MINUTES of a Regular Meeting of the Board of Directors of the Elilzabeth Condominium Association, Inc. (“Association”), held on February 10, 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 December 16, 2008 was made by Ms. Gann with a second by Dr. Muller. The minutes were approved as corrected.
A motion to accept the minutes of the regular meeting conducted on January 14, 2009 was made by Dr. Muller with a second by Ms. Barth. The minutes were approved with the addition of a written protest by Mr. Axelrad. That
statement is attached to these minutes.
PRESIDENT’S REPORT:
Mr. Cunningham announced that the final draft of the
Reserve Study has been received. In addition, the final draft of the
FY2007-2008 audited financial statements will be completed and distributed to the Board within the next two weeks. A preliminary
Energy Audit had been distributed to the Energy Committee for review.
An
updated new five-year plan will be drafted in March 2009.
A
contract with Hartman Design Group, Inc. is in negotiation and should be signed within the next two weeks. The President will appoint a three-person committee from the Board to work with the designer. The President will also appoint a non-Board member advisory committee.
There is no report on the management company proposition. The Board is waiting for a proposal from Legum and Norman, which will include options. A contract will then be negotiated.
A Nominating Committee will be appointed in March, with a “Meet the Candidates” night in April and the Election/Annual Meeting in May 2009.
TREASURER’S REPORT:
News
We are concerned about the fact that
delinquencies for January and February almost doubled to 4.3%. We are not yet certain if this represents the beginning of a trend reflecting the negative effects of the economic crisis on some of our neighbors. If overdue fees are not paid by this Friday we will have to send some of these cases to Lerch Early for legal action.
Asset Allocation
As of 1/31 we had almost $2.7 MM in cash and investments, 14 % growth YOY. We have slightly
over $2 million in reserves, 14% higher balances than where we stood at this point last year.
We have been investing at slightly longer maturities in an effort to earn an interest rate over 1% p.a. and since it will be a few months before we need cash for major capital expenditures relating to the start of the refurbishing project. Our investment strategy remains primarily defensive, as we have been seeking to invest our money in creditworthy institutions rather than to maximize returns.
Monthly Performance
January net income of $42K is overstated due to the early timing of this month’s Board Meeting and the non-receipt of key bills such as natural gas and water. As such, a monthly analysis is not useful since final figures will change. In January, we transferred almost $44K to reserves and spent only $4K from reserves on façade repairs and the final payment for the Reserve Study.
FY 2009 Year to Date (YTD) Results
For the seven months ending 1/31, net income was $102K, 32% less than what we had budgeted. Specific line
items over budget are:
• Interest income lower by 41% and 37%, respectively, for operating and Reserve investments, due to lower prevailing interest rate environment
• Accounting due to timing of payment relating to audit services and extra services incurred due to wait for Reserve Study
• Other Admin due to new phone system, to be reclassified as Office Equipment
• Uniforms due to higher service cost and additional uniforms purchased
• Other personnel due to replacement of time clock
• Sauna & Exercise Room due to purchase of new rower machine
• Other Amenities due to purchase of TV for West Lobby
• Electricity due to our failure to meet “Utility Challenge”
• Elevator maintenance due to inspection and repair work on several elevators out/malfunctioning
• Inspections due to fire system/sprinkler inspections
• Trash removal due to additional bulk pickups
• Association activities due to social activities Board has sponsored that were not in original budget
We have transferred $306K to reserves this year to date and spent $189K from reserves mostly on façade repairs, fire horn installation and correction of electrical system deficiencies.
Comments from the Floor: Ms. Dillon, #718, asked why the utility expense figures were different on the financial statements and on the utility usage chart, Ms. Fridell explained the the figures on the financial statements are accrued forr the month in question, while those on the utility usage chart are the total amount of the bill received for that month. Mr. Cunningham said that the electric utility rates increased in December 2008 when a new contract went into effect. Ms. Mudd, #1617, asked what the uniform fees covered. Ms. Fridell replied that they were for front desk uniforms. Mr. Cunningham said that they were also for maintenance uniforms.
Ms. Dillon, #718, also said that incomplete monthly financial statements should not be presented to residents since they do not accurately represent all the expenses for the month. Ms. Fridell replied that whenever monthly financials are understated due to non-receipt of bills, as is the case for January 2009, she states this in her Treasurer’s Report. Ms. Fridell stated that the Board had decided that it preferred the timeliness of receiving/presenting the previous month’s financial statements to a two-month delay, despite the risk of potentially diminished accuracy.
MANAGEMENT REPORT:
A copy of the Management Report, dated February 10, 2009 is attached hereto.
OLD BUSINESS:
A proposal will be presented for the purchase of an emergency generator for $40,000 from Cummins Power Systems, Inc. Mr. Cunningham recommended accepting the proposal.
A proposal will be presented for modification of the electrical system to ensure power to one bank of elevators in the event of an emergency situation. Mr. Cunningham recommended delaying acceptance of this proposal until further information is received. He expressed concern with Mr. Fauss’ delay and wants assurance of faster turnaround. He also wants to know exactly what Otis Elevator is proposing for $55,000.
Dr. Muller made a motion to purchase the
emergency generator for $40,000 from Cummins Power Systems, Inc. Ms. Kielty seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
The Energy Audit recommendations included replacing fluorescent bulbs, mainly in the garage; window replacement, caulking and sealing windows and doors and heat variations in the east and west corridors of the building.
NEW BUSINESS:
Committee Reports:
Refurbishment Committee: Jason Fisher, our ECA Counsel, is negotiating with Hartman Design Group, Inc. on the design contract.
Energy Committee: Mr. Drazin, acting Chair, reported that a Committee meeting will be held on February 12th at 8 p.m.
Social Committee: Ms. Barth said there have been seven social events thus far this year; four were free and three were fee-based. The budget is very limited. The television will be on for the Oscars and basketball tournament finals.
On February 24, 2009, Ms. Peg Downey will host a presentation on reverse mortgages at 7 p.m. There will be no sales involved; it will be an informational meeting only.
On March 5, 2009 Ms. Sharon Bobb will host a program on Suspicious Activities by the Montgomery County Police Department’s Commander Russ Hamil.
A kick-off barbeque at the beginning of the summer season and another party at the end of summer are also being planned.
Ms. Barth commended her committee for all their hard work.
Exercise Room Committee: Ms. Kielty reported that three vendors have looked at the Exercise Room area. The Committee met with Fitness Resources, who has providedf equipment to the Elizabeth previously. Further discussion of the existing equipment and cost/financing options are necessary before proceeding any further.
Americlean has presented a proposal to clean in-unit air ducts and McQuay units at the same time that the hall units are cleaned. Further information is needed so residents can decide whether to have their individual units done.
Security: Management proposed to reinstate Saturday and Sunday doorman shifts from 7 a.m. to 3 p.m., when more residents are home and may need to go to storage, help with packages, etc. Dr. Muller indicated that the extra cost for such service would be about $10,000. Without a security person at the front door, cars are once again remaining in the driveway, and the luggage carts are not being signed out and are not readily available. Mr. Cunningham asked that Mr. Polite obtain more specific information on the weekend services so the Board can vote on this issue.
Contracts:
Ms. Barth moved that the Board approve a motion to purchase an emergency generator from Cummins Power Systems, Inc. for $40, 648. Dr. Muller seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Ms. Barth made a motion to Americlean to clean the tower air handler ducts and grilles for $7,628. Ms. Kielty seconded the motion. Mr. Axelrad suggested that management obtain another bid.
Mr. Axelrad made a motion that a contract be signed to clean towers at $540 each. Ms. Fridell seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
House Rules: Mr. Axelrad reported that there had been twelve (12) sets of comments from residents. There were three themes: (1) clarifications of changes should be made, (2) rules should be more restrictive of owner rights and common area useage, and (3) rules should be less restrictive of owners’ rights and common area useage.
Mary Catherine Curran, #310, expressed concern about music in the Party Room. There was discussion about the noise levels, keeping the Party Room door closed when music is being played, etc. Ms. Dillon, #718, said that the previous Board adopted the rule because party parricipants roamed beyond the Party Room into common areas. Mr. Treback, #1407, said the problem is sound amplification. Ms. Sandler, #211, reported the issue of young people leaving the Party Room and going into the common areas. Ms. Gann suggested that management should enforce the House rules regarding loud noise, etc. Ms. Olshan, #1014, suggested an appropriate ratio of adults supervising children, based on age and number of attendees. Mr. Cunningham called for a vote on the revised House Rules.
Mr. Axelrad moved to adopt the House Rules with modifications previously distributed to the Board. Ms. Gann seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, and Dr. Muller voted in favor of the motion. Ms. Barth voted against the motion. The motion passed.
COMMENTS FROM THE FLOOR:
Ms. Quarterman, #906, asked about priorities for refurbishment. Mr. Cunningham informed her that no priorities had been set. The designer knows the budget and will present her recommendations for priorities. The Board will then decide how to proceed.
Ms. Alenier, #301, suggested that the Board consider new windows. Mr. Rich said he had put plastic over windows in the bedroom and this has resulted in less cold air leakage. He said he had not turned on the heat even once since covering his windows.
Ms. Downey, #615, stated that this is a good time to check the cost effectiveness of new windows.
Ms. Dillon, #718, stated that Article 10 of the By-Laws states that commercial events are not allowed in the Elizabeth. She stressed that the presentation of reverse mortgages should be informational only.
Ms. Dillon asked why the FY 2007-2008 audit statements were not ready and stated that it is eight months past the 6/30 fiscal year end. She recommended that the audit be distributed to residents in a more timely fashion next year. Ms. Fridell responded that the draft audited financial statements have been available since October 2008 for residents to review as she announced at previous Board Meetings. As discussed in previous Board Meetings, the Board decided last fall to delay publishing the audit so that the results of a full Reserve Study, commissioned by the Board, could be included. The final audit was delayed by a wait for the Reserve Study to be completed.
Mr. Jones, #307, asked why there was not an external advisory committee to study management companies, as there was for the refurbishing project. Mr. Cunningham explained that a special meeting to discuss management companies was held in January, 2009; the Board legally could have held an Executive Session to discuss this issue, since it is of a personnel nature.
Ms. Winthrop, #1114, asked that the Board consider signing a one-year contract with a management company to see how things work out. She also suggested waiting before signing a contract with a management company and having a referendum on the issue.
Ms. Miller, #607, asked that there be a referendum on the management company.
Ms. Feldman, #1819, asked what was the purpose of having a Board if residents are going to have a referendum and make decisions.
The meeting was adjourned at 9:20 p.m.
[These minutes were prepared by Judith Gann, Secretary of the ECA, and Karren Alenier posted these minutes to this blog. Alenier has bolded some of the issues for ease of locating specific topics. The ECA Board Meeting Minutes is a public document and available in paper copy at the ECA Management office.]
On March 4 over 20 Elizabethans assembled in the lobby to meet the senior building engineer Jimmy Keating for a tour of the Elizabeth's inner workings. 
