Elizabeth Condominium Association members will be invited at the end of April to endorse the proposed budget that was decided on in the March 21, 2011 Board meeting.
This budget will be based on a 5 percent increase of condo fees approved at the March meeting that will suggest that the ECA will begin hallway renovations in the new ECA fiscal year (2012) that starts July 1, 2011 and continue into the next fiscal year of 2013. Following this project, the budget will suggest that the project to replace windows and balcony doors should begin in fiscal year 2014 and continue through to fiscal year 2016.
BACKGROUND:
The ECA is financially challenged because our cash reserve fund is low. Our ability to borrow money is based on collateral we can put up to insure our solvency to a lending institution. Having a healthy cash reserve fund helps a borrower, such as the ECA, to get a well-priced loan. Our current board discovered much to their horror that if we were to borrow the $4 million plus we need to finance our three large projects—window-balcony doors replacement, refurbishment of our heating-cooling infrastructure which has to happen before McQuay units can be replaced, and refurbishment of our hallways in both towers—it would cost us over $1 million. Naturally, that idea came off the table immediately as too costly and financially irresponsible.
I would like to suggest that the ECA made a significant mistake when a past sitting board decided to finance our recent lobby renovation by paying for it out of our cash reserve fund instead of borrowing. Our current treasurer Monique Fridell led this decision which drew down our cash reserves because she felt it was the cheapest way to accomplish this project which cost the ECA just under $1.5 million. In the short term, not borrowing to avoid interest on a loan is the cheapest way to go, but had we borrowed then for lobby renovation, the cost of borrowing would have been significantly cheaper than what we are faced with now.
I would also like to suggest that the ECA made another significant mistake at the time that the decision was made to initiate the lobby renovation. Despite years of complaints from Association members that windows and doors were failing in apartments all over the complex, the sitting Board moved ahead with a costly lobby renovation project before getting a comprehensive engineering study done (There was a cursory study done before the in-depth Mendoza Engineering Study) that detailed an overwhelming list of things that needed repair sooner versus later. It turns out the complaints about failing windows and doors were just the tip of the iceberg. What I am suggesting here is that the sitting board that decided to go ahead with the lobby renovation made this decision without having a strategic plan based on a reliable set of engineering data.
CURRENT SITUATION:
While we cannot change how the lobby renovation has been handled, we can learn from our mistakes. I suggest that our current Board is making decisions without considering an overall strategic plan that takes into account the best return on money that will be spent over the next five years. Consider what the return on investment is between renovating tower hallways versus replacement of doors and windows.
BENEFITS OF REFURBISHING THE HALLWAYS:
--Sale-ability of individual units
Like the lobby renovation, refurbishment of carpeting, wall covering, lighting, possibly unit hallway doors, possibly new furniture facing the elevators will make the building more attractive to a buyer.
--Esthetic appeal
Yes, it is more appealing to current unit residents to open their hallway door and to pass through a hallway that is newly refurbished. Because the upscale renovation of the lobby level sets up an expectation that the entire building would be more of the same, not to take care of our hallways becomes a much more noticeable issue.
BENEFITS OF REPLACING WINDOWS & BALCONY DOORS:
The windows & balcony doors of Elizabeth units are the original equipment and are 37 years old. Weather stripping in these windows and doors is not longer capable of performing the functions required to seal the windows from outside elements, including temperature, wind, and precipitation.
--Temperature control
Our current windows are ineffective in protecting our apartments from heat and cold caused by normal weather conditions. Those units that face north experience the worst winter conditions in the building but many units experience the effects of weather year round. In other words, the windows & doors that let in the cold air in winter and the heat in summer make it impossible to achieve a comfortable temperature within our units.
--Energy savings
Along with the inability to achieve a comfortable temperature within our units, we are forced to turn up the heat in winter and increase our air conditioning in the summer placing a burden on our old McQuay heating and cooling units that have also been identified as needing replacement. This means the entire Association is paying additional utility costs for this heating/cooling situation.
Typically new windows save 10-15% of the current bills associated with energy (electric and gas). In our building, a very conservative estimate would be a savings of $50,000 per year.
--Management costs savings
Because the windows & doors are failing, residents typically call on our staff to do something to fix old windows and doors. The problems range from not being able to open windows and door--imagine what happens in the spring when it gets hot in your bedroom and there is no air-conditioning service and you just want to open the window but the slider mechanism is shot and it won’t budge—to residents insisting that the weather stripping be fixed which means a contractor must be called in.
--Cost impact on heating-cooling infrastructure
Replacement of our windows and doors before we refurbish the heating-cooling infrastructure will mean that we have a better chance of making more accurate replacement of heat/cooling elements. In other words, with the old windows and doors, we need bigger and more costly elements to produce the heating and cooling that comes through our McQuay units. If we allow window replacement to be delayed, it is very possible that we might be forced (because of suddenly failing equipment) to attend to the heating-cooling infrastructure before windows-doors replacement begins.
--Preventative measures to preserve building structure
New windows-doors plays into preventing water damage problems. Some balconies in our building have problems with wind-driven rain that comes under balcony doors. How many floors in the Elizabeth have been ruined this way? Quite a few from what I hear. With installation of new balcony doors, this problem could be fixed. Some windows also have water seepage problems.
--Energy tax credits
Currently there are some energy tax credits that we as an Association and individual unit owners could realize by replacing windows and doors now.
--Sale-ability of individual units
While some buyers may not be savvy enough to ask about when the Elizabeth last replaced its exterior windows and doors, those that do ask will be more interested in buying in this building. Ask yourself, would you purchase in an old building without asking this question, now that you know how costly it is to make this improvement?
--Esthetic appeal
If you want to see how new windows will improve the outside appearance of the Elizabeth, go out the party room door to the right side and look at the newly installed windows in our management office. New windows will improve the appearance of our building.
I have probably stated some of the benefits of replacing windows/doors ineloquently and maybe missed some (like blocking ultra violet rays that bleach our drapes, carpet and furniture) but this should help get the conversation started. Replacing windows and balcony doors impacts the health of our building, our pocketbooks over the long-term, and we, the people living in this old rundown building.
WHAT SHOULD WE DO?
Personally I think we need to invest in a project that will show return on our investment and that improves the quality of life within our individual units. There are many more benefits to replacing windows/balcony doors versus refurbishing our hallways. If we all feel that we cannot live with shabby hallways, than we need to compromise by just attending to the wall covering and the carpet in the most economical way possible. This also means we need to say no to replacing the furniture that sits in our hallways and no, to replacing hallway light fixtures and doors.
Will a 5 percent raise in our condo fee be sufficient to fund the three looming major projects we need to attend to? No.
Is it possible to get the Association to agree on a special one-time assessment? Maybe not under the current bylaws, but we won’t know until our Board steps up and asks. Also the Board needs to address changes to our Bylaws that were recommended by our legal counsel.
Remember elections for three Board members are coming up. We need some good candidates with the skills it takes to navigate the current challenges. Most of all we need a good strategic plan and logic to prevail.
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