THE BUDGET MEETING THAT WASN'T Edit page

The Estates ll budget meeting should be the time when all board members face the residents to talk about money. However, there are significant concerns regarding what actually happened at the recent budget meeting. It is crucial for homeowners to have a clear understanding of how the board developed the budget, including an explanation of key expense categories, the rationale behind the increase in maintenance fees, and the strategies employed to reduce costs. Unfortunately, the opportunity for a comprehensive discussion was undermined by the absence of both Treasurers, Stephen Fanuka and Stephani Michel, which hindered the ability of attending board members to answer substantive questions.

The board displayed a concerning lack of oversight regarding their own financial documents, demonstrating insufficient familiarity with their budgetary allocations. When questioned about a significant discrepancy—specifically, the expenditure of $37,000 on waste management services compared to a budgeted amount of $60,000 for the previous year, and a continuation of the same budget for 2025— The board president was unable to provide a satisfactory explanation. He acknowledged the inquiry but only offered to follow up later, leaving serious questions about fiscal accountability and transparency unaddressed. This raises alarming concerns about the board’s financial management practices and decision-making processes.

Key Points that Should Have Been Addressed:

1. Review of Previous Budgets: A comparative analysis of last year's budget alongside the new budget was essential. Residents should have been informed about the factors contributing to the increase in maintenance fees.

2. Presentation of Proposals: The Treasurers should have presented a detailed budget rationale, including justifications for the proposed increase in maintenance fees, and updates on Phase 2 of the clubhouse renovation. Furthermore, clarity on the allocation of $75,000 for legal fees is warranted, as residents have the right to understand how their funds are being utilized.

3. Discussion of Financial Goals: The meeting should have outlined the board’s financial objectives, priorities, and any significant strategic changes that could impact Estates II.

4. Resource Allocation: A forum for discussing decisions regarding the allocation of resources to various departments or projects—such as the clubhouse renovation, landscaping and security—should have been established based on comprehensive presentations and discussions.

5. Cost Analysis: An analysis of expenditures, focusing on potential areas for cost reduction or essential investments, was missing from the agenda. It is vital for the board to approach budget discussions with a collaborative mindset rather than a unilateral approach. The boards presentation was a “here’s the budget, deal with it.”

6. Collaboration and Negotiation: Residents deserved insights into the budgeting process. Transparent communication about the decision-making framework that led to the allocation of $15,000 to the social committee and $75,000 in legal expenses, coupled with the maintenance fee increase, should have been part of the discussion. There needed to be a clear reason why the Treasurers decided it was ok to breech the bylaws by allocating $15,000 of residents funds to parties that most residents do not attend. 

7. Setting Milestones and Deadlines: The meeting should have established timelines for the completion of the clubhouse project and defined checkpoints for budget monitoring and progress assessment.

8. Q&A Session: Due to the absence of both Treasurers, residents were deprived of a crucial Q&A session, limiting their ability to seek clarification and express concerns. 

Effective budget meetings should foster open communication, transparency, and alignment of financial resources with over all goals for Estates ll. The recent meeting did not meet these essential criteria, leaving the residents of Estates II without the information and engagement they deserve.

 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

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 successfully provides round-the-clock security for just $188,000, 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

 ___________

Savings attainable in the 2024 Budget

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 condo attorney 

Hiring a forensic accountant to review TCM’s management of our bank accounts and expenditures

Replacing TCM with a competent in-house permanent Property Manager

Understanding that by using TCM Vendors, contracts & repairs cost 20-25% more from the commissions the vendors have to pay back to TCM. (The hidden TCM Tax on residents)

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 the financial management, accounting or budgeting fields and it shows.

Estates ll Board of managers: Alan Rothenberg, Cindy Davidowitz, Debbie Resnick, Stephen Fanuka, Stephani Michele, Donald Feldman, Donna Geffner, David Hoffman