Glen Oaks Village Finance

Dear Shareholders: December 2006

The board of directors would like to thank those shareholders who attended and filled the house of our recent shareholders budget meeting at the Glen Oaks Campus HS. For those who could not attend, we have prepared a summary report of the meeting. We do hope you can attend the next one, as these meetings provide a perfect forum for in-depth discussion and Q&A about our budget, spending priorities and the board’s thinking in the decisions it makes. We also viewed property photos of some of our newest decks and terraces, saw a 10 minute video on the installation of two Glen Oaks dormers and watched a Glen Oaks Village television commercial from 1982. We put a lot of time and effort into making it an informative and enjoyable evening.

The board has done an excellent job in keeping variable costs such as salaries and operational costs under control – however, at the risk of sounding like a broken record, we are still experiencing sharp increases in our most expensive non-discretionary budget items. Heating fuel, property taxes and insurance continue to put a strain on our finances. This puts the board in a position of having to make certain decisions that affect each one of us. Are these sharp increases permanent? Do we raise maintenance? Do we implement a special assessment to take back the tax credits to cover some of these costs? Do we cut back on some of our capital projects? Do we dip into our reserve account? And so on. These are all very serious questions that have long-term ramifications for us all. Contrary to some who may think otherwise, the board takes no pleasure in increasing maintenance or reclaiming the tax credits through special assessments. In fact, all board members pay the same fees as all other shareholders and the financial composition of the board closely mirrors the working class demographics of our community. So we take these issues seriously.

But decisions have to be made and that is what a board of directors does. We take pride in our co-op and we have all seen the dramatic improvements of our property over the years. Even those who may complain cannot deny the significant improvements both physically and financially that have taken place at Glen Oaks Village over the years. This has all been accomplished while maintaining the lowest maintenance of all neighboring co-ops.

So in 2007 in order to create a balanced budget the board cut back on some projects, funded a larger portion of capital work through the reserve account and elected to implement 2 special assessments equal to the NYS/NYC tax credits and 50% of the NYC rebate check. This means most owner-occupant shareholders will incur virtually no additional out-of-pocket costs during the month that the assessment is implemented. The assessments will appear on your February or March 2007 bill at the same time as the tax credits and also in October or November 2007 at the same time the NYC/NYS tax rebate checks are received. As in the past we will re-examine this 2nd assessment towards the end of 2007 to see if it can be reduced or eliminated. The alternative would have been a larger permanent maintenance increase that would have had a negative cash flow effect on everyone. When we polled our shareholders at the meeting it was unanimous that this was the preferred method rather than a permanent maintenance increase. We did NOT raise maintenance in 2007 but think an increase in 2008 is likely. Of course we will seek to minimize any future maintenance increases and we have a long track record of doing just that. There of course will be some who disagree with our decision -- and in this category will most certainly be offsite shareholders or investor owners of multiple rental apartments. These shareholders feel a larger sting from the assessment, as they do not receive the corresponding tax credits and rebate checks. However, for the majority of shareholders who live here we believe our decision serves them well.

Our maintenance continues to be the lowest of all neighboring co-ops and with our right to make value-added improvements, Glen Oaks will continue to be a premier co-op in which to live and raise a family. In the end it is about leadership, good management, communicating and making decisions that are in the best long-term interest of our co-op and shareholders. We hope you feel the board has met this test. Thank you and please email your thoughts or comments to us at govonyc@aol.com.

The Board of Directors

Glen Oaks! Fine Folks!

 

70-33 260th Street Glen Oaks, NY 11004 718-347-2337 www.GLENOAKSVILLAGE.com
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