BOARD OF DIRECTORS MEETING

Management Report

Monday August 13, 2018 

2nd Floor Party Room

7:30PM – Audit Review Meeting with Ralph Picker of Picker and Associates.

The Board will meet with the Association’s auditor for a review and opportunity to ask questions about their audit of the Association’s financial statements for the 2017/2018 Fiscal Year.

OWNER FORUM – 15 minutes, 2 minutes per person

The Board and Management will address feedback and questions from Unit Owners.

OPEN SESSION – Call to Order

The meeting chair, expected to be Board President Michael Parrie, will call the meeting to order. Please be courteous – if applicable, the meeting chair may choose to entertain audience questions as may be applicable to each agenda item. All speakers shall be recognized by the chair as necessary. Please do not interrupt speakers who have the floor.

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.

Committee Reports

Committees will be invited to give updates to the Board on business and activities.

Board Report

The meeting chair may report on current Association activities or business of interest.

Action Items – New Business

1.     Closed Session Business

This agenda item is provided for any resolutions proposed resulting from Closed Session discussion.

2.     Minutes – Board Meeting July 23, 2018

Attached to the report for Board Member review, are the proposed minutes from the Board of Directors Meeting held on Monday July 23, 2018, 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 July 23, 2018.”

3.     2017/2018 Audit Acceptance

It is our understanding Board Members have received and fully reviewed the preliminary draft of the 2017/2018 Audited Financial Statements. At the Boards direction, the draft audit was also made available upon request to any Unit Owners, and posted online with a notice of tonight’s meeting. In advance of Open Session, Ralph Picker of Picker and Associates, PTCA’s auditing firm, is expected to meet with the Board and Owners to review the audit and answer questions.

In the absence of any need to amend the draft based on discussion at the meeting, the next step is for the Board to accept the audit so a formal draft can be released, and 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 2017/2018 Fiscal Year as presented by Picker and Associates, Inc.”

4.     Transfer Of 2017/2018 Audited Surplus To Reserve

Attached to the report for Board Review, is a page from the draft audit, showing the Excess of Operating Revenue over expenses for the 2017/2018 fiscal year, which was $155,272.

Should the Board choose to accept the audit of the 2017/2018 Financial Statements, we suggest the Board approve transferring this net Operating Surplus to the Association’s Reserve fund. We believe this is warranted, in part due to last year’s unexpected expenses related to the roof project such as the masonry work and safety anchorages. Furthermore, future possible work in the building such as garage concrete and membrane replacement will be large investments with the possibility of unknown conditions warranting consideration.

To do this requires a relatively complex resolution. In summary, the Board needs to recognize this was a surplus of operating funds from assessment income collected from owners, but that upon due consideration the Board believes for the financial health of the reserve, these funds should be kept for future capital needs of the building.

The following motion for resolution is consistent with past advice from legal counsel.

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 2017/2018 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 $155,272; 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 2017/2018, 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.”

5.     Social Committee Request – New Member

We received a request from the Social Committee liaison, recommending the appointment of a new member, Unit Owner Stephen Weiss, Unit 4614.

A sample motion: “I move the Board of Directors approves the appointment of Unit Owner Stephen Weiss, of Unit 4614, to the Social Commission.”

6.     Control System Maintenance Contract

The service and support contract for maintenance of the HVAC Andover Control System expired this summer. We’ve been working for a couple months now on a renewal agreement with the incumbent, Kroeschell Service, Inc.

Although we are generally happy with Kroeschell, we’ve gotten 2 renewal quotes for good measure. The proposals are attached to the report for Board Review, and while there are some nuances and some things one vendor does which others don’t, the important piece is the basic service, support and annual inspection and preventative maintenance which are all relatively consistent.

The quotes are as follows:

ATOMATIC Mechanical –              $2685/qtr (3 Years locked)

Kroeschell Service –                      $2466/qtr (3 Years locked)

$2,392/qtr (6 Years locked)

Schneider Electric –                      $2,600/qtr (2 Annual options to renew 3% increase)

This service and support program is presently budgeted at $2400 per quarter.

We’ve already held two meetings with the incumbent. We were intrigued enough with the renewal proposals, and what appear to be some additional services the challenging vendors provide, that we’ve actually gotten Kroeschell to beef up their contract through negotiation. However, as of the drafting of this report, we are still working on it and have meetings scheduled with reps from ATOMATIC and Schneider. We will be going over the terms in more detail and making sure we are as happy with their reps as we’ve been with Kroeschell.

We expect to have a formal recommendation in time for the Board Meeting.

A sample motion: “I move the Board of Directors approves entering a contract with ______________ for maintenance service and support of the HVAC Control System, for a term of ____ years, as proposed at a rate of $______.”

7.     Receiving Room Plans

Attached to the report for Board Review is a letter from Home Improvement Committee Chair Erik Butka along with plans related to the consideration for future delivery of packages and the effort to remodel the receiving room.

The purpose of providing this is for discussion, and ideally Board direction on how to proceed. $102,000 is budgeted for this effort. Options to proceed include (but aren’t limited to) putting it out to bid as is, sending it to bid with specific changes, or returning it to the Committee for further considerations with specific inquiries or suggested changes.

Time is of the essence, as Sue and Jim have indicated their desire to retire as soon as the end of this month.

To put it out to bid as is or with specific changes simply requires direction from the Board. Should a resolution be needed, a motion can be suggested at the meeting.

8.     Construction Requests

Attached to the report for Board Member review are remodeling packets for the following Unit Owner construction projects:

603 – Hard Flooring Install

1415 – Master Bathroom Remodel

3108 – Hard Flooring Install

5303 – Kitchen & Bathroom Remodel

5511 – Hard Flooring Install

A sample motion follows: “I move the Board of Directors approves the remodeling plans of units 603, 1415, 3108, 5303, and 5511, as submitted by the unit owner, following the recommendations of the chief engineer as outlined in their written specifications and in accordance with the Rules and Regulations and remodeling guidelines of the Park Tower Condo Association.”

Business Reports
1.     Treasurer’s Report

a. Fund Balances End of June 2018

Operating Funds $828777 (increase of $11,835 from prior month)

Reserve Funds $1,344,363 (increase of $32,549 from prior month)

Total Cash and Investments $2,173,141 (increase of $44,384 from prior month)

b.     June 2018 Revenue and Expenses

Total Operating Revenue: $505,210

Total Operating Expenses: $340,783

Income From Garage: $26,863

Contribution To Reserve: $136,675

Total Surplus: $54,615

CD Transactions

Management acted, in consultation with the Board Treasurer, to renew two Certificates of Deposit which matured (at Deleware Place Bank), and to purchase another with funds from a third maturing CD (at Lakeside Bank to Byline Bank). These actions should be formally ratified by the Board.

Attached to the report for Board review are copies of memos from Draper and Kramer with details of the specific transactions bank by bank, which are summarized as follows:

A CD with Deleware Place Bank, for the Reserve Fund, was renewed for 15 months, $101,500.12 with a 2.1% yield:

A sample motion follows: “I move the Board of Directors approves the renewal of a $101,500.12 Certificate of Deposit with a 2.1% interest rate for 15 months with Deleware Place Bank for the Reserve Fund, scheduled to mature on November 5, 2019.”

A CD with Deleware Place Bank, for the Operating Contingency Fund, was renewed for 15 Months, $81,200.08 with a 2.1% yield:

A sample motion follows: “I move the Board of Directors approves the renewal of a $81,200.08 Certificate of Deposit with a 2.1% interest rate for 15 months with Deleware Place Bank for the Operating Contingency Fund, scheduled to mature on November 5, 2019.”

A CD with Lakeside Bank for the Reserve Fund matured, and a CD with Byline Bank was purchased for 13 months, $101,824.04 with a 2.2% yield:

A sample motion follows: “I move the Board of Directors approves the purchase of a $101,824.04 Certificate of Deposit with a 2.2% interest rate for 13 months with Byline Bank for the Reserve Fund, scheduled to mature on September 8, 2019.”

2.     Management Report

a. Business and Activities

b. Recent Sales Activity

ADJOURNMENT

There being no further business, the Board will consider adjourning the meeting.

A sample motion: “I move the Board of Directors adjourns the August 13, 2018 Board Meeting at ____PM.”

OWNER FORUM – 15 minutes, 2 minutes per person

The Board and Management will address feedback and questions from Unit Owners.

Next Meeting Dates TBA