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Majority RulesDec 07, 2007


Although I am board president I still represent only one vote on the board.

Therefore, I am often harangued by shareholders who disagree with certain board decisions that I may not have voted in favor of.

However, I am reluctant to say how I voted as I fear it would harm the board dynamic.

Do you face similar situations?

Do you state how each member voted?

Any suggestions?

Join the Conversation Comments (6)
no no - AR Dec 07, 2007


You never want to state how you voted on anything to anyone, it will usually come back and bite you later on somehow.

Perhaps there is a lack of proper communication between management/the Board and the shareholders.

When a resolution is made (lets say... raising maitenance 12%) and you must tell this to the shareholders, it is not your job. let management send a memo to all SH stating that

[actual letter i sent]

After careful consideration and review of the many rising operating expenses; such as Fuel (35%), insurance (9%), electric 15%), real estate taxes (11+%), supplies, labor, etc… it has been determined to raise maintenance in the amount of 12½%, beginning January 1, 2008.
Kindly understand that this increase is purely to permit us to operate at par with the rising operating expenses of the building.
Please do not hesitate to contact me should you have any questions concerning the aforesaid matter.

this type of memorandum takes the blame and eyes off the BP. all other communication should be the same.

hope that helps some..
~AR


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Board Decision (To Alex) - Fat Nickie Dec 07, 2007


Not sure if you are Alex P Keaton from Family Ties? Quies simply, you each have a vote when it comes to decision making but the result is a board decision,(3,5,7,9) not Bob, Mary, and Jane were in favor and Pat and Sam opposed. If you are going to inform shareholders how you voted you might as well post it on a bulletin board and a target on your back.

FN.

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Board as a whole - Mallory Dec 07, 2007


I agree with the others -- the decisions the board makes are the board's. As we say in our board meetings, it's fine to disagree among ourselves, but once a decision is made, everyone on board defends and upholds it.

Let me add that although the managing agent can help answer questions about unpopular moves (such as raising the maintenance fee), any board member must be prepared to answer those questions as well. If he or she can't, you, as board president, should ask them to refer the questioner to you.

Making unpopular decisions is never easy. When I'm asked, I explain why we need to raise money (so we don't have to borrow money to pay operating bills), and that we, the board, pay the maintenance fee just like everyone else. You can also ask the complainer for suggestions on how to save money so the next increase will be less -- that is, make the complainer responsible for finding a solution.

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We have a plan for unanimous votes - TedT-NJ Dec 07, 2007


We send a letter to the shareholders about three weeks before the fall “open board of directors meeting” describing the “planned” increases and the rationale. All board members sign the letter. This “budget approval” open board of directors meeting is typically conducted in November.

By this, I mean that twice a year, we take a room in a nearby public building and invite all shareholders to view (not participate) in the open board of directors meeting. This part of the evening takes about ten minutes. Note shareholder opinions are not solicited during the open board of directors meeting. Shareholders not permitted to ask questions or make statements during the open board of directors meeting. Then, we conduct a Q&A session for all shareholders. This Q&A session usually lasts about sixty to ninety minutes.

Because we have previously reviewed the amounts and all the details at a board of directors workshop; hence all details are finalized (no votes are taken for the record at the workshop, though all board members can voice opinions, and we come to any compromises, as necessary), at the open board of directors meeting, shareholders see all the board members vote affirmative.

= = = = = = = =

In May we have our annual open board of directors meeting wherein new board members are elected (following publication of candidates and solicitation of proxies). Any items to be voted during the open board of directors meeting are previously discussed in a workshop, without votes, and thus any motions are always unanimously voted.

Note as with the fall meeting, shareholder opinions are not solicited during the open board of directors meeting. Again shareholders not permitted to ask questions or make statements during the open board of directors meeting. Following the close of the May open board of directors meeting, which usually requires fifteen minutes, we then have a Q&A session that usually lasts about ninety to minutes.


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> Join the conversation Comments (2)
How to have unanimity – recruit board members - TedT-NJ Dec 08, 2007


We recruit like minded board members. But do note, we have a history of longevity among board members. Further, we have a common purpose (kindly see my other postings herein these forums) and all board members check their personal demands at the door.

Yes, there was a discussion thread about two weeks ago regarding soliciting votes. We usually recruit friends of the board of directors and they in turn go door to door to solicit proxies for the preferred slate.

But do also take note that we are without any debt, having retired the original mortgage without refinancing. We raise maintenance EVERY year by 2.5% to 4%. We slowly year by year raised our capital assessment which initially garnered $20,000 so that now we are bringing $900,000 to our yearly capital reserve fund. Yes, there was a jump from $450,000 to $900,000 when we retired the debt and its payments, and moved the debt retirement amount of maintenance from the maintenance income stream to the capital improvement stream.

And we have a mega-million line of credit which as I noted elsewhere is used for intra year payments in anticipation of capital reserve income.

= = = = = = =

How did we do it?

Single minded focus of a board of directors recruited by the board of directors with total dedication to fiduciary responsibility.

= = = = = = =

Oh, we are self managed, and our staff is all long term thus avoiding the churn of management companies and managing agents even if the same firm is retained.

= = = = = = =


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plan... (to TedT-NJ) - AR Dec 11, 2007


"...Any items to be voted during the open board of directors meeting are previously discussed in a workshop, without votes, and thus any motions are always unanimously voted...."

Can you explain to everyone what a "workshop" is, as to clarify your process?

This is a great process / protocol and I think we all cab benifit by understanding it more, thanks.

~AR

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> Join the conversation Comments (2)
Our NJ 500 unit coop plan - TedT-NJ Dec 12, 2007


As a way of introduction, we are self managed. In our decision process, we have periodic workshops. Attendance at the workshop is composed of the board of directors, the building manager (employee, almost always attends), the superintendent (employee, usually attends), our in-house attorney (most often), our outside attorney (occasionally), guest invitees, e.g.: a resident with a particular skill, a tax specialist, a banker, etc.

The frequency of workshops is about one a month or one every six weeks. The duration is typicallyractor 60 to 90 minutes.

At recent workshop meetings, we discussed such items as:
• The underlying rationale for the 2008 maintenance increase and the 2008 assessment; and how we would explain it to the residents.
• The final agenda and format for the annual “open” board of directors meeting.
• The status of arrears in general (we hardly have any), and the status of one shareholders.
• The purchase of a billy-goat to clean our sidewalks.
• The need for some additional furniture in our lobby.
• The status of our outside security firm’s performance.
• The final steps in our acquisition of a larger credit line.
• The Christmas holiday luncheon for our staff of employees and contractors and vendors.
• Shareholders (a married couple) who purchased, who did not move into the apartment but in turn allowed their daughter to occupy the apartment, e.g.: illegal sublet.
• Discussion of capital improvements completed this year and those planned for next year.
• A suggested elevator cab improvement.
• Any pending legislation that might affect The Twin Rivers (Hightstown, NJ) case.
• The status of our pool services company and its contract.
• Letters to the board and the proper response.
• Planned meetings (one-on-one, really two on one) with shareholders.
• Results of requests for proposals and thence selection of a vendor.
• Results of engineering studies.
• Superintendents report on the status of the mechanical plant.
• Discussion of other property conditions.

Quite frankly, our property is in an excellent financial and management position, e.g.: no mortgage, a large capital reserve fund, extremely minimal arrears, board longevity, formal reporting of our financials monthly, weekly management reports from the building manager (including all letters from shareholders), mechanical plant in excellent condition, building in excellent condition, etc.

Thus, we do not have a need for very frequent multi hour board meetings with much anguish and weeping to discuss what will be paid, what will held, where we have issues, etc. As we have a building manager as an employee, most issues are resolved before they come to any board member. In some cases, the building manager will consult with a board member when making a decision, e.g.: switching vendors, responding to a shareholder who is a pest, etc. Kindly note, not all board members need to be consulted. The board member responsible for the landscape committee is somewhat autonomous. Likewise, the board member responsible for the security committee operates somewhat autonomously. The board member responsible for capital improvements operates somewhat autonomously. In point of fact once the outside engineer approves an invoice submitted by the vendor, the responsible board member approves the invoice and allows the building manager to issue a check in the next cycle. Kindly do not opine that we do not seek competitive bids, we do.

Note that we have two payment cycles each month for invoices. All that arrive by the 25th of the prior month are paid by the fifth of the current month. Special payments are issued during the last week of the month. All our vendors are aware of the policy and conform to our requirements for invoice submission.

Thus the fall (year end) open board of directors meeting to which all shareholders are invited by letter covers a narrow range of voting topics, e.g.: approval of the budget for the next year, approval of the maintenance changes (it increases every year in the range of 2.5a% to 4.5%) and assessment (we have an assessment every year), authorization for the board to enter into contracts that might be required per the budget and the capital improvement plan, and approval of the plan to accumulate capital reserves.

As a consequence entering into contacts during the next year becomes a procedural formality that does not require full board of director’s ratification as we have preapproved the authority of the board to enter into contracts. But do note, the bid, the proposals from the vendors and the selection of the vendor is discussed in the workshop.










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> Join the conversation Comments (1)
income disparities - Batch Dec 13, 2007


500 units @ $1000 avg/mo = $500,000/mo, $6 million/year.
45 units @1000 avg/mo = $45,000/mo, $540,000/year.

Which one of these co-ops can afford huge capital projects and to pay off their mortgage early?

Tired of hearing about it.

Geez

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Our $1,000 average a month - TedT-NJ Dec 13, 2007


Let me clarify when I assert that our shareholders pay about $1,000~ a month for maintenance (average); studio through three bedroom. (In reality we are closer to $1,100, and this cost includes the parking fee of $60 a month for one car.) This cost also includes all taxes, all heating and all air conditioning. We have a central heating and cooling plants. Thus, residents do not have PTAC units within their apartments that in turn are operated by the residents and funded by the residents directly.

In our building, there is a continuous loop of chilled or heated water that is routed through the under window units in the residents apartments. The residents operate the "fans only" in these units to their desired heating or cooling level.

Thus, the costs above are inclusive of heating and cooling but exclusive of the residents monthly electrical bill for lighting, appliances, PC's TV's and heating/cooling fan operation. For example, a typical three bedroom unit will see a monthly electrical bill of $55 to $80, depending upon season.

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majority rules - J Dec 08, 2007


I believe that shareholders should know how board members vote, in prior years our board unfortunately has had almost all members voting the same - this does not imply individual thinking - especially in matters of assessments and raises - which we have had since 2001 and over 50% in 3 years - the cause of this which your coop might not have is ignorance, non caring and corruption. Our supply and repair costs are massive and then we do not have the supplies and the repairs have to be done again because they were not done correctly, we have in our coop massive waste, misuse and disappearance of funds and when certain board members vote against the increases and assessments because they are aware of these problems I believe these votes should be made public so that at election time the shareholders can make an educated vote

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Majority rules (to J) - Fat Nickie Dec 08, 2007


J,I disagree with you. If the individuals on the board cannot make a deision (vote) on their own and everyone has to agree maybe it is time for others to step forward.So what if six agree and one person disagrees when a vote is taken.

Fat Nickie

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