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Are you raising maintenance this year?
If so, by what percentage?
Are you, as board members and managers of cooperative housing corporations, who are likely undergoing your budget process for 2008, likely to put forth maintenance increases to be paid by your corporations shareholder for the upcoming fiscal year 2008?
If so, then what percentage over your current maintenance charges are you likely to raise maintenance?
Each building is different depending on the budget from the prior year. For instance, some of my buildings i budgeted enough to account for rising cost in the 08 year, some we did not.
On average (in most of my buildings),
~fuel is up, and now (today)announced and expected to top $3.00 per gallon on #2 oil - a 17% increase over my last years year end average (these numbers many differ from my other post)
~Insurance is increased 3% (not too bad)
~Water & Sewer is up 11%
~RE Taxes are up, but we are promised a decrease?? (For budgeting purposes ignore the promises and budget up 8%
Salary - up 3.5%
lets average them to 8.5% together,
given these expenses are 70% of the total budget, would give me a mandated 5.95% increase to maintain this years financial stability.
therefore, if you did not budget the extra 6% last year, you should increase this year, and take into account next year, unless you are like many buildings that opt to raise every year by a standard inflationary number.
Some buildings will raise every to years and assess a fuel cost assessment if needed to balance out.
Either way is good - unlike years ago where buildings were not wanting to raise maintenance because they thought it looked bad to potential buyers and banks; I believe buyers and banks are more understanding of the changing times, and we have to change with them. There is alot more instability in the markets nowadays and it is more acceptable to review and revise your maintenance and budget year by year. I believe it better on the shareholders as well.
We raise yearly costs to shareholders every year by a percentage between 3 to 4%. The rational is that the shareholders become acclimated to an increase very year. Heaven forbid we skip a year and then because of some quirk, we need to raise maintenance by a double digit value. It would be pandemonium. Our assessment has remained constant at about $6 a share for several years. Prior to three years ago, we raised the assessment at the rate of $.25 a year to finally arrive at $6. Now our 45 year old coop building and property with 500 units and 160,000 shares garners about $960.000 a year for our capital improvement program.
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Larry I am doing a lot of things this year, Now please can you elaborate so we can respond.
FN
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