Monday August 14, 2017 7:30PM
2nd Floor Party Room
7:30PM – PTCA 2016/2017 Audited Financial Statements
Presentation By Ralph Picker of Picker and Associates
OWNER FORUM – 15 minutes, 2 minutes per person
OPEN SESSION – Call to Order
The meeting chair, expected to be Board President Michael Parrie, will call the meeting to order. Please be courteous – no audience participation is permitted. If applicable, speakers will be recognized by the Meeting Chair.
Roll Call – Confirm Quorum
The meeting chair will confirm a quorum of Board Members are present. Board Members and representatives from Management will be introduced.
Committees will be invited to give updates to the Board on business and activities. Attached to the report for Board Member review are the most recent Home Improvement and Health Club Committee Reports.
The meeting chair may make comments or provide updates on Association business and activities or otherwise address the Board and Owners present.
Action Items – New Business
This agenda item is provided for any resolutions proposed resulting from Closed Session discussion.
Attached to the report for Board Member review, are the proposed minutes from the Board of Directors Meeting held on Monday July 24, 2017 as submitted by Timothy Patricio, Property Manager.
A sample motion: “I move the Board of Directors approves the minutes from the Board Meeting held on Monday June 24th, 2017.”
It is our understanding Board Members have received and fully reviewed the preliminary draft of the 2016/2017 Audited Financial Statements. In advance of Open Session, Ralph Picker of Picker and Associates, PTCA’s auditing firm, is expected meet with the Board and Owners to discuss highlights and answer questions. One question was provided in advance by the Board Treasurer, after which a correction was made and a revised draft was distributed to Board Members.
At the Boards direction, the draft audit was also made available upon request by any Unit Owners, and posted online in advance of the meeting. The next step is for the Board to accept the audit so a formal draft can be released, and the tax returns for the fiscal year can be filed.
A sample motion: “I move the Board of Directors accepts the audit of the Financial Statements for the 2016/2017 Fiscal Year as presented by Picker and Associates, Inc.”
The Board may also choose to act on the disposition of the audited operating cash surplus, reported by Picker and Associates, in the amount of $92,894. In prior years, the Budget & Finance Committee recommended 25% remain as a part of the Operating Contingency Fund, and 75% be assigned to the Reserve Fund. However, due to the expected expense of the Roof Project, with particular regard to the additional masonry repairs and anchorages which far exceeds budget and the surplus, we suggest 100% of this be allocated to the Reserve Fund.
A sample motion: “WHEREAS, the Board of Directors (the “Board”) of Park Tower Condominium Association (the “Association”) is the governing body of said Association and is charged with the direction and administration of the Property subject to that certain Declaration of Condominium for Park Tower Condominium, as from time to time amended (the “Property”); and
WHEREAS, the Declaration provides that the Association is obligated to maintain, repair, and replace the common elements located in the Property; and
WHEREAS, an accounting for the 2016/2017 fiscal year revealed that there is an accumulated amount of cash in excess of the amount required for actual expenses (“excess”) in the amount of $92,894; and
WHEREAS, the Board has reviewed the status of the Association’s capital reserve account; and
WHEREAS, the Condominium Property Act requires, pursuant to section 9 (c) (2), the Association to maintain reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements located in the Property; and
WHEREAS, the Board has considered the following factors relative to the reasonableness of the Association’s reserves:
1) The repair and replacement cost, and the estimated useful life, of the property which the Association is obligated to maintain, including but not limited to structural and mechanical components, surfaces of the buildings and common elements, and energy systems and equipment;
2) The current and anticipated return on investment of the Association’s reserve funds;
3) The amount that the Association’s most recent capital reserve study provides should be on deposit in the capital reserve account;
4) The financial impact on the unit owners in the market value of the condominium units of an immediate assessment increase to fund the reserves and
5) The ability of the Association to obtain financing or refinancing as a supplement to the capital reserve account; and
WHEREAS, after due consideration of the foregoing factors, the Board contends that their fiduciary duty demands that the excess funds be transferred into the capital reserve account.
NOW, THEREFORE, BE IT RESOLVED that the Park Tower Condominium Association Board of Directors approves the transfer of $92,894, the identified year-end operating fund surplus cash for 2016/2017, to the Association’s reserve account, after taking into consideration the criteria for establishing a reasonable reserve set forth in Section 9(c)(2) of the Illinois Condominium Property Act, in order to more properly fund said reserve account.”
Management suggests the Board formally vote on exercising the Proxy Forms for the initiative to purchase 12c, for the PTCA owned units 311, 511, 7c, 14c and 15c. In so doing, Boards support and decision on the matter can be published in advance of the Special Meeting and the percentage of ownership can be included in the tally being accumulated.
A sample motion: “I move the Board of Directors approves and votes in favor of the proposed purchase and subsequent sale of Unit 12(c) as it relates to Units 311, 511, 7(c), 14(c), and 15(c), and designates the Board President as primary proxy, and Board President and Board Secretary as signers for the Proxy Forms for said units.”
Attached to the report for Board review, is a request from the Unit Owner for reserved use of the deck area, as well as a description of the event being planned for Saturday October 7, 2017. If approved, they would use the deck for setup beginning 12pm, the event at 3pm to 5pm, after which the event would move to the Party Room. They would also like to use chairs from the Party Room on the deck during that time.
As best I can recall, during my tenure we have not had an event of this scope occur with reserved use of the deck, with the exception of the 4th of July Party which is open to all residents. But we cannot see any material reason for the Board not to consider such a request. Because that area would presumably be closed off for exclusive use of a particular owner, you might propose a fee be charged, not unlike a fee is charged for reserved use of the Party Room.
A motion can be proposed at the meeting, consistent with the decision of the Board.
Attached to the report for Board Review, is a request for the Board to grant a waiver from rental restrictions to the Owner of Unit 4914. The Board has the discretion to waive the rental limit if they believe there is a reasonable hardship or justifiable purpose for an exception.
A sample motion follows: “I move the Board of Directors (grants/denies) the rental exception request for the Unit Owners of 4914.”
At the last Health Club Committee Meeting, members raised concern we were not adding a camera to view traffic going into the pool area. We met with our Security System vendor (CBS), who is conducting the network replacement project underway. They gave us the attached proposal for $1,802.79 to add the camera viewing the corridor and doorway into the pool and weight room. The purpose is to help prevent non-member traffic, and members allowing non-members in with their fob. Also, in cases where we have complaints, we can attempt to identify such individuals.
After determining the pricing is consistent with the cost associated with the other cameras we are adding throughout PT, and agreeing this could prevent non-member traffic, we authorized adding this to the job. The pricing is only good while they are mobilized and already working in the building, so we agreed this was a wise course of action.
We request the Board ratify this at the next meeting since it is adding a location we did not previously discuss.
A sample motion: “I move the Board of Directors approves the proposal by Chicago Building Services, at a cost of $1,802.79 for the for the addition of a security camera (consistent with the camera system being installed), to view the corridor into the pool area and weight room.”
A horizontal waste line connecting several roof deck drains around the pool structure unexpectedly cracked along a wide portion (about 140’) of the cast iron. In heavy rain events, this causes water to shoot out of the pipe into the 1p garage and along a portion of the exit ramp. It could be hazardous in certain conditions, especially severe weather and heavy rain.
This could have been caused by any number of things we’ll never know. Our theory is, during one of this summer’s severe weather/heavy rain events, the pipe may have had a weak spot which finally gave way under the stress and sudden weight and rush of water. That is just a guess.
We expected this to be very costly, because it will entail building a scaffold along the ramp area wall. That and the replacement of 140’ of cast iron drain pipe is plainly a very big job. We’ve collected bids for this repair:
AMS Mechanical – $19,500
Titan Mechanical Corp – $24,250
We are waiting for a 3rd bid as well which we hope to have in time for the meeting.
A sample motion: “I move the Board of Directors approves the proposal by ______________ for the replacement of cast iron drain pipe and drain heads in the 1p garage, as proposed at a cost of ________ .”
We held what has become an annual budgetary meeting with our reps at Prospect Resources. At this meeting, they discussed a phenomenon occurring in the gas market – very similar to what we discussed at a Board Meeting in March regarding electricity. That is, forward pricing in the market is actually less than current pricing. Following discussing this and the potential impact to long term budget considerations, we asked they put the following in writing:
“Per our conversation earlier today coupled with your request, please find the natural gas pricing below for the upcoming 6 winter seasons.
Nov17-Mar18 – 31.59 cents/therm
Nov18-Mar19 – 30.88 cents/therm
Nov19-Mar20 – 29.78 cents/therm
Nov20-Mar21 – 29.78 cents/therm
Nov21-Mar22 – 29.99 cents/therm
Nov22-Mar23 – 30.36 cents/therm
As you can see, the concept of backwardation is pretty prevalent throughout.
Please be aware that these prices are just for the commodity. It does not take into effect the basis or the margin [TRANSLATION BY MANAGEMENT – taxes and other utility fees]. It is literally just the cost of the commodity.
Also, we are not necessarily advocating a hedge at this time beyond 3/31/20. We just want the authorization so that if the opportunity exists, we can move immediately since prices are good for mere minutes.”
In March, the Board authorized extending their authorization through 2021. We agree their present analysis and reasoning appears sound, and taking advantage of ‘backwardation’ seems to be a wise way to add stability to budget line items such as utilities which can otherwise be prone to volatility. As they point out, fees and taxes may still go up, and the budget may need to increase regardless. But if you stabilize the commodity portion, it can act to soften the blow (as they say).
We suggest the Board consider approving their authorization be extended through March 2023, as they propose, so they can act when they deem it is advantageous for PTCA.
A sample motion: “I move the Board of Directors authorizes extension of the current agreement with Prospect Resources, to continue hedging for and securing the purchase of natural gas and electricity for Park Tower through March 2023, at the current agreed upon rates, terms and conditions.”
Fund Balances End of June 2017
Operating Funds $509,400 (increase of $98,538 from May)
Reserve Funds $1,870,038 (decrease of $249,455 from May)
Total Cash and Investments $2,379,437 (decrease of $150,917 from May)
June 2017 Income and Expenses
Total June Income: $504,087
Total June Expenses: $301,689
Income From Garage: $18,371
Contribution To Reserve: $131,417
Total Surplus: $89,352
Management acted, in consultation with the Board Treasurer, to purchase two new Certificates of Deposit with funds from the Operating Contingency Fund and the Reserve Fund. This action should be formally ratified by the Board. Attached for Board review is the internal memo from Draper and Kramer with details of the bank activity.
A CD with Delaware Place Bank, for the Operating Contingency Fund, was purchased for 12 months, totaling $80,000 with a 1.5% yield:
A sample motion follows: “I move the Board of Directors approves the purchase of an $80,000 Certificate of Deposit with a 1.5% interest rate for 12 months with Delaware Place Bank for the Operating Contingency Fund, scheduled to mature on August 7, 2018.”
A CD with Delaware Place Bank, for the Reserve Fund, was purchased for 12 months, totaling $100,000 with a 1.5% yield:
A sample motion follows: “I move the Board of Directors approves the purchase of an $100,000 Certificate of Deposit with a 1.5% interest rate for 12 months with Delaware Place Bank for the Reserve Fund, scheduled to mature on August 7, 2018.”
Business and Activities
Monthly Activity Report
Recent Sales Activity
There being no further business, the Board will consider adjourning the meeting.
A sample motion follows: “I move the Board of Directors adjourns the August 14th, 2017 Board Meeting at _ _ PM.”
OWNER FORUM – 15 minutes, 2 minutes per person
Next Meeting Dates Monday August 28th and Monday September 11th at 7:30pm.