North Shore Towers Courier n January 2016 7 By Stephen Vrattos The North Shore Towers annual Open Finance Meeting was held in Towers on the Green catering hall on Thursday, December 10, 2016. Board President Mort Gitter opened the meeting with a short greeting before introducing Board Treasurer Steve Redlich, who was presenting his first report, since his election to the Board last June. Redlich began by discussing the process that goes into constructing a budget, which takes several months. It starts with management, meeting with the department heads and committee chairs to review contracts and analyze historic data. From these analyses, a preliminary budget is drafted and massaged over several weeks before it is presented to the Finance Budgeting Subcommittee, one of four subcommittees, which make up NST’s overall finance committees, the other three being Auditing, Investments and Insurance. The latter three then does some tweaking of their own before the proposed budget is presented to the Board of Directors for approval by North Shore Towers Comptroller Robert Serikstad and Redlich. The budget is broken down into two parts: Operating Expenses and Capital Improvements, each of which Redlich presented separately. After informing his audience of the fact that maintenance charges represent 92% of the total revenue stream for North Shore Towers, he announced that there would be no maintenance increase in 2016, for which he received grateful applause. Redlich sees little change between the projections of 2015 and 2016. The largest expense North Shore Towers pays is for real estate taxes, which are $18 million, accounting for nearly 44% of the total 2015 expenditures. The co-op is projecting a 1.9% increase in real estate taxes going forward only because there is no way of knowing what the second half of the year will bring. Labor & Related costs follow at 23%. Although the $481,000 projection for 2015 for the latter may appear to be a tremendous jump, Redlich was quick to point out that half of that number was on account of savings due to employees taking medical leave and such. North Shore Towers saved more than $800,000 dollars of budget of its Fuel & Gas budget—7% of total—due to the warmer weather, lower oil rates, and efficiencies in the new power plant. By end of year, Redlich projects a savings of $1 million. A jump in Maintenance expenses was due to several projects that were budgeted for, but never gotten to, so those projected expenses have been rolled over, balancing out the savings in 2015 with the dramatic increase in 2016 to overall projected levels. Overall there’s an expected $1.3 million increase in expenses from projected 2015 to actual 2016. Still, North Shore Towers ended up with more than a $2 million surplus from 2015, the Board approving $1 million dollars of which to put into a fund toward the first mortgage payment of 2018. “This would result in not having to raise maintenance in 2018 for this purpose,” Redlich said. “I’m not saying others things might not happen, but at least we have the reserve in place in 2018 when our first mortgage payment becomes due.” As for Capital Expenditures, the new Air Conditioning chillers made up the brunt of the cost; followed by such projects as the replacement LED lighting in the Arcade and other areas; replacement roof on the Towers on the Green catering hall; and Towers Restaurant façade along the Arcade. In 2016, a half million has been allocated to garage improvements; $250,000 for outdoor pool concrete, with the Country Club contributing another quarter million; $150,000 for replacement ceiling tiles; plus expenses for such other items as the rehabilitation of the pool dome. Total: $1,332,000. “If the projected numbers hold,” Redlich explained, “the apartment corporation will end up with an $18 million plus cash reserve at the end of 2016.” According to the Treasurer, this doubling of projections was primarily due to stronger than expected apartment transfer fees from a red-hot real-estate market. The Operating escrow, which includes the aforementioned $1 million for the mortgage payment in 2018, is $500,000 more than usual. But Redlich cautioned that there were as yet no plans for rolling any excess funds into Capital Improvements until they “see how the year pans out. The Country Club goes through a similar painstaking process, with Club heads reviewing contracts and researching historic data to draft a preliminary budget, which is massaged before presenting to full Finance Committee. Membership fees account for 86% of the Country Club’s total revenue stream of $3 million: golf—1.1 million; tennis—$62,000; guest fees—$64,000, with the rest coming from golf cart and equipment rental. The Country Club’s biggest expense is payroll— groundskeepers, club employees and other personnel. Its largest Capital Improvement expense is attributed to the pool renovations at more than $400,000, with new equipment following. Goods News Open Finance Meeting reports projections of a strong 2015 and 2016 General Manager Glen Kotowski speaks with a resident Board Treasurer Steve Redlich presides Photos by Julie Weissman
NST012016
To see the actual publication please follow the link above