(Adds New York City mayor's comment)
By Jonathan Stempel
NEW YORK Feb 16 A divided appeals court in
Manhattan on Thursday rejected New York City's plan to give
small homeowners a $183 credit on their water and sewer bills, a
defeat for Mayor Bill de Blasio.
The Appellate Division, First Department of the State
Supreme Court ruled 3-1 that the city's water board lacked a
rational basis to award the credit to owners of one- to
three-family homes, while leaving other property owners
De Blasio had last April promoted the one-time credit, to be
funded with a water board surplus, to cut annual water and sewer
bills by 17 percent to 40 percent for about 664,000 homeowners.
His proposal also included a 2.1 percent rate increase, and
was to take effect last July 1.
But real estate companies and the Rent Stabilization
Association trade group objected. They called it unfair to
subject larger landlords, and in turn their tenants, to the rate
hike, while denying them the credit.
The appeals court said the credit "cannot be reconciled"
with the city's budgetary needs, and the water board had no
basis to conclude that small homeowners were "more needy" than
other property owners or paid too much relative to them.
De Blasio said in a statement he remained "confident" that
homeowners will eventually receive the credit.
"Wealthy landlords and high-priced lobbyists have spared
nothing to line their own pockets at the expense of hardworking
New Yorkers," he said. "Today's court ruling keeps $183 of water
rate relief out of the hands of everyday homeowners - for now."
Michael Berengarten, a partner at Herrick Feinstein
representing the objecting landlords, welcomed the decision.
"This was a flat giveaway to a broad class of property
owners, regardless of need, without any legitimate water-related
purpose," he said in a phone interview.
"Board members are appointed by the mayor, and abdicated
their responsibilities to achieve the mayor's political goals,"
De Blasio is widely expected to seek re-election this year.
Thursday's unsigned decision upheld a June 2016 ruling by
State Supreme Court Justice Carol Edmead in Manhattan.
Justice Marcy Kahn dissented, saying the water board had
authority to help "overburdened" lower and middle-class
homeowners, including the elderly, facing rising water rates.
The case is Prometheus Realty Corp et al v New York City
Water Board et al, New York State Supreme Court, Appellate
Division, First Department, No. 653003/2016.
(Reporting by Jonathan Stempel in New York; Editing by Tom
Brown and Alan Crosby)