APC President's 2011 Year-End Report

APC President's 2011 Year-End Report

Dated: January 12, 2012



EXECUTIVE SUMMARY



We have managed to put APC on a sound financial footing. The loss of RD$ 240,000 in 2009 before we took office was turned into surpluses of almost RD$ 400,000 in 2010 and 2011 – a turn around of a million pesos. Capital equipment worth 3/4 million pesos including a compactor garbage truck was purchased and fully paid for. Personal security in Costambar is probably at its best. The security operations now include about 35 radios and a repeater station. APC is now legally compliant with and incorporated under the new 2005 law governing not-for profit organizations. The amended by-laws of APC have been certified by the Attorney General of Puerto Plata. All eligible employees of APC are now covered by Social Security. We defeated the efforts of the Junta de Vecinos of Costambar to have APC's contract with the Ayuntamiento rescinded. Instead we succeeded in getting the Contract ratified by the Legislature of Puerto Plata. Mr. Vallarino took legal steps in Santiago to have APC evicted from the main entrance. We foiled his efforts, and the Magistrate in Santiago ruled in our favor. We won the case against Villa Mexico for non-payment of APC dues and recovered RD$200,000 pesos in back dues. Lastly, we created administrative efficiencies that resulted in substantial savings, streamlined operations, and greater productivity.



Financial Health - A primary objective of this Board was to improve APC's fiscal health. We achieved this objective handsomely. When this Board took office, APC had a loss of more than RD$ 240,000 and nothing in reserves to pay for liabilities. We had surpluses for the years 2010 and 2011, creating a reserve exceeding RD$800,000. In short there was a turn around of more than a million pesos in the finances of the Association.



This turn around was achieved despite increases in the cost of living, the added cost of providing Social Security to all eligible APC employees, extraordinary legal costs of RD$140,000, a theft of RD$ 115,000 pesos, and without increasing the monthly maintenance dues. The financial turn around resulted from a strategy of aggressively pursuing those who fail to pay their dues, streamlining expenditures, optimizing the use of personnel, and by creating administrative efficiencies. Board member Lisa Melatti and her husband Gino played a crucial role in cajoling many property owners to pay their dues.



Capital Investments: in 2010 and 2011 we invested almost 3/4 of a million pesos in procuring capital equipment including a Garbage truck with a compactor, 2 rifles, a new motorbike, a new body for the old Mitsubishi truck, grass trimmers, and office computer systems. The compactor garbage truck, costing RD$ 475,000 pesos, was funded by donations (40%) and from current income as well as 2012/13 dues paid in advance.



Enhanced Security: Security within Costambar at present is probably at its best. Despite a general increase in criminality in the Dominican Republic , incidences of thefts/robberies or assaults has decreased in Costambar. The improved security has resulted from Sandro Falla's efforts to forge greater cooperation between the National Police and our security personnel, a pro-active policy of dismissing security officers found ineffective, and the creation of a network of more than 35 security radios. Additionally, cameras have been installed at the main gate paid for by the Security Committee. A new motorbike and two rifles were also purchased by APC.



Legal Compliance: APC was conferred the benefit of a not-for profit organization by a Presidential Order in 1985. On April 8, 2005 a new law - No. 122-05 - was enacted. Organizations constituted under the old Executive Order are required to amend their by-laws/constitution and take steps to bring them in compliance with the new law. The process proved to be lengthy, tedious, and more cumbersome than incorporating a new organization. Documents were procured from governmental sources in Santo Domingo and Santiago and had to comply with changing demands from the Attorney General's office. After almost 8 months of diligent efforts and frustrations APC was incorporated under the new law (Resolution No. 027/10/2011 of the Attorney General of Puerto Plata).



The Labor laws in the Dominican Republic require that workers receive Social Security benefits. The cost of this coverage is about 20% of employee salary, of which about 3/4 is paid by the employer and a 1/4 by the employee. All eligible employees of APC now enjoy Social Security benefits.



The legal name of APC had never been registered with ONAPI and hence subject to usurpation by anyone. We took the necessary steps in Santo Domingo and Santiago to register the name. The registration is good until 2020.



Overcoming Opposition: In 2011 APC confronted strong opposition from the Junta de Vecinos of Costambar. Their objective apparently is to debilitate APC by creating road blocks. First, they went to the Mayor's office seeking to rescind the contract signed by the Mayor and myself. This contract gives APC the exclusive right to collect garbage in Costambar, and provide other services. After failing to get satisfaction from the Mayor, they took their fight to the Puerto Plata Council. The Council created a commission to study the issue and advise the Council. Public hearings were held. We did a lot of work behind the scenes and in the end APC prevailed. Instead of rescinding, the Legislature/Council ratified the contract - Resolution No. 017-A-2011 dated April 28, 2011.



Mr. Eduardo Vallarino sought to dislodge APC from the main Gate of Costambar, claiming that his company constructed the Gate and that APC was occupying it illegally. He sought the intervention of the Abogado del Estado (Magistrate's Office) in Santiago to have APC evicted. I went to Santiago 5 times, once with our attorney, and twice with Amadeo Luciano. I dug into APC's records, drafted a brief refuting Vallarino's allegations. Finally, the Magistrate personally came to Costambar and met with the parties in which Hector Rodriguez played a key role. After 8 months of hassles, the Magistrate issued his verdict declaring that APC was not illegally occupying the Gate and that if Mr. Vallarino thought his claim had merit he could pursue it further in the Civil court in Puerto Plata.



Apparently, Mr. Vallarino is not done with his futile efforts to force APC to vacate the front Gate. APC has been served notice to appear in the Civil Court in Puerto Plata. I am confident that Mr. Vallarino will once again fail. This time, however, he will have to bear APC's legal costs.



Note: This Board has gone out of its way to bring about a harmonious cooperation between APC Mr. Vallarino - but to no avail. Hector Luis Rodriguez has played a key role in this effort and he has been designated by the Board to try one more time.



Villa Mexico Court Case: For years no one believed that APC had a legal right to get paid for the services rendered. Upon joining the Board in 2009 I did considerable research on the history of APC as well as the company Costa de Ambar, S.A. that sold plots to individuals. I sought documents from Don Docker. Amadeo Luciano, Jose Polanco and dug into the archives of APC. I prepared a chronology of the historical events and a legal basis for APC's claim for payment. I contacted my attorney who agreed with me that APC had a strong case and took the Villa Mexico test case on a contingency basis. After 2 years of appearances in the Puerto Plata Civil Court and written arguments, the Court issued its verdict in favor of APC. The Court summarily rejected Villa Mexico 's plea to dismiss APC's claim and ordered it to pay APC's legal costs. The amount sought was RD$250,000. The lawyers of Villa Mexico appealed to the higher court, but before the appeal could be heard APC reached a settlement at the behest and intervention of Gino Melatti. APC was paid RD$200,000. This decision sets a precedent for the reason that the Court rejected all arguments by Villa Mexico as to why it was not liable to pay APC.



Administrative Efficiencies - The use of security personnel was optimized, resulting in lower costs and enhanced productivity. Banking costs were cut and operations were streamlined and simplified. For example, we got Scotia Bank to reduce its fees and charges by 85% and pay interest on our checking account in pesos; resulting in a savings/income of more than RD$25,000 in 2011 compared to 2009. Also, we stopped the hazardous practice of withdrawing in cash the bi-weekly payroll and paying the workers individually at the APC office with an armed security guard in attendance. Instead each one of the workers now gets paid directly by our bank.



We initiated the practice of sending out invoices to property owners for back dues - which has resulted in greater compliance in payments. A late fee of 10% and interest @2% per month is charged on amounts due more than 3 months. The results are encouraging and in 2011 APC collected about RD$ 11,000 in late fees/interest. Strict procedures have been instituted for hiring/firing of employees and in reporting to the local Labor office.



Electricity and Water: The quest to get EDENORTE to provide 24 hour electricity and CORAAPPLATA to provide adequate water remains a challenge. We have had several meetings with the top management of EDENORTE and are currently collaborating with them to reduce incidences of theft of electricity in Costambar. We have met with the managers of CORAAPPLATA and are meeting again with its Director General on Jan. 13, 2011. Apparently, CORAAPPLATA has major problems with the equipment that pumps water from Cerro de Nave. They have ordered a dozen new pumps from Miami that are arriving on the 22nd.



Respectfully



Yash Aggarwal – APC President