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Summary of the 33nd Annual Meeting of 205 West End Avenue Owner’s Corporation

posted May 25, 2019, 6:05 AM by Marc Donner

Keith Bleiweiss, our Certified Public Accountant from Newman, Newman & Kaufman, LLP, led us through a comprehensive review of our financials, for both the Coop and the Condo. All this information can be found in the 2018 Financial Reports mailed to you in the package containing the formal Meeting Announcement. Net, net, we are very healthy financially, however our Reserves coverage ideally needs to increase from its current ratio of just under 1.5 to 3 months.  This was expected due to the numerous capital improvements we completed over the past several years.

This should not be a concern as we don’t see any major capital expenses on the horizon and our maintenance arrears are insignificant, but the Board is working on a plan to bring it to industry standard at approximately 3 month’s expense coverage.

Next, Stu Sugarman gave the report for the Board:


President's Comments - 2019 Annual Shareholders' Meeting

Good evening.  As the president of our 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 our community. 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 busy one. I’ll highlight some of these activities. If you can hold your questions until I finish, I would appreciate it.

  • We completed the work on the balconies: 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 applying a multi-layer waterproof coating to all balcony surfaces, including flooring, roof and fascia.

Due to multiple factors, including bad weather, DOB mandated delays, and the need for additional unanticipated and very time-consuming work, this project took longer to complete than planned.


Two such unanticipated elements were: significant core drilling and patching of weak spots in both the balcony floor and roof, and the repair of over 20 broken drainpipes.


This project will give us many years of maintenance-free enjoyment of our balconies, enable us to comply with regulatory mandates, and has made the building much more attractive.

Budgeted at $3.8 million, this project was funded half from reserves and half from increasing our current mortgage at an Extremely favorable rate. ($2 million @4.45% for 26 years)

It should be noted than none of these delays increased the overall project cost as this was a fixed-price contract. Additionally, we received performance penalties that helped reduce the overall cost of the project. Even with the additional work elements, the project came in on budget.

  • In addition to the balcony work, the contractor also completed Local Law 11 leak repairs to our building’s façade.

  • With the completion of our construction, the Landscaping Committee, headed by board member Rob Stein, is in the midst of a complete restoration of the landscaping in front of the building. This

is a big job as we are basically starting from scratch. We hope you will find it pleasing when completed in several weeks, and the new landscaping has time to grow and mature.


  • As an outgrowth of last year’s Annual Meeting, we created a Bicycle Room Committee, headed by board member Ernie Sander. This committee has engineered a complete redesign of the bike room, with new lighting, brightly colored paint, better ventilation and with the installation of a new state-of-the-art bike racking system. The new racking system will comfortably hold 200 bikes.  Although the older system was designed to hold 200 bikes, the upper racks were unwieldy and thus bikes were strewn all over the room.

Additionally, the Committee found car tires, strollers, etc. – none of which belonged in the bicycle room. By cleaning out the room and removing unregistered bikes, over 40 slots opened and were assigned to those on the waiting list.

With the room now complete, and once all bikes are returned to their assigned slots, we anticipate finding some available slots to accommodate additional shareholders on the waiting list.

  • The Community Room Committee, created last year and headed by board member Abigail Burns, will ensure that the Community Room is best serving the entire 205 population. A survey was sent out to all shareholders late last year to get a feel for the kind of activities they should be considering.  The Community Room is now being refurbished to make it more pleasing and functional; an aerobics class has already been added, and other classes for shareholders are in the works.

  • As always, the Board focuses on expense management.  Led by our Treasurer, Rob Stein, we delivered a 2019 budget calling for a maintenance increase of 6.5%, much higher than in any of our past 10 years. Most of this was due to the increase in real estate taxes levied by NYC.  Although we have always retained a tax certiorari attorney to help reduce the impact of real estate taxes, this year we interviewed and hired a new certiorari who we feel will do a better job for us.

  • The Gym Committee, led by board member Larry Chaifetz, responded to member requests and added a pull-up bar.

  • We had our building’s insurance carrier, HUB, perform a risk assessment. The results were quite encouraging, and the few minor items identified were quickly resolved by Mark and Jose.

  • We acquired two new Automated External Defibrillators (AEDs), one for the gym and one for the front desk.  Three training sessions on CPR/AED have already been held by the Red Cross. We’ve had great shareholder attendance.

  • We are launching a trial compost program next month, which was a shareholder suggestion from our February informational meeting.  We will monitor its usage to determine if we want to make it permanent.

  • As a normal Board function, we review for approval all purchase and refinance applications. These applications are quite large and very detailed. In 2018, the Board reviewed 14 purchase applications, four refinance applications and two transfer applications. These entail a lot of work for the Board, but is a critical function to ensure the financial stability of the Coop.  Additionally, all new prospective shareholders are interviewed by the Interview Committee, headed up by board member Ellie Applewhaite, who would be pleased to add new members to the committee.

 

  • And last, but not least, windows and hallways.

With the completion of our Local Law 11 project, the Board is now beginning to look at potential capital projects.


There are two major capital projects on our radar:

  1. Window Replacement

  2. Hallway Renovation

Window Replacement


As you can imagine, this would be an expensive and very disruptive project.  Very preliminary estimates for this project are in excess of $6 Million.


Additionally, residents will need to remove any built-in window treatments and the contractor will need to erect bridgework for the length of the project.

The Board has just begun to scratch the surface on this potential project, so please do not expect any decision or action on this soon.

Since this is not a near-term project, we encourage you to continue to report any window issues to the management office.  Our staff have expertise supported by ample supplies and can quickly rectify many window complaints.

Hallway Renovation:

Although the building staff does a great job maintaining our hallways, our hallway design is over twelve years old and a few shareholders have suggested that the Cooperative would benefit by updating the look. Although we do not have a definitive estimate, based on our prior renovation, we feel that it will be about $1.5 million.

Since this is also not a near-term project, building staff will continue to work to keep the hallways looking as fresh as possible.  Jose just completed an examination of each hallway and compiled a “repair” list.


They have already begun to give a fresh coat of paint to those hallway, elevator, compactor and apartment doors that need it.   We have an ample supply of hallway materials. We will replace stained and damaged carpeting and damaged wallpaper, and we will re-caulk and paint crown moldings where required.  We intend to keep the hallways in good repair until such time as we renovate them.

If you see something in your hallway that needs repair, please contact AKAM.

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, the effective running of our cogeneration plant, the repair of water leaks from our facade, and regular training for our building staff.

And, as we know, Mark and Jose go out of their way to service you, the shareholders. A small handful of examples of their service orientation are:

  • Reworking our hot water systems such that they operate at peak performance. I hope you are enjoying your hot shower.

  • Setting up a rotating maintenance schedule to ensure all kitchen drain lines are clear in order to prevent clogs which can cause backflows with resultant apartment damage.

  • With the conclusion of the LL11 project, helping shareholders restore their balcony belongings, cleaning windows, repairing screens and cleaning air conditioners.

  • Handling numerous NYC-mandated local laws around elevator door locks, staff training on sexual harassment, energy efficiency audits and many more.

  • Contracting for 3rd party purchase of electricity and gas at the lowest rates.

  • Obtaining and installing new smoke detectors with a ten-year battery life.

  • Helping shareholders insulate around their ACs and cover them during the winter months.

  • Painting all outside railings and curbs that surround this building now that the construction is done.

Looking forward:

Going forward, we plan to be as tough on spending as possible, 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.  Including this year, the 10-year average increase is 3.32% per year.

For 2019, we delivered a budget with a 6.5% maintenance increase; however, 205 still has the lowest cost per share within Lincoln Towers. ($4.25/share) The 2019 increase was distressing to the board.  This increase was almost entirely due to increases in real estate taxes.  In order to prevent a recurrence and in hope of getting some of the increase rolled back, the board has engaged a new tax certiorari attorney.  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 continue to work with our managing agent on updating our multi-year capital plan. Based on the numerous capital projects already completed over the past 5 years, we don’t expect any new major capital projects in our near future. We have some minor ones to complete, mostly pertaining to DOB code changes.

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

So, I’ve covered a lot of ground here, and I’ll open the floor for questions on these topics.  Be assured, there will be ample time for general Q&A, on any topic you like, after the formal meeting is adjourned.

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 and one additional shareholder were standing for election.

The candidates are, in alphabetical order:

  • Eleanor Applewhaite

  • Abigail Burns

  • Larry Chaifetz

  • Marc Donner

  • Reshma Rughwani

  • 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.


Reshma Rughwani was recognized by the President and asked to introduce herself as she was a new candidate and not well known to many of the attendees.

These 8 candidates were nominated, and nominations were then closed.

Since we had 8 candidates for 7 Director positions, ballots and proxies will be counted in the management office tomorrow morning at 9AM, in the presence of two inspectors of elections.  As such, we needed two inspectors. Two shareholders volunteered to perform this function.

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 8:45PM.

ELECTION RESULTS


After counting all of the ballots on the morning of 5/21, the following were the results:


The following shareholders were elected to the Board of Directors for the year 2019-2020:

  • Eleanor Applewhaite

  • Abigail Burns

  • Larry Chaifetz

  • Marc Donner

  • Ernest Sander

  • Robert Stein

  • Stu Sugarman

We would also like to thank Reshma Rughwani for her interest and participation in the Annual Meeting.

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