RSA files suit on H2O meters.

Led by the Rent Stabilization Association, a coalition of owners is challenging New York City's water metering plan with a lawsuit was filed late last week.

The suit charges that the city is acting without proper legislative authority, that the meters are inaccurate, and that water bills have risen dramatically and will lead to the abandonment of properties.

"We're attacking the program as a sham," explained John J. Gilbert III, president of the RSA. "It is not a water conservation program."

While New York City has been promoting metering as a means of water conservation, owners of multiple dwelling point out that one meter to building does not help tenants become conservation-conscious.

"We know that meters in multi-family buildings won't conserve water because tenants don't have to pay the bills." Gilbert noted. "Metering isn't a water conservation program, it's a money raiser."

The suit charges that the city, acting without specific authority from the State Legislature, and contrary to an act passed by the New York City Council in 1985, has begun a 10-year program to install water meters in approximately 700,000 city dwellings. Most owners who have had meters installed have found that meter charges have skyrocketed over former frontage rates, which are based on the building's "front" on the street and the number of stories.

Meanwhile, the city's meter contractor, Vanguard Meter Services of Owensboro, Kentucky, was recently charged with a 206 count indictment and has been investigated by the Manhattan District Attorney, the U.S. Department of Labor, the U.S. Postal Inspection Service, the FBI, the City Comptroller and the U.S. Attorney for the Southern District.

"With the indictments of Vanguard," Gilbert said, "there are real questions as to the management of the contract."

The suit claims the meters were poorly installed by Vanguard and cannot be relied on to give accurate readings. About 12,000 meters have been installed in multiple dwellings and 350,000 in other residential buildings.

Gilbert said the only impact water metering will have is to drive people out of business. He said there are numerous examples of large increases that have been imposed on people once the meters were installed.

"Unfortunately, it's a function of the demographics," Gilbert explained. "It's the housing we most need that is what we are most likely to lose."

The plaintiff's buildings are all in low income areas, with two in Manhattan and two in the Bronx. One plaintiff in the suit has seen bills rise from approximately $4,700 to $21,200.

Because lower income housing is more likely to have more people living in each apartment, and have more people who are home during the day, those buildings are the ones that are finding metered water bills outpacing the income stream from rent regulated apartments. "We'll lose housing," Gilbert said." And we'll lose revenue from tax paying properties as building go out of business and the city seizes them."

One city official said, "It's not a utility issue but a housing issued and a social issue for people who can't afford to pay the extra cost. The rental regulations should be changed."

Gilbert said the city has been trying to pass legislation to allow them to have the meters put in, and was trying even before the program went into effect.

"It's clear they believe themselves to be on questionable grounds," he said. "The policy basis for this is as hollow as the pipes that carry water into peoples' apartments," Gilbert added.

In 1984, the New York State Legislature created the Water Board, which is a seven-member body appointed by the Mayor of New York. The board is authorized to set charges for water and sewer services to pay the costs of the operation, and the principle and interest on bonds issued by the New York City Municipal Water Finance Authority.

In 1985, the council granted the Division of Environmental Protection (DEP) the limited right to install water meters for business consumption and in all residential dwellings that are either new or substantially improved. The owners of other dwellings must request the meter be installed or the law reads, the Board of Estimate - now defunct - or the City Council must authorize this action.

In 1986, the mayor announced his intention to meter all New York water users and a task force was organized by the DEP. In its report, the task force indicated the city had no legislative authority to direct the installation of water meters other than the general grant of authority to the Water Board.

Under current regulation, all premises connected to New York City's water system must be metered and all charges calculated based upon metered rates by Dec. 31, 1995.

Multiple family dwellings currently are in a transition program which gives them an adjustment period of one year until metered charges must be paid. This transition time, agreed to only after owner protests, gives property owners time to assets the charges and make maintenance changes such as the fixing of leaks.

Rate hearings, which will include the discussion of any further moratoriums, including proposals for a two year moratorium, begin in April and rate adoption takes place in May.

One city official believes the rates can be challenged on the basis of equity and suggested that rates might be made different, say for commercial owners. "But with respect to the system's ability to install meters, it's a common practice in the country," the official explained. "New York City can no longer afford to not install water meters, particularly with all the incentives to conserve."

Until they can determine the impact of this lawsuit, the RSA, is advising people not to install the water meters. The RSA represents 25,000 owners of residential rental apartment buildings.