THE ELIZABETH CONDOMINIUM ASSOCIATION
4601 North Park Avenue
Chevy Chase, MD 20815
Minutes of Board of Directors Meeting July 21, 2009
Board Present:
Woody Cunningham ....................President
Alexandria Kielty .........................Vice President
Monique Fridell ...........................Treasurer
Judith Barth ................................Assistant Treasurer
Jeffrey Axelrad ............................Secretary
Charles Bressler ...........................Director
Dr. Alfred Muller .........................Director
Also present:
John Algner ............Community Manager, Legum & Norman
Mike Horan .............Site Manager, Legum & Norman
Aisha Gardner .........Resident Services Coordinator, Community
................................Management, Legum & Norman
Martha Morris .........Recording Secretary
Call to Order: Mr. Cunningham called the meeting to order at 7:35 pm.
Approval of Minutes
MOTION Ms. Kielty moved to approve the minutes of the July 9, 2009 and July 16,
2009 meetings as presented. Ms. Fridell seconded the motion. The vote to
approve was unanimous.
President’s Report
• The Elizabeth has received a refund from the State of Maryland for $89,000 in overpayment of sales tax on PEPCO electricity bills. The eligibility for the refund was based on information received from Legum and Norman, and Ms. Robinson and Ms. Farrell worked diligently to effect a successful outcome. The President said that he wanted the $89,000 to be applied to ECA’s Reserves.
• Ms. Farrell and Mr. Polite will be leaving The Elizabeth at the end of the month. He encouraged Board members and residents to express their gratitude to them personally for their work over the years. He added that the entire staff has been extremely cooperative during the transition. Ms. Robinson will stay through August to help with audit preparation.
• The President is hoping that a Board meeting in August will not be necessary, as has been past practice.
• Under the new agreement with Legum and Norman, meetings should not exceed three hours, as the Community Manager’s time after that will be billed by the hour.
Treasurer’s Report
• Ms. Fridell reported that effective July 1, Legum & Norman had taken over bill paying, financial management and accounting. The lockbox address was changed and there will be no late fees imposed for July in light of the transition. She reiterated that Ms. Robinson has been diligent in effecting a smooth transition, offering to stay on through August 31 to help with the FY2009 audit.
• As of 6/30 ECA had $2.6 MM in cash and investments, 4% higher YOY. ECA had $2.1 million in reserves, 8% higher balances YOY.
• For the month of June ECA posted a loss of $48K. Total expenses were 23% over budget.
• Ms. Fridell reviewed the preliminary unaudited FY 2009 financial results. There was a $40,000 operating loss for the year; total expenses were 4.9% higher than last year’s notwithstanding management’s excellent cost control in administrative expenses. Utilities were 7% higher than last year and repairs and maintenance were over budget. $535,000 was transferred to Replacement Reserves, and $385,000 in Reserves was spent, principally on fire alarm installation, and garage repairs.
• Mr. Cunningham complimented the Energy Conservation Committee for their recommendations and noted that while some of the recommendations have been implemented, costs continue to rise. Ms. Fridell executed a new fixed price contract for Natural Gas which will reduce costs to $.15-$.20 per therm.
Old Business
• Mr. Cunningham asked Mr. Algner to make a brief report. Mr. Algner reported that he toured the property with the engineer. He complimented the engineering staff for their conscientiousness and concern. He said the equipment appeared to be in good repair and that the spaces were neat and orderly. He also complimented the Board for commissioning a Reserve Study, which should be done every 5-7 years. He will go into more detail about the report at a later time.
• Mr. Cunningham reported that the emergency generator has been ordered. An agreement with the elevator company has been reached to have the proper switches set up. Currently he is negotiating with the company regarding the required construction.
• A small amount of garage repair work still remains. Mr. Cunningham is working with the contractor to obtain a favorable price without a setup fee; if this cannot be arranged, the work will be deferred until next year.
Committee Reports
Energy Conservation – Joan Rosenbach
• Ms. Rosenbach noted that the residents are doing a great job at conserving, with utility usage down about 10 percent from last year.
• Four items in her report:
• Windows – American Renovators is recommending replacement; the committee is researching options. Thanked Mr. Horan for joining the July 8th committee meeting.
• McQuay heating and cooling units – also nearing end of life expectancy. Committee is exploring options for them. Residents were reminded to submit work orders for any problems with McQuay units or thermostats.
• American Renovators recommends engaging architect/consultant to conduct a more in-depth energy audit. Mr. Horan will obtain names of potential contractors.
• Finally, the committee suggests that a supply of CFL bulbs be kept on hand for residents to purchase at an attractive price.
• Ms. Rosenbach asked about the status of the light fixture replacement in the garage and stairwells, which the Board had approved in concept. Mr. Horan responded that he will obtain three bids. The Board may then vote on a contractor by email.
Mr. Cunningham added that the work on the Structural Preservation of the Garage, Roof and the Tier 06 leak is complete.
Exercise Committee – Alexandria Kielty
Ms. Kielty thanked Mr. Jim Jones for compiling the results of the resident survey and stated that the committee will have an open meeting to discuss the results as soon as they are available.
Refurbishing Committee – Judith Barth
Ms. Barth reported that the committee has approved a plan that includes all lobby areas and the first floor and excludes the pool and exercise room.
Ms. Fridell had asked if the committee could look into the possibility of the building receiving LEED (Leadership in Energy and Environmental Design) certification as part of the renovation. Ms. Barth reported that Ms. Hartman responded that it would be extremely difficult and expensive for The Elizabeth to receive such certification, as all the mechanical systems would have to be replaced, but she did suggest that the renovations could incorporate “greening” wherever possible. Ms. Barth added that, if we went for a LEED certificate, Ms. Hartman said it would require a whole new approach and we would have to bring a consultant on board for additional $50-60,000 taking us over budget. Ms Hartman estimated an additional 25% cost to the total cost of the refurbishment; Leed is very complex and would require new mechanical systems as well which would delay the refurbishment project even more. Ms Hartman recommends that we go about our renovation in the "spirit of greening" the Elizabeth. Ms. Hartman said the project will incorporate energy-efficient products where possible and good air-quality products. Mr. Algner agreed with this direction. Mr. Cunningham added that the Board needs to have a long-range vision with energy-efficient goals.
Ms. Barth stated that if the Board approves moving forward with the project before August 1, the renovations could begin in January 2010 and it would take about six months to complete.
Mr. Cunningham added that a memo was sent out last week to the residents about a new law regarding condominium homeowners’ insurance and that he has arranged for the Association’s insurance agent to address the residents on this topic on July 30 at 7:00 pm.
Security Committee – Dr. Alfred Muller
Dr. Muller reported that Mr. Horan has offered to speak with the guards to ensure a uniform and sharp appearance. He is reviewing the Legum & Norman contract, especially the section on security. He reiterated that L&N will review the present security situation and will provide the Board with a written report with any recommendations for change.
Social Committee – Judith Barth
Ms. Barth reported that there had been 10 social events this year, six of which were free to attend and four of which had a nominal charge. The committee would like to repeat the “box party” on December 6, where residents can bring items to be donated to So Others Might Eat charity.
Discussion Items – Contracts
Courtesy Patrol – Dr. Muller reviewed the history of the contract and led a discussion on the number and hours of the shifts and responsibilities of the guards.
MOTION Mr. Axelrad moved to adopt the proposal from Securitas for Courtesy Patrol services as stated but reduce the two 8 hour shifts to one (11pm-7am shift), with the understanding that the contract can be modified with 30 days notice. Dr. Muller seconded the motion. The vote to approve was unanimous.
Ms. Kielty asked that management track the results of this contract change and report back to the Board.
Aqua Fit Swimming Pool Contract – Ms. Kielty reported that she had received a few letters expressing that they used the pool and very much wanted the contractor to be renewed. At the same time, there had been some complaints about the service last year and suggested that management can help monitor the maintenance of the pool area. It was suggested that this contract should be bid out next year, with guidance from L&N.
MOTION Ms. Kielty moved to approve the contract from Aqua Fit for swimming pool services for the 2009 pool season as presented. Dr. Muller seconded the motion. The vote to approve was unanimous.
Replacement of Pipes in West Lobby – Mr. Cunningham led a discussion about the need to replace the horizontal pipes on the first floor. A bid was received from Heath Corporation in 2006 but the decision was deferred. Heath has made a new proposal with little increase in price. Mr. Cunningham recommended approval of the proposal, noting that there is $500,000 in reserves set aside for this project. This work needs to be completed before the refurbishing can begin.
There was discussion about the second part of the proposal, which is for the first floor at a cost of $198,608. It was not clear exactly what locations the contract was addressing. Mr. Cunningham said that he will check with the company and if the area is not in the front lobby, he will defer the vote until the next meeting. Mr. Axelrad complained that he had not seen the proposals and the information supplied at the meeting was inadequate to determine what the proposed contract entails.
MOTION Ms. Kielty moved to approve both parts of the proposals from Heath Corporation to repair the horizontal piping in the west lobby at a cost of $498,850 and $198,608 for the “storefront” lobby. Ms. Barth seconded the motion. The vote to approve was unanimous.
Façade Refacing – Mr. Cunningham referred the Board members to a spread sheet comparing four bids. Mr. Cunningham recommended C.A. Lindman as the contractor for this project.
MOTION Mr. Cunningham moved to approve the proposal from C.A. Lindman for façade refacing at a cost of $65,400. Dr. Muller seconded the motion. The vote to approve was unanimous.
Reburbishing – Ms. Barth asked that the Board approve moving forward with Hartman Design firm for the reburbishment of the first floor as a priority. The firm needs Board approval so that it can proceed to prepare RFPs from contractors.
MOTION Mr. Cunningham made a motion to move forward with the Hartman Design firm on the refurbishment of the first floor as a priority. Dr. Muller seconded the motion. [Discussion.] The motion carried, with six votes in favor, Mr. Axelrad abstaining.
Mr. Axelrad stated that he could not vote for the motion as it did not contain the $1.2 million cost cap that the Board, except for Mr. Bressler, who was not on the Board at that time, had represented would be the cap on these costs. Mr. Axelrad made the points that the option selected was the best option but that Board members were equivocating on whether they would adhere to their prior representation to residents. Mr Axelrad also commented that last year during early meetings considering renovations that he favored spending more than $1.2 million but a compromise was reached under which the Board represented that it would spend no more than $1.2 million under its first contractual arrangement for renovation and therefore urged Board Members to oppose the motion. Dr. Muller said that the current motion does not deal with cost. Mr. Axelrad said that, on that basis, he would abstain.
Landscaping Contract – Mr. Bressler received three bids for landscaping services and recommends Valley Crest. He was impressed with the company’s ability to create photos of various plantings as they would appear on The Elizabeth grounds.
MOTION Mr. Bressler moved to approve the contract from Valley Crest Landscapers at a cost of $16,428. Dr. Muller seconded the motion. The vote was five in favor, two against (Barth, Fridell). The motion carried.
Ms. Fridell expressed concern that this contract was for maintenance only and she recommended that The Elizabeth engage the services of a landscape designer.
Five-Year Plan – After adding $200,000 to the existing $500,000 already in the Plan for the horizontal piping project, Ms. Fridell asked the Board to approve the five-year plan of Replacement Reserves for the 2010 budget year. This plan projects the capital expenditures planned for the next five years and is included in ECA’s audited financial statements. She said that this schedule is important as a planning tool and as information for current and potential residents. She said that the plan is updated each year.
MOTION Dr. Muller moved to approve the five-year reserve plan as illustrated, with increases in the contributions to reserves as follows: 2011 5%, 2012 5%, 2013 3%, 2014 3%. Ms. Barth seconded the motion. [Discussion.] The vote was two in favor (Cunningham, Muller), five against (Axelrad, Barth, Bressler, Fridell, Kielty). The motion failed.
MOTION Ms. Kielty moved to approve a five-year reserve plan with the following increases in contributions to reserves: 2011 10%, 2012 7%, 2013 7%, 2014 7%. There was no second.
MOTION Ms. Fridell moved to defer the vote on the five-year reserve plan as Board members could not see in real time the financial effect of the percentage increases they were proposing. Mr. Axelrad seconded the motion. The vote to approve was unanimous.
The Board discussed the possibility of securing a line of credit to provide flexibility in financing for upcoming reserve projects. Ms. Fridell said that she had already explored this possibility over one year ago and had received a term sheet from Chevy Chase Bank; she explained the likely proposed terms, collateral, and associated fees to the Board.
MOTION Dr. Muller moved to authorize Ms. Fridell to explore securing a bank line of credit not to exceed one million dollars. Mr. Axelrad seconded the motion. The vote to approve was unanimous.
Residents’ Comments
• A resident urged the Board to engage the services of a landscape designer. She also reported that there has been no one at the front desk on several early-morning occasions.
• A resident reviewed landscaping history. There had been a design at one time and it was being executed, but it recently became stalled. She applauded the Board for moving forward on the refurbishing project.
• A resident reported that in the course of remodeling, some owners allegedly are removing parts of their ceilings, which contain asbestos, which the resident feared was a hazard. Mr. Cunningham observed that, without owners’ intervention, the ceilings’ encapsulate any asbestos in a way preventing hazardous loose asbestos.
• A resident asked for clarification on the cost of the refurbishing. Mr. Cunningham responded that during the discussions, it was clearly stated that there was $1.2 million in reserves for this project but that it was known that that amount would not be enough for the entire project. Ms. Barth added that the committee received a ballpark estimate of $2.2 million for the entire project.
• A resident asked for clarification of the first floor plans.
• A resident expressed dissatisfaction that he received from L&N a coupon book for his condominium fee assessment payments even though he had elected to be on direct debit and felt this was a waste of money. He asked for an accounting of the cost of the mailing.
• Mr. Cunningham gave a resident permission to have the L&N contract copied at her expense.
• A resident asked that the next fire inspection include a review of the need for fire horns in the arcade. Also asked if the pet policy could be revisited.
• A resident complained that dogs are having accidents in the elevators.
• A resident asked if L&N deals with pet issues in other buildings.
Next Meeting
MOTION Ms. Fridell moved to hold a Board of Directors meeting in August to finalize the five-year plan and to monitor the on-going financial and operational transition being implemented with L&N. Mr. Bressler seconded the motion. The vote was two in favor (Bressler, Fridell), four against (Barth, Cunningham, Kielty, Muller), one abstention (Axelrad). The motion failed.
MOTION Dr. Muller moved to have a public workshop to discuss this issue. There was no second.
Additional comments were entertained from owners and residents in attendance.
Adjournment
There being no further business brought before the Board, the President adjourned the meeting at circa 10:45 pm.
Martha Morris prepared the initial draft of these minutes.
Respectfully submitted,
Jeffrey Axelrad, Board Secretary
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