MINUTES OF REGULAR MEETING OF THE BOARD OF DIRECTORS
OF THE ELIZABETH CONDOMINIUM ASSOCIATION, INC.
MINUTES of a Regular Meeting of the Board of Directors of the Elizabeth
Condominium Association, Inc. (“Association”), held on April 21, 2009 in the
Party Room of the Condominium pursuant to notice in accordance with the
Bylaws. Present were: George “Woody” Cunningham, Jeffrey Axelrad, Judith
Gann, Monique Fridell, Alexandra Kielty, Judith Barth and Alfred Muller.
The President called the meeting to order at 7:35 p.m.
MINUTES:
A motion to accept the minutes of the Regular Meeting conducted on March 17,
2009 was made by Dr. Muller with a second by Ms. Kielty. The minutes were
approved unanimously.
PRESIDENT’S REPORT:
Mr. Cunningham thanked the Nominating Committee comprised of Pat Peyser, Gerald Feldman and Peg Downey for its efforts. April 23rd will be the “Meet the Candidates” night and pursuant to the By Laws, the Annual Meeting and Election will take place on May 6th. The next Regular Board Meeting will be on May 19, 2009.
A draft management contract with Legum & Norman is currently being
negotiated. Once approved, a public meeting will be held for informational purposes.
A request by Jim Lawson to bring the issue of outside management to a vote by all residents was discussed with Jason Fisher, Counsel for the Elizabeth. On advice of Counsel, there will be no printed ballot on this issue nor will this issue on the agenda at the Annual Meeting.
Work is continuing in the garage and, due to unexpected developments, will likely take longer than expected. Repairs and resurfacing by Structural Preservation Systems in continuing on G-3 and due to an unexpectedly higher degree of spalling, the contract will need to use a cement that does not dry as quickly but is less expensive. As a result of the increased repairs that are needed, the cost of the contract will increase. Management is not sure of the increased time nor increased cost yet. The Board will be informed as soon as this is known so that it can make a decision on the amount of work to be done.
The leak in Unit 06 has been discussed with the contractor, Structual Preservation Systems, and our consulting engineer, WJE, and the work will begin shortly. The work is expected to be completed by May 8, 2009.
The President has appointed a Refurbishment Committee comprised of Judy Gann, Judith Barth and Alexandra Kielty. The contract with Hartman Design Group has been signed. Principals of the firm have been in the building taking measurements and generally reviewing common elements in preparation for design work.
The President complimented The Energy Committee on a job well done. In the coming year, the President would like the Committee to refocus on other specific areas. Those areas have not been determined as of this date.
Legum & Norman has advised the President that ECA may not be required to pay sales tax on our utilities. This could be a material amount of money, possibly $4,000 monthly. Management is seeking redress/reimbursement from our utility vendors. The question remains if this law applies to The Elizabeth in light of its commercial billing status.
TREASURER’S REPORT:
Asset Allocation
As of 3/31 we had slightly over $2.7 MM in cash and investments, 11 % higher
YOY. We have $2.1 million in reserves, 12% higher balances YOY.
Monthly Performance
In March we had a net loss of almost $2K versus projected net income of $46K. Printing was over budget due to printing of House Rules. Personnel was over budget due to annual payment into employees’ SEP plan. Utilities were over
due to high usage of natural gas and electricity. In March, we transferred almost $44K to reserves but had no reserve expenses this month.
FY 2009 Year to Date (YTD) Results
For the nine months ending 3/31, we are running a loss of about $9K, versus net income of $73K this time last year. Interest income for operating and reserve funds is down 25% and 35%, respectively, due to the low interest rate environment in which we are investing. Most expense categories are running approximately 3-4% higher than last year, or approximately the rate of inflation, with the exception of Utilities and Association activities, which are 8.5% and 53% higher than last year’s comparable period, respectively. I am particularly concerned about trend in growth rates for utilities expense, which continues to significantly exceed inflation. I urge the Board to execute some of the suggestions in the Energy Audit to mitigate this unsustainable growth.
We have transferred $393K to reserves this year to date and spent $208K, or 62% less than last year, mostly on façade repairs, fire horn installation and correction of electrical system deficiencies.
MANAGEMENT REPORT:
A copy of the Management Report, dated April 21, 2009 is attached hereto.
OLD BUSINESS:
The President reiterated that negotiations are in progress with Legum & Norman.
NEW BUSINESS:
Committee Reports:
Energy Committee: Mr. Drazin, acting Chair, reported that the Committee has prepared a report on the Energy Study for the Board. Mr. Drazin (#1611) noted that there are many areas of the energy study, which require the feedback and analysis of a qualified engineer. He thanked those Committee members who assisted in the preparation of the report.
Mr. Trebach, #1407, reported that he has met (on his own) with Titan Windows regarding replacement windows for the units. He will have more information in May, but believes we can save money by doing the work now since money can be borrowed at a lower interest rate and contractors are looking for work.
Dr. Muller drew attention to the discrepancy between the cost figures for window replacement cited in the reserve and energy studies. He also noted that we have six sample high efficiency fixtures in the garage. Ms. Farrell indicated that they are in the area of parking space #135 on G-2, and residents should see how they like them.
Ms. Fridell noted that the Energy study was labeled “preliminary” and asked if we would receive a final definitive version. Ms. Farrell said that the “preliminary” would be changed to a final energy audit when the Board gave its aproval to American Renovators. Ms. Fridell also asked if the Board planned to review the conclusions and recommendations outlined therein. Ms. Fridell reiterated Dr. Muller’s concern on the different cost estimates and said that additional due diligence is necessary.
Mr. Axelrad stated that since Titan Windows sells and installs windows, any quotes on cost and/or savings from Titan are biased, and the Board should commission a neutral party for a cost savings study.
Mr. Cunningham stated that we must consider energy savings and finite lifetime of the windows.
Ms. Bobb, #911, asked if we were eligible for cost offsets such as a Federal Energy Tax credit and the Montgomery $10,000 credit applicable to individual homeowners. She suggested that the Board ask Counsel for advice.
Exercise Committee: Ms. Kielty presented a Committee report, which is attached and which requests that $18,000 be included in FY 2010 budget to purchase exercise equipment. Discussion followed. Ms. Fridell noted that the Exercise Room/Equipment is an important factor in the marketability of ECA condominium units per her feedback session with three professional realtors in Fall 2008. Ms. Fridell stated that in preparing the 2010 budget, the Board included approximately $3000 to purchase two pieces of equipment. She said that the remainder of the requested amount could be considered a reserve expense if it were done in conjunction with the refurbishing project and suggested that the Board consider this individual request within the context of its review of all the projects in the Five-Year Plan.
Dr. Muller noted that management companies and design firms both indicated the importance of having an updated exercise facility.
Dr. Muller made a motion to authorize an amount not to exceed $18,000 for exercise room equipment in FY 2010 from Reserve Funds. Mr. Axelrad seconded the motion.
Mr. Axelrad, Ms. Kielty, Ms. Barth, Ms. Gann and Dr. Muller voted in favor of the motion. Mr. Cunningham and Ms. Fridell opposed the motion. The motion passed.
Ms. Fridell is concerned that reserve expense decisions are being taken piecemeal, and that all expenses in the Five-Year Plan need to be reviewed as a whole. Ms. Barth stated that purchases for the Exercise Room should be delayed until we receive a report from the designer. Mr. Axelrad noted that by voting, we have moved forward with the purchase of equipment. Ms. Kielty also noted the advisability of investing in equipment within the context of a refurbishment of the Exercise Room that is scheduled for FY 2011 (in the Reserve Study) and with input from the Hartman Design Group.
Ms. Fridell stated that expenditures for the five-year plan would be discussed at a specific meeting in June. Mr. Axelrad stated the vote tonight was an exception.
Nominating Committee: Mr. Feldman, #1819, said that the Candidates’ Board is in the Lobby. He reiterated that the “Meet the Candidates” Night would be held on April 23.
Refurbishment Committee: Ms. Gann reported that the contract has been signed and Hartman Design Group has been here for two days performing preliminary work and determining demolition plans. Ms. Esler, #1206, asked if the marble flooring would remain and Ms. Gann responded affirmatively.
Ms. Barth said she spoke with Ms. Hartman and that some furnishings may be salvageable.
Mr. Bason, #110, asked what “demolition” meant. Ms. Gann informed him that we would not know until the designer submits design plans. She said no walls are anticipated to come down.
Mr. Trebach, #1407, reiterated that some walls are not aligned correctly and may require work.
Security: Dr. Muller had no report.
Social Committee: Ms. Barth reported that a social gathering is planning the beginning of June. She noted that the TV remote is available for any resident wishing to use it and can be checked out at the front desk.
Contracts:
John Manougian Insurance/Firemen’s Fund has given us a contract for $160,985 for next year, which would provide the same level of coverage. This price represents an approximately 1% increase from last year. It was suggested that the vote be deferred in order to get one or two additional bids. Also, there is a possibility that Legum & Norman could provide a cost savings quote.
Ms. Gann asked if a contract, once signed, could be pro rated, with the policy going to another insurance company. Dr. Muller asked that the issue be discussed with Mr. Fisher.
Mr. Axelrad made a motion to authorize an expenditure not to exceed $161,000 to purchase adequate insurance for our existing needs through John Manougian Insurance. Ms. Kielty seconded the motion. The motion passed unanimously.
Ms. Farrell presented proposals from Mr. Fauss as follows: Oil tank replacement from JB Tank, LLC for $19,061.67 and Robert Fauss Consultants for $52,570 for Electrical Room and generator design and the programming and connections of Otis Elevator for the new generator at a cost of $52,570.
Mr. Axelrad made a motion to approve the proposal from JB Tank, LLC for $19,061.67 and Robert Fauss Consultants for $52,570. Ms. Gann seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Kielty, Ms. Barth, Ms. Gann, Ms. Fridell and Dr. Muller voted in favor of the motion. The motion passed unanimously.
A contract from Structural Preservation Systems was presented for ratification. Due to the emergency nature of the work, Mr. Cunningham had signed the contract on April 16, 2009. The contract is the result of leaks in Unit 06 and will require replacing the concrete roof on the west side. Ms. Gann made a motion to ratify the contract for $9,516. Dr. Muller seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Kielty, Ms. Barth, Ms. Gann, Ms. Fridell and Dr. Muller voted in favor of the motion. The motion passed unanimously.
Ms. Farrell noted that the contractor, Structural Preservation Systems has recommended use of a different mix of concrete to repair the floor of the garage. This will require a longer period of time to set and therefore, will delay completion of the project and increase costs.
Mr. Fauss has spoken with Holt Electric about replacing the switch for the electric generator. Since it would involve shutting down power to ECA and neighboring buildings for several hours, Ms. Farrell will check with PEPCO to determine how this can be accomplished.
COMMENTS FROM THE FLOOR:
Ms. Gann noted that upon exiting the elevator on the West side yesterday, a resident had left dog excrement on the floor, notwithstanding multiple letters from management to dog owners reminding them to pick up after their pets. Cleaning staff was removing it although this was above and beyond their duties. She noted that if residents see pets that are not appropriately managed by their owners, they should report the owners to management immediately. Dr. Muller asked that the security cameras be checked to possibly identify the culprit(s) and their negligent owner(s).
Ms. Sandler, #211, noted that this should apply to owners whose pets are frightening or intimidating to residents, etc.
Ms. Bobb, #911, drew attention to Legum & Norman’s suggestion that the Elizabeth might not be required to pay taxes on utilities. She noted that even before they had begun to work for ECA, the firm is saving us money. She asked what the amount of savings might be. Mr. Cunningham replied that it could be $4,000 a month.
Ms. Gann asked if the accounting firm should have been aware of this tax situation.
Ms. Farrell noted that it is not clear at this time if this applies to condominiums wit commercial billing as the Elizabeth. She is investigating the situation.
Ms. Sparks, #420, asked if plantings could be improved along the East side walkway/patio.
Ms. Sandler, #211, asked if landscape work could be done on the West side entering the garage.
Ms. Esler, #1206, stated that the new landscaping in the front of the building was very attractive.
Mr. Rosenbach, #1517, is concerned about energy usage. He stated that even though the Elizabeth has not spent less on energy, our KW hours and therms per hour have decreased compared with last year. His conclusion is that residents are conserving energy.
Ms. Alenier, #301, asked whether the spalling in the garage is caused by oil/chemicals leaking from cars in the garage. Ms. Farrell said the cracking is caused by water damage.
Another resident complained about an unpleasant smell in the garage. Ms. Farrell explained that two drains were backed up at the bottom of the garage and that the engineers have resolved the problem.
Mr. Bressler, #1806, asked why there would be no extra printed ballot at the Annual Meeting and was told by Mr. Cunningham that on the advice of Counsel, there would not be a specific ballot on this issue but blank ballots will be available as is customary.
In response to Ms. Gann’s question and the Board’s decision from the March Board Meeting to ask residents to take care of junk cars, expired tags, etc. in the garage; Ms. Farrell explained that only three owners have not responded to the written request. She is working to get this problem resolved. At Mr. Trebach’s request, Ms. Farrell will send a note to the individual, who idles his car for long periods of time in the garage, since it is spewing noxious fumes into the garage space.
Ms. Rosenbach, #1517, noted that there were strong vapors when the elevators were being cleaned and asked if there was another product that could be used. Management said that this was metal lacquer being sprayed on the bronze, and it was not known if there were replacement products.
Ms. Kielty asked what street work was being done in the Village. Mr. Trebach said that the crosswalks are being paved with red pavers to avoid having to repaint crosswalk signage. The project required a certain temperature and non-rain conditions to be done and should be completed within the next few weeks.
Mr. Trebach, #1407, said the Friendship Heights Council is running again, unopposed, with the election on May 11th. He urged residents to vote.
The meeting was adjourned at 9:10 p.m.
Submitted by Judith Gann Secretary (until May 6, 2009)
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