Posted: Jan 22 2016 at 11:39pm | Views: 19404
Information from the Parkchester South Condominium
Board of Directors on the Temporary Common Charge Increase
Parkchester South Condominium held an informational meeting on January 20, 2016, for Parkchester condominium owners, to discuss several issues including the 2016 capital budget and most importantly, the predicted 2016 Parkchester common charge rate increase.
It appears a 15.19% common charge rate increase will take effect but only temporarily; as stated in a letter from
Parkchester South Condominium President, Abu Shakoor.
See President Abu Shakoor's letter below
Dear Owners:
Thank you to all of you who were able to attend Wednesday's (January 20, 2016) informational session about the temporary common charge increase. We hope you came away with a better understanding of the extensive repair work going on at Parkchester South and why it is critical to the structural integrity of our buildings, the safety of our community, and the security of our investments.
For the benefit of those who were unable to attend, as well as those still seeking more information, below are Frequently Asked Questions we prepared after hearing from so many unit owners. We understand that this increase will be tough to bear for many unit owners and their families, and we wanted to give you a better understanding of why this work must be done and how it will be paid for.
Thank you for your time in reviewing this document. If you have any further questions, please contact
The Parkchester South Condominium Board at
1-718-823-7000.
Sincerely,
Abu Shakoor
President
Frequently Asked Questions:
Will renters, in Parkchester, pay the same common charge increase unit owners pay?
The Parkchester South Condominium is a complex of individually-owned units who all share in the cost of common areas such as the roof, elevators and landscaping. Each unit has an owner, and every owner has a responsibility to pay the 15.19% temporary common charge increase.
We realize that some of your neighbors pay rent to a landlord. That landlord is the owner of the individual unit and is the individual or entity obligated to pay their share of the common charge increase.
Again, every Parkchester condominium unit owner, including resident owners and investors, including
Parkchester Preservation Company, will pay the 15.19% common charge increase.
Will all Parkchester unit owners pay their fair share?
Yes. Board members, investors and homeowners will all pay the common charge increase. Every unit owner shares equally in the burden of paying for this work.
Is this common charge increase temporary? What does that mean?
We understand that a 15.19% increase is steep. Once this work is complete at the end of 2017, the Parkchester Board Of Directors intends to roll back the budget to the 2015 level. At that time the Board will review the budget need of 2018 and may increase common charges only to cover increases in non-discretionary expenses, such as heating fuel, other utilities, union contract wages and unforeseen capital needs.
Were other means of financing explored?
Yes. The Parkchester Board only came to this decision after careful and considerate deliberation, understanding that this temporary increase will be difficult for many unit owners. Borrowing funds for these repairs would require approval of 66 2/3% of all unit owners. Having gone through that process for the renovation loan in 2000, the Board was conscious of the time and additional expense required to obtain that approval. In addition, the interest expense and other costs associated with such a loan would add to the cost for unit owners over the long term. For these reasons, it was ultimately decided that a temporary increase in common charges best meets our objective to complete the extensive repairs in as timely a manner as possible. Ultimately, spreading the temporary increase out over a two-year period reflects the most flexible and conservative way to raise the funds to get this critical work done quickly and effectively.
Why are these repairs necessary? Why now?
The wide-spread water infiltration and the discovery of roof slab damage are matters that must be dealt with immediately to avoid the possibility of a ceiling collapse, which could potentially injure someone, displace neighbors, and leave units in disrepair, rendering them unsaleable. When it comes to issues of safety, the Board must act responsibly and we immediately put a plan in place to protect our homes and investments in Parkchester.
It helps to get to the origin of how we found the need for repairs. Under new management installed by the Board of Managers, building engineer consultants conducted investigations to address 300 leaks located in 92 different buildings. These inspections revealed damage caused by years of deterioration due to past water infiltration. Structural engineers determined that, although prior roof repairs may have addressed and stopped leaks, water had penetrated the roof slab and continued to cause further deterioration. This deterioration was not always visible either from above when roofs were removed and replaced, or even in some cases in apartments. This latent condition was likely further aggravated by the construction practices and materials commonly used in the 1940's, but not acceptable today. We are also obligated to comply with NYC Department of Buildings Local Law 11 regulations with respect to regular inspections, maintenance and repairs to building facades. Those regulations require work in 17 buildings before the end of 2017.
Are there other areas such as salaries that can be cut to help cover these costs?
Most of our annual budget covers non-discretionary costs. For example, approximately 47% of the operating budget (not including capital expenses) covers payroll and more than 90% of our payroll expense is dictated by union contracts over which we have limited control. Other major expenses include fuel for heat (8%), water (12%); cooking gas and electricity for the common areas (3%). Where possible, management works diligently to keep other costs as low as possible.
What about other capital needs at the property?
The Parkchester Board Of Directors recognizes that there are other needs that need to be addressed. Our normal operating budget includes funds for repairing parking drives and sidewalks as well as landscaping improvements. We have included funds for these items in the 2016 budget, but they are limited because of the other capital needs to address safety and structural issues that impact the quality of life of our residents and the financial security of our investments. Once we have addressed these immediate needs, we expect that in 2018 we will be able to allocate a larger portion of our customary operating budget to these items.
Are Parkchester Condominium finances audited and where can I find these audit reports?
We have independent auditors who audit the books every year. The audited financial statements are available to all unit owners and are regularly distributed at our annual meetings. To receive a copy of the statements, please call the office at
(718) 320-6030.
What is the management team's plan moving forward?
We have always done our best to make sure the management team responds to maintenance requests, and under new leadership we're striving to do even better. Moving forward, we'll be better equipped to evaluate our operating procedures to make sure we're addressing issues in the best manner possible. For example, now that we have a better understanding of the extent of damage to our roofs, we've put in place protocols to better detect roof issues. Before replacing roofs, we'll be using advanced techniques to assess possible unseen damage and, if necessary, slab repairs will be included. We're addressing this issue head-on because it's a matter of safety, but we've learned from this in a way that will make us more efficient going forward.
