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ON THE MONEY: COMPARATIVE STUDY OF 2002 OPERATING COSTS

Published: Summer 2003

The Comparative Study of 2001 Operating Costs was published last fall and distributed to CNYC member cooperatives and condominiums and professional subscribers. This annual analysis provides a framework to help you decide if your own building is operating economically and efficiently, by analyzing operating costs. Code numbers are used to identify the participants, while preserving their anonymity. When the Study is sent to members whose financial data is included, they are advised of their code numbers so that they can easily find their own statistic.

Participating buildings are listed in one of six categories, cooperatives from the east side of Manhattan, cooperatives from the west side of Manhattan, small cooperatives (those with fewer than 100 rooms), large cooperatives from outside of Manhattan, lofts and condominiums. The Comparative Study analyzes all data on a per-room basis, beginning with the current assessment and mortgage figures for participating buildings and their maintenance fees. It then lists amounts spent per room on wages, fuel, utilities, repairs and maintenance, insurance, management fees, administrative costs, water & sewer fees, property tax, and debt service. When possible, elevator maintenance and legal and accounting costs are each listed separately. The Study also presents a second chart of summary statistics for each category of buildings analyzed, calculating the averages and medians for each item, and the average portion of total operating budget devoted to each.

The Comparative Study is most helpful to the buildings whose financial data is included, but other buildings will still find it a very useful diagnostic tool. To maximize your benefit from the Comparative Study of 2002 Operating Costs, please be certain that CNYC has the 2002 financial statement from your cooperative or condominium along with an accurate room count.
The Comparative Study of 2001 Operating Costs can be purchased from CNYC for $5. Send your check to CNYC at 250 West 57th Street, NYC 10023-2142, being sure to specify the address to which to send the Comparative Study.

JULY PROPERTY TAX BILLS INCLUDE ABATEMENTS FOR QUALIFYING HOMEOWNERS IN CO-OPS AND CONDOS
In mid June, the Department of Finance of the City of New York sent out property tax bills for fiscal 2004, which begins July 1, 2003, to all property tax payers. Because the City Council had not yet fixed the tax rate for the new fiscal year, these bills were calculated by applying the 12.517% tax rate established last January to this year’s assessment. The July bills include provision for the property tax abatement (since the abatement program continues in place through June 2004) for qualifying homeowners in cooperatives and condominiums.
The Department of Finance will recalculate all tax bills once the new tax rate is established. Adjustments will appear on all January tax bills– those for individual unit owners in condominiums and those for cooperative apartment buildings. As it has done in the past, the Department of Finance will send a chart to the contact person in all participating cooperatives in autumn, telling precisely the dollar amount of exemptions and abatements due to each apartment owner. The cooperative has until June 30, 2004, to distribute the abatement.

3.5% INCREASE IN UNION CONTRACT
The new agreement between Local 32-B-32J of the Building Service Employees International Union and the Realty Advisory Board on Labor Relations Inc. established in April 23, 2003 calls for average increases in wages and benefits of 3.5% for the next three years. The benefits increases are instituted through the commercial agreement, which has an anniversary date of January first, and wage increases begin on the 21st of April of each year. See page 5 for full details of this contract, which applies to most residential buildings in Manhattan, Brooklyn, Queens and Staten Island. Buildings in the Bronx and Westchester have a different contract, which was renegotiated in 2001.

WATER RATES UP 5.5%
Water and sewer costs are of growing concern in New York city as their increases outpace inflation. These rates are set annually in May by the Water Board, which must provide for adequate functioning of the city’s complex water and sewer services and for long term planning to maintain and upgrade the system. The Water Board holds hearings in each of the five boroughs to give rate payers an opportunity for input before it votes on the rate for water services in the fiscal year that begins July 1st.
In this challenging year of cost increases everywhere, the City Council questioned the Water Board’s proposed rate increase of 6.5%; the Council’s own budget process would not conclude until June, and thus the Water Board acts prior to knowing what city funding is to be allocated to water issues. The City Council Finance and Environmental Protection Committees convened a joint hearing on April 28, 2003, in the hope of getting the Water Board to reconsider the magnitude of the increase. The City Council also wanted the Water Board to revise its calendar and wait until after the City budget is enacted to set its rates. While the Water Board didn’t agree to change its pattern of rate setting in May, it did roll back its rate increase for fiscal 2004 to 5.5%. On July 22, CNYC will present a workshop on water issues with Warren Liebold of the Department of Environmental Protection as featured speaker.

 
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