Stiff Increase

The best things in life aren’t free and are costing more each year. Like oil, gas, insurance – and just about everything else your building needs – the price of water is going up. As of July 1, water rates charged by the city were upped by 9.4 percent. Sewage rates, which are 159 percent of the water rate, went as well. Last year’s increase was 3 percent.

What that means is that flat rate high-rise apartment buildings that paid, an average $34,470 last year, will be paying an average of $37,710. Metered buildings are predicted to go from about $486 per unit to $531 per unit.

According to Charles Sturcken, a spokesman for the Department of Environmental Protection, water and sewer rate increases are being driven largely by capital investments in water and wastewater system infrastructures in response to federal and state regulations under the Clean Water Act and the Safe Drinking Water Act. About 70 percent of the system’s capital requirements over the next five years are allocated for mandated projects in watershed protection and water quality preservation, water pollution control plant upgrading and rehabilitation, and combined sewer flow abatement. The remaining 30 percent is for upgrading the water main and sewer collection networks and for continued work on a new water tunnel.

Sturcken also says that energy costs have risen for the operation of sewage systems, and that new operations and maintenance requires $80 million. He also points to a decrease in the base revenue forecast. The city took in less than expected, and is using that lower baseline as the new indicator of future income.

Some professionals are a bit surprised at the hike. “We had expected a five percent increase, so this is almost double that,” says Don Levy, senior vice president at Brown Harris Stevens, a management firm. “When all of the changes came about changing the water and sewer flat rates to metering, the sales catch was, ‘Look at how much money you can save by installing meters.’ Well, what happened? I’m certainly not aware of any reduced supply or capacity. This is simply not sensitive to the same kind of economic fluctuations as fuel oil prices. I don’t know any reason for that [rate increase] other than to maximize revenue.”

What can boards do? Pay up – and look for leaks. “There’s a big misconception that Park Avenue buildings don’t have leaks,” says Mark Schwartz, the principal at New York Water Management, a water-monitoring firm. “But leaks don’t discriminate. Leaks don’t go home at night: 24/7, a leaking toilet can be two to five thousand dollars.”