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December 11, 2000 Dear Fellow Owner: I am pleased to report that the Lauren has had a very good year. One important indicator of success has been the large increases in demand for units -- whether for sale or for rent. This is due in part of course to the improved economy in D.C. but it also reflects the continued high quality of the building and level of services provided by the management and staff. We completed a number of important capital improvements. The new laundry machines with their credit card access are in. The lower lobby was re-tiled and adds an elegant entrance to the building. After seemingly endless delays, StarPower has installed cable and residents now have a choice of high speed Internet access, telephone, and cable TV services. Our financial position remains strong. Last year, we had a 1.0% increase in condominium fees. Combined with a somewhat lower contribution to capital reserves, we had sufficient income to cover an approximately 3% increase in operating costs. We also were able to make a net contribution of $120,351 to capital reserves. As our building continues to age, we can expect that capital expenditures will rise. The Board commissioned a capital reserve study that included an extensive review of the building by an engineer. Although the report is not yet in, we expect a number of recommendations that will have implications for our capital budget for several years. As I pointed out last year, we expect to have to replace the roof shortly and the elevator or at least parts of the system are past their expected life. For the coming year, we project an increase in operating expenses of about 8.0%. This is largely due to a 50% increase in the cost of energy, higher health insurance and higher labor costs. Once again, given the level of our reserves and the interest that they now generate, the Board believes it is prudent to make a small reduction in the total contributions to capital reserves compared to the past few years and to transfer those savings to the operating budget. In my opinion, however, this is the last year we will be able to subsidize operating expenses by reducing contributions to capital reserves. If we do not replace the roof this year, we will have a net increase in capital reserves of $90,672. A roof replacement will mean a substantial overall reduction in the total reserves. The enclosed budget calls for a 2.0% increase in condominium fees. I wish each of you Happy Holidays and a wonderful New Year!
Elizabeth VanderPutten |
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