Highview Condominium II
Board of Directors - Meeting Minutes
June 23, 2003, 7:30 p.m.

The fourth regular meeting of the 2002-2003 Highview II Board of Directors was called to order at approximately 8:10 p.m. In attendance were Board members Robert Boynton, Marjorie Cannon, Stephanie Greenberg, and Tamara Keshecki. Victor Bellini was represented by proxy to Robert Boynton to complete a quorum. Sanchie Bobrow and Robert Miele arrived later. Board members Christopher Manginelli and Frank Mattera were absent. Jennifer Ogman attended from J.A.L. Diversified Management. Building super Rob Besser was present to discuss maintenance concerns.

1) As a first order of business, Robert Miele's appointment to the Board, previously completed by an email vote, was confirmed for the record. Seven votes were received in his favor. No vote was received from Christopher Manginelli. There was a brief discussion of the bylaws requirement of the Board to fill any vacancies promptly by appointment (Article II, Section 6): "Vacancies in the Board of Managers caused by any reason other than the removal of a member thereof by a vote of the unit owners, shall be filled by vote of a majority of the remaining members at a special meeting of the Board of Managers held for that purpose promptly after the occurrence of any such vacancy".

2) Minutes from the April 22nd meeting were read and approved.

3) Jennifer Ogman reported that Abassi Construction has completed more than 50% of the exterior repair work. The board discussed several owner complaints of cement stuck on windows and screens. Ogman called Abassi as the meeting progressed to confirm that they will take care of the clean-up. Aside from clean-up work at Abassi's expense, the Board asked Ogman to get an estimate for individual owners who wish to have their windows cleaned while scaffolding is in place. Ogman will get a price from Abassi and distribute to residents.

4) Ogman offered a proposal from Abassi Construction to make roof repairs. It was noted that the building has a warranty on the roof and Mill Basin Roofing should be contacted to make the repair at no charge. Allowing another contractor to work on the roof without Firestone's authorization would void the their warranty which has approximately nine years left. Ogman will contact Mill Basin and/or Firestone.

5) The Board discussed and approved CoinMach's most recent proposal. The final agreement, amending their contract of last year, yields an additional $1,000 for laundry room renovation work. Brand new washing machines and dryers will be installed, the contract is extended for an additional two years (from 7 to 9 years), and there will be a 25 cent increase in the cost per washer load after 1 year. It was confirmed by Ogman that the $5,000 signing bonus that was due in January 2002 has been received. No satisfactory explanation of the $10,000 payment to CoinMach by Highview 7-8 years ago was ever received from CoinMach. Monthly income will continue at $700 per month.

6) The Board and Jennifer Ogman discussed maintenance issues with building super, Rob Besser.

a) Rob Besser reported continuing problems with residents improperly disposing trash. Once the new building rule is posted, fines will be imposed for future incidents of improper disposal. The final text of the new rule relating to disposal/recycling of trash and fine amount were reviewed one last time and approved with slight modification. At the same time, text of the new rule and fine relating to repair/renovation work was reviewed and approved. Both will be added to the Highview website, highview2.com, immediately.

b) A contractor bid to replace a portion of the walkway lighting was reviewed. Ogman indicated that the new lighting units would resemble the old ones on the on the other side of the lawn ones (which would not be replaced). The Board decided that the building could not afford to replace the lights at this time and the units will have to be completely removed. Jennifer Ogman suggested adding a flood light to the side of the building to light the sidewalk. Ogman will get an estimate.

c) Rob continues to paint unit and stairwell doors. It was noted that stairwell doors are already dirty on the recently completed floors. Jennifer Ogman indicated that the super was to be painting the doors and trim with semi-gloss paint. Board members commented that semi-gloss was not being used and asked why the work had not been inspected by JAL over the last 4-5 months of hall painting. The Board also reminded Ogman that the super was to be taking this opportunity (while unit doors were opened by residents for painting) to replace smoke detector batteries for unit residents and have residents sign a receipt for their 2003 copy of the building's NYC Building Fire Plan (which is to be distributed and receipted by residents annually by January 31st according to NYC code). Ogman indicated that JAL was unaware of the need for annual distribution, and has not been able to locate the file previously compiled by Maxwell-Kates to meet compliance. Ogman asked the board to provide a copy of the distribution document.

d) The Board reviewed and approved an estimate by Christie Garage Door for complete replacement of the garage door's motor and currently inoperable safety systems. It was noted that the new electric eye should be much closer to the plane of the door and that an emergency shut off switch for the motor should be part of the installation. Ogman will confirm these concerns with Christie before proceeding.

e) Damage to the front canopy has not been repaired. Jennifer Ogman said that she was having difficulty getting a call-back from the contractor liable for the damage. The awning will be professionally repaired by the original installer, Sign Art, and if necessary, this will become a small claims court action. Similarly, one of the bushes inside the driveway island and near the street had been destroyed by the snow removal contractor's truck. Why this had taken 6 months for any action was discussed. Ogman indicated that the contractor should have been contacted at the time of the damage. Board members said that both the super and JAL hade been contacted, and that it was discussed with a group of Board members with Ogman back in March.

f) Affordable Masonry has not responded to recent requests for inspection of two foundation cracks leaks in the garage. Ogman recommended legal action by Swaaley. Since the contractor had been extremely responsive to previous requests, the Board suggested additional attempts to contact the contractor. Ogman will report at the next meeting.

g) Jennifer Ogman reviewed common charge arrears. Five units are delinquent and in collection with our attorney. One unit was fined for non-compliance with leasing rules, as well as move-in rules.

h) A draft of the Becht Engineering capital reserve study was shared with the Board. There were several errors in the actual age of current systems, several omissions, and one system unknown to the Board seemed to have been included. The Board asked why this report had not been thoroughly reviewed by Jerry Lemmermann prior to Board review. The report could not be accepted in its current state. Ogman will review with Becht and Lemmerman before presenting to the Board again.

i) The Board discussed approval of Epstein Engineering's bid for the required Local Law 11 inspection. Although Jennifer Ogman offered this sole bid at the last Board meeting, she now indicated that she was unfamiliar with the firm's work or reputation and was not confident that they would do a good job. Ogman was asked to provide competing bids and provide some indication of firms' reputations prior to asking the Board to make a decision. The NYC Local Law 11 inspection is now due and cannot be delayed another year without risk of a fine.

j) A proposal was received for re-sealing the outdoor parking lot. The Board requested that Ogman provide additional bids, but agreed that the work needs to be completed before the end of August.

k) There was discussion of several noise complaints. Jennifer will inspect the apartments for carpeting and issue warning letters by certified mail.

l) The lobby floor's buckling section was discussed.

m) In response to an owner's letter, there was discussion of the exhaust fans not properly operating. The Board had previously requested investigation of this problem as the owner pointed out was indicated in prior meeting Minutes.

n) An estimate for replacement of the building's broken water main valve was discussed as a critical repair. No action was taken to approve the estimate and repair.

7) Financial Reporting.

a) The FY2002 audit should be completed in several weeks.

b) It was pointed out that the 4-year budget profile recently offered by JAL indicated a pre-audit total of fiscal year 2002 expenditures of $208,000. However, the December monthly fiscal report from JAL indicated FY02 expenditures totaling $241,000. Since the $241,000 was documented in JAL's monthly reports of actual expenditures provided to the Board, the Board questioned the $33,000 difference in JAL's own reports six months after the 2002 year had closed. And, since Maxwell-Kates paid an additional $25,000 of Highview bills in January of FY02 during the transition to JAL, it was questioned whether the $241,000 should be closer to $266,000. Ogman indicated that the current annual audit will clarify these numbers once completed.

c) There was a review of Highview account balances and discussion of how the operating account balance had fallen to zero this spring. First, a shortfall in income of $5,000 was created by unit-owner common-charge delinquencies last fall. The shortfall was covered by a $5,000 withdrawal from Operating Reserve funds. At the January 2003 Board meeting, the Board voted to return the $5,000 from JAL's operating account to Highview Reserve funds. On April 1, 2003, JAL indicated that the JAL operating account did not have sufficient funds in the Operating Account to cover a $20,000 Highview insurance policy bill. In response, the Board withdrew $5,000 from Reserve funds in early April to make a first installment and $10,000 of the remaining $15,000 was withdrawn in late May to pay off the bill. The receipt of a $5,000 one-time-payment from CoinMach (a signing bonus due from them since spring 2002) took care of the final $5,000 of the $20k insurance bill.

With approximately $60,000 in Capital repairs to the exterior authorized by the Board, a $20,000 payment was made in early May and a second $20,000 payment was made in late May. The final $20,000 will be due in several weeks. Once the final payment has been made, Highview Reserve balances will total approximately $30,000 (down from approx. $105,000). Although a budget for FY03 is still not final, Ogman indicated that she does not anticipate that the funds withdrawn to cover the insurance payments will be replaced in the balance of the year. If that is the case, it was pointed out that when next Spring's $20,000 insurance comes due (assuming no increase in cost), the building will be without sufficient day-to-day operating funds unless immediate steps are taken to revise the building's income.

It was pointed out that the building must finish the year with an adequate Operating Reserve ($60,000) or accept a fiscal 2003 audit based on its 12/31/03 position which would indicate that the building has insufficient funds to safely operate - this based on the fiscal reporting standards of ¼ year of the previous year's operating expenses as a sufficient margin for prudent operation as expressed by DeSantis & Shall to the Board and general membership in previous years.

Jennifer Ogman expressed the importance of rapid replacement of the reserve funds currently being spent. Special assessments should be relatively short-term - covering an immediate bill outside the scope of the current year's budget and rapidly replacing any reserve funds in order to be prepared for future unanticipated emergencies and needed repairs. It was also noted that at previous Board meetings a discussion of Capital Reserve Funds considered the need to significantly increase the Capital Reserve in order to be prepared for a new roof (estimated to be in the range of $100,000 to $200,000 depending on any structural damage discovered in the process) in possibly nine years when the current warranty expires.

Several Board members insisted that a special assessment of $100 or more would be excessive and refused to vote for such an action. One Board member suggested a special assessment over 3-4 years to cover the current shortfall of $80,000. Another Board member insisted that, as in the past, a special assessment should last no more than six months and should have begun in April when the $60,000 in Capital repairs were authorized. By delaying any assessment, the monthly cost of a special assessment necessary to bring the building back to acceptable accounting standards by the end the year with its Operating Reserve margin intact for the auditors to certify for 2004 had increased from $100/mo (nine mo. to 12/31) to $180/mo. (5 mo. to 12/31), to now $225/mo. (4 mo. to 12/31 if not begun until September). There was disagreement as to whether the Board should be concerned with the annual audit declaring the reserve insufficient and whether 25% of previous year's budget was a universal standard or just DeSantis & Shall's guideline.

Jennifer Ogman made several suggestions to the Board for additional building income include setting up a soda machine in the laundry room, implementing a surcharge on leases, and seeking an additional roof-top communications lessee just as VoiceStream. The Board took no formal action on any of these suggestions, but discussed previously courting another roof-top client without success. Jennifer Ogman will investigate.

The next Board meeting will take place at the regularly scheduled 2nd Tuesday of the month on Tuesday, July, 8 2003. The meeting was adjourned at 10:50 p.m.