BUDGET CHALLENGES
Fuel costs are skyrocketing and are impacting on the cost
of electricity, and of virtually all transported items.
Insurance is still very expensive. Buildings higher than
six stories face major facade work for their Local Law 11
filing. The tax rate for fiscal 2006 has not yet been decided,
but it is likely to be slightly higher than 2005. And the
contracts with Local 32B-32J and Local 32E of the Building
Service Employees International Union will be negotiated
during the year 2006. These are just some of the major considerations
facing boards as they try to establish realistic budgets
for the year to come.
Buildings with Union members from Local 32B-32J began paying
an additional $20 per employee per week into the health
fund on January 1st, pursuant to the 2004 contract with
the commercial sector. Traditionally, all benefits changes
for residential and commercial workers are negotiated in
the commercial contract and are imposed on residential members,
as well. The 2004 negotiation was significant, because the
reserves of the health plan had been depleted by the precipitous
jumps in health care costs. An agreement was implemented
to revitalize the plan through significant employer contributions.
The Union, for its part, agreed to a year without a wage
increase, to substantial co-pays for medical services, and
to several belt-tightening measures. Already positive effects
are clear and the health plan is once again able to meet
the demands of Union members.
At CNYC’s 25th Annual Housing Conference, several
workshops will prove helpful to building treasurers and
their finance committees as they grapple with appropriate
increases. In the morning, Norman Prisand will discuss the
Responsibilities of Building Treasurers, Charles Zucker
will help novices in Understanding their Cooperative’s
Audited Financial Statement, and Rick Montanye will discuss
Financial Responsibilities in Condominiums. In the middle
of the day, Abe Kleiman will talk about Reserves, and Charles
Zucker will present Internal Controls for Small Buildings.
In the afternoon, Ted Procas and Andrew Hoffman will explain
how All Building Costs Can Be Controlled, Stephen Beer will
analyze The Budget, and Mark Shernicoff will present Basic
Financial Aspects of Cooperatives. Consult the Conference
program inserted opposite page 10 of this Newsletter and
make your choices.
COMPARATIVE STUDY OF
2004 OPERATING COSTS
For 25 years, the Council of New York Cooperatives &
Condominiums has prepared an annual Comparative Study of
Building Operating Costs to help members determine if their
own buildings are operating economically and efficiently.
The annual Comparative Study gleans data from the annual
financial statements of member cooperatives and condominiums.
The Study is divided into six categories: East Side Cooperatives,
West Side Cooperatives, Condominiums, Small Buildings (those
with fewer than 100 rooms), Lofts, and Larger Buildings
Outside of Manhattan.
The Study analyzes on a per-room, per-year basis all of
the basic costs of operating a building. Code numbers identify
the participants in order to preserve anonymity. When the
Study is sent to CNYC members whose financial data is included,
they are advised of their code numbers to facilitate the
location of their own statistics.
Whenever possible, the Study includes the assessment and
mortgage balance for the building and the carrying charges
paid per room during the year. It then breaks out the operating
costs for labor, fuel, utilities, repairs and maintenance,
insurance, management, administrative costs, water &
sewer fees, property tax and debt service. When available,
elevator maintenance and legal and accounting costs are
each listed separately.
The Study then presents summary statistics, calculating
the average and median for each item and the portion of
total operating costs devoted to each. A 10-year recap of
this data allows trends to be distinguished.
The Comparative Study of 2004 Operating Costs will be published
early in December and sent to every CNYC member cooperative
and condominium and to CNYC professional subscribers. Additional
copies will then be available in the CNYC office for purchase
at a cost of $15. CNYC regrets that it has been unable to
provide this information in time to be helpful with preparations
of building budgets for the year 2006.
TAX ABATEMENT INFO
FOR FISCAL 2006
COMING SOON
The various exemption and abatement programs administered
by the City are credited against property taxes due. Condominium
unit owners each receive their own property tax bill, with
this information clearly noted. In cooperatives, where the
property tax is levied on the building as a whole, abatements
and exemptions are credited against the tax, and then the
cooperative is advised of the amount that is to be credited
to each apartment. This notification is sent to the designated
contact for the building (generally the managing agent).
The Department of Finance sends a chart that tells how much
is to be forwarded to each apartment for their share of
the Property Tax Abatement Program, for the S.T.A.R. abatement
for anyone who has registered their apartment as their primary
residence for this program, advanced STAR for those who
qualify, Veterans benefits, Senior exemptions, etc. Typically
this information is distributed in November, once the City
Council has established the tax rate for the fiscal year.
It is the responsibility of the cooperative corporation
to credit these sums to the designated apartments prior
to the end of the fiscal year on June 30th. u
