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Sewer rates to rise 9.9%.

The New York City Water Board voted last week to raise sewer rates 9.9 percent beginning July 10.

The increase would be felt by property owners paying water and sewer bills as well as those paying only sewer charges. Owner groups were outraged by the close to double digit increase, which will amount to nearly a 200 percent increase over the last few years.

John J. Gilbert, president of the Rent Stabilization Association, said there is no accountability for where this money is going. "The increases are outrageous," Gilbert said, "and property owners should not be the only entities underwriting these dramatic increases. This is a sure fire way to drive people out of business."

William Kusterbeck, director of the Office of Financial Management of the DEP and treasurer of the Water Board said the increase is needed and the board is obligated by law to provide these rates.

"It has no discretion over raising the proper amount of money but does have discretion over the calculation of the increase," he said.

The increase will be for city customers only as suburban rates are set at separate hearing. Right now the sewer rate is 136 percent of water, explained Kusterbeck. The increase is calculated by increasing it to 159 percent of the water changes.

"There is no increase in water rates and, if they are a water only customer, there will be no increase, but a sewer customer would pay more," he added.

Mary Ann Rothman, executive director of the Council of New York Cooperatives said the water and sewer bills are consuming an increasing part of operating budgets for their member buildings.

"We had been geared to expect a double digit increase so there is a certain sense of relief in seeing that the Department is sensitive to our desperate cries for help." The prediction last summer was an 18 percent rise and by March it was down to a 14 percent increase, she said.

Dan Margulies, executive director of the Community Housing Improvement Program (CHIP) said they advocated a rate freeze based on the fact that there has been more than a 200 percent increase since 1986.

"Recognizing the costs are out of control I urged them to freeze the rates to focus the attention of the city and state governments on the need for relief," he said.

While Margulies agrees there may be a need for additional revenues, he said the rate payers cannot afford it. "We must look to the governments to reduce operation costs and look to the state which sets mandates for water quality and treatment to reduce those mandates or the cost of those mandates and provide whatever financial assistance that they can because the rate payers simply can't absorb these double digit increases, he said.

One has to suspect it isn't 10 percent for political reasons," he noted wryly. "It may be a 99 cent sale but we know it costs a buck."
COPYRIGHT 1992 Hagedorn Publication
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:New York City
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 6, 1992
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