Is this a big/normal/small maintenance increase?

Big.

But we need to see the whole picture here. What are your building's financials? What kind of cash reserve do you have? What are your building's expenses? How big is the building staff?

Ours has been raised by about 15% as well. I think its inevitable given the rise in commodity prices and also the fact that the city needs more tax revenues.

Is it a Mitchell-Lama or ex-ML?

"Ours has been raised by about 15% as well. I think its inevitable given the rise in commodity prices and also the fact that the city needs more tax revenues."

Not necessarily.

We raised our maintenance by less than 2% this year. Of course, ours is a well-managed building.

A well-managed building raises its maintenance at least 3% a year, whether it's needed that year or not, to avoid much larger increases in years when, e.g., fuel & insurance spike. Fewer fist-to-boardmember incidents that way.

The ML question was for technologic.

15% sounds like a large amount. when was the last increase before this one? i lived in a coop where in the 7 yrs, they raised the maintenance about that and the old timers were pissed. you have to expect 2% on average per year, but usually done every 2/3 yrs.

"A well-managed building raises its maintenance at least 3% a year, whether it's needed that year or not, to avoid much larger increases in years when, e.g., fuel & insurance spike."

Our well-managed building doesn't operate that way. If no increase is needed, we don't increase. We have a healthy reserve to cover years where costs spike.

Alan - I am sure what a ML is?

Matt - I think it has a cash reserve of $2 million. We have 100 units. We have no doorman/pool/gym/roof but staff - who totals about 8 - is on call (someone always in building) 24/7. We have an elevator, a bike and laundry room. We recycle a lot (they are vigilant about how they do the trash). I would think the biggest expense is the staff plus that they pay electric like I said. But I am concerned, I bought in part becaues the maint was very low, and this is annoying me.

I trust you mean a separate operations contingency fund, not the capital replacement reserve.

It should annoy you.

Do you attend the monthly board meetings?

They only have one yearly board meeting. I have never gone (I know, this is horrible and bad and I plan on going every time now).

Alan - yes, I believe so.

No no. They meet every month. Start going to the monthly meetings.

Really? OK, well I actually have to call the operating agency today so Ill find out when they are. I need to know what is going on to justify this, although I suspect its the staff (the super has his whole family on the payroll) - I had a sneaking suspicion this was a big increase!

Review the financials yourself and end the mystery. Call the buildings CPA for an update as a serious stockholder in the company that owns the building and pays his fee.

You get what you inspect, not what you expect.

And avoid listening to posters who are definitive about your situation in terms of how well managed it is, and spread false and misleading information(percentages can vary widely between buildings and need to be individually reviewed) based on their specific experience. For example, a co-op in SoHo which has no underlying mortgage and owns 2 retail stores and a 2nd floor loft could still raise the maintenance 22% in a year based on Property taxes and utilities. Some buildings let their extremely sophisticated shareholders manage their own funds and contribute only as necessary.

Each building is a private company and no two companies run exactly the same. Get familiar with your situation, understand it completely and see if you can contribute to the Board discussion on reducing expenses and increasing income (balancing your budget).

Also, get yourself on the board. Attend that annual meeting!

Thanks everyone for all the help!

By M-L I mean Mitchell-Lama, a middle-income housing coop (or rental). Buildings are typically from the 1950s or 1960s, usually have terraces, are often 25 stories or so, and are otherwise as you describe, especially the electricity-included part. But usually far more than 100 units, so probably yours wasn't. Included electricity was once common in NY, but virtually all buildings submetered decades ago, except Mitchell-Lamas and NYCHA housing projects. I guess there are others here and there that didn't.

Oh I see now, no we are not a ML.

I was thinking ex-ML. Many have transitioned to regular coops, but with irregularities. Notably the huge cluster around Grand St. and the FDR Drive, known collectively as Cooperative Village.

Pay close attention to staff overtime, and also to separate charges for things that should be included in the duties of staffers, or that should be paid for by individual unit owners (e.g. lockout locksmithing charges).

If the increase is due to the included electricity, push for higher surcharges on air conditioners, better enforcement against dryers in units, and ultimately submetering. This can be done with electricity purchased in bulk by the building, and meter-based electrical charges added to each monthly maintenance bill. It gives people the incentive to cut back on electrical usage that's completely missing in the arrangement you have now.

Keep in mind Water rates have increased by more than 10% in the last6-8 months or so. Electric, Oil and Gas have all increased massively in the last few years (although off the high's from last year). Salaries could have increased. Property taxes have increased sharply. There are many variables that could have pushed up your maintenance by the 14.4% you mentioned.

There are many ways to manage a building effectively. The owners in my building have made their preferences clear- they don't mind larger percentage increases as long as the common charges stay steady for a lengthy period of time. Not every building has monthly meetings- although I would expect it in a mid to larger size building. Small buildings might not hold them so frequently (as is the case in my building with less than 20 units).

I would assume that real estate taxes are also a part of your coop charges. They have certainly increased over the past 2 years.

The articles passed around last year said maintenance up 8%, I believe. Having it happen again, in 1.5 more years, not particularly surprising... especially given how taxes are shooting through the roof.

I would expect that maintenance would reasonably track what's happening with rents over the long term.

technologic, i've never heard of a board allowing shareholders to attend their monthly meetings, especially on regular basis.

from what you are saying, $2M in reserve and no expensive ammenities, it is very strange to have such a large increase. 8 people on staff does not seem reasonable at all. i used to live in a 24/7 doorman building of 130 units and we had 6 full time and 2 part time employees, 4 of them being doorman. as far as the electricity, you have to remember that last year we had summer for only 3 weeks, so that could not be used as an excuse.

did they just finish local law 11 with the facade of the building or changed the boiler or the roof? some buildings do special assessments, others get a mortgage and do a maintenance increase.

if none of the above, something fishy's going on.

You'll get the 2009 financials in a few months, and can then see what's going where.

Just got my 2009 tax letter. Real estate taxes are ~50% of the budget. Between those and the other non-discretionary stuff, there's not much to cut. Sound familiar?

You guys are so helpful, thank you! I just emailed the managing agent asking when financials are coming, and asking for the Board meeting schedules. I am going to get to the bottom of this - and will report back accordingly!!

Tech - 15% over the past 2 years is not uncommon. If you have issues with the way money is being spent, try to angle for a spot on the board. I became treasurer and enjoy the control I have over our spending. Not in a power-trip kind of way, but I question the vendors, spend by vendor, etc. We have cut our operating costs 6% in the time I have been treasurer, and have kep our increases low, only 6% over the past 2 years.

I disagree about the annual raise policy. The problem with this is that the board feels it needs to spend the money each year so that they are not showing income (for tax purposes). As such, they tend to overpay, or fund "pet projects" that are wasteful and unnecessary. I agree that it is good to have a healthy reserve fund for emergencies, and otherwise raise maintenance only as necessary, not as part of an annual plan.

"technologic, i've never heard of a board allowing shareholders to attend their monthly meetings, especially on regular basis."

Most will, if you ask in advance.

Dec 2008, the city council voted a 7% property tax increase.
This January, Dept. of Finance announced.... taxes go up again with assessed values jumping another 5% (even though actual prices went down)

So, thats 12% just right there, and there might have been other increases.