Owners to legislators: 'Water meters a drain' - New York, New York real estate owners complain of exorbitant water charges and poor management by water authority governing New York, New York and New York state water usage

Real Estate Weekly, Dec 2, 1992 by Lois Weiss

Bombarded with complaints of horrendous New York City water charges, the New York State legislature took an unprecedented step by holding joint housing committee hearings on the subject.

What they heard was testimony given by a commissioner, who according to RSA's John Gilbert appeared to be living in another city, and owners on the verge of losing their buildings explaining that they cannot afford the increases and neither can their tenants.

The hearings were conducted under the auspices of the State Senate's Kemp Hannon and the Assembly's Howard Lasher, with an additional panel members Bronx Assemblyman Stephan S. Kaufman, Bronx Senator Ephrahm Gonzalez Jr. and Queens Assemblyman Jeffrion Aubry, often asking probing questions of the speakers.

In 1984 the legislature allowed the creation of the water authority to govern rates for the entire watershed area used by New York City and upstate counties in an effort to self finance and capitalize projects and pay its own way. The water board and the authority were set up in 1985.

What has happened, owners charge, is that it has become an unregulated body raising money for programs and not effectively managing its projects such as metering. The first meter contractor ended up indicted and the latest installers are using subterfuge, such as announcing themselves to be lead test inspectors, to gain entry to buildings where supers have already been warned against water metering crews.

The meters were prompted by an effort at water conversion and are a move away from frontage rates that allowed buildings to pay on a per foot basis.

Meters installed into high-density, low income buildings are generating true usage charges that result in astronomical increases and have become a cost rivaling fuel and real estate taxes for swamped owners.

Commissioner Albert F. Appleton described for the panel the results of the Department of Environmental Protection surveys, which show that for the most part, buildings with water meters are in fact paying less.

Rent Stabilization Association President, John J. Gilbert III, told the panel later that while this may be true, the sample is skewed since those who are opting for meters are the low density high income buildings with less water use. He sharply criticized Appleton's departure immediately following his testimony.

The water board has less than 60 employees as meter readers and bills are read erratically, at best, with most bills being estimated, the owners said.

Suggestions seemed taken seriously by the panel included placing the rate setting of the water board under Public Service Commission domain; splitting the cost of the bills 50/50 with tenants as a pass-along to encourage conservation on both sides; permitting submetering that is currently illegal under building codes; and further oversight of the water authority itself.

The Real Estate Board's of New York's Marolyn Davenport suggested that one to three family homes be put on the top of the list for metering until other solutions were found.

Council of New York Cooperatives Executive director Mary Ann Rothman said cooperators are now landlords and deal with rental tenants who are reluctant to cooperate in water conservation.

Kaufman told Commissioner Albert F. Appleton that there is no certiorari proceeding, no senior citizen's abatement or other method of contesting the charges.

"This is your pot of money," he said," ...and it has become taxation without representation."

Appelton contends the worst of the rate increase is over, but other speakers said only half of a planned six fold increase over a 10-year period has been implemented.

Harold Shultz, deputy commissioner for Intergovernmental Relations at Housing Preservation and Development, was called on the carpet for the 10-year rehabilitation program scheduled for the city's owned housing, primarily obtained by in rem procedures.

They must completely rehabilitate these properties, he said, and not just put in low-flow fixtures. This time period seemed far too long to both the panel and the audience of tenants and industry representatives.

Gilbert brought along three owners. Harley BrookHitching owns 10 buildings in Harlem and caught the legislators attention as she threw them small plastic bags filled with crack vials and spent gun shells, explaining her tenants have other things on their minds besides water conservation.

Owner Robert C. Rosenberg, president of Rosenberg Diamond, has been a vocal critic of the metering process since his gut rehab building near Yankee Stadium received a $58,000 water bill, normally an under $10,000 item. That building is about to be foreclosed, he said. He told the panel that he told his supers they would be fired if a water meter was placed in his other buildings.

Rosenberg said he has received threatening letters from DEP, but would rather get socked with a 50 percent penalty on the old bill than to pay a new metered amount, something the legislators, nodded in understanding.

The last owner, Mario Agri, had inherited his building from his father. An elderly man himself, Agri said later he would like to sell his building but can't because of the water bill -- now $40,000 -- which he paid by borrowing the money.