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Summary of the 32nd Annual Meeting of 205 West End Avenue Owner’s Corporation

posted May 23, 2018, 7:15 AM by Marc Donner   [ updated Jul 5, 2018, 2:21 PM ]

For those who attended the meeting, thank you. For those who could not attend, here is a brief recap.

Keith Bleiweiss, our Certified Public Accountant led us through a comprehensive review of our financials, for both the Coop and the Condo. All this information can be found in the 2017 Financial Reports mailed to you in the package containing the formal Meeting Announcement. Net, net, we are very healthy financially.

Next, Stu Sugarman gave the report for the Board, as follows:

President's Comments - 2018 Annual Shareholders' Meeting

Good evening. As the president of your Board of Directors it has been my pleasure to serve you this past year.  My colleagues on the board, Ellie Applewhaite, Abigail Burns, Larry Chaifetz, Marc Donner, Ernie Sander and Rob Stein, have committed their personal time and energy in service to you, our Shareholders. In recognition of their contributions, I’d like to personally thank them for their hard work and dedication.

As usual, this past year has been a very active one. I’ll highlight some of these activities.

  • We are nearing the completion of the work on the balconies. As a reminder, this project required replacing the railings, the partitions and the concrete on the fascia, along with installing new steel rebar in the new curb for additional structural stability and patching minor cracks and applying a multi-layer water proof coating to all balcony surfaces, including flooring, roof and fascia.  Due to many factors, including extremely bad weather conditions and DOB approval delays, this project has taken longer to complete than planned.
  • It has also required that additional unanticipated & time-consuming work elements be performed. Two such elements are: significant core drilling and patching of weak spots in both the balcony floor and roof, and the repair of over 20 broken drain pipes. However, the end is in sight and we anticipate having most balcony lines open by the end of June.

  •  This project will provide us with many years of maintenance free balconies, enable us to comply with regulatory mandates and be much more attractive than our prior 50-year old balconies. 

  •  Budgeted at $3.8 million, this project was funded equally out of reserves accumulated from our last mortgage refinancing, and from borrowing on our current mortgage at an extremely favorable rate over 26 years to create as little impact as possible to shareholders.  ($2 million @4.45% for 26 years)

  •  The impact of this borrowing was an addition of 1.3% to our maintenance budget this year.

    It should be noted than none of these delays are increasing the overall project cost as this was a fixed-price contract. Additionally, there are performance penalties that will help reduce the cost of the project.

  •  In conjunction with the balcony work, Local Law 11 repairs to our building’s façade will also be made where needed. Once the balcony work is complete, we will tackle the issue of leaks to our façade.

  • As reported last year, our new co-generation system is now online and working perfectly to provide both steam and electricity at a lower cost than that provided by Con Edison.  As a new benefit, not allowed by the old system, the new CoGen units are configured to provide emergency power to the common areas of the building in case of a blackout, including one elevator on each side of the building, hallway lighting, and the pumps that keep the roof tanks full of water.  We are testing this capability 2 times per year to ensure that it is working properly, and that the building staff are adequately trained. It is comforting to know we have this capability in case of a blackout.
  • We completed the replacement of all lighting fixtures in all common areas with LED bulbs. The payback for this $81,000 project is 2.8 years in electrical savings. This does not include extensive labor savings in manpower to change bulbs and the cost of the older replacement bulbs themselves.
  • The Board created a standing Community Room Committee with ongoing responsibilities to monitor the Community Room and provide recommendations to building management and the board. This committee, headed by Board member Abigail Burns, will ensure that the Community Room is best serving the entire 205 population. Very shortly, you will all have had a chance to respond to their survey. The Committee’s group email address can be found on the 205 Website Contact page.
  • As always, the Board focuses on expense management. Led by our Treasurer Rob Stein, we delivered a 2018 budget calling for an increase of 3.72%, which included the one-time increase of 1.3% for the balcony/façade work I mentioned earlier.
  • We completed an inventory of all usable space in the basement to determine if we could either add or expand our shareholder amenities. Unfortunately, we determined that all the current space is being used maximally. However, we are still examining options to store more bicycles in the current space.
  • The Gym Committee, responding to member requests, added a state-of-the-art Peloton spin bike this year. The Committee’s group email address can be found on the 205 Website Contact page.
  •  We had our building’s insurance carrier, HUB, perform a free risk assessment. While we passed with flying colors, there were some minor items that both Mark and Jose will need to follow up on.
  • We acquired 2 new Automated External Defibrillators (AEDs), one for the gym and one for the front desk. Training on the use of the AED units will shortly commence.
  • The landscaping committee, led by Board members Rob Stein and Larry Chaifetz, are doing what they can during the period the sidewalk bridge is up, and have planned a complete landscaping upgrade once the sidewalk bridge is removed.
  • We are working with LTCA to upgrade the common lighting in our shared park grounds. Ernie Sander represents us on the LTCA Board.
  • As a normal Board function, we review for approval all purchase and refinance applications. These applications are quite large and very detailed. In 2017, the Board reviewed 22 purchase applications, 9 refinance applications and 2 shareholder transfer applications. This is a typical volume of transactions, and entails a lot of work for the Board, but is a very critical function to ensure the financial stability of the Coop. Additionally, all new prospective shareholders are interviewed by the Interview Committee, headed up by Ellie Applewhaite.
  • And last, but not least, the Reality Advisory Board and Local 32 BJ have settled on a new 4-year contract. In anticipation of this, our 2018 maintenance had already included the anticipated labor increase. Therefore, there will be NO impact to our 2018 maintenance.

Mark and Jose continue to spend considerable effort to ensure we keep the building running at peak efficiency. This includes the ongoing maintenance of our water, steam, and control systems, upgrades of our window components and the vigilant repair of water leaks from our facade.

Several specific examples of their diligence to go “above & beyond” are:

  • Aiding shareholders during the period of extreme cold weather this past January. Building staff, under the direction of both Mark and Jose, responded to shareholder requests by sealing and appropriately closing windows, sealing the space around the air conditioners and providing covers for the air conditioners to minimize leaks of cold air.
  • Investigating the use of isolation valves to better control heat distribution and save energy costs.
  • Helping shareholders remove and store their balcony belongings until the project is finished. And cleaning windows, repairing screens and cleaning Air Conditioners for shareholders as the balcony project winds down.
  • Installing a direct dialer from Building Link to the Front Desk phone. Since Building Link is the official source of shareholder contact phone numbers, this will ensure that the correct number to contact a shareholder will always be used, and not a phone number given by a delivery person or a guest. This has improved building security and operational effectiveness at the front desk.

Looking forward:

Going forward we plan to be as tough on spending as we can be, consistent with prudent operation of the building and provision of services to shareholders.  205 is known as one of the most economical of the co-ops in Lincoln Towers, with an average growth in maintenance costs over the past decade that is the lowest of the eight buildings. (Average increase is 3.06%/year for past 10 years)

For 2018, we delivered a budget with a 3.72% maintenance. Of this increase, 1.3% is for interest and mortgage amortization expense attributed to the additional borrowing for the balcony project.  The impact of this expense to the operating budget is most noticeable in 2018 as the costs will already be accounted for in future years. 

Aside from the 1.3%, the remaining increase of 2.42% was almost entirely due to increases in real estate taxes. The Cooperative employs a real estate tax attorney to maintain pressure on the City to keep our tax assessment as low as possible.  As I indicated before, this board is very proactive when it comes to ensuring we keep our expenses as low as possible, while still providing a high level of shareholder services and building operations.

We are currently working with Mark & Jose on updating our multi-year capital plan. Aside from the current balcony and façade work and based on the numerous capital projects we have already completed over the past few years, we don’t expect new major capital projects in our near future, except refurbishing the hallways at some point.

It should be emphasized that all our recent capital improvements have been funded from the proceeds of the building’s refinanced low-interest mortgage.  For these capital improvements, such as the lobby, the roof, the gym, the elevators, the driveway, etc., there has been no impact on shareholder maintenance.  For the balcony/façade work, the impact was minimal.

As I said earlier, prudent financial management has kept our maintenance increases quite low over the last several years. 

Thank you

At this point the floor was opened for questions.  

Numerous questions and comments were raised, and a lively discussion ensued.

Nomination of Director Candidates

We then proceeded to vote on the item referred to in the notice of annual meeting and proxy statement.  Seven incumbent directors are standing for re-election.

President: The candidates are, in alphabetical order:

  • Eleanor Applewhaite
  • Abigail Burns
  • Larry Chaifetz
  • Marc Donner
  • Robert Stein
  • Ernie Sander
  • Stuart Sugarman

In accordance with the offering plan, the sponsor is exercising its right to designate one member in addition to our seven.

These 7 candidates were nominated, and nominations were then closed.

With nominations closed, and having no opposing candidates, the 7 candidates were elected by acclamation.

With elections complete and having no other formal business on the agenda, a motion to adjourn this meeting was passed and we then proceeded to the general Q&A.

Again, a lively discussion was held, several follow items were noted, and the meeting was adjourned at about 8:50PM.