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Default Replacing gas boiler

I'm in the process of having to buy a new gas boiler. Keyspan, in my
neck of the woods is making an offer of $500 towards an update of old
boiler...$599 if converting from oil to gas. I had a plumber to get an
estimate from him. I live in a single family home, but it has 2 levels
( often mistaken as a 2 family ) and 3 convection radiators on the
first level and 3 old fashioned steel radaitors upstairs. My btu now is
130000. The plumber said that I could use around the same output or up
to 140000 btus. The cost would be 3800 with labor...minus the $500 from
Keyspan. Is this a good deal? BTW, the old boiler isover 30 years old.
I also have a 40 gallon water tank. The plumber gave me an estimate for
a new water heater for $800 including labor. My water heater was
installed in 1989, and it has shown no problems and no leaks. Keyspan
in their offer of $500 or a new gas water heater for 40-to 50 gallons,
excluding installation, which the plumber said he would do for $200.
Now, I'm torn between getting the $500 rebate or new water heater. The
plumber estimated to replace my water heater for $800 including
installation. Am I wrong towards leaning for the water heater? Would
appreciate some input. BTW, I live in Brooklyn,NY

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