Custom House Square AGM 2017–17.5% Increase in Service Charges
Dear Member,
By now you should have received noticed of the AGM for Custom House Square Management Ltd. on Saturday 22 April at 11am in the Spencer Hotel.
Service Charges
The budget for 2017 was included in your email from SherryFitz. The budget has increased by 17.5% over last year. If approved this will mean a 17.5% increase in your service charges. This is the largest increase ever in CHS. The mismanagement of our company by the Board led by Adrian Carrie led to the EGM in October to debate his removal. This increase is just one of the legacy issues we have been left with.
Discount Scheme
If you examine the budget closely it appears to have increased by 47%. However I understand that the total includes an early payment discount scheme. The service charges will been increased by 25% and then a discount of 20% applied for prompt payment. There isn’t a word of explanation in the documents and the feasibility of the scheme is questionable.
To be clear, if you pay early you face a 17.5% increase. If you pay late you face a 47% increase.
Sinking Fund
At year-end 2014 the sinking fund was 920,000 euros. At year-end 2015 it was 726,000 euros, a 21% decrease. The fund is now at its lowest level since the owners took control of the management company from the developers, Chesterbridge. The sinking fund is a contingency for structural repairs to the building. It is not meant to hide poor decision-making by the Board.
Heating
The heating system is outsourced to Frontline. In their latest accounts their own auditors have added a Special Report stating that the financial position “may cast significant doubt about the company’s ability to continue as a going concern”. If Frontline go out of business there may be no heating or hot water until the mess is sorted out.
The Building Management report, which you should have received, says that the system is “generating in the order of 100,000 per annum”. However in the Budget for 2017 repair and maintenance to the boilers is 40,500 up from 4,500 last year. Why are we subsidising a profitable heating system?
Late AGMs
Note that at this AGM we will be approving the accounts to 31 December 2015. The account for 2016 may well be worse. This delay in holding AGMs need to be corrected. There is no reason to wait 16 months to approve the accounts.
Since no budget has been approved for 2017, no service charge invoices have been sent out this year, so no cash is coming into the company and it is being managed with no budget. This is no way to run a business.
Directors
On 22 October 2016 there was an EGM to remove director Adrian Carrie. He resigned the day before. Shortly afterwards Shay Gannon, our Building Manager, resigned as a director.
The only remaining directors at this stage were Paul O’Brien and Brendan Costello. On 1 February 2017 the Board appointed new directors Michael Manzke and Grahame Spencer. Grahame had previously resigned from the Board in July 2016.
These two new directors must resign and go forward for re-election at the AGM. Paul O’Brien and Brendan Costello come up for re-election by rotation at the AGM. So the entire Board is up for re-election.
Circuit Court Actions
Our company is facing Circuit Court actions from two employees for personal injuries claims for bullying and intimidation. The maximum settlement in the Circuit Court is 60,000 euros. The defendants in the case are named as CHSM Ltd, Adrian Carrie and Shay Gannon.
One of the claims has been approved by the Personal Injuries Assessment Board and a Court summons has been issued. These claims should have been settled long before getting to this stage. Court proceedings will only increase the settlement.
Nomination for Director
It is clear that our management company is in a financial mess and the Board needs to be replaced. I was a director from 2010 to 2014 and managed to reduce service charges during that period. When I left the financial state of the company was healthy and stable. Now it is in serious trouble.
I will be putting my name forward for election as a director. I will attempt to (a) get control of expenditure and reduce service charges; (b) put the heating system on a cost-neutral basis © hold AGMs earlier.
Your Vote
I look forward to meeting you at the AGM. If you cannot attend then do not waste your vote. You can appoint me as proxy (Kevin Fitzpatrick of <redacted address>). The proxy form was included in the documents emailed to you and should be received by SherryFitz 48 hours before the meeting. The AGM will be held the Saturday after the Easter weekend so be sure to send in (or scan/email) your proxy well in advance. A proxy form is in the attachment.
I look forward to meeting you at the AGM. I can be contacted at <redacted>.
Regards,
Kevin
