Two people are walking down a beach, and they come across tens of thousands of starfish that have washed ashore. The starfish are all going to die in the hot sun if someone doesn’t help them, and so one of the pair picks up a starfish and throws it back into the ocean. Then he picks up another one and throws it back. »
His companion is surprised. “What are you doing?” he asks.
“I am trying to save these starfish from dying. They are going to melt in the sun if we don’t do something.’
“But there are tens and thousands of them! How can you possibly make an impact by throwing a few back?”
“I just saved another one, and I just saved another one. And I just saved another…”
It is a story that Josh Fox delights in telling. For, in his eyes, the man on the beach is doing the only thing possible in an odds-against-you situation. He is approaching seemingly insurmountable problems one starfish at a time.
Josh Fox has on the board of the 206-unit condominium at 340 East 23rd Street for the entire seven-year life of the building, and president for the last three. In that time, he has proven himself a certain kind of board member, one who is more than a board member. He acts more like manager – a take-charge guy who has obsessively turned the idea of money-saving into an art form.
Among his accomplishments: he has negotiated lower utility rates with the gas and electric companies; found a different bank to lower banking fees and interest rates; found a new landscaping company at a reduced cost; reupholstered outdated building furniture to avoid replacement costs; started e-mailing building documents to board members instead of printing them; and has instituted a dozen other practices intended to decrease costs and/or increase revenues. Such actions shouldn’t be surprising, either: Fox is the founder and CEO of a company called Bottom Line, which analyzes nonprofit corporations and municipalities and helps them control their costs.
Fox has a kindred spirit in another board president, Michael Herzog, who is just as busy throwing his own starfish back into the ocean. As the president of the 68-unit co-op at 257-291 Cedarhurst Avenue in Cedarhurst, Herzog has been actively involved in the affairs of the garden apartment house for over three decades.
He was an accountant for many years, and arrived at the property in 1961, raised his family there, represented the tenants in negotiations with the sponsor during the property’s conversion to a co-op, and has been board president from 1988 to the present. Now 77, he hasn’t slowed down, spending at least 28 hours a week on co-op business.
“I was walking the grounds the other night,” he recalls, “and I noticed that one of the lights was out, which the porter wouldn’t have seen because he isn’t here at night. So I called him at home at 9 o’clock that night and informed him he should replace it the next day.”
These two men are as different as different can be – but they have three things in common: they want to save their properties money, they are hands-on, and they care.
A New Breed
Fox and Herzog represent a new breed of board member, different from the average one who attends meetings, maybe sits on a committee or two, regularly votes on issues, and is a little involved in management, but has no interest in the minutia. Conversely, this new breed is constantly searching for the great white whale of cost-savings, and more often than not, finding it.
Management executive Gerard J. Picaso, managing director of the Gerard J. Picaso division of Halstead Property, has run across such individuals during his three decades managing property – and he finds them helpful. “They’re on the property, they care about it, and they offer you a second pair of eyes. If their agenda is to make the building run well, and they work with you, then [it’s good because] you have almost like an on-site property manager there,” says Picaso. “I have a couple of buildings where the board presidents are very, very active, and very, very knowledgeable and we work very well together. One of them is a flat-out genius and does all kinds of research and has a tremendous mechanical aptitude as well as a financial background. The building runs great, he works with the super and the resident manager, and we save money all the time.”
The “highly involved” Fox and Herzog are seen as a boon not a bane by those who work with them. “Michael is the most caring board member you have ever met in your life,” says Steve Greenbaum, director of management at Mark Greenberg Real Estate. “He will make you think and challenge you in a very good way.”
Fox is similarly praised by the resident manager at his building, Chris Torres, who observes: “Mr. Fox took it into his hands to order a building-wide audit, breaking down the building into every line item: seeing how much we’re spending there and how much we can save. The board took on a number of capital projects after seeing how much they were spending and where they could potentially save money, too.”
Fox and Herzog are looking out for the building, and check their egos – more or less – at the door. “Here is the difference between Michael and [an ‘interfering’ board member],” observes Greenbaum. “If Michael sees that a light is out, he will call the superintendent. The other type will see the light is out, and he will write you a five page e-mail on how you need to make sure the light bulb never goes out again, and what you need to do to fix it, where you need to buy a light bulb, how many people it takes to change that bulb, and how much time, and why wasn’t the procedure in place three years ago?”
Fox and Herzog seem to wonder: if spending time means spending money, is there a way to cut down the time and save some money? “One of the big things is to really [inspect] your building,” Fox observes. “When you walk around, notice things. You might say: ‘Wait – the lights in the gym are always on, but people are in the gym only a certain number of hours. Does that make sense?’ Logically, you say, ‘What if I put timers on the gym so that the lights aren’t always on?’ If you really spend some time walking through your building and really keeping an eye and an ear open to things, you start to get really creative.”
Such site reviews can find practices that have never been questioned and that simply do not make sense. Fox found that the employees’ paychecks were sent by messenger from the manager to the property. “I asked, why do we use delivery services when someone can walk 10 blocks down the street, pick them up from the manager, and bring them to us at no cost?” The savings per month was the price of a messenger, but as Fox puts it, you do enough of those small savings and it adds up.
“The average recommendation from our management company and others is that common charges, typically, should be raised somewhere between 7 and 10 percent a year,” Fox notes. “We don’t have to; we are finding other ways to save 7 to 10 percent. If our budget is a couple of million dollars, then we are saving 7 to 10 percent of a couple of million dollars.”
Yet even that doesn’t take into account Fox and Herzog’s passion and zeal for the job. Sure, they want to save money, but that’s not the ultimate goal. What they finally want to do is to “save the starfish” – to make their homes a better place in which to live.
“I bought a three-bedroom in the building, and that wasn’t cheap,” explains Fox, “and I wanted to try to use my skill set to help the building control its costs. When you are running a public corporation and you are on the board of directors, your job is to make sure the investor’s money is protected. You try to run that company in the most efficient way possible. It’s my job to try to help everyone protect the building and everyone’s investments in their homes.”
“I e-mail our manager every day,” Herzog says. “We are in touch all the time. Any course of action I want to take that is other than routine, we check with each other before we do it. I am probably a pain in the ass to him because I am e-mailing him or calling him and his staff so much. But it’s not only a co-op – which is a business – it’s my home. I just want to make sure it is the best place for my family and everybody else to live.”
Observes Chris Torres, the resident manager: “I can say having highly involved board members is great for unit-owners and residents alike. They’re scrutinizing everything that’s spent, bringing it down to a bottom line. They’re really looking out for the owners.”