Highview Condominium II
Board of Directors - Meeting Minutes
December 1, 2004, 7:30 p.m.

The third regular meeting of the 2004-2005 Highview II Board of Directors was called to order at 7:50 p.m. by Stefanie Greenberg, President.

Board members in attendance: Victor Bellini, Miriam Biren, Sanchie Bobrow, Robert Boynton, Marjorie Cannon, Stephanie Greenberg, Tamara Keshecki, and Richard Re. Board member Frank Mattera was not in attendance, but available in the building in case of any tie vote. Jennifer Ogman attended from J.A.L. Diversified Management.

A.) Approval of prior meeting Minutes:

The October Minutes were approved this evening after failing to gain the reply of the Board by email. With the 10/13/04 minutes approved, the 11/10/04 meeting's Minutes will be distributed later this week for approval by email.

B.) Stefanie Greenberg requested that two items be addressed in advance of the regular agenda.

1) Discussion of Keyspan gas service lines: On November 18, JAL scheduled the building's plumber, RSK Plumbing, to search for a gas riser valve. When RSK came to Highview, building residents in the lobby objected about adding an access panel in the lobby ceiling, RSK postponed their work, and JAL emailed the Board requesting that the Board make a decision at the December Board meeting about the search for gas-riser valves.

It was reviewed that RSK Plumbing indicated to JAL that unless gas-riser valves can be located, servicing any single unit's gas pipe or gas valve at Highview II can only take place with a full-building shut-down if the work is to be performed legally. Both RSK and Richmond Plumbing explained to JAL that once gas service is turned off, it cannot be turned back on without access to all the units (at a single time) in which service was suspended - to assure that no stove has a burner already turned on at the moment the gas begins to flow again. Both plumbers indicated to JAL that if riser valves can be located, only 6 units would be subject to any service interruption and the plumber would only require access to the 6 units for a service re-start. But if there are no riser valves, a plumber requires access to all 68 residential units at a single time.

Greenberg suggested addressing the gas-riser valve concern as part of the estimates being obtained for hot/cold water riser valve replacement work planned for the summer. When the lobby-level ceiling is open for hot/cold riser valve replacements, a search and possible installation of any other valves would be most cost effective. Board members agreed and estimates will be obtained along with the FY2005 water riser valve replacement work.

2) Stefanie Greenberg requested a discussion of sales & lease waiver process, what forms need to be completed by whom in order for the waiver to be authorized by the Board, and which are required in order for a move-in to be authorized.

The Board discussed that a new owners and new tenants needs to sign documents acknowledging receipt of the Fire Plan, Rules & Regulations, Fine Schedule; and acknowledge that they agree to follow building Rules & Regulations. New owners also acknowledge receipt of bylaws and proximity reader keys from prior owner. A copy of the lease or sales agreement is included, as well as other misc. documents including the number of occupants who will legally reside in the premises and emergency contact numbers.

For Board approval, JAL's cover memo notes that all of the attached forms, approvals, and a statement that there are no outstanding charges on the seller's or landlord's account. Per bylaws, any outstanding balance on an owner's account prevent a sale or lease approval.

Bellini questioned whether the Board is required to approve leases. Boynton replied that the building attorney, Michael Swaaley, has indicated that it is required according to Bylaws and that there is a Board liability if such oversight is not maintained. Archived Minutes from the 1980's indicate that the Board has historically been active in this process per Bylaws.

C.) Financial & Legal Report:

1) Rich Re accepted the position of Treasurer. (At the November Board meeting, Re had only agreed to consider the appointment.)

2) The Becht Engineering Phase-1 contract was signed at this meeting. Boynton confirmed that Michael Swaaley had reviewed the contract and negotiated a number of changes in the agreement with Becht. All of the Board's concerns were successfully addressed.

3) There was a discussion of the FY2005 budget and related issues led by the Board's new Treasurer, Rich Re. Re distributed two FY2005 budget proposals for consideration. One draft included approximately $50,000 in projects that had been previously discussed by the Board for the coming year and the second draft included none of the proposed repairs.

a) The FY2005 budget without repair projects was determined to require $282,550 in expenditures and included approximately $30,000 in estimated increases in utility bills, insurance, and taxes. After discussion and decreasing other operating cost estimates, a FY2005 deficit of approximately $10,000 remained.

b) The list of approximately $50,000 in FY2005 repair projects was discussed. The list included replacement of the water riser valves (currently inoperable), installation of lobby-level recycling chutes (to remove the recycling area and current fire code violation), laundry room table and sink move/replacement, repair to front entrance area façade (water damage), garage painting and lighting (safety/liability concern), parking lot wall and fence painting (building appearance/rust stains/capital preservation), and awning light replacement (no longer available, cannot be repaired). Estimates for elevator bulkhead welding and fire escape scraping/painting were not available for inclusion at this time. Safety, NYC regulations, and appearance issues were discussed for each.

c) In discussed the building's current reserves that might be used to cover capital repairs, Boynton noted that although the building does have approximately $70,000 in Reserves, the building's Operating Reserve minimum balance is calculated as 25% of the previous year's expenditures. Ultimately only about $5,000 exists as a Capital Reserve. The Operating Reserve balance guideline is used by banks use as a reference for granting mortgages and a failure to meet that 25% figure on 12/31 as part of the independently audit could lead to greater difficulty for purchasers seeking mortgages and might figure into whatever interest rate Highview II itself might be able to get if it sought a loan. Other Board members questioned whether the 25% rule was meaningful and whether the Board could afford to maintain a 25% Operating Reserve at this time.

d) There was a discussion of the possible need for a building loan to cover major FY2005 capital repair expenses. A number of points were discussed. The differences between condominiums and co-ops from a tax-deductibility standpoint for unit owners and exactly what residents own was included in the discussion.

i) A variety of payment options that might be offered to unit owners was briefly discussed (lump sum, participation in a loan by the building, or individual home improvement loans). Differences in tax-deductibility and mortgage rates for owners versus the building was mentioned by Ogman.

Although the Board members shared their impressions of the possible options, there was agreement that expert tax and legal guidance might be needed before the Board could formally decide on a building loan and what appropriate options could be offered to unit owners.

ii) There was discussion of the length of time a building loan should be considered for. Possible terms mentioned included five and ten years. Boynton stated a concern that according to the Becht Capital Reserve Study, the building should anticipate approximately $750,000 in capital replacement costs over the next 15 years (2003-2018). Of that amount, the roof and incinerator bulkhead was estimated at $135,000 of that possible $750,000. That would still leave a potential $615,000 before the year 2018, and he felt that any building loan should not be so long a term that a substantial portion of the loan would remain outstanding when another major repair/loan might be necessary. The building's $100,000 boiler was cited as an example of a future potential capital repair for which failure would require an immediate remedy. (Although currently in good condition, the boiler has already exceeded its technically calculated life-span.)

e) There was discussion of continuing the current Special Assessment (average unit cost $100/mo.). The current special assessment is scheduled to conclude this month (December). Although several Board members supported the idea of extending the current assessment to save for part of this Spring and Summer's major bills, support the Operating Reserve margin of 25%, and most likely reduce the amount that the building will have to either finance or cover from a larger Special Assessment later in the year; the majority of the Board supported the suggestion of a few months reprieve from Special Assessments.

f) The Board approved a five percent increase in common charge, effective January 1st. This increase would not relate to any of the major repair projects, but would cover the basic increased operating costs of the building.

g) Costs for the roof renovation project, also scheduled for FY2005, will not be known until Becht Engineering makes a determination of the roof's structural condition, develops specifications for the repairs, and bids are received from contractors. It was speculated that it may take until March to complete the Phase-2 bidding and have a solid contract cost for approval.

D.) Repairs:

1) There was discussion of exterminator services. Requesting that residents use the sign-up sheet posted in the mailroom has resulted in even fewer than the 5-10 units that were being sprayed when the policy was knocking on every door. The exterminator will be asked to go back to the knock on every door policy.

2) The previously approved laundry room painting will be completed in December.

3) The previously approved garage exhaust fan work is waiting for the contractor to do the job.

4) The super is painting unit doors.

E. Holiday Party:

The total expenditure of $500 was reviewed again. There was a request for volunteers to pick things up. Stefanie suggested a $10 gift exchange between attendees at the event and will make up a flyer for distribution.

Meeting was adjourned at approximately 10:30 p.m.

Robert Boynton,

Secretary