Dear Fellow Shareholders,

We have been busy at work on many items on top of our agenda, including balancing the budget and readying the building for the lot line window replacement project. From here on out, we plan to make regular newsletters another top priority. We want to communicate on a more frequent basis to help you all feel more apart of the future of our homes and to give you a better sense of what is being taken care of on your behalf.

Our beloved building will be 45 years old this year.  Maintenance costs of the building's systems are significant, but this board is lucky to have the expertise of not one, but two engineers who have worked closely with our Resident Manager Antonio to ensure that jobs are not farmed out resulting in expensive bills, but rather resolved in-house.  We estimate that such work has saved this building $200,000 in the last year.

Legal Services

When the current board convened in September 2006, one of our top priorities was to review all services accounted for in the budget with the intention of exploring ways to keep costs down without compromising services.  Towards this end, the board reviewed our legal services.  As many of you know, for many years Quaker Ridge retained a lawyer who was a fellow shareholder.  We unanimously felt that it was in everyone's best interest to retain an attorney without any potential conflict of interest.  After interviewing several firms, we felt confident that Sonnenschein, Sherman and Deusch was the right choice for both our corporate and certiorari needs. By transferring both our corporate and tax certiorari business to Sonnenschein, we negotiated a retainer rate of almost 50% less than we had previously paid.  The certiorari work was negotiated for a lower rate as well.  If you attended the last annual meeting, you had the opportunity to meet one of the partners and our regular contact, Ms. Sara Throne.

The real estate taxes, dictated by the city's assessment of our property, have seen a meterioric rise in the past several years. At the end of 2006, our building's assessed valuation was $14,265,000.  In early 2007, NYC notified us that our building’s valuation would be increased to $24,390,000. With the assistance of Sonnenschein, Sherman and Deutsch, this valuation was reduced to $17,000,000. The monthly retainer fee we pay Sonnenschein to do our legal work is different from the fee we pay for certiorari work. The fee of $108,000.00 that we paid to Sonnenschein to negotiate a reduced valuation of our property (certiorari work), is less than the fee we paid for similar work in pervious years. While $108,000.00 may seem high, Quaker Ridge is actually saving thousands of dollars in annual real estate taxes that we would have had to pay had we not reduced our valuation. In addition, the certiorari fee we are paying with this new firm, 15% of net tax savings is less than the 17.5% we paid for similar work in pervious years. Also Sonnenschein is allowing us to pay the $108,000.00 fee over 5 years to avoid a major impact on our operating budget.

Rising Energy Costs And How It Affects Your Maintenance

Energy prices have been extremely volatile in the last several years. In 2007 alone, the cost of oil, which is our primary source of fuel, rose from $1.55 a gallon to over $2.20 by the end of the year. Over the last six months, the board has developed a methodology to decouple the building's energy costs from the rest of the budget. This charge will allow us to recover actual energy costs as they are incurred and avoid excessive maintenance increases in the future. In addition, if energy costs decrease we will be able to decrease this charge and pass the savings to our shareholders. The board will implement this change in the third quarter of this year and will provide detailed information in writing on the change in advance. We will hold informal information sessions to further assist shareholders in understanding this change.

A Look At The Lobby

The entire building voted on the budget for the lobby renovation project, and despite the limitations of a $150,000 budget, we closely managed the designer, selected by committee, to save wherever possible. The project ran approximately 10% over budget, for a total cost of $165,000. 43% of shareholders who responded to the survey distributed by the Lobby Decorating Committee voted on a $150,000 budget and 33% voted on $300,000. Similar lobbies in size and stature in the area have been redecorated for upwards of $350,000. The previous board decided to utilize reserve funds to fund this project. Therefore, the cost of the renovation had no impact on the recent increase in maintenance charges.

Lot Line Window Replacement Project

In response to reports of bathroom and kitchen windows not working properly, we have decided to replace the lot line windows. It is the co-op’s responsibility to pay for the lot line window replacement and not that of the shareholders who own the affected apartments. We are currently seeking proposals from engineering firms and we plan to award the work to the company that is the most qualified. These windows are a special type used to protect adjoining buildings in case of a fire and thus cost more than the standard. They have a fusible link so that when extreme heat hits them, they seal shut to prevent the fire from spreading. A recent change in building law requires lot line windows only through the 10th floor. All higher floors will now be replaced with our standard windows, which are much less expensive. We will update the affected shareholders once the process is ready to commence.

The Real Estate Tax Abatement and the Star Credit

We have received some questions regarding the real estate tax abatement and the Star Credit following the explanation that was distributed by Goodstein. This process has been the same every year for the past five years. Beginning in 2003, the board abandoned its practice of passing along to shareholders the Co-op/Condo Abatement Credit (which resulted in extremely low maintenance charges for one month per year). Many co-ops in the city never passed along this savings to shareholders, instead holding onto the money to offset rising operating expenses. Recapture of the coop abatements is accomplished by levying an assessment, which is posted to our bills in the same month as the abatement credits, at the rate of $2.765 per share. This assessment comes close to, but does not exactly match the credit each shareholder receives. In this way we raise our annual income without having to permanently raise maintenance rates.

In Bloom

The landscaping space in the front of our building is thriving, despite inconsistencies of sunlight. We hired a landscaping company that has helped us identify plants that will endure longer and are consistent with the look of the Gramercy Park neighborhood. Our landscaper understands that we want to supplement each season, rather than have to bear the cost of starting anew with other plants. Our boxwoods have been hearty and we hope to have to replace only a few in the coming months. We are looking forward to planting the colorful New Guinea Impatiens, which thrived last April. In our lobby, we reduced our floral budget to one fresh arrangement per week.

Other Neighborhood News

Many of you have been inquiring about the building under construction on the corner of Third Avenue and 23rd Street.  NYU recently announced that it purchased the building known as Gramercy Green to be used as a dorm this fall. Originally designed to hold luxury rental apartments, Gramercy Green will now house about 900 upperclassmen in rooms ranging from two- to three-person studios to two- to three-bedroom suites with four to six students each. The apartment-style residences will include full kitchens.  This new NYU acquisition was already designed and under construction as a high-end rental apartment building when the university became aware of its availability for purchase. It is our hope that the ground floor, which appears to be designed for commercial use, will include a food market.

Cabrini Medical Center on East 19th Street closed on March 18th due to pressure by the state and loss of revenues.  According to a spokeswoman from the state Department of Health, the 236-bed hospital was unable to make payroll.  It seems Cabrini could not compete with larger hospitals that were benefiting from volume discounts, stronger bargaining position with insurers and modernized facilities.

Going Online

In other good news, we are working to create a Quaker Ridge website to keep shareholders up to date on all news. We are currently in the planning and building stage. We are lucky to have the expertise in members of our board so that we do not need to hire a designer/tech consultant. Many of us have built websites for our own businesses, and it is a costly process when you have to hire out.

Elections

For those of you interested in joining our board, this spring three seats will be available. Joining the board as a volunteer of Quaker Ridge is a significant time commitment; overseeing Goodstein, the managers of our building, to ensure they are making the best decisions on our behalf. It is, however, a fulfilling way to make a contribution to our home.

Regards,

The Board of Directors of Quaker Ridge