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Council of New York Cooperatives & Condominiums
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On the Money
ON THE MONEY

Published: Winter 2005

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

 
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