Present at the meeting: Alexandra Kielty, Judi Barth, Charles Bressler, Molly Frantz, Monique Fridell, Seth Levine, Alfred Muller, Scott Murdoch, and Jim Santos.
This meeting had two parts:
--Discussion of the recent survey of ECA members
--Discussion/Decision about 2011-2012 condo fees: Board has set a 10% condo fee increase.
Discussion of the recent survey of ECA members
Monique Fridell presented preliminary results on the “ECA Reserve Expenditure Survey.” Her discussion was based on 164 responses although more surveys came in after the initial 164.
(SURVEY ANALYSIS METHODOLOGY: All surveys are available for inspection in the Management Office and the total count is about 178. 400 were sent out including all 353 unit owners, commercial owners, and park space only owners. Ms. Fridell randomly selected 17 responses, about 10% of her base, to audit accuracy of raw data tabulation and found 100% accuracy in this 10% sample. However, she cautioned that her calculation had not been validated. The Management Staff did the tabulation. The bottom line is that analysis is incomplete because it was done in a hurry.)
BACKGROUND:
--Board has considered the following major projects to be paid for from reserve fund: hallway renovation, window/balcony door replacement, and heating/cooling infrastructure refurbishment.
--How to prioritize these projects affects Five Year Plan.
--Determination of condo fee increase based on Five Year Plan.
--Condo fee increases can only be decided one year at a time.
--Survey developed to get ECA members feedback on these funding issues before the 4/27/11 meeting.
ANALYSIS (as developed and presented by Ms. Fridell)
--164 responses, 36% of 353 units, 51% were 2 bedroom owners.
--80% of respondents were resident owners.
--49% of respondents attend Board meeting occasionally.
--65% of respondents receive info about ECA through friends/neighbors (Although this percentage does not mean that is the exclusive method for how respondents get their ECA info and this is a corrected number, not the percent Ms. Fridell presented).
--58.4% are worried to some degree about ECA finances.
--38% would vote for a special assessment to fund one or more projects.
--55% would vote to change By-laws to make ECA responsible for replacement cost of McQuay HVAC units.
--46% would postpone major project execution for one year.
PROJECT RANKING (summary, see the chart in handouts passed out last evening and now available at Management Office)
--First priority: Windows/Doors Replacement (based on 154 votes with 56 surveys indicating that Windows/Doors Replacement was the respondents first priority.)
--Second, Third, Fourth priority: Heating Cooling replacement (39-35 responses indicated that respondents wanted heating/cooling & McQuay unit refurb/replacement their priority.)
--Fifth priority: complete refurbishment of hallways including replacement of hallway doors, etc. (35 respondents)
One thing to note is that the results of this survey question was hard to gauge because it was an awkwardly stated question. Not everyone filled out this question and because some of the projects were divided up (i.e. hallways had two categories: partial & complete; heating/cooling also had two categories HVAC and McQuay Units. Because McQuay Units are supposed to be the financial responsibility of the unit owner, this was confusing.)
Discussion/Decision about 2011-2012 condo fees
Mr. Bressler proposed that the condo fee be increased 10% starting in July. Despite the Board having based their Five Year Plan for 2011-2012 on a 5% increase, most of the Board voted a 10% increase. (Mr. Bressler made the motion to approve a 10% condo fee increase and this was approved by: Judi Barth, Charles Bressler, Molly Frantz, Alexandra Kielty, and Seth Levine. Voting against the motion was Monique Fridell and Alfred Muller.)
Dr. Muller made an argument for the 5% increase which would involve moving some projects like replacement of various canopies ($300,000) and possible County-imposed metering project (totaling $200,000) further out in time. Monique Fridell argued for a 5% condo fee increase with an approximate $2,000 special assessment. Either of these plans would have been adequate to address windows/door replacement, hallway refurb and a start on heating/cooling refurb.
The other five Board directors said they wanted more money in the reserves to cover unexpected costs. Dr. Muller pointed out that we have a $400,000 contingency fund and a line of credit for emergencies. In his plan, which addressed all the projects mentioned, the reserve fund would not dip at end of year below 800,000. (If I understand this correctly.)
Directors supporting the 10% increase said that bankers giving mortgages would not penalize buyers over the ECA voting this 10% increase. (Note: I checked into this issue with one banking agent I used to refinance my apartment a couple of years ago and learned that bankers are more concerned with condo debt and losses, including the delinquency rate and the percent of renters in the building than they are with this percent of increase. The red flag would definitely go down if the percent increase were 30%.)
What is problematic about the 10% increase is that many ECA members are on fixed incomes (but this figure is unknown since that was not part of the survey data) and that 46% of the survey respondents (close to half of the respondents) voted to postpone major project execution for one year, despite the fact that Dr. Muller’s suggested plan for a 5% increase would still be able to address a systematic execution of major projects over the next five years.
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