Wednesday, February 6, 2013

Major Rent Hike Needed to Deal with ‘Runaway Spending’


By Michael Horowitz

BRONX, NEW YORK, February 6- Riverbay assistant treasurer Daryl Johnson sees a major carrying-charge hike in Co-op City unless management officials and other members of the board start taking his warning about “runaway spending” seriously.
Based on preliminary budget figures, a carrying charge increase of at least three percent could be in the offing by October of this year, Johnson said, in a Co-op City Times Viewpoint last Saturday.
Johnson noted that Co-op City preliminary budget for the 2013-2014 fiscal year shows expenses for Co-op City's various departments increasing from $95.8 million this year to $106.2 million in the next fiscal year, an increase of $10.4 million, or 11 percent.
The power plant's budget for the 2013-2014, alone, calls for a $3-million increase in expenses.
“The people in management and the people on the board need to take my lead in cutting expenses, something that they have, to date, been unwilling to do,” Johnson noted. “The preliminary budget, of course is not written in stone, but I get a bunch of blank stares or worse whenever I bring up the idea of cutting the budget.”
Johnson added, “Based on the fact that there doesn't seem to be any inclination to cut anything from the budget, I am not at all optimistic about our ability to avoid a significant increase in carrying charges later this year. I have been warning, for months, about runaway spending, but, so far, no one seems to be taking my warnings seriously.”
Johnson, for months, has been saying that Co-op City's expense budget could by cut by at least 10 percent without affecting the delivery of services to the community.
He has offered a number of suggestions on how costs could be cut. These suggestions have included a significant streamlining of procedures in Co-op City's Restorations Department, the curtailment of lucrative contracts for high-paid consultants, strict limitations on changes in the parameters of consultants' contracts, and the duplication of work done by contractors' workers and Riverbay Corporation employees.
Despite the specific suggestions that Johnson has put forward, Herbert Freedman has insisted that the board member has no specific ideas about how to cut Co-op City's expenses.
“It's really outrageous that we're now considering a preliminary budget that calls for more than a $10-million increase in the composite budget for Co-op City's various departments,” Johnson stressed, in a telephone interview on Monday. “The people in management don't seem to care that major increases in our expenses translate into significant increases in carrying charges that we, the shareholders, will have to pay.”
Johnson added, “We continue to have double-digit unemployment in the Bronx, and many of our community's shareholders are unemployed, too. In addition, many people in this community are living on fixed incomes. In short, a large percentage of the people living in Co-op City can't afford to pay an increase in carrying charges. As it is, many people in this community are having trouble paying the current carrying charges.”

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