We increase maintenance every year. After all our corporation’s expenses increase every year: salaries (we are self managed), insurance, services, consumables, fuel, repairs (e.g.: the building is aging), etc.

In this way, the residents are conditioned from the admissions committee interview to expect an increase every year. Thus, there is virtually no quibbling at the shareholders’ meeting.

Further, by increasing every year, we avoid the shock of the double digit increase.

For the record, through good and bad times, over the twenty-five year life of the coop, the maintenance increases have averaged 3.9%. Guess what? That’s the US inflation rate.

By having a cash reserve, not the capital reserve, we can take care of the swing up in one year and the swing down in the next year, thus we do not panic and increase maintenance 7% one year and 2% the next year. Our swings are more like 3.5% to 4.1%.

Further, very early in the life of the coop, we imposed an assessment every year that started at 25 cents a share and rose 25 cents a year cents and is now nearing $12 a share. Seems large, but it stopped at $6 a share and then when we paid off the mortgage two years ago, we did not decrease maintenance costs and just flowed the former revenues destined for mortgage retirement into the capital reserves.

Again, from the admissions committee interview residents expect an assessment every year. Thus, once again, there is no quibbling at the shareholders’ meeting.

We now garner about $900,000 a year for capital improvements. Our AICPA dictated capital improvement schedule shows that over the next fifteen years, we will need to face $15,000,000 in capital improvements at current costs. Yes, it looks like a shortfall with inflation and such, but through diligent maintenance we can push out some costs.

Of equal importance, we have not shirked our capital improvements as the building infrastructure ages. This year, we expended $250,000 to replace our central AC chiller plant. Last year, we repaved our driveways and outside.

The year before, we rebuilt our lobby, refurbished our indoor parking decks and built a new mail room – $1,200,000 for all.

The year before that, we overhauled our elevator system and put in a very large generator (we had a small generator for the fire pump) -- $1,300,000.

And over the last six years, we have replaced windows and terrace doors at the rate of about 10% a year and now we are nearing 55% completion.

In all, we have expended $15,000,000 for capital improvements since the building became a coop. Not all are documented here.

Along the way we have repointed sections of our brickwork each year (ongoing) and about six years ago we refurbished all our terraces (80%) of the units have terraces. And, we have upgraded all our heating and cooling systems to automated controls.

At the same time, we retired the original mortgage without ever refinancing.

Next year we have a new roof planned and replacement of our hot water boilers.

Hope this provides some ideas.





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