Cutting the gravy
“Taxes are not good things, but if you
want services, somebody's got to pay for them so they're a necessary
evil.”
—Michael Bloomberg
For six years the new board watched the administrator tax YCC #42 until
the owners were bled white. They vowed that when they got elected, they
would lift the steep fees off the owners' backs.
That is one promise they kept. On 30 January 2013, a notice was posted
in the lobby bulletin boards that, effective 01 January 2013, the
maintenance fees were being rolled back 20% . That was news that was well received.
Nothing
is free
“There's no such thing as a free lunch.”
—Milton Friedman
The board would need to find over a million dollars a year in "gravy" to make up for the cut in common element fees.
So where do the savings come from? The first lifted burden is the
$100,000+ a year that the administrator pocketed for doing what every
competent condominium board does for free. (It is interesting that the
administrator could not keep his fees within the annually budgeted
$100,000.)
Hopefully, the corporation's legal bills will be significantly lower.
During the first five years under the administrator's rule, the legal
bills came in $418,699 over budget.
After that, the savings become more questionable.
The number of security guards were reduced along with the hours they
worked.
Some contractors were paid late and some suppliers were
replaced by lower-cost competitors. YCC #42 had reneged on signed contracts and lawsuits may wipe out much of the
projected savings.
Shah Jahan Khan, the president, hiring new staff or replaced existing staff with
minimum-wage agency employees.
The administrator informed the courts that the corporation still needed
several million dollars worth of repairs and that the city had
outstanding work orders for the garage. This work was pushed out into the future.
2013 budget
The board needed to hold a special meeting to present the budget to the
owners. Then the owners would learn what services had been cut
to allow the 20% cut in fees.
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