Publication Date: Spring 2000
PROPERTY TAX REFORM
For more than a decade CNYC and the Action Committee for Reasonable Real
Estate Taxes have crusaded for a fair and affordable property tax system
for New York City. With time came City and State recognition that homeowners
in cooperatives and condominiums currently pay more than their fair share
of property taxes. An abatement program was implemented to work towards
fairness. Through June 2001, qualifying units in cooperatives and condominiums
where the assessment averages $15,000 or less receive a 25% abatement
and those with higher assessments receive a 17.5% abatement.
The laws establishing the abatements also required the City to prepare
a long-term plan to continue the process toward tax fairness. A complex
undertaking, this plan must consider the revenue needs of the City and
must deal fairly with all classes of taxpayers. The Department of Finance
has proceeded carefully, learning from the data acquired as the abatement
program has been implemented; its recommendations have been compiled in
a detailed report which Finance Commissioner Andrew Eristoff will soon
present to the Mayor. Not only does this report propose an overall system
designed for greater fairness, it also suggests ways to redistribute the
tax burden more equitably among cooperatives and condominiums.
It is anticipated that the Mayor will then approve the issuance of a
final report, which should form the basis for a long-term plan for property
tax reform. When the City Council and the Mayor agree upon a plan, they
will join to send a Home Rule Message to the State Legislature, requesting
its enactment into law. With the current State legislative session drawing
to a close, it is likely that this final step will not take place this
The Action Committee for Reasonable Real Estate Taxes shall continue
to monitor the progress of the long-term plan, pushing for citywide support
of an equitable plan as soon as possible.
It is likely that a strong grass roots effort may be required in the
final push for passage of the plan. In such an event, the Action Committee
will reach out to its members and to the members of supporting organizations
for letters, telephone calls and lobbying visits. If you are not currently
on the Action Committee mailing list and would like to be included in
this important outreach, please contact the Action Committee by phone
at (212) 496-1306 or fax at (212) 580-7801, or mail to 250 West 57th Street, New York, NY 10019-2142.
COMPARATIVE STUDY OF OPERATING
In 1975, when the Council of West Side Cooperatives was first getting
started, the 30 participating cooperatives were eager to learn if they
were spending wisely. All willingly shared the auditors' financial reports
on their buildings, and thus the first Comparative Study of Operating
Costs was born. After some discussion of the most useful way to present
the data, it was determined that the unit of measure needed to be the
cost per room, as this eliminates problems in distinguishing between small
and large apartments.
In 1980, as CWSC was growing to encompass members from all parts of the
City, it changed its name to the Council of New York Cooperatives and
began compiling the Comparative Study of 1980 Operating Costs. At that
time, participation had grown to more than 100 cooperatives and the Study
was divided between East Side and West Side Buildings. Today, the Comparative
Study has been presented in each of the last 19 years. It has grown to
include a section for condominiums, one for small buildings, another for
large buildings outside Manhattan and one for lofts.
The Comparative Study of 1998 Operating Costs -- with cost information
for more than 700 cooperatives and condominiums -- is now in the hands
of all CNYC member cooperatives and condominiums and professionals affiliated
with CNYC. This annual analysis provides a framework to help you decide
if your own building is operating economically and efficiently by studying
the various costs of operating a building. Code numbers are used to identify
the participants, while preserving their anonymity.
The Comparative Study analyzes all data on a per-room basis, beginning
with assessment and mortgage figures for participating buildings, as well
as their carrying charges (maintenance). It then lists amounts spent per
room on wages, fuel, utilities, repairs and maintenance, insurance, management
costs, administrative costs, water and sewer fees, property tax, and debt
service. When possible, elevator maintenance and legal and accounting
costs are each listed separately. The Study also presents summary statistics,
calculating the averages and medians for each item, and the average portion
of total operating budget devoted to each.
CNYC is currently compiling the 1999 Comparative Study. Please forward
your annual financial statement to CNYC as soon as it is ready, so that
your data can be included in the Study. If this is the first time that
you will be participating in the Comparative Study, a room count for your
building will be very helpful.
When the Study is sent to members and subscribers, those who have contributed
are advised of their code numbers so that they can find their own statistic.
Each CNYC member building receives its own copy of the Comparative Study.
Additional copies can be purchased from CNYC for $5.
WATER BOARD SETS RATES AND
ADOPTS CONSERVATION PLAN
CLICK HERE TO DOWNLOAD 7/1/00 WATER RATES
The New York City Water Board has enacted an increase of 1% in water
rates for all metered and unmetered city customers effective July 1, 2000.
Sewer charge increase also as they are assessed at 159% of the water charge.
This increase will be reflected in the water bills which the Department
of Environmental Protection will send to all buildings on frontage for
payment July 1, 2000. Buildings that receive billings based on meter readings
will see this modest rate increase in bill covering service after 7/1/00.
The New York City Water Board is a public benefit corporation of the
State created by Chapter 515 of the Laws of 1984. Its primary responsibility
is to fix, revise, charge, collect and enforce rates and other charges
for the water and sewer system. Every year, the Water Board receives recommendations
and options based on a financial analysis by a private rate consultant.
The Water Board holds hearings on the proposed changes, taking testimony
from interested groups and individuals, and then votes upon changes for
the ensuing fiscal year.
Upstate reservoirs provide most of the water consumed in New York City.
It is transported through a series of aqueducts and arrives in the city
through two huge and aging water tunnels, with a new tunnel under construction
but already partially operational. Because the volume of city use was
severely taxing the water system, the State required that the city control
and reduce water use. Specifically, in 1986, the city was required to
install water meters in every building with the goal of water conservation.
The Universal Water Metering Program was instituted in 1987, with water
rates increased to cover the cost of the meters and their installation.
By 1991 it was apparent that while meters were effective in controlling
water use in single family dwellings, the same was far from true in some
multiple dwellings, where those using the water neither saw the meter
nor paid the water bills directly.
Furthermore, metering use resulted in very high bills for buildings housing
lower income tenants, where more people tend to live in each apartment
and plumbing may not be in the best condition. In response, the Water
Board voted to grant multiple dwellings a transitional period, when they
could remain on the 'frontage charge' to detect and correct leaks. The
Water Board has annually extended the transition program, enabling buildings
to continue on the flat-rate frontage billing if they so chose. On the
other hand, buildings that found their metered bills would be lower than
frontage charges could notify the Department of Environmental Protection
and change to the metered rate.
For many years, CNYC testified in favor of an improved billing method
that would neither charge exclusively based on use nor discriminate against
lower income buildings. This year the Water Board has adopted such a program,
called the Multiple Family Conservation Program which will take effect
July 1, 2001. For the intervening year, the transition option is continued.
MULTIPLE FAMILY CONSERVATION
The new multiple family conservation program is designed to promote greater
water conservation and to ensure the installation of water meters in multiple
unit apartment buildings. The program provides owners of multiple family
residential buildings of six or more units who replace or have replaced
at least 70% or the toilet, sink and showerhead fixtures with low flow
water consuming fixtures with the opportunity to be billed on the basis
of a fixed charge per dwelling unit per year. Presently pegged at approximately
$420, this unit charge will be subject to the general rate level changes
each year. The Water Board will periodically review this fixed rate to
ensure that it continues to be consistent with the board's objectives.
Properties will have a 3-year period to choose either the per unit flat
rate or metered billing. During this implementation period, no changes
will take place unless the building itself comes forward and requests
a change. Applications will have to be submitted by December 31, 2000,
in order to qualify for the 7/1/01 start. Details and application process
will be described in the autumn issue of this Newsletter and at the DEP
workshop at CNYC's 20th Annual Housing Conference on Sunday, November
Buildings with high water use are advised to take advantage of all the
existing programs at DEP for detecting leaks and defective piping, and
to consider installation of low flow fixtures. Several of the speakers
at the recent Water Board hearings encouraged the city to reinstate the
Toilet Rebate Program; this would certainly facilitate qualification for
the Conservation Program.
CURRENT INCENTIVES MAY BE
ONLY SAVINGS AS ELECTRICITY DEREGULATES
Phase three of electric deregulation in New York State began in April,
with current Con Edison customers were offered the opportunity to subscribe
to purchase up to 3000 megawatts from independent Energy Service Companies
(ESCOs). CNYC encourages member buildings to consider taking part in Phase
3, since incentives are being offered for switching at this time. Escalating
the deregulation process, the Public Service Commission has set November
2000 as the date when all Con Edison customers can seek deregulation.
By the end of 2002, every customer will have to buy electricity independent
of Con Edison, which will continue to provide transportation of electricity
and to bill for this service. However, no further incentives are anticipated
once the 3000 megawatts of Phase 3 are subscribed.