The common areas had seen better days at the Murray Hill Crescent co-op. The hallway carpeting was worn and the wallpaper was peeling, while the drab lobby inside the 21-story, postwar building certainly looked its age. A refresh was overdue, decided the board of the 280-unit midtown Manhattan property. The co-op’s decorating committee set to work. Murray Hill Crescent is a place where residents tackle projects with a painstaking eye for detail, and this time was no exception. The committee thoroughly screened more than half a dozen design firms, visited client buildings, and held monthly meetings to pore over everything from floor plans to swatches.
Now, more than two years later, Murray Hill Crescent is in the midst of a $1.3 million renovation project that will make the property – known for its unique curved facade – even more of a standout. While much of the credit goes to the committee, its best-laid plans couldn’t have come to fruition if the co-op didn’t have the cash.
Rifkin to the Rescue
Fortunately, Murray Hill Crescent runs its finances with an enormous amount of oversight, which has allowed it to fund one capital project after another while avoiding maintenance increases. “Our committees have always been very thorough and meticulous, which is their job,” says Scott Rifkin, the co-op’s treasurer. “Mine is taking charge of the money and keeping my eye on the ball.” When Rifkin, an accountant at the Citco Group, became treasurer in 2013, Murray Hill Crescent wasn’t running a tight ship. “The board wasn’t as proactive as it could have been when it came to accounting,” he recalls. “Whether it was plumbing or plastering, they had historically relied on management to tell them what work was done – and only after the fact, when invoices were already sent and paid. I also saw that there was a big surplus in the operating budget and moved to invest surplus funds in the highest-yield accounts.”
With the board’s encouragement, Rifkin was quick to get the co-op in order. He initiated a weekly contractor report, asking the co-op’s longtime super, Guillermo Guzman, to submit a list every Tuesday morning of all the contractors who had worked on the property in the previous seven days. “That includes which apartments and exactly what was done, giving me a running tally so I could see right away if we were getting billed correctly,” Rifkin says. He also had Guzman prepare and present a separate report to the board and management at monthly meetings. “Keeping track of repairs and projects helps us have a better understanding of the condition of our building and what has to be fixed before there’s a serious problem,” Guzman says. “Preventive is the way to go.”
Rifkin wanted to be more hands-on with payables, too. When the co-op’s management company, Century Management Services, began using an electronic bill paying system called AvidXchange last summer, Rifkin asked management to let him in on the loop so he could access accounts in real time. “They pushed back at first because they didn’t want another party involved,” he says, “but then I think they realized having another pair of eyes would prevent errors from falling through the cracks. AvidXchange automatically sends invoices to management, they approve them, and then they come to me. I check them against the weekly report, and if things are in order, it goes into the payables column – all in one fell swoop. It’s easy to refer to previous bills, too, since the system puts everything in a central location.”
Adam Zerka, a senior account executive at Century, has learned to appreciate the extra pair of eyes. “Thanks to Scott,” Zerka says, “there’s now a three-tier system with the super, himself, and me, which makes it easy to stay on top of everything. And believe me, Scott is on top of it. If there’s a dollar difference, he’ll catch it. At the same time, it’s not like he won’t spend a dime. He just wants to spend it wisely.”
Committee at Work
Murray Hill Crescent has been doing just that. For the current common-area renovation, the seven-member committee narrowed its choices to three design firms, conducted multiple interviews with each, and displayed the presentation boards of the winning firm on easels in the lobby to gauge the reaction from shareholders.
“Somehow, we were the last man standing,” says Joel Ergas, president of Forbes Ergas Design Associates. “This group was very into detail, very patient, and wanted to understand everything before committing to the job, rather than just buzzing through things quickly.”
The aesthetics were nailed down – the hallway refresh includes cool neutral wall coverings, vinyl baseboards that resemble painted wood, and marble doorway saddles, while the lobby will be upgraded with a porcelain tile floor and textured stone wall, as well as contemporary pendant lights and sconces. Then the job was bid on by contractors. “We had the two finalists bid against each other to get the price down,” says Rifkin. “And even after we chose one, I spoke to them again to get their absolute best price, which turned out to be lower than what they originally offered.”
It wasn’t the first time Rifkin gave contractors an extra push. He used the same competitive bidding system to cut costs when the co-op had to do $1 million in repointing and other brickwork in 2014 and when it expanded the package room the following year. Since 2013, it has been replacing its riser lines, a $1 million project that was interrupted by the facade repairs and by the current project. “Each time we started up again I rebid the project,” Rifkin says, “so we’ve been able to avoid any price increases in labor or materials.” To cut energy expenses, the co-op insulated pipes throughout the building, upgraded thermostats and water heaters. LED lighting was installed in the stairwells, with a Con Ed rebate covering $3,600 of the $6,000 tab. “Anyone Can Do It” For Rifkin, no savings are too small. Mindful that water and sewer bills exceed $100,000 a year, Rifkin distributed handouts showing the cost of a slow faucet drip to encourage shareholders to speak up any time they spotted a leak. He even handed out strainers from a 99-cent store to prevent clogged drains that might gum up the building’s plumbing.
And he’s not content to place the co-op’s surplus funds into money market accounts or CDs; he always pushes to get better rates, even if it’s just a fraction. “I’ve never had a bank say no,” he says. “It’s the difference between earning a couple of thousand and tens of thousands. You’ve got to be diligent moving the money around to get the best deal.”
Rifkin’s already doing the math to pare down future spending. The co-op refinanced its underlying mortgage in 2012, taking out a $9 million, 10-year loan that slashed its interest rate from 8.75 to 3.42 percent.
“When the mortgage balloon payment is due in 2022, we will have paid nearly $5 million in principal and owe only $4 million,” Rifkin explains. “Assuming rates continue in a slow upward fashion and don’t completely skyrocket, we’ll be able to refinance, take out a few million more for our reserves and reduce our monthly payments even further.”
If Rifkin can boil down Murray Hills Crescent’s money management philosophy into a few nuggets of wisdom, it’s this: he hates it when people say, “We don’t need to do so-and-so, that’s why we pay a manager.” But at the end of the day, “you’re the owners and you’re in charge,” he notes.
The other thing he dislikes hearing is that “90 percent of the budget is not controllable.” He believes that everything is controllable, at least to some extent, and that’s where you have to look to save money. “But it takes a trifecta,” he says, “a treasurer, manager, and super working hard together.”
At a party on the roof deck recently, Rifkin received a lot of praise from shareholders. That’s great, he says, but adds: “You don’t do this job for the thanks. The combination of seeing these great projects get done and seeing the value of our apartments go up without maintenance hikes – it’s very satisfying. And it can all be done in just an hour a day. Anyone can do it.”