Initial Reactions to the 2015 Financial Statements

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On a quick initial read of the financial statements that were delivered to shareholders’ doors today, a few things jumped out.

The bad:

  • We have disturbingly little operating cash.  At 11/30/15, we had just over $100k in operating cash (with almost $3MM in outstanding payables).  This is far worse than previous years.
  • After last year’s big write-off, commercial tenants’ arrears have already started creeping back up (up another $100k from last year).
  • Flip tax collections were down over $1MM vs. 2014.

The good:

  • Heating costs are down, so it looks like the boilers are paying off.  There’s also a note that they are fully paid off.
  • Security costs are down, so it looks like bringing security in-house is paying off.
  • In the notes, it is revealed that the base rent Icon pays for the garage is $1.08MM per year, which is more than $200k more than the total garage charges we collected from shareholders in 2015.  So even ignoring any costs that are being shifted to Icon (like maintenance/repairs for the gates that are always breaking), the co-op is immediately making more money from this arrangement than from the old arrangement.  And based on the note, it sounds like there is the possibility for us to share in additional revenue under unknown circumstances.

The good and bad:

  • The long-running public-adjuster lawsuit was finally settled for $950k.  This seems like a lot of money to pay to someone for failing at his job, but we had fought it for many years and the latest rounds in court had not gone our way.  At least it’s done and we’re not paying lawyers to continue fighting it.

Garage Communications Timeline

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A contributor provided the timeline below summarizing official communications that the Board and Management sent to shareholders regarding the conversion of the parking garage.  We have included relevant excerpts from some communications and links to the full versions of others.

December 8 – Report from the Boardroom Issued by Aaron Lee Fineman, Secretary:

The Board voted to hire a parking consultant to explore the feasibility of expanding all parking options throughout the coop. No decisions regarding any changes to the garage or its operation have been made yet. As part of the evaluation of utilization options, the Board voted to approve the issuance of an RFP for potential garage operators.

January 28 – Board Memo Regarding Parking (announcing the change, expected to take effect on March 1)

Continue reading →

Valet Parking is the Right Move

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The Board announced last week that they are in negotiations with a parking operator to switch the parking garage from its current approximately 388 capacity self-parking configuration to a valet system that will accommodate approximately 40% more vehicles.

There has been a predictable uproar from those who currently have parking spaces in the garage.  We are sympathetic to their concerns, as most of them waited a pretty long time to get a spot in the garage, and they will almost certainly suffer a very real loss of convenience as a result of the change.  Ultimately, however, we strongly support the Board’s decision to make this change.

The garage currently can be used by less than 25% of shareholders, most of whom waited 8 years or less to obtain a parking space.  But the wait has shot up in recent years.  The last shareholder to receive a spot waited over 12 years, and there are over 200 shareholders on the waiting list who have already waited more than 8 years.  That means that every single shareholder who will be offered a parking spot as a result of this change has already waited longer than most shareholders who currently enjoy parking privileges.

And based on recent rates of turnover in the garage, a shareholder who signs up today can expect to wait something like 25 years for a parking space.  The impetus for the change isn’t that newer shareholders aren’t willing to wait their turn, as some have suggested.  Newer shareholders are just as willing to wait as those who got here earlier, but they would like to have a turn at some point during their lifetimes.

Indoor reserved self-parking is also a luxury that is virtually unheard of in Manhattan.  We are not aware of a single other market-rate co-op, condo or rental building in Manhattan that has indoor reserved self-parking, let alone at prices that are significantly discounted compared to far less convenient nearby commercial options.  It strikes us as quite unfair to ask that this luxury be preserved for the benefit of 388 shareholders who happened to sign up for parking prior to 2003 or so, when there are 662 other shareholders who want a parking space, many of whom have already waited longer than most of the 388 privileged shareholders did.

A valet system that keeps costs from rising but allows significantly more shareholders to access the amenity, and brings the expected wait for new shareholders closer to historical averages, strikes us as a very sensible and cooperatively minded move. We applaud the Board for having the courage to do it, and we thank the shareholders with existing parking spots who will be sacrificing some convenience to enable more widespread sharing of our communal resources.

 

Extrapolating Expected Garage Wait Times

Aside

We have said that (absent an expansion of garage capacity) a shareholder signing up for the garage waiting list today for the first time can expect to wait something like 25 years to get a parking spot.

That figure is based on comparing the 9/6/11 waiting list (which we have a copy of) with the latest 1/6/16 list.

#1 as of 1/6/16 was #68 as of 9/6/11.
#68 now was #142 then.
#142 now was #239 then.
#239 now was #352 then.
#352 now was #519 then.
#519 now didn’t sign up for the list until almost two years after 9/6/11.

1,583 days elapsed between the two lists.

If you assume the same rate of turnover between each of these points on the list holds true, the current #519 (who had already waited 2.5 years as of 1/6/16) will have to wait 5x 1583 days (or almost 22 more years) to reach #1, at which point that shareholder will have waited over  25 years.

The last shareholder on the 1/6/16 list was #661, and that shareholder can probably expect another 4-5 years beyond #519’s expected wait, for a total of well over 25 years.

 

A Sublet Fee Proposal

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Over the last several years the co-op’s sublet policy has undergone quite a few changes. Sublet fees have been raised several times.  Shareholders now give up amenities like parking and storage while they sublet, and drop to the bottom of amenity waiting lists if they sublet for more than two years.  At one point the Board passed a rule that would have limited subletting a given apartment to only two or three out of every seven years, but that rule was quickly reversed. Continue reading →

On the Annual Meeting

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crack

the need for repairs is no joke

The 2015 Annual Meeting of the Shareholders was one of the most informative Board presentations in recent memory, and also one of the best attended. Current Board President Dave Pass led a quick review of the Board’s activities over the past year and then spent a great deal of time explaining the current state of our physical plant and finances. Mr. Pass, together with General Manager Frank Durant and a panel of outside experts (Greenthal’s financial and engineering experts, and the co-op’s attorney and auditor), made a compelling case for the immediate need for new roofs, continuing brickwork, and a way to pay for it. Continue reading →

And the winners are…

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Congratulations to Doron, Aaron, Erica and Mendy.

The final vote tallies were:
#2 Erica Cullmann 399
#3 Sandy Kershon 145
#4 Mendy Erez 388
#5 Aaron Lee Fineman 487
#7 Debbie Finston 373
#8 Hariette Skidelsky 296
#9 Doron Stember 490
#10 Laurel Hirsch 332
#11 Carlos Rosado 381
ABSTAIN 3

That means at least 826 shareholders cast votes.

Thanks also go out to Gus Medina, Kate Nammacher and Paul Sobel for their service over the past three years, and Carlos Rosado for his service going back well over a decade.

Seward Park Board Election is Tomorrow

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Seward Park Cooperative shareholders go to the polls tomorrow (Wednesday).  Please remember to vote!  Note that if you are unable to vote in person on Wednesday, you can vote online using the codes you should have received in the mail from Election America.  If you have misplaced your codes, please contact us and we can send you a proxy form that will allow another shareholder to cast a vote on your behalf.

We believe that the following four candidates stand out in their high levels of demonstrated professionalism and volunteerism.

#2 Erica Cullmann – Offering a background in operations and facilities management, with more than 16 years of experience in RFPs, contract negotiations, vendor management, strategic planning and budgeting. An active leader in planning SPC family events (Halloween parties, Summerfest, etc.) and member of various Board-supervised committees.

#5 Aaron Lee Fineman – Has both run his own business and worked in marketing and communications for large organizations like the United Nations and CUNY, with strong knowledge of both marketing and technology. Volunteers his time and photography and design skills for initiatives like the Halloween parties and promoting the co-op’s shared office space, as well as for a number of neighborhood organizations, including the Lower East Side Girls Club.

#8 Hariette Skidelsky  – Boasts a professional background is in retail management, paralegal work and child care.  She is active in the Women’s Club, where she has gotten to know many of our middle-aged and older neighbors, but also has a 17 year old son and is attuned to the needs of young parents as well.   She has served on a variety of board-supervised committees, including finance, energy and legal.

#9 Doron Stember – As a practicing and teaching physician, Doron listens, researches, consults with experts and synthesizes information prior to taking thoughtful, well- considered action in order to  help others.  Exactly as a good Board member should.   He is motivated, energetic, fair-minded, and capable.

But whether or not you agree that these candidates are the best, the important thing is to vote.

Your neighbors,
Linda Jones, Brett Leitner, Micah Arbisser

2014 Financial Statement Q&A

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The co-op’s financial statements for the fiscal year ending November 30, 2014, were distributed to shareholders recently. We have analyzed them and posed a number of questions to Management and the Board.

Shareholders can access the financial statements by logging into my.sewardparkcoop.com, clicking on “Official Documents” and “Corporate Financial Statements.” Or, after you have logged into my.sewardparkcoop.com, click here. Note that for 2014 the co-op used a different auditor than in recent years, so comparing the 2014 results with prior years is not an apples-to-apples comparison (as noted in some of the responses to our questions).

Because this website is public and our co-op’s financial information should not be public, we are not posting everything directly here, but we have posted our questions and the responses to SPComm, a Yahoo Group for shareholders of Seward Park. If you are a member of SPComm, you can use the following links to access the relevant posts:

Board Treasurer Marc Album also replied off-line to say that due to lack of interest in the last two financial meetings, he does not intend to host one this year.

We will edit this post with additional follow-ups as they come in.