Questions Surround Management of Mount Kisco Mitchell-Lama Building

Terrence Gallimore figured that the co-op board at Barker Terrace in Mount Kisco would decide on another increase for the residents at the Mitchell-Lama building at 1 Barker St. for this year.

But Gallimore, 66, a teacher’s assistant in the Mount Vernon School District, could never have anticipated the surprise waiting for him and his neighbors last fall when word spread of the costs they would face: an almost unbelievable 54.28 percent hike.

Instead of seeing another incremental rise, Gallimore’s monthly bill went from $979 to $1,518 almost overnight.

“We had no idea that it was going to be 54 percent, and they doubled down on it, giving it to us retroactive (to Nov. 1),” said Gallimore, who has lived in the building since 1977 and served six years on the co-op board in the 1990s. “I can’t pay personally, and as well as a lot of other people I spoke to. My budget the way it is, the money that I was paying I continue to pay because if I give them the money that they’re asking for, it would destroy my budget. I would end up homeless because I wouldn’t be able to do that.”

He is hardly alone. Multiple residents in the 92-unit building have reported that they are unable to pay.

However, it is severity of the increase that was requested by the co-op board and/or Ferrara Management and signed off by the state Department of Housing and Community Renewal (HCR) along with the deteriorating condition of the building that has residents embittered and worried whether Mount Kisco Middle Income Housing, the corporation that owns the building, will foreclose on their units. Some are in arrears on their monthly payments, and for those whose increase is beyond their ability to pay, they are falling further behind every month.

It is also the same building that was the subject of a state comptroller’s audit report that sternly criticized HCR for its lax oversight at Barker Terrace and four other Mitchell-Lama buildings across the state outside of New York City.

Officials at multiple levels of government have been questioning how the board and management could impose such a prohibitive increase in a building that has strict income restrictions. They also want to know how the building could be allowed to fall apart so badly.

Assemblyman Chris Burdick (D-Bedford) said what has befallen Barker Terrace has been a common problem with Mitchell-Lama buildings throughout the state, many of them of a similar age with limited access to funding.

“You’re dealing with some severe fiscal issues that the building faces, and that’s required significant capital repairs and there’s just not the money for that,” Burdick said.

County Legislator Erika Pierce (D-Bedford) said seven years ago when she worked as the legislative assistant for her predecessor Kitley Covill, the problems at Barker Terrace were well-known. She said there were potential missteps on the part of the board and/or management company that were reported to her by Barker Terrace residents, although Pierce acknowledged she never had the ability to inspect the books.

There is also a continually aging population in the building, with many residents retired or nearing retirement and living on fixed incomes.

Then there’s the ongoing deterioration of a building that opened in 1967 and is in need of major capital repairs without a large reliable source of money to draw from, which has presented steep challenges.

Pierce also said Barker Terrace, with 92 units, provides a relatively small pool of money, so when major repairs are needed, it impacts residents harder.

“If you have meaningful capital problems that you can’t address in a big way, you end up throwing lots of small money at it repeatedly to try and rectify the situation,” Pierce said.

Gallimore said sometime in the past 15 years the board or management company decided to take out a mortgage to find a way to complete some of the large and expensive capital projects. One of the building’s two boilers was replaced, and at some point, a new roof was installed, he said.

When he served on the board, Gallimore recalled, a healthy surplus was routinely maintained, typically more than $500,000 to absorb surprise expenses or inflation spikes.

But apparently, the recent financial situation reached the point where Mount Kisco Middle Income Housing failed to make some of their mortgage payments, said village Trustee Karen Schleimer, a real estate attorney. Since shortly after the 54 percent increase went into effect, Schleimer said she understands the mortgage payments have resumed but the fate of the residents who can’t afford the new fees and the fiscal health of the corporation remains very much in question.

“The real problem here – there are many – but one of them is the failure of oversight by HCR,” Schleimer said. “They are apparently required to do an annual audit and didn’t. What happened with the management company and what happened with the board? I don’t know.”

Last week, The Examiner reached board President Ursula Johnson who refused to answer questions about the situation at Barker Terrace. Ferrara Management failed to return messages.

An HCR spokesperson said the agency recently approved $293,000 to provide funding for boiler repair work and for the Barker Terrace board to engage an architect to develop a capital repair plan. Once that plan is completed, it is expected to create a path for a more comprehensive rehabilitation.

“HCR has a limited role in overseeing the day-to-day management of Mitchell-Lama housing, which is privately owned and managed,” the spokesperson said. “HCR’s highest priority is the safety and welfare of the low- and moderate-income residents it serves, and HCR is committed to ensuring that all state Mitchell-Lama properties are well-positioned to make critical investments.”

But one of the glaring problems that continue to plague Barker Terrace are the pipes and plumbing. Resident Margie Nugent, who moved into Barker Terrace in 2001, said she has had dozens of floods in her first-floor apartment from burst pipes.

She has also been unable to keep up with the new monthly charge, which she has heard was partially due to large insurance rate increases as a result of all the claims that have been made by the building.

“My maintenance going up 54 percent overnight, I wasn’t prepared for that,” Nugent said.

Schleimer, who has been pressing Burdick and state Sen. Peter Harckham (D-Lewisboro) to introduce legislation that would place a moratorium on taking action against residents until the issues are resolved, also noted that she understands insurance premiums skyrocketed as well.

Pierce said while the state is the primary level of government responsible for Mitchell-Lama buildings, she is working to free up some county money from a foreclosure prevention fund to at least have the residents who have fallen behind on their payments the ability to catch up.

On Wednesday, Feb. 28 at 6 p.m., county personnel are scheduled to be at Barker Terrace to help residents fill out applications for any available funds.

Staff from the county Department of Social Services and Department of Senior Services will also be on hand to see how they can help in other areas, including whether any residents are eligible for the Supplemental Nutrition Assistance Program (SNAP).

Pierce said she’s also asked the Mount Kisco assessor’s office to attend to explore if any residents could benefit from various tax exemptions.

“These people don’t have the ability to pay the increased maintenance,” she said. “They don’t have an increasing income; they’re still on that same fixed income.”

What has made the situation worse, Gallimore said, is the lack of communication between the board, management firm and the residents. Although he has continued to pay his previous monthly fee, he somehow has received a statement saying he’s about $6,000 behind in payments in the last four months.

Gallimore is convinced that the actions of the board and management requires greater scrutiny.

“I would like the Attorney General’s office to do a full investigation into what’s going on here because we’re taxpayers and we’re voters and these people have a legal responsibility toward us and that has not been the case,” he said. “We’re the ones who are suffering.”

Clarification: This article has been updated to reflect that County Legislator Erika Pierce did not have knowledge of potential missteps on the part of the Barker Terrace co-op board or the management company, but had heard of reports from residents who had made those allegations.