Page 8 - CooperatorNews NY July 2022

8 COOPERATORNEWS — JULY 2022 COOPERATORNEWS.COM PROPERTY MANAGEMENT AND GREAT PLANNING FOR OVER 30 YEARS MARBROSE REALTY INC. Our property management fi rm is here to help you and your business. From operations, accounting and compliance to planning for your capital improvements, we are here to help achieve your goals. BUILDING SERVICES | ACCOUNTING COMPLIANCE | PLANNING Call now to fi nd out how: 212-769-3706 43 West 75th Street, Suite C | New York, NY, 10023 WWW.MARBROSE.COM P R O V I D I N G E N G I N E E R I N G S O L U T I O N S T O C O M M U N I T Y A S S O C I A T I O N S F O R O V E R 2 5 Y E A R S ! Architectural Services Building Envelope Restoration Capital Reserve Studies Civil Engineering & Surveying Energy Analysis Expert Witness Testimony Façade Inspection & Safety Program (FISP/Local Law 11) Forensic Investigations Historic Preservation Leak Investigation Litigation & Insurance Claims Mechanical, Electrical & Plumbing Design Parking Garage Inspection & Restoration Retaining Wall Inspection & Restoration Special Inspections (Certified Agency) Structural Evaluation & Engineering Transition Engineering Survey Reports 95 Mount Bethel Road Warren, NJ 07059 350 7th Avenue, Suite 2000 New York, NY 10001 www.thefalcongroup.us info@thefalcongroup.us (800) 839-7740 by extension boards, particularly when it “Budgeting during inflation can be tricky. comes to capital projects. The pandem- ic led to what is now referred to as the reasonable inflation rates such as the ‘Great Resignation,’ and companies across Consumer Price Index (CPI), budgets can the board are struggling to hire and re- tain workers. That situation is pushing labor costs and ultimately vendor bids ucts affected by supply chain issues (ex- upward—and employment watchers say cept oil) can shift at a moment’s notice,” it’s unlikely to change in the immediate Kurian continues. “Co-op and condo future. “It’s harder to find people to work the most critical building system services and smaller jobs,” says Wolf. “There is clearly supplies, and purchasing in bulk wher- a labor shortage at the moment. Overall, ever possible. As a matter of course, sea- there are just fewer people in the trades. sonal supplies like calcium chloride (for A recent graduating class from a local melting snow and ice) and other winter- plumbing school was composed of 25, down from 100-plus previous- ly on an annual ba- sis. Some trades- men left what they were doing dur- ing the pandemic, changed fields, and didn’t come back.” “While vendors and contractors have adjusted pric- ing and services accordingly,” says Kurian, “co-op and condominium boards should plan to remain very prudent when it comes to budget- ing and planning for projects. In addi- tion to higher costs, timelines for repair having major suppliers bid on commonly and renovation projects have extended as purchased items on a quarterly basis to well.” “Fuel is knocking budgets for a loop,” adds Wolf. He points out that it’s both a these days,” adds Wolf. “We try to get direct and indirect cost increase. “An in- direct result of the increase in fuel prices ously—say five instead of three—but in is that we see all the vendors increasing the end it doesn’t matter much. We also their vehicle surcharge,” he says. “Month- ly billings are really starting to \[reflect\] goods in bulk to try to get the overall per- that now. We thought this fuel price jump unit price down. In other words, buy 36 would be short term, but it’s not. Any units instead of 12—but remember it’s a vendors coming to properties we manage bulk purchase, not negotiation. The price are passing higher vehicle charges on to is still the price.” their customers to cover the increase in their fuel costs.” Controlling Costs…Where Possible So we’re in a price/cost crisis at the wave\] hit,” says Jayson Prisand, a partner moment—that seems to be a given. But with Prisand Mellina Unterlack & Co, how do we manage it? “We highly rec- ommend accounting for a five to seven New York. “There were trends at that percent increase in line items like materi- als and supplies for future budgets when- ever possible,” says Kurian. “While this are taking a look at their first quarter ver- amount is double the typical forecasting, sus where they are now, and considering conservative budgeting will help cover whether they may need a short-term or any unexpected costs, even as we move one-time operating assessment to bridge towards more stability.” According to David A. Levy, a CPA based in Needham, Massachusetts, given that boards and managers can’t forecast future costs based on prior information, However, by taking into consideration be forecasted with more accuracy.” “The availability and pricing for prod- boards should be thinking about their specific goods are typically purchased in advance and in bulk, and that will cer- tainly be the case for the upcoming sea- son.” It’s also a good idea to prioritize projects and plan for additional time to complete them. “Bidding repair and maintenance con- tracts is critical in order to ensure ser- vice providers such as HVAC, landscap- ing, etc. are at com- petitively similar levels when it comes to cost as well as distribution and de- livery timeframes,” stresses Kurian. He also recommends find the best deals. “Vendors are in a command position more bids than we might have previ- recommend that associations purchase Budgeting for the Future “The 2022 budgets were set at the end of 2021, before this \[current inflation an accounting firm located in Plainview, time, but no one expected these spikes. In some cases, some of the boards we advise the gap for this year. And in some cases, INFLATION... continued from page 1 “Some boards are considering a short- term or one-time operating assessment to bridge the gap for this year. And in some cases, they’re even considering a second full maintenance increase, mid-year.” —Jayson Prisand