Summary of ECA Board Meeting September 25, 2018

Board Present: Zlatan Beca, Makarand (Mak) Dehejia, Monique Fridell, Al Muller, Lyle Schwartz, Rhonda Taller, Christopher Wemple

Others Present: ECA General Manager MaryAnn Hall, Assistant Manager Romaine Cureton, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer)

Highlights of the meeting:

Embezzlement of Funds: our former Gates Hudson Portfolio Manager, Larry Hirschman, a long-time employee, has been Involved in embezzling funds from the Elizabeth.  A total of $72,000 had been taken over a two-year period.  ($68,000 in 2016 and $4,000 in January of 2017).  We have been working closely with Gates Hudson to ensure all missing monies are accounted for.  A forensic audit is being conducted.  Gates Hudson will be responsible for replacing the stolen money, and other costs that may be incurred by the Elizabeth in resolving this issue.

Motion proposing a House Rule to ban smoking on balconies was withdrawn by Dr. Muller. Residents were invited to provide their comments on the proposed rule at this point in the meeting.  Many residents spoke out against the motion, citing difficulty in enforcement (i.e., locating smokers) and the concern that it would force smokers inside the building where smoke would enter our ventilation system, while smoking on balconies allows the smoke to dissipate into the environment. Only two residents spoke in favor of the House Rule. 
 

Instead of a House Rule to ban smoking on balconies, the Board asked Counsel to draft a bylaw amendment to ban smoking in the Elizabeth.  Counsel pointed out that the current proposed bylaw amendment is modeled after ones used by the Promenade and two of the Grosvenor condos.  He explained that violations of the smoking ban are handled in the same way as violations of other house rules, such as noise violations.  That is, the complaint is investigated, probable cause determined, a hearing held, evidence presented, after which the Board then determines if a violation occurred. If the Board so determines, the Board then sanctions the offender in accordance with the provisions of the bylaw.  A new proposed bylaw will be presented to the community sometime in the future.

Factors to be considered in drafting this bylaw are whether to grandfather-in current smokers (and the details of such a provision), whether to have a designated area outside for smoking, and how to handle e-cigarettes and medical marijuana.  When asked about whether leases would have to be modified should the bylaw pass, counsel responded that such would not be necessary as all leases are subject to association bylaws.

Board voted to approve the new health insurance plan for employees at a cost of $64,826.28, a United Health Care National Point of Service (NPOS) plan.  Employees are currently covered by a CareFirst PPO, which is appropriate for a large company with many employees that travel world-wide.  We have six (6) employees.  The renewal would have cost the Association approximately $92,180.52.  In its deliberations, the Board considered the CareFirst POS, which is less expensive than the current PPO, as well as the United Health Care NPOS. 

The Board chose United Health Care NPOS, which will cover all of our employees’ current primary care physicians and specialists and provides comparable service, but at a savings of $27,354.  MaryAnn Hall was given kudos for her investigation of health care providers and policies leading to this savings.

Treasurer, Lyle Schwartz led a discussion of a proposed Financial Investment Plan for the Association which would guide the Treasurer, our financial management team at Gates Hudson, and our representative at Morgan Stanley in moving cash into appropriate investment vehicles.  Morgan Stanley provided a draft or template for such an investment policy.  The Board approved a modification of this draft investment policy.  It now goes to Counsel for legal review and approval. 

As of August 31, the Association had $601,242.61 in cash in our Operating Contingency Fund at Union Bank, earning little interest.  The plan is to establish a separate Operating Contingency Reserve Fund at Morgan Stanley into which we will transfer this money.  It will still address any unanticipated operating expenses, but with a better return.

Mr. Schwartz mentioned that all inter-fund transfers will be delayed until we have a full audit from the Goldklang Group, providing accurate numbers for transfer of funds from the Reserves and Operating Contingency Fund to an Operating Fund. 

The Board approved an additional $59,700 for Corrosion Inhibitor Treatment (CIT) to be applied to concrete repairs to prevent corrosion.  The only other option to prevent corrosion is a procedure that costs about twice that much, Vector XP 2 Anode, and our consulting engineer, FEA, recommended the less expensive CIT treatment, explaining the treatments are equal.

Empty Apartments: The ECA president asked that residents report any odors coming from vacant apartments. Some apartments have been unoccupied for many years.