New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

BOARD OPERATIONS

HOW CO-OP/CONDO BOARDS OPERATE

Cost-Cutting in 2013: Places Where You Can Trim Co-op / Condo Budgets

New York City

Feb. 1, 2013

Contract Negotiation 

Rather than getting stuck in long-term agreements, think about shifting to annual renewals. This gives you the chance to renegotiate pricing each year, and to opt out of contracts whose quality of service has fallen. Vendors will pay more attention to the account if they know renewal is not guaranteed and tied directly to their performance. 

Cable TV, Internet, Security

If you provide some or all of these services for the community, negotiate the best bundled package or bulk subscription possible — again, shorter term might assure the best services and rates can then be renegotiated annually. Sometimes paying a little more per month not to be locked into a long contract is a wiser move. Most of these companies offer a teaser price (good for three to six months) to lure you in, then raise the prices higher and higher throughout the usual 24-month term. Of course, if you can leave these items up to the individual homeowners to handle, it is just one less issue for your co-op or condo board,  and they will appreciate the ability to choose their own service. 

Office Expenses

Postage is a large expense, considering the various notices you have to send out annually. Try to combine documents into one mailing (invoices with newsletters for instance), use postcards to communicate instead of letters when possible and, of course e-mail whenever you can. A PDF document sent over the Internet costs nothing, and the responses (if required) are much quicker. 

Insurance

Bid out the account each year to take advantage of market changes — don't assume your insurance agent will automatically apply earned discounts, stay on top of this. Consider raising your insurance deductible in order to reduce the premiums; make room in your operating budget for the larger insurance deductible so you are covered in case of a loss. Be certain to require all vendors to provide up-to-date license and insurance binders; requiring that the vendor name the condo or co-op board as an additional insured will prompt the carrier to advise you if the coverage is cancelled. 

Landscaping and Water

Add a requirement in your contract to have the landscape vendor turn on all water stations after mowing and edging to check for leaks. Post signs reminding owners to report water leaks and broken sprinklers immediately; make certain sprinklers aren't aiming onto pathways, parking areas and walls. Update old irrigation lines and sprinklers to cut down on water usage, and use bubblers for decorative plants and ground cover. Make sure you are using the correct lawn seeds for your climate and traffic pattern; choose grass types that are tolerant to higher temperatures and lower water levels.

Green areas have many benefits over using rock landscaping; contrary to popular belief that you should landscape with rocks to save money on water. Lawns cut down on pollen, filter toxins in the air, cool the air temperature (while rocks give off heat into the evening — called the "radiator effect"), and help to prevent rainwater runoff into sewer systems, waterways and even your parking lots and garages.

 

Barrera and Company, based in California, conducts reserve studies for homeowners associations and related properties. This is adapted from an article on the company's website.

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