On Sunday 14 December 2014, the Board of Directors met to review the operating budget for 2015. The following is a reproduction of the follow-up letter sent on 26 December 2014 to all shareholders.

[ PDF version ]

Dear Shareowners,

Yearly recap

As 2014 comes to a close, the year can best be summed up as a year of positive transition. The garage roof replacement project is nearly complete. Progress continues to be made on the interior garage repairs. After receiving your input, the Board has selected three landscape designers to call back for a second round of presentations. And also based on your input, management is receiving bids for garage operators. The work is necessary to perform; it will improve the lives of our residents; and add value to our shares.

2015 budget and cash needs

The finances of the corporation continue to be strong. Part of what makes our finances strong is setting annual balanced budgets and having a plan for funding capital repairs and improvements. The 2015 budget has both. One exciting event will occur in 2015 in that one of the loans taken out to pay for the replacement windows will be fully paid. A bit further off is another event you may be interested in: the building’s mortgage will be fully paid off in less than eight and a half years.

The Board met on Sunday December 14th and approved a balanced budget for 2015. Sadly, most of our costs are not within the control of the corporation. In setting our budget for 2015, 
estimates were used. All budgets utilize estimates as some information will not be known until 
sometime in the future. For example, the amount of property tax increase, if any, will not be
known until sometime in the May/June 2015 timeframe. The budget used a 3% increase estimate and, as you can see from the below table, a 3% increase is not an unreasonable amount given our past history.

Source: Nagle Apartments Corp., Audited financial statements.

Other estimates were used. Here are some of those:

• The amount of Union Contract salary increases
• The amount of property insurance increases as a result of hurricane Sandy
• The final amount of the garage repairs (we are currently within budget)
• What level of income the corporation will receive from the garage

As a result, the Board decided three actions

The Board voted to increase maintenance by $0.193 per month per share (from $6.355 to $6.548); the Board also voted to increase the capital assessment from 7% of maintenance to 8% of maintenance or by $0.079 (from $0.445 to $0.524) per month per share. The combined 
maintenance and assessment increases total 4.00% overall (from $6.800 to $7.072 per month per share). These amounts calculate to an increase of $38.08 a month for a 5th and 6th floor two-bedroom unit (other units will have less of an impact).

The Board is investigating the need for new gym equipment and also voted to increase the gym fees by $5 per month to help fund that initiative.

Finally, the Board made a commitment to review the amount of maintenance charges in the 
May/June 2015 timeframe to see if it can be adjusted downward should some of the estimates go our way.

The Board of Directors, the staff and Management want to wish each of you a fantastic holiday season and a safe, healthy and prosperous 2015!

The following is a reproduction of a memo delivered to shareholders by Managing Agent Justin Verret on 27 February 2014.

(View/download the scanned memo [PDF, 234KB].)

To: All Shareholders
From: Blue Woods Management Group
Re: Star Credits, Tax Abatements and Tax Assessments

Please be advised that the STAR credits and Real Estate Tax Abatement credits have been received for those shareholders that have applied and are eligible. The credits are being applied in 4 equal installments on the March to June maintenance bills. Only shareholders who are primary residents are eligible for the credits.

If your building assesses the Real Estate Tax Abatement, the assessment is being charged to all shareholder accounts over the same 4 months March through June. The assessment is billed at the same price per share for every apartment regardless if they receive any tax credits. [Note: NaBors Apartments does not assess the tax abatement.]

If you have any questions please contact the accounting department at 914-524-8600.

The following is a reproduction of a memo sent on 14 January 2014 to all shareholders by our co-op’s certified public accountants: Prisand, Mellina, Unterlack & Co., LLP.

(View/download the scanned memo [PDF, 678KB].)

TO: Shareholders of NAGLE APARTMENTS CORP.

RE: PERSONAL INCOME TAX RETURN DATA FOR 2013

Dear Shareholders:

Under the provisions of Section 216 of the Internal Revenue Code, a tenant stockholder of a Cooperative apartment is entitled to deduct from personal gross income a proportionate share of interest and real estate tax paid or incurred by the Cooperative Corporation. Note that these deductions are generally available if the taxpayer itemizes tax deductions.

For the year 2013 your Per Share individual income tax deductions are as follows:

MORTGAGE INTEREST    $9.3775 per share

REAL ESTATE TAX    $19.7030 per share

For the year 2013, if you were granted any real estate tax abatements, reflected in a maintenance credit or received by check, your real estate tax deduction as stated above should be reduced by the amount of the abatements you received.

In order to compute your total deductions for 2013, multiply the number of shares owned by you, as indicated on your stock certificate, by the amounts per share stated above. If you became a stockholder, or sold your stock in the Corporation during 2013, you are permitted to deduct a fractional part of the figures, based on the proportionate part of the year you owned the stock.

Contributed capital in 2013 was $23.5902 per share for mortgage amortization and $3.7200 per share for capital assessment. This is not a deduction, but an increase in the basis of your investment.

Should you have any questions regarding the application of the aforementioned information to your individual income tax returns, please consult your personal tax advisor.

PRISAND, MELLINA, UNTERLACK & CO., LLP
Certified Public Accountants

The following is a reproduction of a memo posted to the bulletin boards by Managing Agent Justin Verret on 13 January 2014.

(View/download the scanned memo [PDF, 300KB].)

Dear Shareholders,

The city has just released the breakdowns for the annual STAR and Co-op Abatement credits. In years past the breakdown was received in December or January and the credits were given back to those that qualify in equal monthly installments through June of that year. Last year the program was changed so that only shareholders who live in the building as their primary residence are eligible to receive the credits. The city was determining shareholder eligibility as of last June 2013, and the final list was not received by management until July 2013 with the credits being applied to accounts in August 2013.

Last year the STAR credits were given back before the Co-op Abatement. This is not going to be done this year to avoid the issues created by changes to the credits by the city after the fact. This means that STAR and co-op abatement credits will not be given back until the final list is received from the city. Hopefully this will be as soon as March 2014. This does not affect the total amount you are to be given back. It only affects the total number of months the amount is divided over.

If you do not receive STAR credits, you can still apply for the 2014/2015 tax year. The deadline for that is March 1st. The forms can be found online or by calling 311. The co-op applies for the Co-op Abatement on your behalf. You do not need to apply for that.

If you have any questions please call 914-524-8600.

Regards,

Justin Verret

On Saturday 7 December 2013, the Board of Directors met to review the operating budget for 2014. The following is a reproduction of the follow-up letter sent on 9 December 2013 to all shareholders.

[ PDF version ]

Re: Cash requirement changes for 2014

Dear Shareholders,

Maintenance charges

On Saturday December 7, the Board met to discuss cash needs for 2014. Planning for 2014 and beyond was made difficult this year due to not knowing the level of garage income the co-op will receive. The garage provides significant subsidy to the shareholders of approximately $1.20 per share per month [1]. Our current garage lease agreement expires at the end of this month.

Sometime in 2014, we will likely need to close the garage and remove all vehicles for approximately three to four months. This is to facilitate necessary structural repairs that the Board is considering beginning in early 2014. The Board has asked for a three-month extension to the current garage lease so that people who use the garage will not be inconvenienced during the cold months (it is unlikely that garage work can begin during the winter too). When that agreement is finalized, Management will circulate a communication.

While the Board is planning on adding the lost garage income to the project financing, if allowed, it is not known how much rent or income the co-op will receive from the garage when the repairs are complete [2].

As a result of the above and regular expense increases, the Board voted to increase maintenance for 2014 by 2.5% (from $6.200 per share to $6.355 per share). The last increase in maintenance was in 2011.

Assessment

The Board voted to increase the imposed assessment from 5% of maintenance to 7% of maintenance. This equates a movement from $0.310 per share to $0.445 per share per month to be paid with the monthly billing. The amounts collected will be used to fund Capital Reserves for future projects.

As a reminder, two major and some minor building capital replacements and improvements were completed without having to ask shareholders for funds. This is because the corporation has rental units which, when sold, the funds from the sale can be used for these purposes. As of 12/31/2013, the corporation has four left. However, the timing of when these remaining four may be sold is uncertain and unpredictable.

The assessment is envisioned to supply only a portion of the funding necessary for upcoming necessary capital repairs and discretionary improvements. Any additional amounts will likely come from possible additional assessments, co-op income, loans and the sale of rental apartments, or a combination of sources. The assessment will start with the January 2014 bills and it has no end date.

Additionally, newer regulations from Fanny Mae and Freddie Mac, two large mortgage guarantors, require co-ops and condos to set aside 10% of their annual maintenance charges each year in reserves as a condition of granting mortgages to buyers. Frankly, without the approval of Fanny Mae and Freddie Mac, it will be hard for shareholders to sell their units as the financing Fanny Mae and Freddie Mac provide may not be available. While one can take the view that the 10% amount is heavy handed and arbitrary, despite these objections, the regulations also make prudent financial sense.

The enforcement of these new regulations has been spotty with condos taking the brunt of the enforcement action so far. However, one doesn’t want to be on the short end should they go after co-ops too. With the assessment and reserves on hand, it is believed that our co-op will have met their requirement for 2014.

Staff holiday tips

If you want to give holiday tips to the superintendent or the porters, please do so directly [3]:

• Shahabudeen “Sha” Hayatt – since 1996
• Andres Mangual – since 2008
• Narine “Ricky” Doelaal – since 2008

Building security and loss prevention

Management and the Board wished to remind everyone that the doors are meant to let you in and keep unwanted individuals out. Forcing the door open without a key or propping the door open compromise resident and building (property) security, especially during the holiday season.

Please also keep your fire escape windows closed when you are not in the room or unit. If you need extra keys, please contact the superintendent or the building manager.

Don’t forget, if you have a digital cable television converter box, you can press “998” [4] to see a picture of the entrance of each of your buildings.

Notes:

[1] Source: 2012 audited financial statements

[2] Due to a lack of lease agreement if the Board decides a lease is best, or garage income/expense information if the Board decided to run the garage operation ourselves.

[3] The co-op supplies a small bonus to the staff each year, as it has in prior years.

[4] It is not listed on the TWC guide; you have to press “998” on your remote.

Re: STAR Credits – Block 02171, Lot 0012

Please be advised that New York State has made changes to the STAR credit program effective for 2014. For those that currently receive the STAR credit you will need to re-register by 31 December 2013 to continue receiving the credit. The STAR credit is given back each year on your maintenance bills. This year the credit was given back over three months, April, May and June.

New York State is mailing all shareholders who currently receive STAR credits a personalized letter with instructions and an ID required to re-register. Registration can be done online or over the phone. Click here to register online. You need to follow the instructions on the site. You may also register via phone by calling +1 518 457-2036.

If you do not receive the letter from the State in the next couple weeks, you can retrieve your ID code online by following the instructions using the above link.

Please make sure you register as soon as possible, it only takes a couple minutes to complete the questionnaire.

If you currently do not receive the STAR credit, you have to apply on your own. The building cannot apply for you as it does for the co-op tax abatement. The deadline to apply for the next tax year is 15 March 2014. Fill out the application. The Block and Lot for the building is listed above.

The managing agent contact information to use is on the managing agent page, and you can include Justin Verret as the contact person.

This notice will be sent out multiple times through the end of the year. Please make sure to register before the deadline to ensure you continue to receive the credit. If you do not receive a notice and are not sure if you currently receive the STAR credit, please contact the managing agent.

To: All Shareholders
From: Blue Woods Management Group
Date: 29 March 2013

Please note that the STAR credit has started to be applied to the maintenance bills for those shareholders that have applied and qualified for the credit. It will be on the April, May and June bills. In past years it has been given out equally over six months averaging $45/month. This year it is given over three months averaging $90/month due to the delay from the city.

The co-op abatement has not been issued as of yet. The city has changed the criteria for qualifying and is in the process of verifying information with some shareholders. Those shareholders have been notified by our office and the city directly. This credit will be applied when the final figures are received from the city. This should occur in July 2013.

If you have any question, please contact the managing agent.

For more information about these credits, please see Tax Relief Programs.

To: All Shareholders
From: Blue Woods Management Group
Date: 23 January 2013

We wish to advise all shareholders that the City of New York still has not issued the STAR, Veteran and Senior Citizen credits that are normally issued by this time. We are, therefore, unable to apply the credits to the February maintenance bills, as we had hoped. As soon as the information is received, we will apply the credits to your account.

Thank you for your patience while the City processes this information.

For more information about these credits, please see Tax Relief Programs.

The following is a reproduction of a memo sent on 14 January 2013 to all shareholders by our co-op’s certified public accountants: Prisand, Mellina, Unterlack & Co., LLP.

(View/download the scanned memo [PDF, 47KB].)

TO: Shareholders of NAGLE APARTMENTS CORP.

RE: PERSONAL INCOME TAX RETURN DATA FOR 2012

Dear Shareholders:

Under the provisions of Section 216 of the Internal Revenue Code, a tenant stockholder of a Cooperative apartment is entitled to deduct from personal gross income a proportionate share of interest and real estate tax paid or incurred by the Cooperative Corporation. Note that these deductions are generally available if the taxpayer itemizes tax deductions.

For the year 2012 your Per Share individual income tax deductions are as follows:

MORTGAGE INTEREST    $10.6756 per share

REAL ESTATE TAX    $19.3888 per share

For the year 2012, if you were granted any real estate tax abatements, reflected in a maintenance credit or received by check, your real estate tax deduction as stated above should be reduced by the amount of the abatements you received.

In order to compute your total deductions for 2012, multiply the number of shares owned by you, as indicated on your stock certificate, by the amounts per share stated above. If you became a stockholder, or sold your stock in the Corporation during 2012, you are permitted to deduct a fractional part of the figures, based on the proportionate part of the year you owned the stock

Contributed capital in 2012 was $22.7010 per share for mortgage amortization and $1.8600 per share for capital assessment. This is not a deduction, but an increase in the basis of your investment.

Should you have any questions regarding the application of the aforementioned information to your individual income tax returns, please consult your personal tax advisor.

PRISAND, MELLINA, UNTERLACK & CO., LLP
Certified Public Accountants

On Saturday 1 December 2012, the Board of Directors met to review the operating budget for 2013. The following is a reproduction of the follow-up letter sent on 11 December 2012 to all shareholders.

[PDF version]

Dear Shareholders,

Here are the cash requirement changes for 2013.

Assessment

The Board voted to increase the imposed assessment from $0.155 per share to $0.310 per share per month to be paid with the monthly billing. This is an increase of 2.5% for 2013 based on the current maintenance per share of $6.20 and it will be used to fund the Capital Reserves. This increase raises the assessment to 5% of maintenance overall with 2.5% imposed last year and 2.5% this year.

The corporation was able to repair the building roofs, improve tree pits, replace windows and AC units, and perform other capital improvements without having to ask shareholders for funds. This is because the corporation has rental units which, when sold, the funds from the sale can be used for these purposes. As of 12/31/2012, the corporation has five left (one unit, 5E, has a sale contract pending). However, the timing of when these remaining four may be sold is uncertain and unpredictable.

The assessment is envisioned to supply only a portion of the funding necessary for upcoming necessary capital repairs and discretionary improvements such plans to make much needed structural improvements to the garage and garage roof as well as improvements to the shared garage roof area. Any additional amounts will likely come from additional assessments, co-op income, loans and the sale of rental apartments, or a combination of sources. The assessment will start with the January 2013 bills and it has no end date.

Additionally, newer regulations from Fanny Mae and Freddie Mac, two large mortgage guarantors, require co-ops and condos to set aside 10% of their annual maintenance charges each year in reserves as a condition of granting mortgages to buyers. Frankly, without the approval of Fanny Mae and Freddie Mac, it will be harder for shareholders to sell their units as the financing Fanny Mae and Freddie Mac provide may not be available. While one can take the view that the 10% amount is heavy handed and arbitrary, despite these objections, the regulations also make prudent financial sense.

The enforcement of these new regulations has been spotty, with condos taking the brunt of the enforcement action so far. However, one doesn’t want to be on the short end should they go after co-ops too. With the assessment and the expected sale of 5E, our co-op will have met their requirement for 2013.

Maintenance Charges

While there are significant and unpredictable events occurring in 2013 (for example, both the garage lease and the laundry service contracts expire), the corporation’s cash needs for operations have improved slightly. This is due to tax credits which Blue Woods applied for and received on our behalf from NYSERDA, and projected Real Estate Tax savings. These savings have been used to fund anticipated increases in union charges, a forecasted colder winter and other items. While we are grateful for these savings, the resulting financial benefits are only temporary and are unlikely to last beyond one year.

As a result, there is no maintenance increase for 2013; the charge remains at $6.20 per share per month. This will be the third year at this amount.

Staff Holiday Tips

If you want to give holiday tips to the superintendent or the porters, please do so directly:

• Shahabudeen “Sha” Hayatt – since 1996
• Andres Mangual – since 2008
• Narine “Ricky” Doelaal – since 2008

Building Security

Management and the Board wished to remind everyone that the doors are meant to let you in and keep unwanted individuals out. Forcing the door open without a key or propping the door open compromise resident and building (property) security. If you need extra keys, please contact the superintendent or the building manager.