What makes a typical year for a busy board? There’s the routine and the not-so-routine, from discussing bills to plugging leaks. Mary Fran is a fairly typical board member, dedicated and determined, serving for three years as a member-at-large, one year as vice president, and then a year (so far) as president. And her home, Park Terrace Gardens in the Inwood section of Manhattan, is a fairly typical property of its type: a five-building, 387-unit cooperative built in 1939-40 and incorporated as a cooperative in the mid-1980s. It has a nine-member board, four supers, five porters, and a resident manager and her assistant in an on-site office. Most of the apartments are owned, although there are a few rental units left over from before the building was incorporated. We asked Fran if she’d recall for us, month by month, the ups and downs of her first year as president, so other boards can compare and contrast how their board shapes up against hers. Indeed: as you read, ask yourself, “Does your board juggle as many problems? Is there as much harmony?” One can learn a great deal from studying the slow-and-steady-wins-the-race efficiency of this pragmatic board.
Board service is exhausting, annoying, funny, frustrating, gratifying, and unpredictable, except in its continuing variety. An agenda of 17 items begins our year. We divide our meetings into open and closed sessions so that residents can attend part of the meeting if they wish to do so. Among the “smaller” items to be discussed are an update on our recently installed bike room, updates from committee, a proposal for basement cameras, and the management report on operations and maintenance items. The really big stuff, in the form of major repairs to leaking façades, involves reviewing a proposal from two engineering companies on what this work will entail and cost.
Like many older buildings in New York, ours has had to address aging infrastructure and in our case, serious leaks experienced by some of our residents. Decisions have to be made as to which approach to take, who should be our engineer, and how we will proceed with the project when the problem varies in seriousness throughout the complex.
From our first meetings involving this issue we have been confronted with a tradeoff in the cost/benefit: where was the need the greatest and how much cost could we ask our shareholders to take on? At this first meeting, we approve an engineer and a not-to-exceed amount pending confirmation of a timeline.
We also set up a second January closed board meeting with our attorney and accountants to discuss our finances, maintenance increases, capital improvements, and financial planning in general. Both attorney and accountants consider us in good financial shape but they say it is important to understand our choices, future issues, and how we might prepare for major projects and general cost increases.
Renovations, 1 of 24
A huge agenda of 24 items greets us at this meeting. A proposal to move and replace the deteriorating garbage stockades is presented as well as a proposal for the energy audit required of all buildings by New York City. These larger issues often take less time and discussion than many “minor” ones. A new requirement from the city regarding emergency phones in elevators, one with which we have to comply, engenders a lot of back and forth about what kind, what design, which company to do it, where the phones are to be placed (not much choice here). During our closed session there are legal cases to discuss, questions about fees, apartment renovations, lease renewals, and problems connected to water intrusion, among other items.
The personal dynamics of working with a board contribute to the efficiency and efficacy of how problems are solved. Everyone brings her/his own interests and experience to board work. Our 2012 board had two architects with considerable expertise but who often disagree on how to proceed. We have members for whom our garden is supremely important and energy conservation paramount. As board president I find it difficult to moderate these conflicts and to encourage broader thinking about the overall good of the co-op.
Energy Audit Coming
The big decision of this meeting is to move ahead with façade repairs for two of our buildings, those with the worst leaks. We had tried patching these areas during previous Local Law 11 work, but this met with minimal success. It is decided that two façades must be taken down to the underlying cement, patched, a waterproof barrier applied and the walls rebricked. Two façades were all we could reasonably ask shareholders to pay for with assessments.
There are many items in our management firm’s report as well, including updates on legal cases, apartment repairs, apartment sales, facility repairs, and a particularly nasty conflict between residents. A separate meeting is scheduled to review proposals for performing the energy audit (Local Law 87). This meeting takes place five days later and a company is chosen to do the audit.
Again, the exterior work is the most important issue at this meeting, and the board approves a contractor to perform this work. There are, however, 16 other items on the agenda, including insurance increases, the first draft of the 2011 financial statement, the management report, J-51 application status, bike room proposals, fees, condition of the roof furniture, apartment transfers, continuing difficulties between neighbors, and other routine items. I am always amazed at how long some of these things take to resolve.
Permits in Order?
Ongoing, as usual, is the exterior work. Our manager and I had met with our engineer and contractor on the status of Department of Buildings permits and where we stand with starting dates, scaffolding, and garden protection during construction. We bring the board up to date. This board meeting seems, on paper, to be rather straightforward, but in closed session we have legal cases to review, energy audit questions, shareholder complaints and conflicts, and other nuts-and-bolts recurring issues.
New Use for Garden
Things move forward on the exterior repairs, although there is non-compliance by the contractor to some items in the contract causing considerable agitation, back and forth, and further meetings with our engineer, contractor, and manager. The work is proceeding although it is noisy, dirty, and disruptive. Generally residents are taking it in stride, although some have found it more difficult than others.
Our treasurer presents a spreadsheet on funding options to the exterior work, which will be discussed in July.
One source of conflict in our co-op is the use, or non-use, of our gardens. Currently, and for some years, the gardens have been off-limits to any activity beyond walking through it, and the two co-op sponsored parties held around Memorial Day and Labor Day. One of our members proposes a one-night “camp out” in the garden for parents and young children. This proposal is approved but will certainly cause some strong response from those opposed to any change in garden activity.
By now, the board begins to look really tired.
This is a really tough meeting. We do not usually meet in August, so a lot has to be decided before we break. As it turns out, we cannot cover everything in this meeting and extra meetings are called. No one likes this, but we have no choice as there are serious time constraints. We set up a meeting on the energy audit for the end of July.
Demolition on one building is ongoing and we have permits for the second to commence within the week. We are slightly ahead of schedule but we are all keeping our fingers crossed that things will move ahead without horrible surprises. The board approves an assessment to help fund the exterior work with additional funds to be withdrawn from our reserves and the sale of corporation-owned apartments. This will be a burden for some, but we have tried to make it as manageable as possible, given the necessity to do this work.
Because it is so expensive, so intrusive and important, the exterior work has dominated the board’s interest and work throughout the year. The kind of waterproofing to be applied before the rebricking of the façade has required much research, discussion, and consideration. One of the unpleasant, but not wholly surprising, discoveries of the exterior work was that the parapets above these façades need to be replaced. This will involve additional time and cost, but we hope that it will minimize future water intrusion as well as keep the building façade safe. In addition, we have the mandatory fuel conversion proceeding with filing for permits, the beginning of budget planning for further exterior work that we will have to do over the next few years.
Concerns by shareholders over the assessments and increases are expressed and the board waives late fees for those who cannot comply in time. The board plans to make these financial changes with more lead time in the coming year. The laundry contract was approved after much back and forth with the vendors bidding on it. With five laundry rooms, we are a valuable client.
Exterior work proceeds. We have been lucky with the weather; and even with some delays because of unexpected parapet work, we appear able to finish before it becomes too cold. The board approves an extension of the engineer’s weekly construction inspections.
Planning for the 2013 budget begins and will have to consider routine cost increases, further façade and parapet work, energy upgrades, and other major costs.
This is the last meeting of this board. Our annual meeting takes place in November and the new board will meet the following week. Three current members are taking a break or retiring.
Between the October and November meetings I take a seminar designed for board presidents only. It clarifies my thinking on board management and I hope will help me to do better with the new board. My first priority will be to work toward shorter, more efficient meetings. I have the support of the board for this, but it’s not so easy to implement. I also have plans to bring any new members up to date by meeting with them separately to answer questions and thereby minimize that awful period when you have no idea what anyone is talking about. I have also prepared a one-page statement of function for new and returning board members for their information and reference.
The New Board
The amount of maintenance increases and assessments is still undecided, but the board will spread these out over the year hoping to minimize the impact on the cash flow of shareholders. The exterior work is complete, and the scaffolds and sidewalk bridging are being dismantled.
Planning for energy upgrades begins, with more questions about percentage savings, NYSERDA incentives, timing, project management, and legal review of contracts being major decision points. Other items are committees, tree removal (post-Sandy), plans for forum software, and updates on legal cases, sublets and renewals, apartment sales, noise complaints, staff bonuses, proposed house rule changes, and specific work going on in the complex.
Turning a Page
Our last meeting of the year is rewarded by the consensus that our exterior work, long and difficult and expensive as it was, has produced a very good outcome. The board, and residents, have seen the finished walls and are really pleased. We think that we have gone a long way toward solving water intrusion in these two areas. A request for a proposal for 2013 work is approved and will be sent to our engineer. The board approves the removal of five trees that have been damaged, have diseases, or have grown in a way to compromise safety and infrastructure.
It has been a long year of very long board meetings, lots of disagreement, discussions, and challenging projects, as well as the daily grind of what’s involved in overseeing and managing a co-op in New York City. Another year faces us with many of the same challenges, with a dedicated, intelligent board, some good luck, and hard work. I hope for another productive year as we try to make life better for our shareholders.