We are in the process of reviewing our current budget and planning for 2011. We continue to see a rise in utility, water/sewer and labor costs. We also have the potential based on today’s oil price for higher energy costs in the future, along with continuing need to meet regulatory requirements – water backflow preventers, elevator code changes, local law 11, and new green laws. Discussions about maintenance /assessments are underway.

Add in the following factors, we have seen a sharp rise in arrears since July with no return to normalization expected until at least Q1 2011, and it hinders our ability to raise the funds for operations or capital improvements.

We also have some major façade and terrace work that needs to be completed – a refinance of our underlying mortgage can not be completed until 2012 due to a lock out period, so we will be under stress and probably pay higher rates to obtain alternative funding.

One last factor we have in our building that impacts our decision making– lack of resident shareholders living in the building:
We have 57 apartments (29 sponsors) 28 purchasing shareholders
Out of the 28 purchasing shareholders. (5 have relatives living there and 4 are being sublet and 2 are empty as the families live here part time) we are down to 17 (29.9%) apartments that actually owned and occupied by purchasing shareholders.

This makes it much more difficult to educate shareholders about our financial needs and improvements to the building and raise maintenance and assessments.

So where does that leave us…. We will probably raise the maintenance a nominal amount and need an assessment, but very well may not be around to implement the proper budgeting and use of funds.

If anyone has any thoughts or comments, please let me know.

Thanks

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