You ought to have a meeting with your independent accountant to go over the best way to maximize your tax basis, etc. Also, the comptroller of your management office may provide you some guidance with regard to accounts, etc.

Your operating is kept in your checking and, sometimes, depending on collections and when you pay your bills, you may have a CD associated where you can sweep your account and call from it as required in order to maximize your interest.

Obviously, your reserves are kept separately and only tapped when necessary to do strictly capital, even in emergencies. Unless I don't know what you mean for emergencies, i.e., a major unexpected leak that forces the co-op to spend $50,000 to replace with enhancement of your parking roof (just by way of example).

Your operating budget should be as solid as possible to cover all your expenses during the year. The fact that some builidngs keep the maintenance artificially low and assess to cover deficits may be a problem if you are doing assessments to build reserves and at the same time patch deficits.


In our case, we have three accounts: the operating, a tax escrow to accummulate the surplus during those months in which we have no payments to do, then reserves. We flow monies from escrow to operating and viceversa in order to pay our taxes and insurance. However, the reserves are kept just for major emergencies and capital repairs.

AdC