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 year.

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 COSTS
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 (PDF Document)

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 12, 2000.

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.