NO MAINTENANCE INCREASE NECESSARY Edit page

BOARD BLOWS $281,200 

NO MAINTENANCE INCREASE NECESSARY

Estates II

Memorandum

There will be NO INCREASE in Monthly Maintenance Charges in 2025 

If the Board prepares an accurate budget

We must address the 2025 budget that is riddled with erroneous expenses resulting in the increase in Monthly Maintenance Charges of $100 per unit, totaling an additional $213,600 for our community. This unnecessary expenditure is the result of avoidable budgeting errors and questionable financial practices by the Board of Managers.  

Consider the Facts:

The budget includes $15,000 for social functions, which constitutes a violation of our By-Laws. According to the Estates II By-Laws, the costs for social events should be covered by private admission fees, not from condominium funds. $15,000 Savings

The Board budgeted $75,000 for a potential lawsuit against Manhasset Crest. At the time of the budget meeting, the Board knew the case was about to be resolved. Less than a week later, the negotiations were settled in full.  Considering average annual legal costs are approximately $10,000, the Board should immediately revise the budget and save residents $ 65,000. $65,000 Savings

The Board budgeted $1,200 for car expenses for the TCM manager. The TCM manager is not an employee of Estates II, and the Board should not have authorized this expenditure. $1,200 Savings

The Board budgeted $60,000 for garbage collections when they spent only $37,000 in 2024.  This erroneous number, like many other budget items, represents padding of the budget. $23,000 Savings x2. Where is the $23,000 from 2024?

The Board budgeted $280,000 for insurance in 2025 when they spent only $157,000 in 2024. More budget padding. $123,000 Savings

The budget allocates $300,000 for security, despite receiving a competitive bid that is $50,000 lower than last year's expenses. This decision could result in a substantial loss for our community. In contrast, The Fairways budgeted $188,000 for round-the-clock security, highlighting potential savings within our own security expenditures. To realize these savings, all the board needs to do is prioritize the community's best interests over longstanding vendor relationships and initiate a competitive bidding process. $50,000 Minimum Savings 

The Board budgeted $4,000 in bonuses for the security guards. The security guards are not Estates II employees, and the Board has no right to use condo funds to arbitrarily tip the guards. $4,000 Savings

Several expenses raise concerns. Clubhouse supplies totaled $9,293, yet the budget allocates $20,000 for 2024 and 2025—why such a large increase? Additionally, the $15,000 set aside for miscellaneous administrative services lacks clarity. Finally, why is there a combined budget of $150,000 for roof, siding, chimney, gutters, and skylights without itemization? Potential for more savings 

BOARD MUST REMOVE $281,200 OFF BUDGET IMMEDIATELY

NO INCREASE IN DUES IS NECESSARY

The savings of $281,200 represent only a fraction of the budget that would lead to an actual reduction of common maintenance charges.  The board’s 2025 budget is reckless and highlights the board’s incompetence at best or criminality at worst. 

The Board Should Consider:

Better Contract Negotiations

Competitive Bidding of Vendors

Charging outsiders for use of our facilities 

Wiser decisions when it comes to legal matters and utilizing our expensive TCM condo attorney 

Hiring a forensic accountant to review our bank accounts and expenditures. The current sloppy accounting practices regarding invoice payments have been inconsistent and lack organization. It appears that TCM may be relying on outdated management strategies.

Understanding that by using TCM Vendors only, contracts & repairs cost 20-25% more. “TCM Tax”

Forming a Finance and Accounting Committee staffed by residents who have careers in finance, budgeting, accounting, auditing, and procurement to assist the Board of Managers. 

None of the current board members are professionals in financial management, accounting or budgeting fields and it shows.

$100 monthly increase tied to the 2025 Budget is legally invalid and unenforceable

The $75,000 allocated for legal fees is undoubtedly a waste of resources. If the appointed attorneys were truly competent, they would have already informed the board that the budget violates our bylaws and is, therefore, unenforceable. Additionally, the attorneys who sit on the board seem to be ineffective in fulfilling their responsibilities. The $15,000 earmarked for the social committee constitutes an illegal use of residents' funds. The board must present a clear and precise budget; vagueness regarding financial matters can lead to serious legal consequences. An expense of $15,000 for "administrative services" and $20,000 for "clubhouse supplies" raises red flags. For context, office supplies/equipment costs were only $810 in 2019 against a $2,500 budget, and just $1,000 in 2020. Additionally, budgeting $15,000 for gas, while actual spending is under $6,000 annually, is concerning. Excess funds may be spent without residents knowing their true purpose.  It's imperative that we challenge this budget and seek accountability for these decisions.