BOARD OF DIRECTORS MEETING

Management Report and Agenda

Monday January 23rd, 2017 at 7:30PM

2nd Floor Party Room

OWNER FORUM – 7:30PM

15 minutes, 2 minutes per person

The Board and Management will address questions and feedback 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 – 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 Member is present. Board Members and representatives from Management will be introduced.

Committee Reports

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

Board Report: Board President Michael Parrie

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

1. Closed Session Business

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

2. Minutes – Board Meeting January 9, 2017

Attached to the report for Board Member review, are the proposed minutes from the Board Meeting held on Monday January 9, 2017, as submitted by Timothy Patricio, Property Manager.

A sample motion follows to approve the minutes for January 9th: “I move the Board of Directors approves the minutes from the Board Meeting held on Monday January 9, 2017.”

3. 2017/2018 Budget Adoption

At the Monday January 9th Unit Owner Meeting, the Board and Management met with the Unit Owners to discuss and answer questions regarding the proposed 2017/2018 budget, which was mailed to Unit Owners on December 23rd, for their review and consideration. It is our understanding the Board does not wish to make any changes to the budget as proposed to the Unit Owners.

A sample motion to adopt the budget follows: “I move the Board of Directors adopts the budget as proposed and presented to Unit Owners for the fiscal year starting March 1st 2017 and ending February 28th 2018, with a 3.5% increase in assessments, a 3.8% increase in expenses, and a projected reserve contribution of $1,587,000.”

4. Roof Project Engineering

Attached to the report for Board review is a proposal for consulting services related to the budgeted Main Roof Replacement Project scheduled for the 2017/2018 fiscal year. We propose the Board engage the building’s engineering firm, Wiss, Janney, Elstner, who provided the following estimates to develop bid specs and oversee engineering aspects of the project.

Phase 1 – Construction Documents $23,000

Phase 2 – Construction Period Services $22,000

Additional Service Item A – Penthouse Concrete Wall Consulting $6,000

Additional Service Item B – Safety Tieback Assessment $4,500

(Items A and B are provided at Managements request, due to conditions of the privacy wall and swing stage railing. It makes the most sense to address these items and possible repairs as a part of this project. They are explained within the proposal.)

The project is budgeted for $600,000. It is typical to expect about 10-15% of the cost of a project of this magnitude to go into engineering and consulting services. So their numbers appear very reasonable.

A sample motion follows: “I move the Board of Directors approves hiring Wiss, Janney, Elstner, as proposed to provide consulting and engineering services for the main roof replacement project.”

5. Riser Projects Proposal

Management and the building’s plumber have tentatively worked out a plan to continue the phased replacement of Park Tower’s domestic hot water risers at a rate of 3 per year. As we mentioned at recent meetings and in reports we have distributed via Management’s weekly “News and Updates”, due to conditions we recently observed and assessed, we are planning to escalate one riser and actually attempt to complete 4 this calendar year. Those risers are as follows:

a)       HIGH ZONE 02/04 (all ’02 unit kitchens and ’04 unit bathrooms from 30 to 55th floors) March and April 2017

b)       LOW ZONE 14/15 (all ’14 and ’15 unit kitchens from 3rd to 29th floors) May and June 2017

c)        LOW ZONE 05/06 (all ’05 unit bathrooms and ’06 Mst bathrooms from 3rd to 29th floors) August and September 2017

d)       LOW ZONE 03/15 (all ’03 and ’15 unit bathrooms from 3rd to 29th floors) October and November 2017

Attached to the report for Board review are the proposals we collected from contractors to provide services related to these projects. The estimates follow, with our recommendation for each highlighted, and the lowest bid highlighted – following review of the estimates, the choice of each contractor was unanimous between Management, both building engineers and our building plumber.

Carpentry

MPD Construction Group – $240,160

USA Painting and Remodeling – $363,700

Stanley Decorating, Inc. – $358,400

MEPIS – $300,000

Plumbing

AMS Mechanical Systems, Inc. – $210,000

Fettes, Love & Sieben – $188,600

Great Lakes Plumbing & Htg. – $216,800

Insulation & Firestopping

Insulation

Dettmann Industries, Inc. – $146,640

R.H.L. Insulation and Firestopping, Inc. – $159,700

ABC Insulation, Inc. – $164,680

Materials*

Purchased in bulk through in-house accounts, priced out by building plumber through suppliers where PT has accounts. Primary suppliers expected to be Porter Pipe & Supply, Bornquist, Inc., and Shilvock Company. Other suppliers polled for bulk material pricing include Clark/Devon Hardware and Wolverine Brass.

$67,670

City Permit – $8,000 (estimate)

Budget – $600,000

Total of Estimates Chosen – $651,070

(*The material bidding, as in the past, includes work papers from the plumber and handwritten notes which may be difficult for some to interpret – please feel free to schedule an appointment with us to review this in greater detail, if necessary.)

It should be noted, our contractors have bid ‘perfect world’ scenarios. Once we complete unit by unit inspections there are any number of variables that may impact expectations. In some cases, we may not enter units or complete work which could result in some savings. In other cases, we may be looking at more work than we anticipated. In some cases we may not know with 100% certainty until the walls are open and work is already well underway. So as we have in the past, we ask the Board to approve our planning with the understanding some expectations may change as we go. Should anything of reasonable significance change, the Board will be informed. Should consent or additional resolutions be necessary, the matter will be brought to the Board for consideration at the next scheduled meeting.

Despite the fact doing a 4th riser will put us over budget (the high zone 02/04), this riser is being escalated from a future year, where we could plan only completing 2 risers instead of 3. The estimates themselves also demonstrate we may be able to reduce budget projections for future periods which will put less pressure on needed reserve contributions. So though we expect to end the coming fiscal year over budget, we believe proceeding as planned does not change funding needs for fiscal year 2017/18.

A sample motion follows: “I move the Board of Directors approves the planned domestic hot water riser replacement projects as proposed, for the high zone 02/04 units riser, and the low zone 14/15, 05/06 and 03/15 units risers, and hiring contractors MPD Construction Group for carpentry, AMS Mechanical Systems Inc for plumbing, Dettman Industries Inc. for insulation and fire-stopping, and a approving an in house purchasing budget of approximately $76,000 for permitting and bulk purchase of materials.”

6. Unit Owner Request – Formally Combining Units

The Unit Owner of 1609, 1610, and 1611 has requested the Board authorize initiating the process to amend the Declaration to formally combine the units for recording with Cook County and acquiring a single PIN.

Procedurally, the owner needs to make a written application (attached to the report for Board Member review) to the Board of Directors, requesting an amendment to the condominium instruments (which is allowed under the Act). The application must set forth a proposed reallocation to the new unit of the percentage interest in the common elements of the combined unit, and requesting, if desired, that the new unit be granted the exclusive right to use as a limited common element, a portion of the common elements within the building adjacent to the new unit. Specifically that is the space between the walls dividing the two units. The amendment would include an amendment to the Plat of Survey attached to the Association’s Declaration to show the boundaries of the combined unit and any common elements to be “assigned” as a limited common element of the combined unit. The amendment to the Declaration should be prepared by the Association’s counsel, and the amendment to the Plat would be prepared by a surveyor (all at the owner’s expense – see more below).

The transaction must be approved by a majority of (disinterested members of) the Board of Directors. If approved, the combination is effective upon (1) recording of an amendment to condominium instruments (Declaration and amended Plat of survey) in accordance with the provisions of Sections 5 and 6 of the Act, and (2) execution by the owners of the units involved. The amendment may grant the owner of the combined unit the exclusive right to use, as a limited common element, a portion of the common elements within the building adjacent to the new unit. The request for the amendment must be granted, and the amendment must grant this exclusive right to use as a limited common element, if the following conditions are met:

(1) the common element for which the exclusive right to use as a limited common element is sought is not necessary or practical for use by the owners of any units other than the owner or owners of the combined unit; and

(2) the owner or owners of the combined unit are responsible for any and all costs associated the renovation, modification, or other adaptation performed as a result of the granting of the exclusive right to use as a limited common element.

Those conditions appear to be reasonably met in this case.

If the combined unit is divided in the future, or if part of the original combined unit is sold, and the grant of the exclusive right to use as a limited common element is no longer necessary, practical, or appropriate for the use and enjoyment of the owner or owners of the original combined unit, the Board may terminate the grant of the exclusive right to use as a limited common element and require that the owner or owners of the original combined unit restore the common area to its condition prior to the grant of the exclusive right to use as a limited common element.

Our Attorney has provided a proposal to prepare such an amendment to the Declaration, which has been agreed to by the Unit Owner. The attorney’s fees are estimated at about $600, which will be reimbursed to the Association by the owner. A professional surveyor would have to be engaged by the Unit Owner to provide the amended plat of survey and Associated costs.

The new percentage of ownership will be .361978. That is the current % for 1609, .103613, for 1610, .07684 and for 1611, .181525.

A sample resolution follows: “I move that the Board of Directors does approve hiring Kovitz Shifrin Nesbit to prepare an amendment to the declaration to record physically combining units 1609, 1610 and 1611 into a singly recognized unit, with a percentage of ownership totaling .361978; all associated legal fees for this process are to be charged back and paid by the Unit Owner, and the Unit Owner will be responsible to hire a surveyor for the necessary amended Plat of Survey and any copies thereof that may be necessary, as well as any other activities and all associated costs which may otherwise be necessary to appropriately complete this process.”

7. Construction Requests

We expect to have construction requests for Board consideration. Copies of the necessary materials are expected to be distributed to members in advance of the Board Meeting. A resolution including the unit numbers and other relevant details can be proposed at the time of the meeting.

ADJOURNMENT

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

A sample motion follows: “I move the Board of Directors adjourns the January 23rd, 2017 Board Meeting at _ _ PM.”

OWNER FORUM – 15 minutes, 2 minutes per person

The Next Meeting Date is February 13th at 7:30PM.

A Residents Forum is scheduled for February 6th at 7PM