Treasurer’s Reports are Not Being Filed

UPDATE, July 28, 2016

At Monday night’s board meeting, Treasurer Michael Cleavenger gave the following Treasurer’s Report:

“We, sorry, um, we currently have assets in the total of (being confirmed). That is as of June 1st. Is the most current statement, I believe is that correct?”

Cleavenger was advised by someone at the board table, “That’s correct, June 30th.”

Cleavenger continued saying, “June 30th, I’m sorry. And then on, I’ve got it here somewhere if I can find it. Sorry. The, uh, the actual income year to date is $880,071, the budgeted income was $882,371. Uh, expenses have been $921,543 (unintelligible utterance), the budgeted was $895,000. That leaves us with a monthly (???) actual ($41,472) which is not unusual. We are well within our parameters, well. So.”

During open forum, I asked Mr. Cleavenger for the year-to-date income and expense numbers because I didn’t understand him. He looked at his papers but said he couldn’t find it because his report does not give year-to-date numbers!?!?!?

I’ll have to wait until I see the approved board meeting minutes from Monday night’s meeting to see if a Treasurer’s Report is filed. In the meantime, except for the lying, there appears to be some progress on this issue.

 

It is the Treasurer’s duty to file a report on the financial transactions of State Parkway. The purpose of financial reporting is to make sure that any decisions board members need to make can take into consideration accurate and up-to-date financial data.

A proper Treasurer’s Report should contain at least the following information for each of State Parkway’s two funds (Operating Fund and Replacement Reserve Fund):

1.) beginning and ending balances;

2.) income and expenses during the entire reporting period; and

3.) the signature of the Treasurer.

 

State Parkway’s financial position, however, continues to be shrouded in secrecy. In fact, my wife and I are still forced to make requests to inspect State Parkway’s books and records, including the property manager’s monthly financial report. The problem is since last fall State Parkway stopped permitting me to inspect the property manager’s monthly financial report after I learned she was leaving tens and tens of thousands of dollars of invoices in the drawer at the end of each month. At the very least, this means State Parkway’s financial information that is posted in Lieberman Management Services’ eStar Portal for unit owners is outright fraudulent.

Meanwhile, at State Parkway’s Board of Directors meetings, during Open Forum I ask about the association’s  year-to-date financial results. I’m often told, by either the Treasurer and/or President that the board does not have year-to-date information with them.

In addition to not recording expenses and liabilities in a timely manner, State Parkway is doing a lot of unauthorized interfund borrowings, which places State Parkway’s $1MM+ Replacement Reserve Fund at risk of being taxed by the IRS.

My review of the old Board of Directors meeting minutes reveal State Parkway’s former Treasurer, Darrell Butler, whom I believe moved out long before my wife and I purchased our unit in 2003, used to file excellent Treasurer’s Reports.

Is It Better to Rent or Buy a Parking Space?

The choice between buying a deeded parking space and renting one is a major decision many residents make. But State Parkway’s financial statements intentionally obscure the true costs of the garage operations. In fact, State Parkway’s garage operations are buried under “Repairs and Maintenance” expense category (where garage operations do not belong because they are neither repair nor maintenance), and, since the 2014 Financial Review, garage income and expenses are no longer itemized in the annual report. To help you answer this question, I will take you through the most important costs associated with buying a deeded parking space so it can be compared to the monthly rent.

State Parkway’s 2016 Budget cover letter states that monthly parking for residents will remain at $245.00 per month. Many deeded parking space owners, however, rent out their parking space for less. I’ve seen some ads on the bulletin boards in the laundry room and/or exercise room offer parking as low as $175-$200 per month.

As a long-time owner of a deeded parking space, I can tell you how much it is costs to own a parking space each month. For starters, my wife and I pay approximately $112.50 per month for the carrying charge (mortgage interest) related to the purchase of our parking space back in September 2003. State Parkway’s 2016 Budget calls for us to pay $60.87 per month in parking assessments, plus an additional $74.37* per month for our share of the $239K budgeted garage shortfall, plus $14.50* per month for the approved $46.6K garage operations shortfall that somehow was excluded from the sham 2016 Budget (that’s a story for another time), and plus approximately an average of $29.17 per month for property taxes on our deeded parking space for an average total of $291.41 per month! This $291.41 per month amount, by the way, does not include indirect costs such as garage heat, electricity, water, sewage and maintenance. However, should we decide not to own or rent a parking space, we will only eliminate the carrying charge, parking assessment and property tax, or save just $202.54 per month. That is, we have to pay $88.87 for the garage operations from our regular assessments regardless whether or not we own a parking space. This means our breakeven is $202.54 per month. Consequently, the $175.00 ad for parking is a steal.

 

 

*(My wife and I have the 17th-22nd smallest percentage of ownership interest at State Parkway (out of 160 units). Consequently, unit owners with a higher unit ownership percentage than us will pay more for garage operations than we do.

 

 

 

State Parkway’s Board Adds Youth To Board

UPDATE: December 21, 2016

At the last regular board meeting on November 7, 2016, after the board announced director John Schwandke’s resignation, the board appointed Kevin Phelan to replace him. Since Phelan is a little more than a couple decades younger than Schwandke, the average age of State Parkway’s board is now approximately 63 years young. Meanwhile, Phelan, like Treasurer Michael Cleavenger and Vice President Howard Robinson, seems to have a very impressive background and experience. It’ll be interesting to see if Phelan is a leader or yet another follower.

 

At State Parkway’s January 25, 2016, Board of Directors meeting, President Mary Marta announced the resignation of a board member, effective December 31, 2015. President Marta also announced the board’s replacement, effective that evening. Given the new board member is approximately 11-years younger than the person she replaced, the average age of State Parkway’s board members is now approximately 67 years young (instead of approaching 70). I have nothing against seniors but I have a hard time believing State Parkway’s Board of Directors will ensure intergenerational equity. Moreover, I think the recent 5-year renewal of the cable-tv contract (which runs through at least December 31, 2018) without unit owner input was a mistake.

State Parkway’s Revolving Door Nearing the End of Its Useful Life

UPDATE: MAY 19, 2018

There have been a flurry of resignations at State Parkway over the last 16 months. Presidents Mary Marta and Howard Robinson both resigned as State Parkway’s President during 2017. However, even through today’s update, both remain on State Parkway’s Board of Directors. And on March 27, 2018, board Secretary and De Facto Vice President Terry Leja resigned from State Parkway’s board of directors, effective immediately.

The good news is both Bill Southall and Sara Kacheris are still acting as State Parkway’s property manager and Regional Director, respectively.

UPDATE: FEBRUARY 22, 2017

Today my wife and I received an email blast, saying Cathy Goldner resigned as State Parkway’s property manager. Her last day will be Friday, February 24, 2017. Cathy had been at State Parkway since June 2016, when Donna Weber resigned.

During the transition, Cathy’s boss, Sara Kacheris, will be filling in. Sara replaced Tracy Braun when she left.

Given four property managers, and five property supervisors/district managers have resigned from State Parkway since April 1, 2006, when Lieberman Management Services, Inc., took over, I think it’s time to replace several board members and management company.

 

UPDATE: DECEMBER 26, 2016

Looking at the 2017 Budget, it appears the association is now deferring over $640K of reserve expenditures between 2016 and 2018, including $84.4K for the replacement of the revolving door.

Between the $640K deferral and the $320K overstatement of the projected replacement reserve balance as of December 31, 2016, (see December 23, 2016, update in the blog post State Parkway’s 2017 Budget Calls for a 12.2% Assessment Increase!), the Association is trying to make it appear a special assessment can be avoided in the near future.

 

According to State Parkway’s 2012 Reserve Study Update, State Parkway’s revolving door is scheduled to be replaced next year at a cost of $84,442. The revolving door is used by unit owners, residents, employees, guests and the property manager’s supervisors. Since Chris Barich, State Parkway’s first property manager supervisor (and former property manager Candy Starbuck’s boss for more than 10 years), left in December 2004, there have been at least seven new supervisors/district managers assigned to State Parkway. No longer overseeing operations at State Parkway are Tairre Dever-Sutton, Dan Chalifoux, Nicole Washington, Terry Dixon, Leah Fox Greenberg and Tracy Braun.

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