Balancing Act

Call it a question of balance - both literally and figuratively. First, there is the issue of balancing temperatures in a large property. And then there's the issue of balancing shareholder cost concerns. In each case, Greg Fricke Sr. has risen to the occasion. Although he has been the board president of 2 Tudor City for only two years, Fricke Sr. has taken the lead in instituting energy-saving programs at his 333-unit co-op.

"I am an activist," he says. "I have yet to be involved in something that I didn't end up running. I'm a Type A personality; I just like to be in charge. It's detrimental in one way because you've got a lot on your plate. But that's the way I am." His approach and his ideas are instructive for boards looking to cut costs in tough times.

Fricke Sr. first got involved with the building four years ago, shortly after moving in. He had been familiar with the property long before that, however: his daughter had lived there for years and his son-in-law had been the president. Fricke Sr. initially served on the building grounds committee, hoping to use the skills he had developed in 40 years as part owner of a mechanical engineering firm, GA Fleet Associates. Since he had retired, he had a lot of time to devote to research. By the end of his first year living in the building, he was on the board. Twelve months later, he was the president.

The first thing Fricke Sr. noticed as head of the grounds committee was that the common area ventilation system was not being used. When he asked why, he was told that the machinery made too much noise. That problem was solved simply enough: "We installed noise suppression equipment."

He next tackled the co-op's biggest problem, a common one in large residential buildings: apartments on one side of the structure were overheated, while those on the other were downright chilly. According to Edward Sarubbi, an engineer who studied the double-building complex, "Each of the two buildings (north and south tower) operate as independent heating zones, each with its own heating control and motorized zone control valve. The south face of each tower has tremendous solar gain on sunny days while the north face is subject to prevailing north winds in the heating months." Both areas operated as a single zone, with no provision to adjust for these differences.

How to achieve balance? At a cost of $250,000, the building replaced its two aging, energy-losing boilers with new energy-efficient ones. Fricke Sr. convinced the board to replace them by arguing that the fuel and energy saved with new equipment would quickly give the building a return on its investment.

The president then asked his son, Greg Fricke Jr., to lend a hand. For eight years, Fricke Jr. had owned Leonard Powers, a 70-year-old firm that specializes in dealing with problems relating to the control and distribution of steam (Fricke Sr.'s former company, GA Fleet, had previously owned Leonard Powers). Coincidentally, the property's managing agent, Grogan Associates, had frequently worked with Leonard Powers on energy matters. At Fricke Sr.'s request, the company sent Sarubbi in to evaluate the balancing issue.

In a letter to Grogan Associates, Sarubbi offered this solution: "The south tower is piped so the southern and eastern exposures can be controlled via a new zone valve control and new heat control. The northern and part of the western exposures can be controlled via a second valve and control. The north tower piping makes it possible to zone this building with the western half controlled as one zone while the east side [is] controlled as a second zone."

The engineer also suggested upgrading the type of controls used to regulate the heat levels, one that involved two sensors. One sensor would register outside temperature while the second could be a temperature reading "from an apartment for the referenced zone or from the condensate return piping from the respective zone." The system to be used is "a microprocessor-based digital control with...an optional remote communication from a local PC or via [a] modem. These controls are expandable if future sensor outputs are wanted or if other control points are to be interlocked."

In addition, the engineer recommended replacing and/or repairing radiator traps and valves for individual apartments. "Each of the radiator traps, as well as the steam riser traps, should be checked or changed for proper operation," he advised.

Over a three-week period, the co-op followed these suggestions, revamping the heating controls. "Because of the piping configuration we were able to segregate it into four zones, giving us more control," recalls Fricke Jr. "We also examined the radiator traps and valves, which are often ignored. Many of them had worn out. We replaced most of them."

The result: less fuel burned and more energy saved. In another letter to Grogan, Sarubbi estimated that "the energy saved by balancing the heat levels can be as much as 10 to 12 percent of oil usage. If the building currently uses 250,000 gallons of oil per year at a cost of 75 cents a gallon, then the total energy cost is $187,500. A ten percent conservative savings would be $18,750 per year...[meaning] a payback within three years from the date of installation."

Tim Grogan, president of Grogan Associates, cites Fricke Sr.'s tenacity and foresight as the two key factors in getting this job done. "Boards are always reluctant to spend money if they can't see the return on the investment," he observes. "Because of the changing price of oil, it is hard to say how long the payback will take. But Fricke [Sr.] saw that savings potential. That's why he pushed for it."

In implementing the program, Fricke Sr. did what he says all leaders should do: listened, learned, and communicated. "One of the shortcomings of previous boards was that things were done without consultation or communication with the shareholders," he notes. "Besides the annual meeting, we try to have one or two informal, informational shareholder meetings. I also helped put together our own web site, 2tudor.com, which is a useful tool in communicating. It was designed, conceived, and [is] maintained by the shareholders and therefore doesn't cost us anything." The efforts have borne fruit. He reports that shareholder interest is high: at the last annual meeting, over 70 residents attended.

Grogan, who also lives in 2 Tudor City, has nothing but praise for Fricke Sr. "Greg is good to work with and good to work for. He pushes for communication. He wants to have more openness. For instance, he had a town hall meeting about the budget. We had a maintenance increase of ten percent. After meeting with the residents and talking with them, the tenants understood why. There were few complaints."

Fricke Sr. has also overseen the installation of energy-efficient hallway lighting and is now preparing for the start of a congeneration electricity program. He is matter-of-fact about it all: "Our insurance premiums went up 127 percent. Our taxes went up 18 1/2 percent. We have to deal with that. We received a grant of $200,000 from NYSERDA [the New York State Energy Research and Development Agency] for congeneration. Cogeneration looks to save us in excess of $100,000 a year. That, combined with the other programs we've set in motion, will offset the increases. You have to take care of these things. My personal philosophy is that you make sure that the infrastructure is maintained properly. I don't believe in putting off repairs. Things only become worse."