New York's Cooperative and Condominium Community
As we begin to talk about our budget we realize a maintenance increase is likely as past boards have not done so. Without crunching our numbers yet we have thrown around the likelihood of minimal increases that are in line with inflation over the next few years. Do your boards consider this at all? That is minimal routine maintenance increase just to keep pace with rising costs which seem much higher for cooperatives than for the average individual purchaser of, for example, consumer goods.
A good idea is to budget for building maintenance that is usually deferred. Example: a building just undergone a 180K renovation of the facade and other areas. This particular building as a 45 unit, 6 story building. I recommended budgeting in 30K per year for capital items such as these. Now every 5-6 years, they perform the work needed in any area and have the money put aside for it. They do not have to assess, or borrow to pay for these items.
inflation should ALWAYS be put into the budget, I usually add 6% across the board. budgeting in the added 30K per year (obviously, this amount will vary for different buildings), it will allow me to float the budget through an average of 2 years before having to reraise maintenance.
If you find yourself in a jam, you can always place a fuel cost assessment for the winter months to make up a shortfall.
- just a few ideas
~AR
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
We increase maintenance every year. After all our corporation’s expenses increase every year: salaries (we are self managed), insurance, services, consumables, fuel, repairs (e.g.: the building is aging), etc.
In this way, the residents are conditioned from the admissions committee interview to expect an increase every year. Thus, there is virtually no quibbling at the shareholders’ meeting.
Further, by increasing every year, we avoid the shock of the double digit increase.
For the record, through good and bad times, over the twenty-five year life of the coop, the maintenance increases have averaged 3.9%. Guess what? That’s the US inflation rate.
By having a cash reserve, not the capital reserve, we can take care of the swing up in one year and the swing down in the next year, thus we do not panic and increase maintenance 7% one year and 2% the next year. Our swings are more like 3.5% to 4.1%.
Further, very early in the life of the coop, we imposed an assessment every year that started at 25 cents a share and rose 25 cents a year cents and is now nearing $12 a share. Seems large, but it stopped at $6 a share and then when we paid off the mortgage two years ago, we did not decrease maintenance costs and just flowed the former revenues destined for mortgage retirement into the capital reserves.
Again, from the admissions committee interview residents expect an assessment every year. Thus, once again, there is no quibbling at the shareholders’ meeting.
We now garner about $900,000 a year for capital improvements. Our AICPA dictated capital improvement schedule shows that over the next fifteen years, we will need to face $15,000,000 in capital improvements at current costs. Yes, it looks like a shortfall with inflation and such, but through diligent maintenance we can push out some costs.
Of equal importance, we have not shirked our capital improvements as the building infrastructure ages. This year, we expended $250,000 to replace our central AC chiller plant. Last year, we repaved our driveways and outside.
The year before, we rebuilt our lobby, refurbished our indoor parking decks and built a new mail room – $1,200,000 for all.
The year before that, we overhauled our elevator system and put in a very large generator (we had a small generator for the fire pump) -- $1,300,000.
And over the last six years, we have replaced windows and terrace doors at the rate of about 10% a year and now we are nearing 55% completion.
In all, we have expended $15,000,000 for capital improvements since the building became a coop. Not all are documented here.
Along the way we have repointed sections of our brickwork each year (ongoing) and about six years ago we refurbished all our terraces (80%) of the units have terraces. And, we have upgraded all our heating and cooling systems to automated controls.
At the same time, we retired the original mortgage without ever refinancing.
Next year we have a new roof planned and replacement of our hot water boilers.
Hope this provides some ideas.
.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Sounds like you guys are doing a great job in self managing
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Ted;
Can you explain being self managed and all that it entails. We are very unhappy with the service our coop has gotten from, so called, professional management companies.
Perhaps a separate posting might help others who are interested in this topic.
Thanks.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
We have a building manager, an office administrator and an accountant / bookkeeper. These folks do not live on premises. Our two superintendents live on premises.
We have three senior maintenance staff and a number of porters. Maintenance personnel are on site 7 AM to 6 PM. Porters are on site 7 AM to about 9 PM. Our maintenance and porter staff personnel are all employees. We have 24x7 doormen (multiple on some shifts) on our staff and they are all employees.
Our maintenance staff performs small repairs (not requiring a license) in a resident’s apartment, e.g.: drain trap beneath a sink, sink washer replacement, shower washer replacement, door bell repairs, flushing mechanism repair, fans in the AC/heating units, window mechanism repair, etc. Of note is that the first thirty minutes of maintenance support, exclusive of parts, is free. And the staff cleans the under window AC/heating units and replaces filters each year.
The maintenance staff cleans our sidewalks and grounds, power cleans (riding machine) our garage decks, shampoos hallway carpets on each floor each month, cleans laundry rooms, picks up recyclables on each floor several times a day (no way to install a chute, among other things.
Residents will sometimes have maintenance person come to their apartment to change a light bulb.
= = = = = = = = =
On site, we have a valet cleaners, a bicycle storage room, a health club, a community room, an indoor children's playground, an outdoor pool, outdoor tennis courts (with lighting), basketball court (with lighting), an outdoor children's playground. During the summer, the pool staff fills, lights and then cleans charcoal grills, located within the pool area, for the residents.
= = = = = = = = =
All below are contracted:
Our security (contracted firm), 24x7, staff is in our upper garage (we don’t have access control), and our lower garage (again no access control) as the lower garage is also employed for visitors. Even if we had access control, we would have a security staff presence.
We have a rear lobby and the security staff watches our CCTV system and assists with food and truck deliveries and contractor access control, e.g.: no out of hours deliveries, no contractors except those pre-registered with the office (e.g.: insurance and credentials). Contractors, except cable TV and telephone are restricted to Monday to Friday, 9 AM to 5 PM; and the rule is enforced as every contractor has a badge issued by our security staff. Truck deliveries have the same restrictions except deliveries are permitted Saturday, 9 AM to 1 PM. The security staff does a late evening sweep of the floors to check for hazards, trash, etc. Security also walks the garage areas looking for autos with lights on, flats, oil leaks, fuel leaks, etc. Oh, contractors are not permitted access the day before certain religious holidays, e.g.: Christmas, Rosh Shoshanna, etc. And yes, the restrictions are enforced.
We have a house counsel (retainer) for most legal affairs, e.g.: closings, letters, town notices, notice to vendors/contractors, etc. We have an outside counsel for major items, e.g.: any litigation (rare, but necessary), and we hire “specialist” counsels as needed, e.g.: tax law, labor, etc.
We have an engineering firm that handles our every other year capital improvement / replacement AICPA redquired schedule for our annual report. The firm also assists with RFP’s and performs the quality assurance when we have major work in progress, e.g.: parking deck repairs, roof replacement, window replacement, recreation deck overhaul, etc.
We have a contracted elevator consulting firm that checks the safety and maintenance quality of our elevator system. This firm monitors our elevator repair service firm’s work. The consulting firm wrote the RFP for our major overhaul several years ago and assisted in the entire process.
= = = = = = = = =
We have renewable contracts with:
• a quality (and large) public accounting firm,
• an HVAC / boiler / mechanical engineering firm,
• an outside landscaping firm and an inside landscaping firm, e.g.; lobby, and holiday decorations, Halloween, Thanksgiving, Easter, Christmas,
• a snow removal firm, if we need assistance, e.g.: heavy snow,
• a fire and safety system firm,
• a pool service and staffing firm,
• a boiler water treatment firm,
• a generator service firm and a generator fuel delivery firm,
• a laundry room firm (21 floors, with a laundry room on each: two washers, three dryers),
• an AC firm for the standalone AC units that we have,
• an elevator maintenance firm,
• a LAN and PC support firm.
We hire and contract, as needed, with a plumbing firm, a painting firm, a carpentry firm, an outside electrical firm, a paving firm for spot repairs and striping, a tennis court maintenance and striping firm, an environmental firm (filing with the state), a marble maintenance firm, a brass maintenance firm, a pest control firm (free to any resident, but no real problems), a compactor maintenance firm, a secure paper and files shredding and disposal firm, etc.
= = = = = = = =
Without fear of contradiction, we are the lowest cost coop in the area and perhaps NJ region, considering all costs (maintenance with taxes, parking, assessment), and we are considered an upscale “luxury” residence. Our annual cost for a large two bedroom with terrace is about $13,700 or about $1,142 a month. As all residents have gas stoves/ovens, the cooking gas is “baked” into the monthly maintenance because we do not have gas sub-metering.
Oh, did I mention that the HVAC and the heating system are a central plant and the costs are included (electrical or gas, as appropriate by season) in the monthly maintenance displayed above (no PTAC units). Thus the resident only need pay to operate the electric fans in the under window units. As with other coops, share count is employed to allocate all costs, taxes, assessment, etc. So on top of the monthly maintenance, a typical resident personally pays another $50 a month for in-unit electrical service for lighting and for AC/heating fan operation– depending on season.
= = = = = = = =
But why self managed? The board, a number of years ago, deduced that coop or condos seek to acquire the least expensive management contracts. With the low cost contracts there is typically a novice building manager. Please accept my apology if this offends anyone, but many management firms provide what the coop/condo wishes to pay. In addition, with the high turnover in board members in many coops, the life of a management firm is typically short lived as each new board appears to have a penchant to replace the management firm as the first agenda item in identifying any ills.
By being self managed, we control our destiny; we set standards; we have continuity; we reward for performance.
And, our staff, management office (three), superintendents (two), doormen, maintenance, porters, etc, have been with us for a considerable period of time.
Our management office is open from 9 AM to Noon and 2 PM to 5 PM. The exceptions are certain half days before major holidays. Residents may only conduct business during the posted hours.
Likewise, our contracted firms have been with us for a long time.
And, we have many safety checks. For instance, the president is not authorized to sign checks and the president does not sign contracts – the secretary signs contracts. Two board members must sign every check. The management staff is not permitted to sign any checks.
We avoid all credit cards use for bills, with only minor exceptions, e.g.: stationery supply firm. Our staff is not permitted to partake of restaurant meals, sporting events, etc. sponsored by any vendor or firm with which we do business or may do business. Some firms will sometimes provide pastries, coffee rolls, etc. for the office staff. As a matter of fact, one vendor bakes his own pies and brings to the staff once or twice a year.
We pay all bills twice a month. The “big” run is at the beginning of the month for all bills received by the 25th of the preceding month. Then, we do a late month run (minor) for some stragglers or must pay transactions.
We have a seven figure line of credit which we may employ in advance of assessment revenue collections, but always repay by year end. Most often we have $500,000 to $1,000,000 in capital reserves.
= = = = = = = =
Of the 500 units (studio, one, two and three bedroom), only about a dozen are still owned by the sponsor (protected seniors) as we negotiated with the sponsor to divest all non-protected units.
= = = = = = = =
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Every Friday our building manager sends all board members and our counsel a recap of the week’s activities and events. Included are all letters from residents and all letters to residents. The monthly trial balance and income and expense statements are included as available; likewise the list of arrears is provided. Results of inspections are noted. Board members may also provide items for fellow board members.
Of note is that the board members do not charge dinners to the coop corporation. Yes, we meet, four board meetings a year and about four to eight workshops for board members. But, if we go out to the dinner, it is either share the bill or one board member picks up the tab, not the coop.
Yes, there are occasional working lunches and well have sandwiches brought to the board room. Similarly, for a workshop, we may have sandwiches provided.
= = = = = = = = = =
Across the years we have made many large scale capital improvements, but we have also made improvements not too evident to the residents. We do not wish to store our compacted trash outside and invite vermin. So we have chilled our compactor room and our trash storage room to reduce the heat of the trash and thereby reduce the generation of odors.
We replaced our aircraft warning lights (we are a high rise) with LED devices so that we need not send someone to the roof every few weeks to check on the bulbs and then have someone replace the bulbs. The LEDs last ten years – yes more expensive but there’s a cost benefit.
Our larger generator now supports emergency lighting in our emergency stairwells ands in our parking garage, as well as some lights in every hallway.
We replaced our original fresh water pumps that raise water to our roof top storage tanks with high quality vertical pumps from Norway or Sweden. We went with the best ands slightly oversized them to avoid future maintenance and replacement woes.
We added lighting to some dimly lit areas outside the perimeter of the building.
When we rebuilt our mailroom, we added parcel lockers for the convenience of the residents. I tried to have the postal service do home delivery, and I was even going to buy the postman an electric cart to deliver to each door, but I was turned down by the postal service.
We have had our roof infra red scanned, which is why we know we need to replace the roof next year.
For many years, we already used fluorescent bulbs (as replacements for incandescent bulbs) throughout the building. Now we have equipped many areas, save hallways, with motion detectors.
= = = = = =
As I think of more, I’ll add to the narrative.
Also see:
500 unit coop in NJ and committees +
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
At Halloween, the office provides orange 8-1/2” x 11” sheets of paper imprinted with a pumpkin. As only children of residents may go door-to-door, a resident who wishes to participate pastes the pumpkin on the door.
Following a funeral for a Jewish family, the doormen provide table with water and towels for purification.
We only permit the volunteer fire department to go door to door for their annual appeal. A letter is posted in all elevator lobbies notifying residents. No other in house solicitation is permitted, not even by a resident.
Annually, we do permit the voter registration folks to sit at a table we provide in our lobby to remind residents to register.
The postal service is permitted to collect food in its annual drive in our mailroom.
The local police do an annual Christmas toy drive and the residents leave gifts beneath our lobby trees for collection by the police department.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
We have 500 units and about 600 indoor parking spaces, and another 100 outside parking spaces.
But, in this day and age of multiple vehicles per family, there is never enough spaces. So we have waiting lists for upper garage, lower garage and outside parking. Folks, can stay on the lists, even though they have other spots. Thus, someone with an outside spot can stay on the list for the upper or lower garage. Someone, with a lower garage spot can still stay on the upper garage list.
Of importance is that the board members never (correct, never) permitted access to the lists and thus cannot influence the order of the list. As a matter of fact, board members are reminded they are not to attempt to influence the lists. The rules have been established and the building manager has total responsibility.
We have 225 storage cages (e.g.: dog kennel size) and the waiting list is similarly anonymous to board members and managed by the building manager.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Introduce yourself to other members of Board Talk! Log in below or register here.
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
Habitat U: learn about how to manage a building, and what you should know as a co-op or condo board member.
Search, by word or phrase, all magazine articles from January 2002 to present. You may print or email your results. Print subscribers receive free access to the Habitat Article Archive.
Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments
Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise
Got elected? Are you on your co-op/condo board?
Then don’t miss a beat! Stories you can use to make your building better, keep it out of trouble, save money, enhance market value, and make your board life a whole lot easier!
You don't want to have too frequent increases. Increasing maintenance annually is pretty frequent. Combine larger maintenance increases every two or three years, with assessments if necessary to fill in the gaps.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.