[0:00] This is a meeting of the Roosevelt Island Operating Corporation Audit Committee.

[0:17] Today is Wednesday, December 22nd, present for the committee, myself, Howard Poloby and

[0:25] Erica Lewandowski, present for the corporation, John O'Reilly, our CFO, and Vice President.

[0:34] We're going over the budget, which we expect to approve next week.

[0:39] This is a budget for the fiscal year beginning April 1st, 2022, and so a lot of the assumptions

[0:50] and projections from our partially completed year, but we've done this before and I'm sure

[0:55] that we have a tight range for those projections.

[1:02] We've had an initial meeting to go over the proposed budget, and so this is our final

[1:10] meeting, and we expect after this meeting to be in a position to recommend its adoption

[1:15] at the board meeting.

[1:19] Yeah, so the presentation that we made in September hasn't changed much.

[1:27] One change that we made to it was we adjusted the salary and the benefits to account for

[1:32] the reorganizational changes that we've made, which at the end of the day I think is going

[1:36] to result in about a half a million dollar reduction from the September budget to the

[1:43] budget that's currently in front of you.

[1:44] So we've identified some reorganizational changes that we wanted to make, and we've

[1:52] rolled those through into this budget, which is effective April 1st, 2023.

[1:57] So revenue is being projected down with $32,384,000.

[2:03] Personnel expenses at $12,481,000.

[2:07] Other expenses, $10,279,000, which brings us to a total expense of $22,760,000, net

[2:15] income before depreciation and extraordinary expenses at $9.6M, extraordinary expenses

[2:21] at $8.9M, which gives us a total net income before depreciation, which is basically our

[2:26] cash flow of a little less than $700,000, depreciation at $4.6M, that number keeps on

[2:33] going up as a result of the capital expenditures improvements that we've made over the last

[2:39] two years of $4.6M with a net income loss of $3.9M.

[2:44] The important part about that is we're still projecting to be cash positive at $688M.

[2:51] We are in the process of updating the projected actual 2022 numbers.

[2:57] Currently we're running at about a $2.6M profit for 2022 as opposed to a $506,000 loss.

[3:05] That base, that line, that column right there really represents what we had in the budget

[3:09] for last year.

[3:11] And that represents an increase as a result of some transaction fees associated with Riverwalk

[3:17] where they sold some co-ops and we earn some transaction fees as a result of those sales.

[3:22] Tram revenue is much better than it was last year, but it's still lagging behind.

[3:28] We're projecting that number to be about $3M, which is about a million and a half dollars

[3:31] off where we normally would go.

[3:36] We put $4.6M into the budget for 2023.

[3:42] This was before we really had this new variant come through.

[3:47] We were averaging about $263,000 a month in tram revenue, which was up significantly from

[3:53] last year.

[3:54] Normally we would do somewhere between $3.25M and $3.50M, so we saw a pretty good trend

[3:59] on it.

[4:01] We're still looking to see if we can get the $0.75 increase from the $2 that we get on

[4:06] a swipe to the $2.75, which is what the MTA fare is.

[4:09] I've had conversations with Shelton to see if we can press Albany or get somebody in

[4:14] to help us get to that number, so we're working hard to try to figure out if we can get that

[4:18] increase.

[4:19] That represents about a million and a half dollars to $2 million in additional revenue.

[4:24] We'll make up for the loss that we're currently seeing as a result of low traffic, which has

[4:30] been impacted by the pandemic.

[4:33] The one number in the current year that we're looking at that's higher from an expense perspective

[4:39] than we anticipated, which is hurting the numbers slightly, even though I indicated

[4:44] we have a bigger profit as professional fees and legal fees.

[4:47] We're fighting a couple of lawsuits, as you guys know, that are causing us to have a fairly

[4:52] significant increase in our outside legal costs.

[4:58] Other than that, guys, we really didn't make many changes.

[5:01] We didn't make any changes to the budget other than that salary and that benefit number,

[5:08] which, again, we're looking at about a half a million-dollar decrease from the budget

[5:11] that we presented last year.

[5:13] If you look at the year-over-year number, the projected actual for 2022, we're looking

[5:17] at almost a $300,000 reduction in that personnel expense.

[5:22] I'll be happy to answer any questions that you guys may have.

[5:30] Let me just touch on one other thing before I get to that.

[5:33] We started the insurance renewals.

[5:36] We kicked that off about two and a half weeks ago.

[5:40] There seems to have been some softening in the market relative to the general liability

[5:45] stack.

[5:46] I don't see that that doesn't mean necessarily we're going to have a decrease in cost, but

[5:51] it means that we'll be able to get the stack completed much earlier than we did last year,

[5:57] which will give us more opportunity to be out in the marketplace.

[6:01] I have Gallagher putting an analysis together on the people who they're approaching from

[6:06] a marketing perspective so everybody understands how many underwriters they've actually gone

[6:13] out to to try to fill the stack and get the numbers in.

[6:20] Hopefully, I have that by middle of January or early February so we can start looking

[6:24] at it.

[6:25] We're still going to have an issue with finding somebody to write auto liability insurance

[6:30] because there are not many people out there who are looking to write auto liability relative

[6:35] to buses.

[6:37] That's still going to be something that we're going to have to evaluate as the process goes

[6:42] along.

[6:43] I suspect we're probably going to have somewhere between a 5% and a 10% increase in premium.

[6:48] That's conservative on my part.

[6:49] I wouldn't want to tell you we're going to have a decrease just because of the nature

[6:54] of the business right now.

[6:57] The market looks like it's starting to head back to more of a reasonable perspective as

[7:04] opposed to what we've seen over the last two years.

[7:07] That's good.

[7:08] I think you said 4.3%.

[7:13] I saw that there was, I focused a little bit on the narrative, I'm sorry to spend loads

[7:22] of time on this, but I expected it to be a certain way and it was.

[7:30] You mentioned the insurance costs there and then you also discussed insurance costs again

[7:38] on page four, the second paragraph under extraordinary expenses.

[7:48] Is there a difference, could the discussions be melded in some way?

[8:05] We moved some of the numbers down below into extraordinary expenses, we can meld those

[8:10] up a little bit and change that narrative.

[8:12] It's just that this is something that someone could read.

[8:18] The rest stays.

[8:21] And also, this is like a page three you mentioned, second from bottom paragraph, increase is

[8:38] mainly due to a decrease in scope related to landscaping services, maybe it should be

[8:45] an increase.

[8:46] Yeah, it should be an increase.

[8:52] Yeah, it should be an increase.

[8:55] That increase is really associated with the fact that we have more space that we have

[9:03] to landscape now.

[9:06] We have the conversation that finished, we have South Point Park, both coastlines that

[9:11] just finished.

[9:13] We have Nellie Bly now that has to be manicured a little bit neater than what we had before.

[9:18] So we have a lot more space that we need to take care of.

[9:21] We have the aqua pavers, that space is going to have to be manicured a little bit further

[9:26] than what we've done in the past just because if we let it go, it just doesn't look good.

[9:32] And for South Point Park, my point was that we did such a good job and made the shorelines

[9:38] look so good.

[9:39] It kind of made the inside of the park look like it was a little worn and down.

[9:45] So we have to do a little bit more relative to making sure that the whole park looks good,

[9:49] not just the shorelines.

[9:52] Yeah, I saw it very briefly and I mean, it's what I envisioned.

[10:00] So in a year or two when the planting starts maturing, it will look great.

[10:07] Yeah, it's going to take two or three years and we're going to have to make sure we stay

[10:13] on top of it, otherwise it just falls back to where it was before.

[10:17] We've got some good comments on it.

[10:21] Of course, we get the few people who didn't like it who give us comments on the blogs

[10:26] and stuff.

[10:27] Oh, do they?

[10:28] Yeah, most part the people who have been walking down there, when I walk down there they've

[10:33] given us some nice comments about the place.

[10:34] It really came out well.

[10:36] It's amazing.

[10:37] The public asked for something.

[10:39] They asked for shoreline access.

[10:41] They wanted the possibility of pathways down there.

[10:45] And you have divided opinion and there are people who never want to see anything other

[10:51] than what they saw three years ago.

[10:53] There's nothing to be done about it.

[10:56] Yeah, it's come out. I think I think Trevcon did a great job on it.

[10:59] They came in and they came in a couple of months early.

[11:02] They came in on the budget.

[11:03] We couldn't ask for a better job.

[11:05] I mean, they really they really did a good job in managing and getting forward.

[11:11] So we're happy with it.

[11:12] We're happy with the way it came out.

[11:14] All the projects we did.

[11:15] We've we've done. We've finished a lot of projects this year.

[11:18] Hope Memorial, the shorelines, the elevator is going to be done probably by middle of

[11:23] January. We did Blackwell pavers.

[11:26] We got the Youth Center done.

[11:28] We got the comfort station done.

[11:30] The lighthouse will probably be done in the next week or so.

[11:32] We got Nellie Bly up.

[11:33] All that got done was in the last 12 months.

[11:36] Amazing. It was pretty, pretty, pretty aggressive schedule.

[11:41] And next year, most of the most most of the capital work will be on design.

[11:46] There's not going to be a lot of work actually being put in place as far as physical

[11:49] construction is concerned. It's mostly going to be design work.

[11:53] All right. Right.

[11:55] So where do we stand with Sports Park?

[11:59] Sports Park looks like it's going to be done probably next June or July.

[12:02] I mean, they're moving along pretty well.

[12:05] They started putting the tiles in.

[12:06] They're probably 80 percent done with the main lobby as far as tile tiling is

[12:11] concerned. All the all the infrastructure is done.

[12:16] HVAC, electrical power data.

[12:18] That's all that's all been run.

[12:20] The floor is probably going to go in.

[12:22] The gym floor is probably going to go in in somewhere around January, February

[12:25] timeframe. They started to work in the pool on the on the on the locker rooms.

[12:32] They've pretty much laid down all the plumbing work inside the ground.

[12:37] So the next thing that's going to go up and that's all going to be sheetrock.

[12:40] It's not going to be block.

[12:41] So the sheetrock is going to go up pretty quick.

[12:43] So it's moving it moving ahead pretty, pretty well.

[12:46] I suspect we'll be a little bit ahead of schedule on that.

[12:51] The way things are things, things are looking, we're going to be a little bit

[12:54] ahead of schedule.

[12:55] So it's progressing pretty well.

[12:58] We still we're still we're working with a company called New York Community Bank.

[13:03] They have interest in the space in Sports Park, but we still haven't they

[13:07] still haven't made a decision on whether they want Sports Park or the old

[13:11] amalgamated space.

[13:12] But I need to have a little bit of a plan for that.

[13:14] Old amalgamated space, but I need to have a decision from them by the end of

[13:19] next week, because if they don't make a decision on that space, then it's going

[13:23] to put a little bit of a cramp in the phasing of the projects.

[13:26] I got to figure out if I'm going to leave it for them for them to do that work or

[13:29] if I'm going to have to go back to the original design, which was office space

[13:32] and conference room.

[13:44] All right, so that's that's great.

[13:49] All we have to do is publicize everything that's been accomplished in the year.

[13:58] I actually have Liro working on like a marketing document that talks about all

[14:03] the projects that were completed over the last year and a half, two years, and

[14:09] then a section on future projects that we're thinking about doing and the

[14:13] conceptually what was what I thought is relative to those future projects.

[14:18] So we're working on that.

[14:20] I think it's going to be done for the board meeting.

[14:24] And it may be something that Shelton will present at the board meeting.

[14:29] I'm not 100 percent sure of that, but I know they're coming down to the final

[14:33] final piece, final edits relative to that document.

[14:36] And so far, what I've seen is it looks pretty good.

[14:39] That's great, because we could certainly use something like a website.

[14:43] Yeah, yeah.

[14:47] We're going to go we're going to go look to see if we can get some, you know,

[14:51] engineer news and record, which is the which is the construction periodical.

[14:57] They give they give out awards on certain projects relative to, you know,

[15:02] different different types, you know, historical work or show like work or

[15:08] whatever. So Liro and our architects.

[15:12] And also going to work together both both on the South Point Park riprap work

[15:16] and on the lighthouse restoration to see if we can apply and get

[15:21] win a couple of awards that will put us on the map a little bit.

[15:25] That would be that would be great.

[15:28] Well, I have looks good in the distance.

[15:31] It looks good, doesn't it?

[15:33] Yeah, it does. It's really good.

[15:35] Really, really, really good.

[15:37] And the monument looks good without the backdrop.

[15:41] Yeah, the monument came out really good.

[15:45] We have we have we have plans to we have plans to expand that park south.

[15:50] That's going to be in that document that liberals prepare for us.

[15:54] OK, because we've been discussing using part of the

[15:58] hospital parking space as part of the space for the residents.

[16:02] Well, we have a we have a different concept that we're looking at.

[16:05] We're actually looking at putting a green parking tower

[16:08] similar to Motegate in that space.

[16:10] We have we have a waiting list at Motegate of four hundred and eleven people.

[16:15] Look at the space is there.

[16:17] There were documents about creating the last quadrants of Motegate.

[16:22] And I don't know what I don't know if there was even a trigger

[16:25] in the documents, I believe.

[16:27] No, I don't. I'm not sure.

[16:28] I'm not aware of that.

[16:29] We're looking if we can put if we can put another parking garage in

[16:32] and earn some revenue on the parking garage,

[16:35] we can get the thing paid for probably within five to six years

[16:38] and satisfy a need for parking on the island.

[16:41] That would be very important.

[16:43] Yeah. And the way they do it.

[16:45] And also, you'd also believe that a congestion point.

[16:50] Yeah, definitely would.

[16:52] And the way they build parking garages now, they look like they look they're all green.

[16:56] They have green fronts and the top level would be almost like a park.

[17:00] We can make the top level of park so we don't lose it.

[17:02] We wouldn't lose any green space as a result of the footprint of the of the garage.

[17:06] And we would do it in a way that the first Florida garage

[17:10] would potentially be certain things like retail or different types of stores

[17:15] or things that would support the community.

[17:18] That sounds great.

[17:20] So thanks for the concept.

[17:23] Everyone involved with that.

[17:24] You know, we have we have we have a conceptual drawing of it and it looks really good.

[17:29] Oh, I'd love to see that.

[17:31] Yeah, I would say I would set that up.

[17:33] Great. Thank you.

[17:35] So.

[17:40] Can you hold on one second?

[17:41] I got to go let the dog in.

[17:43] OK.

[17:47] Erica, how are things in your neighborhood?

[17:52] You know, hanging in there, some budget season, so it's ramping up fun.

[17:57] You know, for the first time,

[18:02] we're spending more than a couple of weeks away.

[18:06] It's nice.

[18:06] That's different.

[18:08] Yeah, for me, it makes a big difference because I have some joint issues

[18:12] and I do this every day.

[18:15] That's it's.

[18:18] Good. It's nice.

[18:21] We have a lot of.

[18:24] That's good.

[18:24] It's still you know, it's Florida and covid stuff and hit and miss

[18:29] and you can go to the store and it's it's kind of a mixed bag.

[18:33] Go into any indoor space and we're not able to because they don't take the portions

[18:37] like they do in New York.

[18:40] Yeah, my my mom's in Tampa and she sort of sees a lot of the same

[18:44] inconsistent application of restrictions and guidelines.

[18:50] Oh, well, those are those are helpful suggestions, I think.

[18:54] Right, right.

[18:57] Yeah, yeah, you know, you may want to consider.

[19:02] Yeah. Terrible.

[19:04] And New York City's bearing the brunt of it right now.

[19:07] So, I mean, I get I get the daily alerts and everything, too.

[19:11] So let's see exactly what's going on.

[19:17] My kids are both in health care.

[19:20] I'm looking at things.

[19:22] And so anyway, I hope everyone whether it's a storm.

[19:28] I'm sorry that the holiday season has such a downpour on it.

[19:32] And it's tough.

[19:33] Yeah, well, everyone has hopes.

[19:36] Yeah.

[19:38] And it's just to worry people down.

[19:42] Well, I don't have any particular questions about the budget.

[19:45] How many months have actually used it right now?

[19:48] So again, how many months are

[19:51] are in the projected actual?

[19:55] We have April, May, June,

[19:59] July, August, September, October, November, eight months.

[20:02] Oh, OK. So.

[20:06] I'll update those numbers,

[20:07] but we were right now reflecting a two point six million dollar operating profit,

[20:11] which, you know, the combination of

[20:15] watching and keeping our cost in line and the additional revenue

[20:18] we got from the transaction fees on the condo sales.

[20:23] Good.

[20:27] One one other small question on the page three,

[20:31] where we talked about personal expenses.

[20:33] We want to say anything about the expenses are reviewed by you.

[20:41] I mean, we can do we can do that.

[20:43] I don't know if you have a problem.

[20:45] No, not at all. I mean, you know, just just just

[20:48] points of information for

[20:50] any of our interested public friends.

[20:55] That is, I believe, our role on the board.

[20:57] So noting that is fine.

[21:01] Yes. Just a place to review by department budget.

[21:08] And other than that, I don't have it.

[21:11] Yeah, same here. I'm glad to hear that.

[21:13] John, I'm very pleased with the way things are going.

[21:17] What about the search for control?

[21:21] Most of the people that are looking for a job

[21:22] want guarantees that they can work remotely.

[21:27] And we can't get we can't give guarantees on that.

[21:32] States not going to allow us to give guarantees that we can

[21:34] that people can work remotely.

[21:36] There's a bunch of different jobs that we're having a hard time filling

[21:39] because of that that issue.

[21:41] And it's not just us.

[21:43] It's it seems to be rampant in the marketplace

[21:45] that people are either not working because they're getting

[21:51] getting subsidies from from the government, state or federal subsidies,

[21:55] or they don't want to work because they don't want to want

[21:57] don't want to come to work.

[22:01] And I, you know, I kind of get it.

[22:03] The other night, I lived 28 miles from Roosevelt Island.

[22:06] On Monday night, it took me two and a half hours to get home.

[22:10] Because people are not take the people are leery of public transportation.

[22:14] They don't want to take the buses and the trains and the subways

[22:16] because of a combination of homeless people and covid issues and crime.

[22:22] So they feel safer driving.

[22:23] So a lot of people have switched from using public transportation

[22:27] to driving in and using their vehicles, which is causing.

[22:31] I mean, it's trying to get trying to get from Roosevelt

[22:34] down to Long Island is not one road that isn't just jam packed with traffic.

[22:38] So it's it's it's until we get this thing behind us

[22:43] and people decide that it's safe to get on the subways

[22:46] and the trains, it's going to be that's what's going to be.

[22:51] So it's been a tough market.

[22:54] So bottom line to your question, we have no hits on the controller yet.

[22:59] How would you commute?

[23:01] How would you use mass transit if you could?

[23:04] I could take Long Island Railroad into Penn, walk up a block at the train.

[23:08] You have train. Yeah, yeah.

[23:11] So, yes, it's a real two zone commute for you, but you backtrack.

[23:18] Yes. OK, so it's it's hard.

[23:25] And the state is being very careful.

[23:27] And so remote work is being offered where necessary, but can't be guaranteed.

[23:35] No, it can't be guaranteed.

[23:36] I mean, we want remote today.

[23:38] We're looking at it.

[23:39] I think we're looking at a two or three week look, look, look out.

[23:43] So, you know, most people, a lot of people on vacation for the next week.

[23:46] So it's not impacting us that much.

[23:48] And it will take us probably through the middle of January

[23:50] before we go back full time to the office.

[23:52] So we have staggered staff, staggered chefs.

[23:57] And the way we did it, the way we did it went back in the spring of 2020.

[24:04] So we'll look at that and take another view out of another.

[24:07] And, you know, middle of January timeframe.

[24:13] Meanwhile, we have we have we have staff who have to be present.

[24:20] Yeah, we have, you know, buses have the bus has to run, the tram has to run.

[24:24] We have to have facility management.

[24:25] We have to have the grounds there.

[24:27] But we try to we try to alternate the shifts, take people out of shifts.

[24:31] So in case one shift does get hit with a covid issue, we can we can have

[24:35] the flexibility to maneuver different shifts into different spaces.

[24:39] So we always have coverage.

[24:41] So we did this we did this back in the spring of 2020.

[24:46] So we just reimplemented the process that we had back then.

[24:49] So it wasn't that big of a big of a shock for anybody to understand

[24:53] what was going on and everybody's comfortable with it.

[24:56] So we'll see how it goes.

[24:59] But, yeah, it's it's going to be it's going to be

[25:02] a it's going to be a difficult next 30 days or 40 days.

[25:06] It's been hit by covid cases.

[25:10] So, yeah, we got we got a number of we got a number of staff that are

[25:14] that are positive.

[25:16] And then we have other staff that were close to the staff that tested positive

[25:21] that are the waiting results.

[25:23] I am not aware of the details, but has the quarantine recommendation changed

[25:28] for vaccinated individuals?

[25:31] It's just it's less.

[25:32] There's fewer days.

[25:34] Five days.

[25:35] Yeah, it's five days as opposed to 10 days.

[25:38] In the beginning, it was 14 days.

[25:39] Now it's 10, 10, and then it went to 10 and then five.

[25:42] Hold on for a second.

[25:53] Hello. Yeah.

[25:56] OK.

[26:00] OK. OK.

[26:08] So that's where we are.

[26:10] OK. Well, Erica, do you have any questions about?

[26:17] Oh, nothing for me.

[26:18] No, I'm I'm actually of all of this.

[26:20] I'm sort of glad to see that there might be some softening in the insurance

[26:23] market, because that's actually one part of the budget that I've always been

[26:26] a little, you know, concerned about.

[26:28] Nothing that, you know, not a result of anything that has done or could do.

[26:31] But it's out there.

[26:33] So I'm glad to see that maybe, you know, not as much of not too bad anyway

[26:37] going forward. Otherwise, I have no concerns, no questions.

[26:40] I think I'm up to speed.

[26:42] Well, maybe the market softening and then maybe the insurance companies

[26:45] have a little better internal return

[26:48] because of their portfolios.

[26:51] That can be a driver, too.

[26:53] Mm hmm. So let's see.

[26:56] Anyway, thank you for this, John.

[26:58] I know it's a lot for you.

[27:00] And these are hard circumstances for everyone.

[27:03] So if you speak to anyone on staff,

[27:06] please convey my concerns and my wishes for a healthy and happy.

[27:14] All right. Sounds good.

[27:16] We'll speak next week.

[27:17] Anyway, Erica, it's our sense that we'll recommend this budget.

[27:23] So we agree on that.

[27:25] And Erica, we agree that this concludes.

[27:30] Yes. Thank you, John.

[27:32] Thank you.

[27:35] So that's this has been a meeting of the Rosalina

[27:37] D'Aldo committee, viewing the proposed budget for the year 2022, 2023.

[27:44] But we expect to recommend this at our upcoming board meeting next week.

[27:49] I hope all viewers are well and see and enjoy the happy video. Bye bye.

Untitled meeting

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