Going Forward
Capital Improvements featured prominently in annual finance meeting
STORY AND PHOTO
BY STEPHEN VRATTOS
With many residents already
nestled in their
cozy winter abodes
down south, the attendance at the
Board of Director’s annual Open Finance
Meeting may have been lower
than September’s general affair,
but those who did come were fully
engaged, paying close attention to
the proceedings and offering interesting
questions and insight during
the QA session which followed.
As Board President Stanley J.
Goldsmith explained during his
opening welcome and remarks,
the night’s focus was the co-op’s
financial state, how residents’
investment faired in 2018 and what
to expect in the New Year. To that
end, the main thrust of the evening’s
agenda would be Treasurer
Steve Redlich’s audiovisual fiscal
presentation, with the Board Chairs
suspending their usual Committee
updates—the lone exception being
Capital Improvements Chair Ed
Phelan.
This came as no surprise.
Everyone in the cinema was concerned
about the planned massive
renovation of the underground
garages, first discussed at the
aforementioned early fall meeting.
The project’s various construction
phases, timeline for work and completion,
how it would impact their
wallets and day-to-day lives during
the renovation, all weighed heavily
on the assembled. Thus, the Board
and Management dutifully ceded a
large chunk of the meeting to discussing
this great, but necessary,
undertaking.
Redlich, who also serves as the
Country Club Chair, began with the
club’s financials. Despite a 5.4%
increase in operating expenses,
membership fees will not increase
in 2019. The only increase at all will
be in bag fees, in order to help offset
the raise in wages for the workers
in the storage area.
Still, Redlich reported the
Country Club financials were in
“good shape,” with an operating
budget over the $500,000 threshold,
which according to the career
corporate finance guru, is enough
for the Club to easily survive the
lean winter months until the spring,
when the golf and tennis seasons
open. Membership is also anticipated
to increase in 2019 with the
opening of the new practice area,
which will make the NST Country
Club a more competitive option for
area golf aficionados.
The news for the cooperation,
however, is not as rosy. Expenses
pertaining to fulfillment of Local
Law 11 cost approximately $5
million in 2018, amounting to
more than $6 million being spent
and an ending balance of just over
$3 and a half million. Despite the
work on Local Law 11 having been
completed, the necessary repairs to
the front plaza, garage roof, expansion
joints and traffic circle, as well
as the expansion of the Country
Club’s VIP Room, among other
needed expenses, equal a projected
Total Cash Expenditure of nearly
$5.5 million dollars resulting in a
Projected Ending Balance of just
under $1.4 million.
“We’re talking about a Capital
Improvement Fund that a number
of years ago was about $22 million,”
Redlich noted. “Every year, we’re
spending more than we’re bringing
in… At this point we’ve pretty
much exhausted what we have in
our Capital Improvement Fund…
Things need to change.”
In order to replenish the Capital
Improvement fund, the Finance
Committee recommended the
following:
• The assessment for June 2019 be
increased by 40¢/share, which
will recapture approximately
80% of the abatement for those
that receive it
• If an operating surplus in excess
of $1.7 million is achieved, $1
million be placed in the Capital
Improvement account
Fortunately, NST won its tax certiorari
proceeding, which contested
the assessment of its apartments,
resulting in a rollback in property
taxes retroactive to 2017 and a
reimbursed of $1.5 million. Though
certainly helping the sagging financial
situation, more need be done.
“We’re going to be increasing
the maintenance by 1%,” Redlich
explained. “Although we might have
gotten by with 0 zero, we need to
start putting wind in our sails, so
that some of the operating surplus
goes into Capital Improvement.
There are too many things coming
down the road regarding our buildings
being forty-seven-years-old not
to have sufficient funds in in our
Capital Improvement to get the
job done correctly and make this
a first-class type of establishment
that we all enjoy.”
Yet, the overall increase in
expenses at North Shore Towers
in 2019 is only 3%, in line with that
of the cost of living, which is 2.8%.
“Two ways we ought to count our
lucky stars is that we’ve been able
to get away with a 1% increase,
because I’m telling you, without
the success of that proceeding, we
would have been staring at a 5 to
6% increase for next year in order
to break even.”
Ed Phelan’s updated the audience
on the procedures—necessary
repairs and renovations—to
be done on the garage and traffic
circle, stressing the 1.2 million earmarked
for the project was just an
estimate. His presentation featured
more than a dozen vivid photos of
the garage’s extensive damage, the
steel corrosion from water infiltration,
chloride-laden snow, spalling
and moisture, and deterioration
at the expansion joints. Repairs
will necessitate such temporary
inconveniences as the closing of
the main entrance to Building #2
and delivery vehicles having to
back into the loading dock, which
Phelan estimates at no less than
two weeks.
He also went over the weight
issues of the trees and wide cement
path of the central gardens, which
are negatively impacting the garages
beneath, resulting in a complete
overhaul of the landscaping as well
as the amendments to be made to
the 4-way intersection atop the
hill at the entrance after passing
the security gate. “I’m not a traffic
engineer, but certainly you can see
that this is an accident waiting to
happen, And there have been accidents
because people run through
the STOP sign with people coming
out of level one, so we’re going to
address it and get it fixed.”
An adjunct to the main project
is the increase of rear parking area
adjacent to the outdoor pool. With
the impending extensive repairs to
the garage will come areas of the
main parking lot being closed,
necessitating the expansion of
more spots. For this reason, Phelan
believes this project would need
to be done first before the grand
one begins.
Capital Improvements Chair Ed Phelan and Board Treasurer Steve
Redlich took center stage at the Open Finance Meeting
6 NORTH SHORE TOWERS COURIER ¢ January 2019