Highview Condominium II
Board of Directors - Meeting Minutes
October 7, 2010, 7:30 p.m.

The ninth meeting of the 2009-2010 Highview Condominium II, Inc. Board of Directors was called to order at approximately 7:30 p.m. by Stacey Cohen, President.  This meeting was conducted by conference call.   

Board members in attendance:  Robert Boynton, Joseph Cann, Marjorie Cannon, Stacey Cohen, Nora Colford, David Cutler, Michael D’Angelo, and Natalie Hendrix.  Angelo Morelli was absent but represented by proxy for any votes that might be required relating to the specific topic.  Wentworth Property Management was not asked to participate in this meeting.  

The special purpose of this meeting was to discuss the previously distributed draft of the FY2009 audit prepared by Wilken & Guttenplan and to discuss related financial planning issues.  

Discussion of the FY2009 Audit draft:  Boynton asked about several significant variations between the FY2008 audit and this FY2009 audit.  He requested that a column be added offering FY2008 comparisons.  David Cutler noted that this is a common practice in the audits he has been involved with.  D’Angelo will ask auditor to incorporate a column of previous year’s figures.  

Questions were raised about significantly lower expenses.  D’Angelo noted that the building has been able to save by taking aggressive action in cases of common charge delinquencies, including the increase of the monthly late payment charge from $25 to $75, and initiating legal action and foreclosure against units (unit now scheduled for auction in October).  Our new building super has done a great job in managing building maintenance contractors and quickly determining any damages that should be attributed to individual unit owners instead of allowing them to become building expenses.  Several vendors were replaced on account of their inconsistent billing practices.  On account of accrual method, some income and expenditures were attributed to previous years or written-off.  Question was raised about final payments to previous landscaper.  

D’Angelo noted that a conference call for the board has been scheduled with auditors on 10/20/10 at 7:30 p.m. to discuss the FY2009 audit and future financial planning issues.  

Update of the 2002 Capital Reserve Study:  In response to advice received from the auditors in their FY2008 audit and FY2009 draft, the board approved by email an update of 2002 Capital Reserve Study to adequately plan for future building repair costs.  Voting in favor of a Level-2 update were Boynton, Cann, Colford, Cutler, D’Angelo, and Morelli.  Voting against the Study at any level were Cohen and Hendrix.  No response to the vote was received from Cannon.  

Discussion of FY2011 Budget:  It was noted that in previous years the board has approved an annual budget for the coming year by early November.  D’Angelo indicated that he would distribute a proposed budget for FY2011 in approximately two weeks.  

Noting that electric and gas utilities, insurance, and taxes had increased last year without any increase in common charges, a question was raised as to whether common charges would need to increase for FY2011.  

The FY2010 budget figures, both totals by cost-center and the amounts remaining unencumbered, are still not appearing in the monthly financial reports from Wentworth.  The board has made numerous requests to Wentworth to incorporate the budget in financial reports.  Per the September Board meeting, Jon Klein of Wentworth has agreed to move Highview II accounting services to Wentworth’s NYC office, but the Board has yet to see a report providing the needed information.  Since Wentworth has yet to provide a monthly report for FY2010 incorporating expenditures by cost center, it was difficult for the Board to see where Highview is running ahead or behind the FY2010 budget.  It was agreed that accounting needs to be up-to-date with budget lines in order to approve a FY2011 budget at the October 26^th board meeting.  New board member David Cutler will partner with Michael D’Angelo.  

FY2010 Special Assessment:  In discussion of the current Special Assessment passed in November 2009 for the FY2010 year, it was reviewed that the purpose of this assessment was to increase the Capital Reserve balance to approximately $250,000 from its low of approximately $35,000.  This topic was discussed at last year’s annual meeting with all unit owners and the building’s auditor from Wilken & Guttenplan, resulting in a mandate from unit owners to achieve the $250,000 Capital Reserve balance as quickly as possible.   

Through the FY2010 Assessment and Operating Budget cuts in both FY2009 and FY2010, the current balance is now approximately $150,000.  Without increasing the common charge, it is anticipated that the FY2011 budget will include $37,000 earmarked for Capital Reserve savings – increasing the Capital Reserve to $180,000.  

D’Angelo requested that the Board decide on whether to continue the Special Assessment for FY2011.  There was discussion about the current Capital Reserve balance versus the Operating Reserve balance, and whether these funds were co-mingled within Highview savings accounts or separate.  Without seeing the current year’s spending in detail and the proposed FY2011 budget, several board members questioned whether the FY2011 budget would be able to provide for a $37,000 transfer to Capital Reserve in FY2011 without a Common Charge increase.  

The board agreed to table further discussion of the FY2011 budget and any Special Assessment pending completion of the FY2009 audit, an update of Highview’s FY2010 financials segmented by budget line (which has appeared zero’ed out all year in Wentworth financial reports), and completion of the Capital Reserve Study (completion expected around November 1, 2010).  All of these items will be available when the budget and assessment decisions are made.  

Unit Foreclosure:  The delinquent unit is in foreclosure and the property is scheduled to be auctioned off in October.  

The meeting was adjourned.

Minutes submitted by Robert Boynton, Secretary.