Jeff Glasser loves his annual shareholder meetings so much that he has them twice a year. “We have one official meeting, which is our annual meeting, and then we have a budget informational meeting the first week of December,” reports the board president at the 128-unit Normandy co-op in Forest Hills, Queens. “In November, the board makes a final decision as to what the budget will look like, and if and how much of a maintenance increase there might be. Then we present that budget to the shareholders at our meeting in early December.”
You heard that right: a board member who actually enjoys the building-wide get-togethers, those sessions that occur every year, which usually deliver frustrating and/or debilitating challenges to boards. The first challenge is common and practical: it’s difficult to get a quorum of shareholders together for the annuals – so doing it twice is double the trouble. The second challenge concerns how much abuse a board can handle: one manager – who requested anonymity – says the meetings are “something to dread. With all the complaints and raw emotion floating around there, you’re lucky if you get out in one piece.” Indeed, one special meeting attended by attorney Geoffrey Mazel, a partner in Hankin & Mazel, was brutal. The building had been underfunded for years and had to raise the maintenance by 13 percent. The meeting was meant to explain that. “The board was subject to intense shareholder scrutiny,” recalls the attorney, “but they had to do it.”
That said, why on earth would anyone want to schedule building-wide gatherings twice a year? Are they nuts – or just gluttons for punishment?
Neither. The extra meetings are primarily scheduled for one or two reasons: to announce and explain new projects, and/or to release and report on the annual budget.
Using meetings to announce new projects. Often billed as “town hall meetings,” these gatherings are usually held when the need to disseminate information arises. Lorry Bogarsky, board president of a 68-unit cooperative in Hewlett in Nassau County, notes that having the sessions has been particularly helpful because the board often has a lot on its plate that needs explaining. “We’ve made a lot of improvements, some of them necessary and some of them ‘curb-appeal’ items.”
“If ever we’re going to have a big project, like a window installation, we have a special meeting,” says Steven Greenbaum, director of management at Mark Greenberg Real Estate. “You introduce all the people involved [in the job]: the board, the engineer, the window company, the foreman, the owner of the window company, the project manager, the person who’s going to be on site, and the managing agent. You talk about the contract, how much it’s going to cost, whether it’s being done with the reserve fund or whether it’s being done through assessments. Everybody gets to understand why and how you’re doing it, and that takes all the fear of the unknown away.”
These gatherings can be held formally, in a large space on the property (such as a lobby) or in a rented hall. (One building, the Le Havre, a 1,024-unit cooperative in Queens, stages its extra meeting in the summer by the co-op’s swimming pool, which gives firebrands and hotheads an opportunity to cool off – quite literally – if the discussion gets heated.)
Using meetings to discuss money matters. Many call for extra meetings to discuss finances, from maintenance increases to special assessments. A number of properties have regularly scheduled meetings specifically to discuss the budget. These are usually held in November when the budget has just been completed.
“Last year,” Glasser recalls, “we did raise the maintenance, and some people wanted to get a little more specific about items that were in the budget. That included telling them that we had been over budget for the prior year, because of the heating situation, how cold it was – which affected fuel prices – and how we needed to restore some of what we had taken out of the reserve funds.”
The Meetings Are to Trade Info – Not Make Decisions
The effectiveness of these meetings depends on how well the board understands their purpose: discussing, not deciding. Although such get-togethers are for informational purposes only – the residents are not there to decide on anything, just to learn – it does give them an opportunity to ask questions.
“For the last three years, we were doing either three or four [shareholder] meetings per year,” reports Ronald Arnero, board president at University Towers, a three-building co-op in Brooklyn. “We call them our quality-of-life meetings, and to me, they are very fruitful. It’s normally very positive. We provide a little food, and we bring people up to date on all the projects that are going on around our development, and we find out things as a result of having the meetings.”
“It works very well,” admits Bogarsky. “Shareholders know that they have the ability to see the board and to see the property manager, and that’s a good thing. It keeps communication lines open.”
Indeed, these gatherings are useful tools for the board members, helping them keep informed about the concerns of the residents. Keith Werny, president of the City Line division of FirstService Residential, says there may be issues that come up at the biannual meetings that indicate an issue is more widespread than the board had realized. “At University Towers,” he recalls, “there were complaints regarding the consistent level of heat that was provided within the buildings. We identified this is an issue in multiple buildings that needed further investigation.”
Meetings Can Diffuse Tension
Making boards transparent. These extra meetings are helpful because they make board operations more transparent and keep residents in the loop, which should cut down on rumors and other misinformation. For instance, a 35-unit Bronx co-op staged a second shareholders’ meeting because the board had to raise money. “They hadn’t kept up with their maintenance increases like they should have, so we needed to have a special assessment. We needed to spell everything out in the financials and tell them why,” says Joseph L. Bavaro, senior vice president at Finger Management. “We got about 30 of the shareholders together, and the board was a little nervous, because they thought it was going to be a free-for-all. But it really turned out well, because everybody had the same sentiment that said, ‘At least you told us why. We’re glad you called this [special] meeting, and we’re glad that you explained it to us. If [we need a special assessment] then that’s what we have to do.’”
Many professionals and board members agree that having more meetings is generally a good thing. “The shareholders appreciate it and it’s a better form of communication than just putting out a newsletter or a memo. It’s more of a face-to-face situation,” says Stanley Greenberg, board president of Le Havre. Indeed, the more information people have, the better they feel about the building. “There’s more transparency and trust with the board,” says Mazel, the attorney. “When you see the numbers, and they’re in black and white, and your maintenance goes up – whatever, five, ten percent – it resolves the issue in your mind. You don’t have to like it as a shareholder, but those are simply the facts of life in your building.”
Of course, there is always the danger of depressing turnout by having too many meetings, but most experts agree that you should err on the side of more rather than less. Although it is not widely publicized, a large number of boards in properties ranging from small to very large are now staging biannual – sometimes even quarterly – meetings with all the residents. And they’re getting attendees. In fact, rather than being a burden, such meetings are helping boards govern more effectively while keeping many residents satisfied.
“It’s an open exchange of information and allows owners to be more informed,” says Dawn Dickstein, president of MD2 Property Group. “People have to make a major investment in their apartments, and a lot of times, they want to know what’s going on more than just once a year.”