrastructure.

It’s important to note that coastal resilience is not an eligible use of water rate revenues, so BCR’s work must be funded out of the agency’s tax levy budget, which traditionally only included our air, noise, and hazardous materials functions. As BCR’s needs expand, this is unlikely to be realistic. As a result, former Deputy Mayor Meera Joshi and I convened a Resilience Finance Task Force to explore ways to fund and finance this critical work. The task force released its findings yesterday in the report Securing a Resilient New York City: Funding and Financing Shoreline Protection, which can be found on the DEP homepage.

Air, Noise, and Hazardous Materials

The size of our water operations make it easy to overlook the critical functions DEP provides in enforcing the city’s air, noise, and hazmat codes. Our hazmat response team responded to more than 3,000 events in FY 24, including almost 400 responses to lithium-ion battery fires, and assisted NYPD at 18 major events, such as the World Series. Our air and noise inspectors processed over124,000 citizen idling complaints and issued 849 muffler noise summonses based on evidence from our camera program.

I testified last year on Intro 941, which would reform the citizens idling enforcement program. The budget should reveal the need to reform this program. Today, fully 94% of our air/noise administrative staffs’ time and 65% of our air/noise inspectors’ time is dedicated to administering this single program. As I testified, that program is currently failing to focus on neighborhoods where air quality-related health impacts are disproportionately located, which should be our first priority—areas such as Hunts Point, Sunset Park, and others. It is also a key reason we cannot currently expand the noise camera program, or do more to focus on the many dust and construction noise complaints we receive. I urge the Council to enact Intro 941 to help us redirect our resources appropriately.

Water and Sewer Bills

Most of our work is paid for by water and sewer payments, not city tax levy. As such, it is critical that we maintain a reliable funding stream, and ensure that everyone pays their bill.

We have worked this year to improve our customer service and make it as easy as possible to pay water bills. We are making major capital investments to replace our aging Automated Meter Reading (AMR) devices—now at the end of their useful lives—to reduce estimated bills. We offer several affordability programs, including the Home Water Assistance Program and the Multi-Family Water Assistance Program. We offer flexible and customized payment plans to any account holder who is behind on payments. I’m pleased to say we have worked especially hard to address our largest delinquent customers, including reaching the final stages of resolving a long-standing dispute with the Port Authority about its water bill.

Unfortunately, some people choose to simply ignore their bills, passing their portion on to their neighbors—and that is not fair. If some people do not pay their water bills, the cost must be borne by those who do, eventually raising rates, so we must enforce bill payments. Last year, we initiated a water shutoff program, shutting down service on chronically delinquent customers. We have been able to recoup over $18M and secure another $21M in payment agreements through shutoffs so far. We are continuing this program this year, after pausing for the winter. It is not DEP’s goal to shut off services, but this remains an important tool for ensuring people pay their fair share and keep rates fairer for all New Yorkers.

Thanks to the Council’s help, we are partnering with DOF and HPD to hold a lien sale this year to recoup more owed money. This year’s lien sale will be in May. Outreach began last month with notices sent to everyone on the lien sale list. After several years of no lien sales, this year’s is potentially the largest 90-day lien sale list in DEP history. There are 17,970 delinquent customers with over $450 million in open charges.

Our goal is not to sell liens or shut off water; our goal is to have all customers come into good standing. Up until the day before the sale, anyone who pays their balance or enters into a payment agreement will be removed from the lien sale list. A customer does not need to pay their entire balance to be taken out of the lien sale. They can be taken off the list by making the minimum payment amount or by working with our customer service team to enter into a payment plan. We want people to enter payment plans. As I mentioned, these plans are customized to be manageable within a customer’s unique circumstance. Customers can enter into 0% down payment agreements. We have been reaching out to ratepayers who are on the lien sale list, and we invite the Council’s assistance to engage with them.

Working Efficiently and Effectively

In addition to increasing collections, we are also keenly aware of our responsibility to manage our costs through efficiency improvements. We are working towards this on several fronts:

• We are in the midst of a major effort to increase digitally-enabled operations (SCADA systems) at our Wastewater Resource Recovery Facilities (WRRFs). This should allow us to operate more accurately and to redeploy our skilled labor to the kind of preventative maintenance that we most need to focus on.
• We are beginning a “smart sewer” program to make the best use of our existing sewers; this begins with the installation of 200 sewer monitors this year.
• For our $3 billion Newtown Creek tunnel, required under our Long-term Control Plan and as part of the Newtown Creek superfund, our engineers identified ways to redesign that project to make it far more effective. I’m pleased that the State Department of Environmental Conservation approved that modification, and I want to thank CM Restler for his support and also note the support of Riverkeeper for that. Going forward, we will need to consider carefully how we can get multiple benefits from all our investments. It is important to note that while I believe your constituents are often talking to you about flooding, our largest investments going forward will be to comply with mandates about water quality in the harbor.

Federal Changes

As we know, the new Federal administration is making major changes to Federal programs. We are less reliant on federal funding than other agencies, but we have been using federal grants to support Cloudburst infrastructure, lead service line replacements, and some other discreet projects. We have been awarded multiple BRIC grants to stretch our Cloudburst program and are moving forward with the assumption that the funding will not change. If it does, however, we would expect several neighborhoods’ cloudburst projects to be delayed.

Beyond direct funding, we rely heavily on several Federal agencies for our operations. The National Weather Service provided detailed weather forecasts that we rely on for our reservoir operations; if these are in any way curtailed, we will need to pay for private-sector forecasts. The US Geological Survey provides us services both in the watershed (where they monitor streams that feed our reservoirs) and in the city (where we are working with them to measure groundwater levels). Finally, the US Army Corps is a partner both within the City on coastal protection and in the watershed in the management of the Delaware River. We are closely monitoring what might happen to these Federal programs we rely on, but we have no news to report at this time.

Conclusion

Overall, DEP continues, I believe, to be well-run and far-sighted. We have real challenges to face: recruiting, inflation, federal changes, and climate change. We have work to do internally on efficiency, permitting, and planning. And we face major milestones ahead of us, most notably the renewal of the FAD, but also on issues such as coastal resilience, and the impact our treatment plants have on Jamaica Bay. We also constantly think about how we balance our needs, the demands of New Yorkers for better services and especially floodwater protection, and the need to manage our water rates to be affordable.

To close, I will simply ask for the Council’s continued partnership to support our work. As I mentioned earlier, we hope to work with the Council in the near future to enact legislation relating to lead service line replacements and the Bureau of Coastal Resilience, as well as legislation for the Indirect Source Rule and idling reforms that we have discussed at recent hearings.

Thank you for your time this morning. My colleagues and I are happy to answer any questions that you have.