(also mailed Friday December 23rd, 2016)
NOTICE OF SPECIAL MEETING OF THE UNIT OWNERS TO DISCUSS PROPOSED BUDGET FOR 2017-2018
To be held Monday, January 9, 2017, 7:30 p.m., in the 2nd Floor Party Room
Dear Fellow Owners,
Enclosed for your review is the proposed annual budget for the fiscal year March 1, 2017 to February 28, 2018, as presented by Management and edited by the Budget and Finance Committee and the Board of Directors. The initial draft was reviewed line item by line item, on three consecutive Saturdays in November. Under consideration is a planned increase of 3.5% in assessments. We also expect an increase of the cable/internet charge to $44.37 per unit per month. The Board and Committee were a bit more challenged with inflationary pressures than in previous years. With our long term continued goal of managing our operations without the need for a Special Assessment and in order to keep a 3.5% lid on assessments, we spent time considering other fees and income. In some cases these have remained static for many years, and others are increased due to corresponding increases in related expenses. Most of the changes we agreed to are proposed as follows:
|Washers in Laundry Room||Increase 25¢ per load for light/normal wash|
Increase 15¢ additional for medium soil
Increase 30¢ additional for heavy soil
|Lockout Fee||Increase $10 (from $40 to $50)|
|Move In / Move Out Fee||Increase $30 (from $520 to $550)|
|Transfer Fee (Move within Park Tower units)||Increase $55 (from $95 to $150)|
|Adding or Removing Occupant Move In/Move Out||Increase $5 (from $245 to $250)|
|Party Room Rental Fee||Increase $50 (from $100 to $150)|
|Bike Room Rental Fee||Increase $10 (from $50 to $60)|
|Elevator Reservations (construction/large deliveries)||Increase $12.50/hr (from $37.50/hr to $50/hr)|
|Labor Charge||Increase $10/half hr (from $40/half hr to $50/half hr); Plumber $55/half hr|
|Parking Charges (Valet and Self-Park 1P and 2P)||Increase $5/month (from $120 to $125)|
|Parking Charges (Reserved Premium)||Increase $5/month (from $135 to $140)|
|Parking Charges (Day)||Increase $10/month (from $146 to $156)|
|14-Day Parking Pass||New option for $100 (not available before)|
Major projects in 2017-2018 and their associated costs include:
|Hot Water Riser Projects (4 Tiers)||$600,000|
|Main Roof (above 55th Floor)||$600,000|
|Main Pool Liner and Pool Area Enclosure||$220,000|
|2nd Floor Deck Planters (Membrane, Irrigation, Landscape)||$155,000|
|Upgrade Security System (Cameras, Software, Fobs)||$105,000|
The proposed budget includes an increase in annual income of $240,200 for total income of $6,680,800. Approximately $166,300 of that increase is accounted for by the adjustment in assessments. The bulk of the balance in the increase comes from cable/internet, and income from parking operations. Total proposed non-reserve operating expenses are $5,103,800. The proposed annual reserve contribution is increased $104,100 to $1,577,000. We presently expect total reserve expenses for the year of approximately $2,058,000.
This proposal represents the best efforts of Management, the Budget and Finance Committee, and the Board to anticipate general expenses for the coming year, and future needs to operate and maintain the building responsibly and efficiently. All our anticipated reserve projects are listed under the section “RESERVES” on the proposed budget page 4. We have continued our focus on increasing our annual budgeted contribution to the reserve, with the goal of meeting forecasted physical and structural needs for the building. A professional reserve study update was completed in 2016 by Reserve Advisors, who proposed a minimum annual contribution of $1,600,000 gradually increasing annually to $1,900,400 through 2022. We come reasonably close to this recommendation. This line item alone illustrates the Association’s key fiscal challenge. As our building ages, more attention will be needed to responsibly maintain it. And we should expect and properly prepare to run into events that can be unpredictable and costly.
Other expenses are escalating as well; for example, the City of Chicago will be raising our water/sewer rates annually, with an increase of about 30% for tax as well as a 5% inflationary increase in the base rate over the next five years. This is after the city already doubled water rates over the last five years. Thus, we believe a goal to continue strengthening our reserve cash flow, keep up with expenses, and prepare for unknowns, will help the Association overcome these challenges.
Please join us at a Special Meeting to discuss the proposed budget on Monday, January 9, 2017, at 7:30 p.m. in the 2nd floor Party Room. We will consider the enclosed proposed budget for adoption at a Board Meeting on a date following the Special Meeting. All owners are welcome and strongly encouraged to attend and participate in the discussion.
Park Tower Condominium Association