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Water Rates, Filings, Fees, Operating Cost Study

Published: Spring 2014

The Water Board has prosed to increase New York City water and sewer rates for the fiscal year 2014/2015 by 3.35%. The Water Board administers all of New York City's complex water system; water rates must cover all its costs, including maintaining water purity, completing the new third tunnel to bring water from upstate reservoirs (the two existing tunnels are over 100 years old) and servicing bonds issued to help fund the system. The NYC Department of Environmental Protection produces an annual report with detailed information about the water supply and the quality of New York city water. The 2012 Annual Water Supply and Quality Report can be viewed at dep/2013waterquality. New York City rate payers are billed for water based on use as measured by water meters (or calculated based on a frontage formula which is in the process of being phased out). The new rate will be finalized in June and will be applied to July water bills.

Real Property Income & Expense Forms (RPIE) must be filed with the Department of Finance by June 2nd this year. Cooperatives and condominiums with commercial income of $40,000 or more must file RPIE Forms. The information received from commercial buildings is used by the Department of Finance to develop comparable for assessing cooperatives and condominiums, which are required by law to be assessed as if they were income producing (=rental) properties. This change from the prior September deadline was made at the request of the Department of Finance to provide sufficient time for computer modeling to improve the accuracy of assessments.

Since the deregulation of energy, New York State energy customers purchase their natural gas, steam and electricity from a variety of sources, and pay another entity (generally Con Edison) for transmitting this energy to them. Recent State legislation has provided for a phasing out of a temporary surcharge that is currently levied on the transmission bill. This modest reduction will affect Con Edison bills beginning in July. The current 2.26% transmission surcharge comes down to 1.3% in 2014, then to 1% in 2015, and to 0.73% in 2016 before disappearing completely in 2017. A permanent assessment of 0.24% will continue to be charged on these transmission bills.

Cooperatives continue to be responsible for distributing all abatements and exemptions to qualifying apartments following the chart provided annually in November or December by the Department of Finance. The many changes in the abatement program may create challenges, particularly in cooperatives that regularly 'recaptured' all or part of the property tax abatement through a per share assessment. Cooperatives where many shareholders have primary residences elsewhere may find resistance to such an assessment from shareholders no longer receiving abatements in similar amounts. On the other hand, buildings where the abatement percentage is increasing may find that this is the opportunity to try to create a budget that balances without recourse to assessment. It is difficult to predict at this time what may happen when the property tax abatement program sunsets on June 30, 2015 (See pages 1 and 3.)

All CNYC members and Professional Subscribers have received the Comparative Study of 2012 Operating Costs as they renewed their affiliation with CNYC for the calendar year 2014. CNYC is currently preparing the Comparative Study of 2013 Operating Costs and seeks to include as many financial statements as possible in this Study. The Comparative Study provides a framework for deciding how well one's own cooperative or condominium is operating It analyzes operating costs for cooperatives and condominiums in eight categories: 1) East Side Cooperatives, 2) West Side Cooperatives; 3) Small Manhattan Cooperatives (with fewer than 100 rooms) 4) Small Brooklyn Cooperatives, 5) Larger Cooperatives Outside of Manhattan, 6) Condominiums in Manhattan, 7) Condominiums Outside of Manhattan and 8) Lofts.

Except in the case of lofts, all data is presented on a per room basis, beginning with the current assessment and mortgage figures and carrying charges. The Study then lists as dollars-per-room the amounts spent in 2013 on labor, heat, utilities, repairs and maintenance, insurance, management, administrative costs, water & sewer fees, and (except for condominiums) property taxes and debt service. When financial statements separate the amounts paid for elevator maintenance and for attorneys' and accountants' fees, those items are listed separately. Loft data is presented on the bases of dollars-per-250-square-feet for easy comparison with the per-room data in the other categories. An introductory narrative explains what is included in each column of the Study and attempts to provide answers to the questions that readers will ask.

After presenting charts of individual data for the year, the Study goes on to provide a ten year recap of summary statistics, calculating the averages and medians for each item and the average portion of total operating budget devoted to each one.

Any CNYC member cooperative or condominium with data in the 2013 Study will receive notification of its code number when the booklet is sent. This will enable them to find their information easily. CNYC members are welcome to copy pages of the Comparative Study to share information among board members and with shareholders or unit owners. Additional copies can be purchased from CNYC for $25.


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