Feb 23, 2016 ECA Board Meeting—President's Message

Because the February ECA Board meeting was one where lots of information was provided given our new management company, I'm going to do more than one blogpost.  In this post is the ECA Board President's opening remarks.

President’s Message

February 23, 2016

1.   On behalf of the Board of Directors, it is my pleasure tonight, to introduce Mr. Larry Hirschman, our Portfolio Manager from Gates Hudson Community Management (GHCM) and Mr. Dave Ostrander, the GHCM employee who has been serving as our interim GM since February 1.   We wish to thank Mr. Ostrander for his excellent service to the Elizabeth this month.  His last day of work will be March 7. 

2.   It is also my pleasure to introduce Ms. Stephanie Deoudes, our new General Manager, whose first day of work will be Monday, March 7.   For those of you who have not already met Stephanie, she has 30 years of experience in condominium management in luxury high-rise buildings, and as such brings a wealth of experience and expertise to the Elizabeth.  I am sure you will be pleased to know that Stephanie will live on-site as a condition of her employment.

In making the decision to require on-site residency for the General Manager, the Board considered the age of our building, the devastating emergencies we have had over the last two years with the sewage backup, pinhole leaks, and ruptured pipes, and the resultant damage of over half a million dollars, to both individual units and common areas.  We also took into consideration the impact on our insurance coverage and escalating insurance premiums.  Additionally, we considered that our residents have suffered personal losses and have been terribly inconvenienced, some having to relocate to hotels for a considerable period of time while their apartments were being restored. 

The Board, therefore, concluded that it is in the best interests of the Association and our residents to make on-site residency a condition of employment for the General Manage so that she is available for duty at all times to respond to any emergency that might arise, regardless of the day or time of day or night.  While it is not possible to prevent unforeseen emergencies, we feel that taking this pro-active step to protect our residents and our property is in the best interests of the Association, and will mitigate the damage and loss going forward.  It will help us sleep better at night, too – and I hope you feel the same way.

Of course, we will have a Chief Engineer and an Assistant Engineer living on-site immediately available to respond to after-hours plumbing and building problems and to address emergencies.  They will continue to be our first responders.

3.   I have been asked about the recruitment and selection process for GM.  Our contract with Gates Hudson Community Management (GHCM) requires them to recruit, vet, and recommend candidates to the Board for General Manager, Assistant General Manager, and Chief Engineer. 

On November 25, 2015, immediately after the contract with GHCM was signed, Lynn Kiley and Larry Hirschman began an extensive 6-week search for the most highly qualified candidates for the Board to consider for our General Manager vacancy, candidates who:

·      have a minimum of 20 years’ experience as a General Manager in luxury high-rise residential buildings, of which a minimum of 15 years was in  a condominium;  and who

·      have demonstrated experience and a proven track record

--- managing large capital projects of $1 million or more

 --- managing a staff and building a strong team

 --- effective and successful emergency response and resolution, and

--- outstanding customer service

In conducting this search, they reached out to industry professionals throughout the Washington metropolitan area – to auditors, insurance professionals, legal professionals and others who work closely with condominium General Managers on a daily basis, as this is usually the best way to find solid individuals with a proven track record.

As you might imagine, the property management community is small, and the pool of highly qualified candidates who meet this criteria is even smaller.

Many names were referred to Ms. Kiley and Mr. Hirschman.  They interviewed the candidates and carefully vetted them.  After an exhaustive search and careful vetting, Mr. Hirschman sent a short list to the Board to interview.  All seven of us were extremely impressed by Stephanie Deoudes, and her selection was unanimous.

4.   On January 25 at 2:33 PM, January 26 at 9:24 PM, February 1 at 9:00 PM, and February 22, 2016 at 7:30 PM, as agreed to by a majority vote of the Board of Directors, the Board met in Closed Session in the Party Room with Management and Counsel to discuss delinquencies, personnel, contractual and legal issues.

5.   At the January 26 Executive Session, the Board approved the audit firm of the Goldklang Group to conduct a Transition Audit covering the period from July 1, 2015 through Jan 31, 2016.  This firm specializes in auditing condominiums, and its expertise in this arena is recognized by CAI. 

6.   Since we have a new General Manager, I thought it might be helpful to review the protocols for reporting problems in your unit. For day-to-day issues with operations within your unit, or even those you observe in the common areas, such as a leak, air conditioning not working, toilet or sink clogged, or security doors left open, please put in a work order, notify the Concierge Desk, or contact the Management Office directly.  These are the people who are responsible for solving such problems.  If the problem occurs after normal business hours, such as on weekends or in the evening, please report the problem promptly to the Concierge, who will make an incident report in the log and contact the engineer on duty.
 

When you report these issues to the Board, we simply turn around and forward them to Management to resolve.  Since the Board cannot fix the problem, you only delay the resolution by emailing us.  When we are the middle-man, valuable time is lost.  It is just not an efficient way to handle such matters.

We have a new team.  Be patient as they become acclimated to the building, and work with them.  I am sure you will be pleased with their responsiveness, professionalism, and expertise.

7.   On Sunday afternoon (Sept. 6, 2015) a kitchen fire on the 7th floor of 4615 North Park sent residents out into the heat. Multiple floors were filled with smoke. On Jan. 12, 2016, a fire on the 16th floor of 4701 Willard Avenue evacuated the building, sending residents in the cold for hours, beginning at 8 p.m.  In both instances, buses were eventually called to serve as temporary shelter until hours later when residents were permitted to return to their units.

I have been meeting with the presidents of the 4620 & Carleton over the past months to exchange experiences and best practices. We have discussed reciprocal “mutual aid” in the event of a fire, power outage, gas leak, or other urgent or emergency situation. The objective is to provide our Elizabeth residents -- in the event of need -- with immediate shelter and facilities that are more friendly and comforting than a bus.

The Presidents of the 4620 and the Carleton and I are proposing a formal understanding that each building would “welcome temporarily occupants of another high-rise residence in Friendship Heights Village in the event of an emergency in the other’s building. We welcome the other building’s occupants to shelter in our common area sitting rooms and use toilet facilities.” There would be no admittance beyond the lobby. 

During New Business, the Board will vote on a motion to formalize our agreement for mutual aid among high-rise residences in Friendship Heights Village in emergencies.

The Presidents of the other condos and I will continue to work together in the best interests of all of our residents.  By joining forces, we believe we can accomplish a great deal. 

8.   As you know, Gates Hudson is now preparing our financial statements.  As part of their service, Mr. Hirschman will give a Financial Report at each monthly Board meeting for the next few months as the financials settle, to explain the financials and answer resident questions, and help us understand and interpret the financial data. This is a basic service GHA often provides to their properties, particularly following transition.  Of course, our Treasurer will continue to provide the Treasurer’s Report, and he and Mr. Hirschman will be pleased to answer any questions you may have regarding their reports.

At our next meeting, we hope to have Mr. Massey with us.  As the Chief Financial Officer for GHCM, he handled the Transition and is responsible for all the financial reporting.  He would have been here this evening, but his wife is expecting a baby momentarily. 

9.   In light of the upcoming 2016-17 budget preparation process that begins in March, I want to revisit comments I have made in the past about the Association’s financial philosophy.

Specifically, the decision to spend down the Reserve Funds because we have access to a line of credit until October 2016 is, in my view, particularly troubling.  While I recognize that savings accounts are not paying significant returns, I do not believe financing our savings through a line of credit is a sustainable path, and the logic of doing so escapes me. We need a sufficient Reserve Fund available for any and all emergencies and contingencies as they arise.

During the budget preparation process, I am asking the Budget and Finance Committee and my fellow Board members to give special consideration to the Reserve Fund allocations to ensure that we always have sufficient cash on hand to 1) cover anticipated projects; 2) unexpected projects; 3) and to service the loan. We have an older building; we have to be prepared.

Consequently, I have tasked Larry Hirschman to prepare a comprehensive financial plan and draft budget that is more in line with more conventional thinking for condominium finances, and that places the Association back on a more sustainable path.  The draft budget will be presented to the Budget and Finance Committee and the Board for review and revision.

10.               With a new management team in place, it might be helpful to review the role and purpose of the monthly Board meetings – an item which was addressed at the June Board meeting, and touched on at our last meeting. 

The monthly meetings of the Board are for the purpose of conducting the business of the Association.  The Resident Comment Period is the time allotted for owners’ comments.  It occurs at or near the beginning of the meeting to allow owners an opportunity to voice their concerns about the agenda prior to the Board taking a vote.  Comments are limited to 3 minutes to give everyone an opportunity to speak.

At regular Board meetings, the Board may request topics to be limited to those on the agenda so the Board can conduct required business in a timely manner.  No one is prevented from bringing up any subject, but residents are urged to limit their comments to items on the agenda so that the meeting will move along quickly.

On the other hand, the Annual Meeting, held in May of each year, is different from regular board meetings. Unlike the regular monthly business meetings of the Board, the Annual Meeting, operationally, is the one meeting where owners may bring up for discussion any topic relative to the governing of the Association.

In addition, Conversations with the Board was established expressly to provide a one-hour monthly open forum with the Board during which time residents can raise any concerns they wish without regard to topic or time limitation.  This is the appropriate forum to address any issue of concern, whether or not it was on the agenda for our monthly meetings.