Wednesday, June 17, 2009
BBQ -- Excellent Food, Friendship, Weather!
Someone at the Elizabeth (kudos to Judi Barth) really knows how to put on a good party and whoever watches over gave us the most picture perfect evening. Judi got her friends from Lia's Restaurant to manage the cooking of the food and lots of Elizabeth volunteers to help decorate and assemble the "fixins." The patio looked beautiful and the music added spirit. It was a well attended event with all ages represented.
Friday, June 5, 2009
Update from the Refurbishment Committee
On June 4, 2009, the Refurbishment Committee including the steering group (Judi Barth, Judy Gann—absent, and Alexandra Kielty) and advisory group (Sharon Bobb—absent, Jerry Feldman, Joan Rosenbach, Barbara March Smith) met to discuss the options that were presented to the steering group by Phyllis Hartman. The Hartman Group has prepared CAD drawings to map out the areas of work. Fabrics and carpet samples were shown to the steering group.
In order to ensure the integrity of any refurbishment work, President Woody Cunningham has told the Refurbishment Committee that he will pursue calling in outside engineers to evaluate and recommend repairs to any problems areas of the building that might potentially cause problems.
The process is off to a good start that the joint committee feels excited about. The steering group will brief the ECA Board on the status of the project at the June 16 Board meeting.
In order to ensure the integrity of any refurbishment work, President Woody Cunningham has told the Refurbishment Committee that he will pursue calling in outside engineers to evaluate and recommend repairs to any problems areas of the building that might potentially cause problems.
The process is off to a good start that the joint committee feels excited about. The steering group will brief the ECA Board on the status of the project at the June 16 Board meeting.
Tuesday, May 26, 2009
ECA Board Votes to Hire Legum and Norman
While I should be writing my review of Turandot, I thought some folks who were not at this evening’s (May 26, 2009) board meeting on professional management might want to know something about what happened.
It was a full house in the West Lobby. ECA Woody Cunningham made interesting opening comments. He said we have been operating like a family business with a management team that is out of control: no policy on hiring and firing, no training for our employees, no performance reviews, no backup for engineering, a five year plan that is a sham, and reacting to one crises after another. He answered the allegation that this Board is not transparent by saying that this has been a Board much more open than the previous Board that hired Ed Polite (operations manager) in secret. He said this had not been a rubber stamp board.
Next came comments from those in attendance. There were comments from 18 people that I noted including one man who did not live or own in the building. Comments included such suggestions as presenting comments in a civil manner, postponing the vote, how much Legum and Norman (L & N) are bonded for, how personnel who will be let go will be treated financially, what yardstick we will measure L & N performance, costs that might go up over time from L & N, more time to consider big decisions, outright desire not to change things as the stand, what happens if the building is left to deteriorate.
Board Members followed Association members and stated their comments and which way they were voting. The most surprising statement came from Jeffrey Axelrad who said The Elizabeth had been cited for a building code violation by the County for failing to fix some structural problem. Yes, we really need some proactive building management!
The vote was 4 for professional management (Woody Cunningham, Jeffrey Axelrad, Judi Barth, and Al Muller. Three were against: Charles Bressler, Monique Fridell, Alexander Kielty. Fridell said she wanted to restructure the personnel and would have done the plan herself except the Board rejected her offer. Both Fridell and Kielty vowed to work with the Board no matter if professional management was voted for. Bressler said he had a fiduciary responsibility to the owners and wanted the vote on professional management postponed.
Judi Barth provided information about L & N, a 40-year firm that manages 125 building representing over 70,000 units. She said they took one year to study many professional management firms. The most interesting set of comments came from Al Muller who pointed out that we must keep our condo competitive in the current buyer’s market. He reaffirmed that the cost of hiring L & N had been evaluated by a third party (our accountants DeLeon & Stang). He said we will realize lots of cost saving in the next few years but we need a team effort meaning everyone in the Association, the Board and the staff. Muller said when he was on the Friendship Heights Village Board, people said they didn't want the Village bus service and later they didn't want the community center. He asked did anyone want to give up those things now? Alexandra Kielty was mostly concerned with things she didn’t understand in the contract and got those questions answered by our condo lawyer Jason Fisher.
Ok, now I am free to think about why Puccini’s Turandot would kill so many men who sought her hand. Fear of change! Time to find the love.
It was a full house in the West Lobby. ECA Woody Cunningham made interesting opening comments. He said we have been operating like a family business with a management team that is out of control: no policy on hiring and firing, no training for our employees, no performance reviews, no backup for engineering, a five year plan that is a sham, and reacting to one crises after another. He answered the allegation that this Board is not transparent by saying that this has been a Board much more open than the previous Board that hired Ed Polite (operations manager) in secret. He said this had not been a rubber stamp board.
Next came comments from those in attendance. There were comments from 18 people that I noted including one man who did not live or own in the building. Comments included such suggestions as presenting comments in a civil manner, postponing the vote, how much Legum and Norman (L & N) are bonded for, how personnel who will be let go will be treated financially, what yardstick we will measure L & N performance, costs that might go up over time from L & N, more time to consider big decisions, outright desire not to change things as the stand, what happens if the building is left to deteriorate.
Board Members followed Association members and stated their comments and which way they were voting. The most surprising statement came from Jeffrey Axelrad who said The Elizabeth had been cited for a building code violation by the County for failing to fix some structural problem. Yes, we really need some proactive building management!
The vote was 4 for professional management (Woody Cunningham, Jeffrey Axelrad, Judi Barth, and Al Muller. Three were against: Charles Bressler, Monique Fridell, Alexander Kielty. Fridell said she wanted to restructure the personnel and would have done the plan herself except the Board rejected her offer. Both Fridell and Kielty vowed to work with the Board no matter if professional management was voted for. Bressler said he had a fiduciary responsibility to the owners and wanted the vote on professional management postponed.
Judi Barth provided information about L & N, a 40-year firm that manages 125 building representing over 70,000 units. She said they took one year to study many professional management firms. The most interesting set of comments came from Al Muller who pointed out that we must keep our condo competitive in the current buyer’s market. He reaffirmed that the cost of hiring L & N had been evaluated by a third party (our accountants DeLeon & Stang). He said we will realize lots of cost saving in the next few years but we need a team effort meaning everyone in the Association, the Board and the staff. Muller said when he was on the Friendship Heights Village Board, people said they didn't want the Village bus service and later they didn't want the community center. He asked did anyone want to give up those things now? Alexandra Kielty was mostly concerned with things she didn’t understand in the contract and got those questions answered by our condo lawyer Jason Fisher.
Ok, now I am free to think about why Puccini’s Turandot would kill so many men who sought her hand. Fear of change! Time to find the love.
Response to Jim Rich's Posting
Jim -- I seems to have hit some nerves with you.
Yes, I do have a "burr" under my saddle -- it is called being offended by the Board's lack of meaningful communication with the owners. I frankly don't know if they all know what they are doing (not the overarching decision to hire, but at the level of consequences of their decision and, GOD Forbid, those pesky "unintended" consequences). I believe, as others do, that the Board hasn't shown that they do know. Transparency, forthrightness, open-mindedness and amenability to the concerns of owners are qualities I would like--and expect even though I get disappointed--from my Board members. So lynch me for that!
My "attack" on the Board reflects my wanting to be on record with saying how upset I am with the Board's handling of this matter. Unlike what you suggest, I am not opposed to hiring Legum & Norman. I just think everyone should know what this entails and the true costs -- both gross and net costs. By the way, you will see that I credit L&N with the $89,000 saving as one of the "value-added" aspects of outside management.
The Board is altering 10% of the operating Budget. Lynch me for thinking that that is important to owners, expecially if the replacement system has an open-ended cost structure. You know how owners love to have those increased fees!!! Doubly so when it is unexpected!!!
To the extent I am mixing fact and fiction -- that is a result of the Board's lack of transparency. I'd love to have the real numbers to work with. Could even become an advocate for the L&N contract if I knew what the cost implications were. But to paraphrase Mason Williams "Believeing in something isn't enough, you NEED to know what it is." I mean, what is so hard about telling the owners what the contract will cost--both gross and net. What is so hard about owning up to the impact on the present management structure. After all, the DeLeon and Stang analysis clearly shows the elimination of the bookkeeping position. No one has claimed that that is a personnel matter and shouldn't be discussed. Au Contraire, the Board and others have used the savings from eliminating the bookkeeper position to reduce the overall cost of the L&N contract. It seems a bit unfair to let one side raise the elimination of a position and not the other side. But then, fairness isn't everyone's suite in this decision process. Since the Community Manager will have the same responsibilities as our Manager, what is wrong in asking if the Elizabeth will retain that position? What is good for the goose is suppose to be good for the gander!
Love your "cowboys getting all liquored-up at the saloon as some agitator stirs them into a frenzy so they can go lynch someone they don't like". But, if you'll just "put your bottle and rope down" Jim, you will see that I have not proposed the Board reject the Legum and Norman contract, just that they postpone accepting the contract until such time that they know -- and I guess I should have spelled out that they tell the owners" the whole story. If this is "agitating", then so be it.
You are all wrong about my mixing up cost analysis and personnel matters. Cost analysis in the understanding of the components (line items of a budget IS NOT an operations activity. It is a policy activity. I don't know of any budgets that say hire so-and-so, fire so-and-so. But if the budget reflects a decision to "contract out", yes that will ultimately have personnel reamifications. The fact that the logical outcome of contracting out means personnel changes, does not justify a prohibition on talking about the policy/management. You are arguing that the owners have no right to know what the budget implication of the Board's actions are. I can't disagree with you more. By the way, I have had 20 years as a Budget Analyst for federal agencies, as an OMB Budget Examiner, and as a Budget Policy Analysis for the House Budget Committee. I think I know something about budget proposals. The way budget proposals are put forth is by line items, such as the "Administrative Staff" line item in our Budget. What action the Board takes regarding who constitutes personnel is absolutely a Board matter, as you point out Jim, but what is in the Budget is a matter for all owners. That is why the budget is handled in open meetings and why it is distributed way before the Board takes action on it. What the Board is doing is making a major revision to our Budget--whether or not you want to acknowledge that.
So Jim, take a breath, reread your excellent paragraph about how professionals do business and think about how you have conducted yourself on this matter--especially when identifying the "rantors". I am sure the best you and I can do is "agree to disagree" on who is liquored up, wanting to lynch individuals.
See you tonight at the OK Corral. Molly Frantz
Jim -- I seems to have hit some nerves with you.
Yes, I do have a "burr" under my saddle -- it is called being offended by the Board's lack of meaningful communication with the owners. I frankly don't know if they all know what they are doing (not the overarching decision to hire, but at the level of consequences of their decision and, GOD Forbid, those pesky "unintended" consequences). I believe, as others do, that the Board hasn't shown that they do know. Transparency, forthrightness, open-mindedness and amenability to the concerns of owners are qualities I would like--and expect even though I get disappointed--from my Board members. So lynch me for that!
My "attack" on the Board reflects my wanting to be on record with saying how upset I am with the Board's handling of this matter. Unlike what you suggest, I am not opposed to hiring Legum & Norman. I just think everyone should know what this entails and the true costs -- both gross and net costs. By the way, you will see that I credit L&N with the $89,000 saving as one of the "value-added" aspects of outside management.
The Board is altering 10% of the operating Budget. Lynch me for thinking that that is important to owners, expecially if the replacement system has an open-ended cost structure. You know how owners love to have those increased fees!!! Doubly so when it is unexpected!!!
To the extent I am mixing fact and fiction -- that is a result of the Board's lack of transparency. I'd love to have the real numbers to work with. Could even become an advocate for the L&N contract if I knew what the cost implications were. But to paraphrase Mason Williams "Believeing in something isn't enough, you NEED to know what it is." I mean, what is so hard about telling the owners what the contract will cost--both gross and net. What is so hard about owning up to the impact on the present management structure. After all, the DeLeon and Stang analysis clearly shows the elimination of the bookkeeping position. No one has claimed that that is a personnel matter and shouldn't be discussed. Au Contraire, the Board and others have used the savings from eliminating the bookkeeper position to reduce the overall cost of the L&N contract. It seems a bit unfair to let one side raise the elimination of a position and not the other side. But then, fairness isn't everyone's suite in this decision process. Since the Community Manager will have the same responsibilities as our Manager, what is wrong in asking if the Elizabeth will retain that position? What is good for the goose is suppose to be good for the gander!
Love your "cowboys getting all liquored-up at the saloon as some agitator stirs them into a frenzy so they can go lynch someone they don't like". But, if you'll just "put your bottle and rope down" Jim, you will see that I have not proposed the Board reject the Legum and Norman contract, just that they postpone accepting the contract until such time that they know -- and I guess I should have spelled out that they tell the owners" the whole story. If this is "agitating", then so be it.
You are all wrong about my mixing up cost analysis and personnel matters. Cost analysis in the understanding of the components (line items of a budget IS NOT an operations activity. It is a policy activity. I don't know of any budgets that say hire so-and-so, fire so-and-so. But if the budget reflects a decision to "contract out", yes that will ultimately have personnel reamifications. The fact that the logical outcome of contracting out means personnel changes, does not justify a prohibition on talking about the policy/management. You are arguing that the owners have no right to know what the budget implication of the Board's actions are. I can't disagree with you more. By the way, I have had 20 years as a Budget Analyst for federal agencies, as an OMB Budget Examiner, and as a Budget Policy Analysis for the House Budget Committee. I think I know something about budget proposals. The way budget proposals are put forth is by line items, such as the "Administrative Staff" line item in our Budget. What action the Board takes regarding who constitutes personnel is absolutely a Board matter, as you point out Jim, but what is in the Budget is a matter for all owners. That is why the budget is handled in open meetings and why it is distributed way before the Board takes action on it. What the Board is doing is making a major revision to our Budget--whether or not you want to acknowledge that.
So Jim, take a breath, reread your excellent paragraph about how professionals do business and think about how you have conducted yourself on this matter--especially when identifying the "rantors". I am sure the best you and I can do is "agree to disagree" on who is liquored up, wanting to lynch individuals.
See you tonight at the OK Corral. Molly Frantz
Monday, May 25, 2009
Response to Molly Frantz’s Post
There seems to be a burr under Molly’s saddle. Why she is attacking the Elizabeth board is not clear. What is the purpose of her post? Why haven’t her comments been posted before now? The issue of professional management has been on the front burner for months.
While Molly’s post suggests that she wants to stop the board from moving forward with professional management and is upset about using a professional management company versus self-management, she has mixed fact and fiction with her own opinions and has not offered any solutions. One example is that Molly’s has failed to note the $89,000 dollar rebate for the Elizabeth paying unnecessary taxes on utilities over the past three years. Legum and Norman pointed this out (at no charge to the ECA).
Her arguments and comments come across more like a bunch of cowboys getting all liquored-up at the saloon as some agitator stirs them into a frenzy so that they can go lynch someone they don’t like. This is not the way professionals do business and is not in the best interest of the Elizabeth residents.
Let’s discuss the Elizabeth management like mature adults. Let’s discuss the pros and cons of different approaches to building management and then offer real solutions (and not rants). Let’s work together and use facts and logic to make sound business and financial decisions that will help the ECA community be a better place to live. In my view, that is what the board has been trying to do while others in the ECA are misbehaving.
I don’t have all the facts about the Legum and Norman contract and I don’t think Molly does either. However, I believe that most members of the Board are operating in good faith and that the Legum and Norman contract is a reasonable attempt by our Board to use good business sense to remedy current and future issues that the Elizabeth faces. Our current management has had years to perform. Their track record is poor. Overall the current management is not equipped to handle current and long-term matters that will help owners optimize the ECA operating expenses and maintain the value of our investment here.
Lastly, it appears Molly is mixing her own idea of cost analysis with Elizabeth personnel matters. My understanding is that personnel matters are not discussed in public. Those rules are part of the Elizabeth by-laws and local laws. The Elizabeth’s officers (our elected officials) are the only ones who can deal with personnel matters and are NOT allow to discuss them outside of the board. If board members do discuss them with non-board members, they are in violation. Most of the board is doing exactly what they are supposed to do in a clear and transparent way. If Molly or others wants to be a self-appointed lynch mob, then so be it.
Responsible replys are welcomed.
Jim Rich #301
Recommendation to Board--Postpone Vote
May 25, 2009
To: Board of Directors
Elizabeth Condominium
From: Molly Frantz
Apartment #1007
Subject: Proposed Management Contract with Legum & Norman -- My Understanding, Comments, Concerns, Worries, and Alarm
Recommendation: Postpone the vote to accept the Legum & Norman (L&N) contract until the Board has the facts and figures to support an affirmative vote.
Committing to an unspecified -- dare I say, unknown -- six-figure payment to L&N is (1) fiscally irresponsible, (2) a breech of Board responsibility to the owners of the Elizabeth Condominium, and (3) and abuse of Board power. To fire employees (or whatever you want to call it to ease your consciences) without cause and in the absence of supporting cost-benefit analyses is (1) morally reprehensible, (2) fiscally irresponsible, (3) a breech of Board responsibility to the owners of the Elizabeth Condominium, and (4) and abuse of Board power.
The manner in which the Board of Directors of the Elizabeth Condominium has approached the need for and selection of a Professional Management firm brings to mind these quotes:
"Not only should you believe in what you’re doing/ But you should know what you’re doing." (Mason Williams F.C.C. Rapport (Liveright))
"This update on our recent discussions concerning a management firm for the Elizabeth Condominium is the first of what we expect to be a continuing transparent process." (emphasis added) (Woody Cunningham (For the Board) Letter to friends and neighbors dated February 24, 2009)
"Prior to that meeting owners will be provided the Board’s estimated one time costs as well as the annual costs for professional management." (emphasis added) (May 13, 2009 notice to Residents and Owners)
Thinking Behind My Recommendation:
1. The Board’s decision-making process has been anything but transparent, forthright, open-minded and amenable to the concerns of the owners.
Administrative services account for 10 percent of the Elizabeth Condominium’s operating budget. Eliminating this line item from the Budget significantly and irrefutably alters the management structure of the Elizabeth Condominium. This is not just simply a personnel issue involving the firing and hiring of individuals. And, as such, such a change deserves to be openly presented and discussed with the owners. I do not believe the Board has come anywhere close to doing this.
It is pretty hard to believe the Board was interested in what the owners had to say at their first public information meeting (January 14, 2009) about hiring a management firm. Mr. Cunningham’s remarks were general, although he did indicate the net cost of hiring outside management was estimated to be $67,000 more than what is currently paid to manage the Elizabeth Condominium. No gross cost estimate or limit on any contract was provided. Mr. Cunningham refused to discuss the ramifications on Elizabeth administrative staff/management structure, claiming this was a personnel matter that can only be discussed in Executive session. Owners were permitted to speak for 3 minutes. Immediately thereafter the Board voted (4 yes and 3 abstention votes) to proceed with contract talks with Legum and Norman.
The February 24, 2009 communication to owner’s (1) again mentioned the $67,000 net cost associated with hiring a management firm. This figure was now "whittled down" to $17,000 because the Board "saved" $50,000 by eliminated one security/doorman sift – an example of "apples" and "zebras" (not even "oranges") cost analysis and budget scoring! (2) Reaffirmed that only the Board has the authority to hire and fire Elizabeth employees, but failed to address the actual concern/question (as expressed at the January 14 meeting) -- i.e., what will happen to our Administrative Staff if their responsibilities are to be performed by L&N? This is a budget question, NOT a personnel question! (3) Agreed to explore a "hybrid" form of management with L&N, but nothing was said about what that meant. And (4) indicated that any management contract would not be long-term (e.g. 5 years). Of course, there was no indication of what the Board considered "a fair evaluation time" period.
At the April 21, 2009 Board Meeting, Mr. Cunningham indicated that drafts of a contract with L&N were being exchanged; he would provide NO information on the content; AFTER the contract was signed there will be an information meeting. He also informed the owners that there would be NO discussion or ballot initiative regarding the proposed contract/action at the Annual meeting.
May 6, 2009 Annual Board meeting. I did not attend but know it was ugly.
The May 13, 2009 notice for the upcoming May 26, 2009 open Board meeting "to discuss and vote on a proposed contract with Legum and Norman" indicates "Prior to that meeting owners will be provided the Board’s estimated one time cost as well as the annual costs for professional management."
At the May 20 meeting, Mr. Rhodes and Ms. Harrington, representing L&N, and Mr. Cunningham went to great lengths to provide the owners only general information about Legum and Norman, as a company, and the generic responsibilities and management structure L&N would provide the Elizabeth Condominium. There was no information forthcoming on the fate of the Elizabeth’s Administrative management structure/staff if the L&N contract is signed, even though these responsibilities would be assigned to L&N. After the discussion period, Mr. Cunningham distributed a "Cost Analysis for Legum and Norman Professional Management at the Elizabeth" that laid-out the basis for the $67,000 net cost figure that had been previously provided. Reflections on the May 20 meeting:
Mr. Cunningham stated that "there will be a complete staff restructuring" .
He also stated that he "expects there to be a substantial number of Elizabeth employees that will be supervised by a L&N Site Manager". The implication was that these employees will remain Elizabeth employees, however, the Cost Analysis indicates that there will be NO Elizabeth employees.
How many Elizabeth Administrative Staff positions are slated to be eliminated?
Accountant/Bookkeeper Position: The Cost Analysis’ narrative states that "Handling of all financial matters would be centralized at L&N Headquarters." The accompanying financial details clearly indicate that the accountant/bookkeeping position will be eliminated from theElizabeth’s budget and, presumably the management structure.
Manager and Assistant Manager Positions: The L&N handout identifies 15 "Specific job responsibilities of your Community Manager". These duplicate the responsibilities of our current Manager and Assistant Manager positions. Unlike the accountant/bookkeeping position, the Cost Analysis does not show any offsetting cost savings and, by inference, changes in the Elizabeth budget. Is the Board really proposing to pay for the same services twice? Or is the Board intending to fire these employees in Executive session once the contract is signed? Is this the "promised" transparency?
2. It is clear that the identified $117,978 cost estimate laid out in the Cost Analysis is no where near whatthe actual L&N contract payments will be. In fact, I have serious doubts the Board has any idea what the L&N contract will actually cost the Elizabeth Condominium.
The first-year costs of the L&N contract is either (1) grossly understated on the Cost Analysis ($117,978 or $89,850 Base annual fee plus $28,128 in per-incident service fees) or (2) the Elizabeth Condominium has been overpaying for the administrative responsibilities carried-out by the Elizabeth’s administrative staff ($217,777 based upon the FY 2009 Budget amount of $202,440 for Administration Salaries plus FICA of 7.58%, but excluding an unknown amount for insurance and other employee expenses) more than twice what L&N purports to be able to do the work for.
The L&N proposal calls for a part-time Community Manager, a full-time Site Manager, and a Resident Services Coordinator. Is the $89,850 Base annual fee really adequate to cover their costs? It is clear from the Cost Analysis and from Mr. Bressler’s questions at the May 20 meeting, that a significant portion of L&N’s payments will be generated by per-incident items. Is this how L&N will recoup the "cost deficit" for managing the Elizabeth? Does the Board know what these fees are, let alone what they are expected to amount to? Is there a reason the owners are not privy to this information?
How open-ended is the contract’s cost structure? Has the Board made provisions to have L&N provide the kind of information necessary to evaluate how effective and how economical L&N’s services are (i.e., to be able to carry out the "fair evaluation" referenced in the February 24, 2009 communication)? How detailed will that information be? What controls will be in place to monitor and -- if need be -- limit these service fees? For instance, the Cost Analysis indicates that all of the Elizabeth staff will actually be L&N staff. L&N charges an additional 2.5% service fee for Payroll Administration when the employee is an L&N employee as opposed non-L&N employee. Who is going to monitor these fees?
Has L&N ever provided the Board an estimate of what it’s contract will cost? The Cost Analysis provided the owners was done by our accounting firm (DeLeon and Stang) on January 4, 2009, even before the Board voted to enter into negotiations with L&N! The numerous NL (not listed or addressed) entries make it clear this can not possibly be a comprehensive cost estimate. Yet this is what was provided the owners, presumably in accordance with the May 13 notice. Why is the cost estimate coming from a third-party and not from L&N? Shouldn’t a firm as experienced as L&N be able to provide their own cost estimate of their proposed services? After all, if they can’t do that, what is so great about their expertise!
What due-diligence has the Board undertaken to assure itself that the L&N contract is the best approach to meeting the management challenges the Board is trying to fix? For instance, our financial system. Mr. Axelrad wrote, "While we have excellent personnel running and overseeing our finances, our system is antiquated." (undated correspondence, handed out at the May 20, 2009 meeting). Is hiring L&N the only way to modernize our finance system? What did the cost-comparison for upgrading/replacing our current software coupled with providing training to "our excellent personnel running and overseeing our fiances" show? Was such a comparative cost-analysis even performed? I have to think that there is more to L&N’s assuming the finance responsibilities than meets the eye (or the public record). Two explanations might be: (1) there are problems with our employee that the Board has previously failed to address and has now chosen contracting-out as the way to resolve the situation, or (2) L&N wants to perform the financial responsibilities because it will be a cash cow for them.
Why hasn’t the Board provided the owners accurate and current information regarding the estimated cost of the L&N contract and compared that to the offsetting line-items in the FY 2010 Budget? Is the Board even able to provide the owners such an analysis? This begs the question "What else isn’t the Board sharing with the owners?"
3. The proposed annual increase in the L&N contract (CPI + 1.5%) is incredibly generous and will yield double- to triple-digit percentage growth in L&N’s profits over a five-year span, while the overall payments to L&N will only increase modestly during the same 5 year period.
It is very interesting that the proposed L&N contact is not a cost plus contact. It made me wondered just what that 1.5% factor above CPI growth would mean to L&N’s bottom line. I did three analyses -- assuming L&N had build-in a profit margin in the first year of 1%, 5% and 10%. An initial 1% profit margin grows to 6.5% of contract payments by the 5th year, a 700% growth in profits. A 5% initial profit margin grows to 10.3% of contract payments by the 5th year, or a 155% growth; and a 10% initial profit margin grows to 15% of contract payments by the 5th year, or an 86% growth. The total payments to L&N grow only 30.7% during the same period. (Spreadsheet attached to the Board Member’s hard copies).
The disproportionate growth in profits reflects the wonderful power of compound interest, especially since the 1.5% factor is applied to the total cost of the contract, not just to the profit portion. I can’t imagine why the Elizabeth would agree to an automatic increase in the L&N’s profit margin without requiring a commensurate increase in benefits for the Elizabeth. Why would the Elizabeth Board agree to pay more for an actual service than its actual cost (remember, the profit is already built-into that "cost")! Am I missing something here? One of the arguments for hiring L&N is to have access to their "best-practices". Well, shouldn’t the Board also use "best practices" in structuring the contract? There is a reason for cost-plus contracting -- it keeps down the gaming of the system.
Besides this wonderfully profitable profit margin windfall for L&N, an automatic annual increase above costs would seem to discourage any incentive for efficiency. I strongly suspect that the proposed contract does not contain any provision/expectations for productivity savings. To the extent the L&N achieves productivity savings, these would all be retained by L&N.
There are "Value-Added" reasons to hire L&N. Wednesday evening Mr. Rhodes listed the following things to illustrate what L&N "brings to the table": access to more resources; economy of scale when purchasing things like energy, insurance, trash; access to best practice knowledge and expertise; cross-training of L&N employees as well as back-up staff. And L&N has certainly contributed to reducing our expenditures by alerting us to the error in paying State sales taxes on utilities. But is a Automatic Increase contract provision of 1.5% over CPI (or any amount for that matter) the fiscally responsible way to reward them? Wouldn’t a bonus (i.e., a one-time sharing of the savings) mechanism be more appropriate? Wouldn’t that provide incentive to L&N to identify/facilitate future cost savings for the Elizabeth?
To: Board of Directors
Elizabeth Condominium
From: Molly Frantz
Apartment #1007
Subject: Proposed Management Contract with Legum & Norman -- My Understanding, Comments, Concerns, Worries, and Alarm
Recommendation: Postpone the vote to accept the Legum & Norman (L&N) contract until the Board has the facts and figures to support an affirmative vote.
Committing to an unspecified -- dare I say, unknown -- six-figure payment to L&N is (1) fiscally irresponsible, (2) a breech of Board responsibility to the owners of the Elizabeth Condominium, and (3) and abuse of Board power. To fire employees (or whatever you want to call it to ease your consciences) without cause and in the absence of supporting cost-benefit analyses is (1) morally reprehensible, (2) fiscally irresponsible, (3) a breech of Board responsibility to the owners of the Elizabeth Condominium, and (4) and abuse of Board power.
The manner in which the Board of Directors of the Elizabeth Condominium has approached the need for and selection of a Professional Management firm brings to mind these quotes:
"Not only should you believe in what you’re doing/ But you should know what you’re doing." (Mason Williams F.C.C. Rapport (Liveright))
"This update on our recent discussions concerning a management firm for the Elizabeth Condominium is the first of what we expect to be a continuing transparent process." (emphasis added) (Woody Cunningham (For the Board) Letter to friends and neighbors dated February 24, 2009)
"Prior to that meeting owners will be provided the Board’s estimated one time costs as well as the annual costs for professional management." (emphasis added) (May 13, 2009 notice to Residents and Owners)
Thinking Behind My Recommendation:
1. The Board’s decision-making process has been anything but transparent, forthright, open-minded and amenable to the concerns of the owners.
Administrative services account for 10 percent of the Elizabeth Condominium’s operating budget. Eliminating this line item from the Budget significantly and irrefutably alters the management structure of the Elizabeth Condominium. This is not just simply a personnel issue involving the firing and hiring of individuals. And, as such, such a change deserves to be openly presented and discussed with the owners. I do not believe the Board has come anywhere close to doing this.
It is pretty hard to believe the Board was interested in what the owners had to say at their first public information meeting (January 14, 2009) about hiring a management firm. Mr. Cunningham’s remarks were general, although he did indicate the net cost of hiring outside management was estimated to be $67,000 more than what is currently paid to manage the Elizabeth Condominium. No gross cost estimate or limit on any contract was provided. Mr. Cunningham refused to discuss the ramifications on Elizabeth administrative staff/management structure, claiming this was a personnel matter that can only be discussed in Executive session. Owners were permitted to speak for 3 minutes. Immediately thereafter the Board voted (4 yes and 3 abstention votes) to proceed with contract talks with Legum and Norman.
The February 24, 2009 communication to owner’s (1) again mentioned the $67,000 net cost associated with hiring a management firm. This figure was now "whittled down" to $17,000 because the Board "saved" $50,000 by eliminated one security/doorman sift – an example of "apples" and "zebras" (not even "oranges") cost analysis and budget scoring! (2) Reaffirmed that only the Board has the authority to hire and fire Elizabeth employees, but failed to address the actual concern/question (as expressed at the January 14 meeting) -- i.e., what will happen to our Administrative Staff if their responsibilities are to be performed by L&N? This is a budget question, NOT a personnel question! (3) Agreed to explore a "hybrid" form of management with L&N, but nothing was said about what that meant. And (4) indicated that any management contract would not be long-term (e.g. 5 years). Of course, there was no indication of what the Board considered "a fair evaluation time" period.
At the April 21, 2009 Board Meeting, Mr. Cunningham indicated that drafts of a contract with L&N were being exchanged; he would provide NO information on the content; AFTER the contract was signed there will be an information meeting. He also informed the owners that there would be NO discussion or ballot initiative regarding the proposed contract/action at the Annual meeting.
May 6, 2009 Annual Board meeting. I did not attend but know it was ugly.
The May 13, 2009 notice for the upcoming May 26, 2009 open Board meeting "to discuss and vote on a proposed contract with Legum and Norman" indicates "Prior to that meeting owners will be provided the Board’s estimated one time cost as well as the annual costs for professional management."
At the May 20 meeting, Mr. Rhodes and Ms. Harrington, representing L&N, and Mr. Cunningham went to great lengths to provide the owners only general information about Legum and Norman, as a company, and the generic responsibilities and management structure L&N would provide the Elizabeth Condominium. There was no information forthcoming on the fate of the Elizabeth’s Administrative management structure/staff if the L&N contract is signed, even though these responsibilities would be assigned to L&N. After the discussion period, Mr. Cunningham distributed a "Cost Analysis for Legum and Norman Professional Management at the Elizabeth" that laid-out the basis for the $67,000 net cost figure that had been previously provided. Reflections on the May 20 meeting:
Mr. Cunningham stated that "there will be a complete staff restructuring" .
He also stated that he "expects there to be a substantial number of Elizabeth employees that will be supervised by a L&N Site Manager". The implication was that these employees will remain Elizabeth employees, however, the Cost Analysis indicates that there will be NO Elizabeth employees.
How many Elizabeth Administrative Staff positions are slated to be eliminated?
Accountant/Bookkeeper Position: The Cost Analysis’ narrative states that "Handling of all financial matters would be centralized at L&N Headquarters." The accompanying financial details clearly indicate that the accountant/bookkeeping position will be eliminated from theElizabeth’s budget and, presumably the management structure.
Manager and Assistant Manager Positions: The L&N handout identifies 15 "Specific job responsibilities of your Community Manager". These duplicate the responsibilities of our current Manager and Assistant Manager positions. Unlike the accountant/bookkeeping position, the Cost Analysis does not show any offsetting cost savings and, by inference, changes in the Elizabeth budget. Is the Board really proposing to pay for the same services twice? Or is the Board intending to fire these employees in Executive session once the contract is signed? Is this the "promised" transparency?
2. It is clear that the identified $117,978 cost estimate laid out in the Cost Analysis is no where near whatthe actual L&N contract payments will be. In fact, I have serious doubts the Board has any idea what the L&N contract will actually cost the Elizabeth Condominium.
The first-year costs of the L&N contract is either (1) grossly understated on the Cost Analysis ($117,978 or $89,850 Base annual fee plus $28,128 in per-incident service fees) or (2) the Elizabeth Condominium has been overpaying for the administrative responsibilities carried-out by the Elizabeth’s administrative staff ($217,777 based upon the FY 2009 Budget amount of $202,440 for Administration Salaries plus FICA of 7.58%, but excluding an unknown amount for insurance and other employee expenses) more than twice what L&N purports to be able to do the work for.
The L&N proposal calls for a part-time Community Manager, a full-time Site Manager, and a Resident Services Coordinator. Is the $89,850 Base annual fee really adequate to cover their costs? It is clear from the Cost Analysis and from Mr. Bressler’s questions at the May 20 meeting, that a significant portion of L&N’s payments will be generated by per-incident items. Is this how L&N will recoup the "cost deficit" for managing the Elizabeth? Does the Board know what these fees are, let alone what they are expected to amount to? Is there a reason the owners are not privy to this information?
How open-ended is the contract’s cost structure? Has the Board made provisions to have L&N provide the kind of information necessary to evaluate how effective and how economical L&N’s services are (i.e., to be able to carry out the "fair evaluation" referenced in the February 24, 2009 communication)? How detailed will that information be? What controls will be in place to monitor and -- if need be -- limit these service fees? For instance, the Cost Analysis indicates that all of the Elizabeth staff will actually be L&N staff. L&N charges an additional 2.5% service fee for Payroll Administration when the employee is an L&N employee as opposed non-L&N employee. Who is going to monitor these fees?
Has L&N ever provided the Board an estimate of what it’s contract will cost? The Cost Analysis provided the owners was done by our accounting firm (DeLeon and Stang) on January 4, 2009, even before the Board voted to enter into negotiations with L&N! The numerous NL (not listed or addressed) entries make it clear this can not possibly be a comprehensive cost estimate. Yet this is what was provided the owners, presumably in accordance with the May 13 notice. Why is the cost estimate coming from a third-party and not from L&N? Shouldn’t a firm as experienced as L&N be able to provide their own cost estimate of their proposed services? After all, if they can’t do that, what is so great about their expertise!
What due-diligence has the Board undertaken to assure itself that the L&N contract is the best approach to meeting the management challenges the Board is trying to fix? For instance, our financial system. Mr. Axelrad wrote, "While we have excellent personnel running and overseeing our finances, our system is antiquated." (undated correspondence, handed out at the May 20, 2009 meeting). Is hiring L&N the only way to modernize our finance system? What did the cost-comparison for upgrading/replacing our current software coupled with providing training to "our excellent personnel running and overseeing our fiances" show? Was such a comparative cost-analysis even performed? I have to think that there is more to L&N’s assuming the finance responsibilities than meets the eye (or the public record). Two explanations might be: (1) there are problems with our employee that the Board has previously failed to address and has now chosen contracting-out as the way to resolve the situation, or (2) L&N wants to perform the financial responsibilities because it will be a cash cow for them.
Why hasn’t the Board provided the owners accurate and current information regarding the estimated cost of the L&N contract and compared that to the offsetting line-items in the FY 2010 Budget? Is the Board even able to provide the owners such an analysis? This begs the question "What else isn’t the Board sharing with the owners?"
3. The proposed annual increase in the L&N contract (CPI + 1.5%) is incredibly generous and will yield double- to triple-digit percentage growth in L&N’s profits over a five-year span, while the overall payments to L&N will only increase modestly during the same 5 year period.
It is very interesting that the proposed L&N contact is not a cost plus contact. It made me wondered just what that 1.5% factor above CPI growth would mean to L&N’s bottom line. I did three analyses -- assuming L&N had build-in a profit margin in the first year of 1%, 5% and 10%. An initial 1% profit margin grows to 6.5% of contract payments by the 5th year, a 700% growth in profits. A 5% initial profit margin grows to 10.3% of contract payments by the 5th year, or a 155% growth; and a 10% initial profit margin grows to 15% of contract payments by the 5th year, or an 86% growth. The total payments to L&N grow only 30.7% during the same period. (Spreadsheet attached to the Board Member’s hard copies).
The disproportionate growth in profits reflects the wonderful power of compound interest, especially since the 1.5% factor is applied to the total cost of the contract, not just to the profit portion. I can’t imagine why the Elizabeth would agree to an automatic increase in the L&N’s profit margin without requiring a commensurate increase in benefits for the Elizabeth. Why would the Elizabeth Board agree to pay more for an actual service than its actual cost (remember, the profit is already built-into that "cost")! Am I missing something here? One of the arguments for hiring L&N is to have access to their "best-practices". Well, shouldn’t the Board also use "best practices" in structuring the contract? There is a reason for cost-plus contracting -- it keeps down the gaming of the system.
Besides this wonderfully profitable profit margin windfall for L&N, an automatic annual increase above costs would seem to discourage any incentive for efficiency. I strongly suspect that the proposed contract does not contain any provision/expectations for productivity savings. To the extent the L&N achieves productivity savings, these would all be retained by L&N.
There are "Value-Added" reasons to hire L&N. Wednesday evening Mr. Rhodes listed the following things to illustrate what L&N "brings to the table": access to more resources; economy of scale when purchasing things like energy, insurance, trash; access to best practice knowledge and expertise; cross-training of L&N employees as well as back-up staff. And L&N has certainly contributed to reducing our expenditures by alerting us to the error in paying State sales taxes on utilities. But is a Automatic Increase contract provision of 1.5% over CPI (or any amount for that matter) the fiscally responsible way to reward them? Wouldn’t a bonus (i.e., a one-time sharing of the savings) mechanism be more appropriate? Wouldn’t that provide incentive to L&N to identify/facilitate future cost savings for the Elizabeth?
Professional Management Pros & Cons
What is professional management?
Why do I bring up this question when the Elizabeth Condominium Association (ECA) just had an informational briefing May 21, 2009, on professional management by Legum & Norman, the firm that is under serious consideration to become the supplier of building management services? The reason is that most of the questions asked by ECA members attending the meeting indicated that despite the clearly explained details and handouts from Legum & Norman principals John Rhodes (President) and Brenda Harrington (executive Vice President, Operations), ECA members for the most part do not understand the responsibilities of those who provide management services (no matter whether the services are by a in-house manager or a professional management company’s employee who serves as the ECA manager) versus the responsibilities of our elected Board of Directors.
THE PLAN: SITE AND COMMUNITY MANAGERS
Let me recap briefly the organizational structure Legum & Norman (L & N) have been discussing with our Board members. L & N would put in place a site manager (this is what we know as our in-house manager) and a community manager. Why? Let me first offer this example from those who oppose professional management: some people have said (I will paraphrase here), including our current Board Treasurer, that our current manager has too much to do and that’s why we don’t get proper maintenance of the building. The thought was that our manager should be concentrating on contracts while her assistant should be attending to the daily issues. The belief is for those who support in-house management that our manager should act as a community liaison while the assistant manager should be the site manager.
Now here is what L & N lists as the responsibilities of the community manager:
• Supervise the site manager.
• Visit the property at least once a week.
• Approve all payments on behalf of the property.
• Inspect the property monthly and prepare inspection report.
• Prepare and present monthly management and financial reports.
• Attend Board of Director meetings.
• Coordinate and attend the annual meeting of owners.
• Communicate frequently with the Board’s liaison.
• Develop specifications for service contracts and bid those contracts.
• Analyze contract proposals and make recommendations to the Board.
• Implement and supervise contracts.
• Purchase equipment and supplies in accordance with the budget and an approved purchase order system.
• Administer community covenants and rule enforcement procedures.
• Investigate and follow up resident complaints.
• File insurance claims and supervise restoration of property as appropriate.
THE ARGUMENTS FOR IN-HOUSE MANAGEMENT
To be fair to those supporting in-house management, I have heard a number of these proponents say that they advocate restructuring our staff. This means that our current manager and assistant manage would be replaced by new hires. Those of us who have been in our manager’s office know that the way her office looks (cluttered, unorganized, and unclean) stands as a metaphor for the service we get and the way the building is deteriorating.
Although there are those that say all they have to do is go tell our current manager about a problem and the problem will be addressed, I find that most of the fixes are cosmetic and do not treat the source of the problem. For example, one resident owner told me she saw mold on the ceiling tiles in the west lobby and as soon as the manager heard about the problem, she had the mold cleaned up. I’m not sure if the tile was washed off or replaced but what about the source of moisture that invariably will recreate the mold in a visible place? Clearly the source of the problem has to be addressed by our Board of Directors to fix the long-term problem but what recommendations did our manager present to the Board for how to deal with the mold issue? I don’t know but so far I haven’t heard anything in monthly board meetings to believe that our manager has been thinking about how to resolve water, moisture, and mold problems. Anyone who has owned a single family dwelling for a long period time will be able to tell you that the longer a problem is left untreated, the more expensive the fix will be. Long-term neglect can also go beyond the possibility of economical repair and mean demolition and reconstruction.
Also let me address the recently failed service we experienced with a security guard serving as doorman. Among the tasks the doorman was suppose to perform included keeping the driveway clear of parked vehicles, assisting people with packages as needed, and being a visible security presence. Many residents, including me, were unhappy with the performance of those providing this service. Our current manager, tasked with managing the security services contract, failed to be proactive and call Securitas (the company we currently employ for security personnel) and tell them to replace the guards who were not performing as expected. While some might blame this on the Board for failing to tell our manager what to do, the question that comes to my mind is what does it take to have smart management?
PROFESSIONAL MANAGEMENT & SAVING MONEY
What does L & N bring to the table that in-house management supervised by our Board of Directors would not offer? It brings years of experience, a network of resources that mean economical advantages, and an objective point of view backed up by a wide and experienced community. Let me say clearly that we are already reaping the financial benefit of possibly hiring L & N. They told our Board that we were paying utility taxes that we should not be paying. Our President announced at the meeting that we would be receiving a refund of $89,000 (this goes back three years), which covers most of the cost in the first year of hiring L & N. Going with a professional management company means the ECA does not have to re-invent the wheel. If we have water pouring into walls in our building, L & N has a vetted list of contractors to evaluate the problem as well as an archive of experience accrued from managing other buildings.
Now back to the problem of ECA members not understanding what a professional management company does versus what our Board does or would do. The main questions that came up in the May 21 meeting is who is responsible for hiring and firing staff who are or would be managing our building? The Board President has explained that the Board has the final word on personnel. L & N would make their recommendations and the Board would consider those recommendations.
One other thing I wanted to bring up is that some ECA members tried to say that L & N has not done a good job in some of neighboring condominiums such as 4620 North Park Avenue. The word I have heard on the street from people who live in 4620 is that they love the management provided by L & N. One 4620 resident I spoke to also owns commercial property here at the Elizabeth and she is completely fed up with the lack of services here at the Elizabeth where garbage smells waft into the arcade and dogs urinate on the walls.
No one knows what the future will bring and I am not so naïve to think that just hiring L & N will immediately bring the Elizabeth back to its former status of a luxury high-rise building. Who is hired to be our site manager will make a significant difference. Getting 21st century services such a website where we can order usual repairs like fixing a leaking faucet won’t happen in the first year’s contract. The thing is before the building falls down, hiring a professional management company such as Legum and Norman is a big step in the right direction. Let’s hear it for spending our money wisely, maintaining our property values, and saving us from paying unnecessary expenditures!
Why do I bring up this question when the Elizabeth Condominium Association (ECA) just had an informational briefing May 21, 2009, on professional management by Legum & Norman, the firm that is under serious consideration to become the supplier of building management services? The reason is that most of the questions asked by ECA members attending the meeting indicated that despite the clearly explained details and handouts from Legum & Norman principals John Rhodes (President) and Brenda Harrington (executive Vice President, Operations), ECA members for the most part do not understand the responsibilities of those who provide management services (no matter whether the services are by a in-house manager or a professional management company’s employee who serves as the ECA manager) versus the responsibilities of our elected Board of Directors.
THE PLAN: SITE AND COMMUNITY MANAGERS
Let me recap briefly the organizational structure Legum & Norman (L & N) have been discussing with our Board members. L & N would put in place a site manager (this is what we know as our in-house manager) and a community manager. Why? Let me first offer this example from those who oppose professional management: some people have said (I will paraphrase here), including our current Board Treasurer, that our current manager has too much to do and that’s why we don’t get proper maintenance of the building. The thought was that our manager should be concentrating on contracts while her assistant should be attending to the daily issues. The belief is for those who support in-house management that our manager should act as a community liaison while the assistant manager should be the site manager.
Now here is what L & N lists as the responsibilities of the community manager:
• Supervise the site manager.
• Visit the property at least once a week.
• Approve all payments on behalf of the property.
• Inspect the property monthly and prepare inspection report.
• Prepare and present monthly management and financial reports.
• Attend Board of Director meetings.
• Coordinate and attend the annual meeting of owners.
• Communicate frequently with the Board’s liaison.
• Develop specifications for service contracts and bid those contracts.
• Analyze contract proposals and make recommendations to the Board.
• Implement and supervise contracts.
• Purchase equipment and supplies in accordance with the budget and an approved purchase order system.
• Administer community covenants and rule enforcement procedures.
• Investigate and follow up resident complaints.
• File insurance claims and supervise restoration of property as appropriate.
THE ARGUMENTS FOR IN-HOUSE MANAGEMENT
To be fair to those supporting in-house management, I have heard a number of these proponents say that they advocate restructuring our staff. This means that our current manager and assistant manage would be replaced by new hires. Those of us who have been in our manager’s office know that the way her office looks (cluttered, unorganized, and unclean) stands as a metaphor for the service we get and the way the building is deteriorating.
Although there are those that say all they have to do is go tell our current manager about a problem and the problem will be addressed, I find that most of the fixes are cosmetic and do not treat the source of the problem. For example, one resident owner told me she saw mold on the ceiling tiles in the west lobby and as soon as the manager heard about the problem, she had the mold cleaned up. I’m not sure if the tile was washed off or replaced but what about the source of moisture that invariably will recreate the mold in a visible place? Clearly the source of the problem has to be addressed by our Board of Directors to fix the long-term problem but what recommendations did our manager present to the Board for how to deal with the mold issue? I don’t know but so far I haven’t heard anything in monthly board meetings to believe that our manager has been thinking about how to resolve water, moisture, and mold problems. Anyone who has owned a single family dwelling for a long period time will be able to tell you that the longer a problem is left untreated, the more expensive the fix will be. Long-term neglect can also go beyond the possibility of economical repair and mean demolition and reconstruction.
Also let me address the recently failed service we experienced with a security guard serving as doorman. Among the tasks the doorman was suppose to perform included keeping the driveway clear of parked vehicles, assisting people with packages as needed, and being a visible security presence. Many residents, including me, were unhappy with the performance of those providing this service. Our current manager, tasked with managing the security services contract, failed to be proactive and call Securitas (the company we currently employ for security personnel) and tell them to replace the guards who were not performing as expected. While some might blame this on the Board for failing to tell our manager what to do, the question that comes to my mind is what does it take to have smart management?
PROFESSIONAL MANAGEMENT & SAVING MONEY
What does L & N bring to the table that in-house management supervised by our Board of Directors would not offer? It brings years of experience, a network of resources that mean economical advantages, and an objective point of view backed up by a wide and experienced community. Let me say clearly that we are already reaping the financial benefit of possibly hiring L & N. They told our Board that we were paying utility taxes that we should not be paying. Our President announced at the meeting that we would be receiving a refund of $89,000 (this goes back three years), which covers most of the cost in the first year of hiring L & N. Going with a professional management company means the ECA does not have to re-invent the wheel. If we have water pouring into walls in our building, L & N has a vetted list of contractors to evaluate the problem as well as an archive of experience accrued from managing other buildings.
Now back to the problem of ECA members not understanding what a professional management company does versus what our Board does or would do. The main questions that came up in the May 21 meeting is who is responsible for hiring and firing staff who are or would be managing our building? The Board President has explained that the Board has the final word on personnel. L & N would make their recommendations and the Board would consider those recommendations.
One other thing I wanted to bring up is that some ECA members tried to say that L & N has not done a good job in some of neighboring condominiums such as 4620 North Park Avenue. The word I have heard on the street from people who live in 4620 is that they love the management provided by L & N. One 4620 resident I spoke to also owns commercial property here at the Elizabeth and she is completely fed up with the lack of services here at the Elizabeth where garbage smells waft into the arcade and dogs urinate on the walls.
No one knows what the future will bring and I am not so naïve to think that just hiring L & N will immediately bring the Elizabeth back to its former status of a luxury high-rise building. Who is hired to be our site manager will make a significant difference. Getting 21st century services such a website where we can order usual repairs like fixing a leaking faucet won’t happen in the first year’s contract. The thing is before the building falls down, hiring a professional management company such as Legum and Norman is a big step in the right direction. Let’s hear it for spending our money wisely, maintaining our property values, and saving us from paying unnecessary expenditures!