Fiscal Year 2017 Budget Review Process: Part two June 20,2016

Presentation by Folake Fabunmi; Mark Day, Connie Row, of the Budget and Finance Committee

 

The B & F committee has met frequently and, working with management, have identified some areas of multi-year savings, and have now reduced the recommended condo fee increase from 15% to 13%. The savings (over $100,000 per year) come from renegotiated or new contracts with service providers. Stephanie Deodes explained that the services were not cut, and in fact, would be the same or in many cases, better.

 

Nevertheless, as the committee dug deep into the numbers it became clear to them that we are in a transition year, a perfect storm as a result of deferred maintenance, rising costs from every day operation of the building, major repair and replacement projects, increased insurance expenses and the need to budget for the large deductible imposed by the insurance company. The premiums increased 250% and the deductible increased 400%.

 

The Elizabeth is largely dependent on condo fees to cover the costs of running and maintaining the building. The good news, as reported by Stephanie Deodes, General Manager, is that the windows, doors, and balconies are done, phase two of the fire safety improvements are completed, the elevator work, and the new contracts are for two years, allowing for greater stability and predictability in expenses. The ePipe project is set to begin and will be completed in 2017 which will fix the pin-hole leaks in the domestic hot and cold water pipes. New cut off valves will be installed simultaneously so that unit residents and building engineers can shut off the water quickly. Many of the deferred maintenance items will be done, including clearing the air conditioning condensate lines and the lint lines. We will then be moving to a phase of preventative maintenance rather than deferred maintenance. Will have a new reserve study by November 2016 which will help guide the budget process for the coming year. The reserve fund will be robust.

 

Still, the reality is that we have increased insurance premiums for about 3 years, we have to repay the $5M loan for the windows and doors and we ARE living in an older building. The committee and management will continue to look for ways to economize, various ways of financing, and ways to increase revenue.

Thanks to Jackie Lapidus for these notes.