LEGISLATIVE ALERT!!! INTRO 967

On Friday, May 22, 2009 Greg Carlso and Geoffrey Mazel, represented the Federation in a private meeting with Jim Gennaro, City Councilman who is a Primary Sponsor of this legislation. Also in attendance was Warren Shreiber, President of the Bay Terrace Community Alliance and Jay Shusteroff, President of the Bay Club Condominiums. The purpose of the meeting was to emphasize to Mr. Gennaro the possible devastating effect this legislation could have on Cooperatives and Condominiums.

First, briefly summarized, the proposed law imposes the following requirements:

1) The law will apply to owners of buildings, including condominiums and cooperatives, with more than 50,000 square feet.

2) Owners would be required to retain an approved energy professional to perform a comprehensive and systematic "Energy Audit" of the building's central operating systems that use energy or which impact energy consumption, including the building envelope.

3) The Energy Audit shall identify a) all reasonable non-capital operational repairs and adjustments ("Retro-Commissioning Measures") and
b) all reasonable capital alterations involving the installation of new equipment, insulation, or other proven energy efficient technologies ("Retrofit Measures")
c) which, if implemented, would reduce energy use and/or the cost of operating the building.

4) With certain limited exceptions, building owners would be obligated to perform all of the repairs and all of the capital installations identified in the Energy Audit for which there is a projected 7 year payback.

5) There is no cap on the amount of money an owner would be required to spend.

6) The bill allows for a 3 year period of time between the completion of the Energy Audit and the completion of all required work.

7) An "Energy Efficiency Report" certifying the completion of the work required by the Energy Audit, along with copies of approved construction documents and sign-offs, must be filed with the city.

8) The city will, by rule, assign due dates for the completion of work and the filing of the first Energy Efficiency Report pursuant to a staggered schedule over a 10 year period. The City will designate 10% of the buildings to complete their work each year, with the first 10% of the buildings required to complete their work by December 31, 2013.

9) Owners may apply for a 1 year extension, but no more than 2 extensions will be granted. Owners may also request extensions if they are unable to secure loans to finance the work or if the building is deemed "financially stressed".

10) Energy Audits and Energy Efficiency Reports must be completed every ten years.

Mr. Gennaro was extremely receptive to our concerns and suggestions as to how to modify the legislation, including:

• There is a vast difference in the financial means of a luxury coop on Fifth Avenue and a middle-class building in one of the outer boroughs.
• Coops and Condos will generally not have sufficient funds in their reserve accounts to pay for the extensive alterations and installations identified in the Energy Audit.
• Coops and Condos may be faced with other non-green major repairs and capital improvements that demand immediate attention to ensure the sound and safe operation of the building or which, in the judgment of the Board, warrant a higher priority.
• Coop shareholders and Condo unit owners may not be able to easily afford the substantial assessments that in all likelihood would be necessary to pay for the required work.
• If financing is sought in lieu of a large assessment, Coops may be unable to refinance their underlying mortgage or to obtain a second mortgage, especially since property values have declined in recent years. Even those coops with considerable equity may find it difficult to obtain financing in today's tight lending environment.
• We suggested that the payback should be 5 years, not 7.
• A cap should be placed on the amount of money a condo or coop would be obligated to spend during a specified period of time.
• Inasmuch as it is not unlikely that the Energy Audit would identify more than 1 building system for upgrading, perhaps coops and condos should not be required to complete work on all of the building systems within the specified 3 year period of time.
• Even if only 1 building system needs upgrading, coops and condos should be given a period of time longer than 3 years to perform the work.
• Less affluent coops and condos with less annual income or fewer reserves should be treated differently than those with more.
  

A public hearing before the Environmental Committee that is scheduled for June 18 at City Hall.

For press information, please contact FNYHC at 718-760-7540.