Published: Autumn 2013

ABATEMENT IMPLEMENTATION CHALLENGES

DISTRIBUTING THE ABATEMENT
Condominium unit owners receive individual tax bills directly from the Department of Finance, with appropriate adjustments and explanations provided. In cooperatives, where property taxes are levied on the entire building, abatements and exemptions are credited against the full property tax and the Department of Finance (DoF) provides the contact entity of each cooperatives (often the property management firm) with a chart itemizing precisely what is due to each qualifying apartment in the way of exemptions and abatements. These amounts are to be distributed in the fiscal year in which they are received.

Normally these charts are provided in November, four months into the new fiscal year, and distribution by the following June 30th presents no problem (yes, many cooperatives establish per share assessments to coincide with the distribution of the abatement in order to recover funds to operate the building, but that does not interfere with timely distribution). Fiscal 2012/2013 was not a normal year. The abatement extender wasn't even passed until the end of January, and the changes in the structuring of the abatement required considerable work. A preliminary chart was distributed in March, but it was agreed that this did capture all the nuances of the primary residency issue. Efforts continued, and a second chart was distributed late in June, and DoF further acknowledged that corrections would be accepted through mid-July. This leaves many cooperatives with lingering questions and misgivings about distribution. Some adjustments will be made on October tax bills, and there are cooperatives waiting to see this final adjustment before completing its distribution (or recapture) of the abatement.

PRIMARY RESIDENCY
Despite major efforts by the Department of Finance to confirm which units are the primary residences of their owners, there is reason to believe that many shareholders and unit owners have not responded to requests for confirmation of primary residency. These individuals were billed for the return of 50% of the abatement provided in 2012/2013 and receive only 25% of the abatement in 2013/2014. To reinstate their eligibility for the abatement for 2014/2015, they will have to confirm to the Department of Finance that their cooperative or condominium is their primary residence. This is most easily done by applying for STAR credit. The appropriate form can be downloaded from the Department of Finance website at www.nyc.gov/finance.

A SNAPSHOT IN TIME
Note that property taxes bills for each fiscal year that begins on the 1st of July are based on a snapshot in time of ownership data on the previous January 5th. Thus the adjustments made retroactively for fiscal 2012/2013 addressed ownership of units and shares on January 5, 2012. Bills for fiscal 2013/2014 look at ownership of January 5, 2013. And anyone who failed to confirm their primary residency for either of these tax years, will only be able to qualify for fiscal 2015 which begins on July 1, 2014.

Debate is ongoing regarding ways to treat sales that take place between primary residents and nonprimary residents. Condominium unit owners who have followed this issue will address it themselves with their purchasers; cooperative boards may want to address this in a cover letter to accompany their application form or at the admissions interview (particularly when a non-primary residence is being purchased as a primary residence).

At CNYC's 33rd Annual Housing Conference on Sunday, November 17th, the Department of Finance will have a table in the Exhibit Hall and there will be a midday Property Tax Update class, where you may fine answers to your questions on implementing the abatement.

RE-REGISTRATION OF ALL BASIC STAR RECIPIENTS
STAR is a New York State administered program proving home owners with family income of less than $500,000 with an exemption from a portion of their school tax bill. To continue to qualify for STAR, all home owners now receiving a basic STAR exemption will be required to register by the end of the year with the New York State Tax Department. This is part of a state initiative to protect New Yorkers against the costs of inappropriate or fraudulent STAR exemptions. During the week of September 23rd, the State will send letters to all current Basic STAR recipients in New York City. These letters give instructions for online registration. The deadline for filing is December 31, 2013. Based on the information provided the Tax Department will monitor future eligibility and reregistration will not be required. Seniors receiving Enhanced STAR are not required to register, as their information is verified annually. Because people may not grasp the full importance of these letters, you may want to advise shareholders and unit owners toward mid- September that this letter is forthcoming and that registration is necessary if they wish to continue to receive STAR exemptions. To learn more about STAR visit www. tax.ny.gov or call 518 457-2036.

BIODIESEL TAX CREDIT AVAILABLE THRU 2016
New York State has a Clean Heating Fuel Tax Credit to encourage the use of biofuel in producing heat or hot water. The credit is equal to one cent for each percent of biofuel per gallon of fuel purchased. Since New York City buildings typically use thousands of gallons of fuel each year, keeping track of fuel purchased and its biofuel content is well worthwhile. Biofuel reduces the use of fossil fuel and its cleaner burning protects the environment.

Biofuel is produced by mixing vegetable oil or animal fat with the conventional home heating oil petroleum. Since October of 2012, all #2 oil used in New York City is required to contain 2% biofuel and therefore, #4 oil, which is produced by mixing #6 oil and #2 oil also has a biofuel component. Oil companies will provide a mix of up to 5% biofuel for those requesting it, and at least one company provides 20% biofuel, which is the limit level eligible for the credit. Cooperatives and condominiums can apply this state credit to their franchise tax (surplus credits are refunded to the taxpayer).

Accountant Abe Kleiman points out that form CT-214 requires that documentation be attached. His firm has been attaching consumption reports obtained from the fuel vendors, which is a summary of the furl purchases for a period of time. Most reports will detail the date of the purchase, the number of gallons purchased, the type of fuel purchased, the price and the cost. If the oil contains biofuel, most consumption reports indicate the type of biofuel as B2 (=2% biofuel), B5 (=5%), B10 (10% or B(20%). "We believe a consumption report provided by the fuel oil vender is sufficient documentation, said Mr. Kleiman, adding "it is always recommended that paid bills be kept."

5.6% WATER RATE INCREASE
After many years of double digit increases in water and sewer rates, this year the Water Board set its increase at 5.6%, which applies to water bills payable during the fiscal year 2013/2014.

The Water Board must raise through the water rate sufficient funds to service all the water needs of the City, which includes building a new water tunnel to ensure future water supply and transport for all of New York City's needs. It also includes funds that historically were needed to service the debt on water bonds; today, most of those bonds have been retired, and now a growing portion of funds collected from rate payers go into the City's general funds. CNYC has repeatedly objected to this additional burden on water ratepayers (while acknowledging that the City would have to raise these sums from residents and businesses in some other way).

NYSERDA GRANTS HELP BUILDINGS FUND ENERGY CONSERVA TION IMPROVEMENTS
The New York State Energy Research and Development Authority (NYSERDA) has funding and technical advice available to help buildings establish and implement energy conservation programs, many of which help reduce the building's carbon footprint and comply with the City's green laws. Buildings wishing to receive these grants must work with a Multi-Family Performance Partner: a consulting firm or a firm of architects, engineers or both, that has been qualified by NYSERDA to help buildings prepare and implement programs designed to reduce energy use by at least 15%. NYSERDA offers free classes explaining its programs (see page 14), which include help for attendees in:

• selecting the most appropriate path for implementing energy efficiency,
• qualifying for cash-back incentives and low-interest loans
• becoming eligible for bonus incentives of up to $300 per apartment
• decreasing building energy consumption through electrical submetering.

At CNYC's 33rd annual Housing Conference on Sunday, November 17th, a number of classes will address energy issues, and NYSERDA will have a table in the Exhibit Hall.

32BJ CONTRACT WITH NYC RESIDENTIAL BUILDINGS EXPIRES IN APRIL 2014
The four year contract currently in place between Local 32BJ of the Building Service Employees International Union and the owners of residential buildings in Manhattan, Brooklyn, Queens and Staten Island (including cooperatives and condominiums) expires at midnight on April 20, 2014. The Realty Advisory Board on Labor Relations, Inc. (the RAB) will negotiate a pattern contract on behalf of all of these buildings that are its members. Buildings in the Bronx have contracts that expire in the summer and fall of 2014. These are negotiated by the Bronx Realty Advisory Board. Cooperatives and condominiums should prepare for the possibility that negotiations could break down and the Union could call its members out on strike.

On Thursday, February 20, 2014, speakers from the RAB will present a seminar for CNYC members specifically explaining contract negotiations and suggesting preparedness measure. CNYC will also update and circulate its booklet on this topic, entitled, "In the Event of a Strike. . ."

At CNYC's 33rd annual Housing Conference, the Union contract will be addresses briefly as part of two classes, one at midday about The Super and another in the afternoon entitled Working Effectively with your Building Service Employees.