Board Meeting, Feb 23rd

The letter below was sent to the Board on February 24. It was my original intention to speak at the board meeting last night when the floor was opened to discussion. However, I became so incensed at the proceedings that I feared my “talk” would dissolve into a screaming diatribe directed at the Board. As much as this would have been deserved, reality is it would have accomplished nothing.

Last night I attended the monthly Board meeting. Quite frankly I was appalled. I was both appalled at the behavior and the actions of the Board. The Board President spent some time decrying the rudeness and general lack of civilized behavior on the part of the ownership. She was quite correct, civility and good manners have all but disappeared. That was clearly evident last night. However, I believe the blame for this sad state of affairs can be placed directly at the feet of the Board.

The Board members are elected to represent the interests of the owners and oversee the management of the Condominium Association. I understand completely that being on the Board is voluntary. There is no compensation; it takes time from the member’s lives and its hard work. People take on this responsibility for various reasons. To some it’s prestige, to others it’s an altruistic desire to better the common good and some look at it as simply a way of protecting the investment in their home.

Regardless of what your particular motivation for serving might be, Board membership comes with certain obligations both legal and moral. One of these obligations is to act in a fiscally responsible manner when dealing with the finances of the Association. Here in lies the problem. A significant percentage of the ownership believes the Board has not done this with regard to the renovation project, myself included.

The people are angry and the majority of the Board has simply chosen to ignore their concerns. Several Board members appear to have their own agenda and the ownership be damned. You were given a budget and you exceeded it. The purchase of the piano is a poster child for what I and many other owners consider uncontrolled spending.

Last night we heard the absurd justification for its purchase; “it’s in the budget”. I’m sorry but it wasn’t in the budget. A piano can certainly be considered furnishings, but it is not furniture. There is a very important distinction here. Sofas, chairs, tables and chests are furniture. A piano is an accessory.

The budget was spent. It might not have been spent as originally planned but the fact remains the money allotted for the renovation was spent. At least an hour was spent at last night’s meeting discussing the cost overruns for the design company. There were unforeseen expenses such as the Lobby windows. This happens and no one is at fault. Sound fiscal management would dictate that if one segment of your project had cost overruns then nonessential items should be dropped from the project. I hardly consider the expenditure of almost $20,000 on a piano a necessity.

I live in the West Tower on the 18^th floor. The hallways have a drop ceiling. That ceiling is broken and sagging in several places. It’s filthy and water stained. In a number of places the wallpaper is starting to peel away from the wall. The hall more closely resembles public housing than a Chevy Chase condominium. It’s an embarrassment but we have a shiny new piano in the lobby! I would like each and every member of the Board who voted for the purchase of that piano to come up to the 18^th floor and then try and justify the expenditure of $20,000 on a piano.

No one is asking Al to take a financial hit on the purchase of the piano. I believe he, like several other members on the Board, had their personal agendas but I believe he was acting in good faith and should not be punished for his actions. However, the piano needs to be either sold or returned and the funds put back in the reserves.

Lobby Renovations

The letter below was sent to the Board of Directors on February 5. A number of board members subsequently responded. I found it rather strange that several board members were unaware of the piano purchase:

I would like to comment on the Lobby renovations. It’s quite obvious that this has been an extremely contentious issue among the owners of the building. In my mind I don’t think there was any question that the renovations were necessary. Should we have allocated as much funding as we did; I really can’t say, I do not have a clear concept of what a renovation should or shouldn’t cost. At this juncture it’s a moot point.

For the most part I’m happy with the results. I think the overall design was well executed and is practical. The designers took a cavernous space and reduced it to three usable areas. I would like to commend whoever was responsible for choosing the artwork. With the exception of a couple of pieces that appear to have been pilfered from the local Holiday Inn, I find it outstanding. Someone got a little carried away with the tchotchkes and the upholstery is not a style I would have chosen; however that is a matter of personal taste and I don’t find it offensive.

This week however, I was offended. I was offended when I saw the piano rolled in. I don’t know exactly what was paid for that piano but a piano of that size and style typically costs $18,000 to $25,000. In addition it requires yearly maintenance. I have to ask, what were you people thinking? You have paid approximately $20,000 for what is essentially a space eating sculpture that will receive little or no use. I’m sorry but that is patently absurd.

Given the current climate of anger and animosity present among the residents did you not consider perhaps this was not a good idea? This was not a custom piece that could not be cancelled! The most ridiculous argument I heard justifying its purchase was “it was in the budget”. Just because something is in the budget does not mean it has to be purchased.

If you insist on spending the money why not look elsewhere? As an example we have a fitness center that is filled with dilapidated and out dated equipment, some of it in excess of 20 years old. The fitness center is used by numerous residents on a daily basis. It’s not an exaggeration to say the fitness center gets more use in a day than the piano will in a year. $20,000 would have gone a long way toward modernizing the fitness center; a facility used by a significant number of residents regularly. I would like made public exactly who is responsible for authorizing the purchase of the piano. I believe the owners have right to know.

Summary of Jan 19, 2011 Elizabeth Condo Board Meeting

Present at the meeting: Alexandra Kielty, Charles Bressler, Molly Frantz, Monique Fridell, Seth Levine, Al Muller, Scott Murdoch, Jim Santos, recorder of meeting minutes. Judi Barth was absent.

Renovation. Furniture is coming this week Jan 25-27. Tues-Thurs. some inconvenience with elevators. Staging area is party room.

Audit Report. Auditors had to change the audit report presented last month. They used an estimated 2010 amount from PEPCO. When the actual number was established, it was double the amount. This reduces homeowner equity.

Security. Fob will be phased in, one floor at a time. 2 per apartment or buy extra at $10. Some doors need to be worked on, not all completed. Key pads for arcade will stay in place.

ECA working session on January 31 at 6:30 pm. 5-year plan and prioritizing building improvements. There will be no participation from the floor.

Marble Floors Restoration. Need special maintenance process done after furniture installation

Delinquencies. Discussion of collection fees procedures. Delinquencies being worked on with some success.

Hazardous Waste. House Manager Jim Santos says we have a collection of paint cans for example and he wants to hire a company to remove such hazardous waste. He got name of company through a recommendation.

Pipe Cleaning. 3 apartment tiers in The Elizabeth need pipe cleaning relative to water backup problems. Board gave approval to proceed.

Canopy in Front of the Building. Discussion but no action due to cost and various issues that do not solve problems of bad weather and cars discharging passengers.

Projects under review by house manager:
1. Arcade stairwell painting (2 proposals in hand)
2. Garage painting at egress points (2 proposals in hand)
3. HVAC 4-pipe reactivation (2 proposals in hand)
4. Garage fan replacement (2 proposals in hand)
5. Garage door operation/maintenance (adding key fob reader)
6. Fire alarm panel upgrade
7. Fire alarm code compliance for commercial owners
8. Energy conservation
9. Management office/front desk networking
10. Staffing duties, performance
11. Residential Directory (98% complete)
12. Reactivation of newsletter
13. Introduction of website into management opera

Website: discussion about how there is no package notification capability

December 2010 Minutes of ECA Board Meeting

THE ELIZABETH CONDOMINIUM ASSOCIATION
4601 North Park Avenue
Chevy Chase, MD 20815

Minutes of Board of Directors Meeting December 20, 2010

Board Present:
Dr. Alfred Muller .........................Vice President
Monique Fridell ...........................Treasurer
Molly Frantz ...............................Assistant Treasurer
Charles Bressler ...........................Secretary
Judith Barth ................................


Board Absent:
Alexandria Kielty .........................President
Seth Levine .................................Director


Others Present:
Scott Murdoch ...............Community Manager, Legum & Norman
James M. Santos ...........ECA General Manager
Jana Bowcut .................Recording Secretary, On the Record


Call to Order: Dr. Muller called the meeting to order at 7:30 p.m.

Announcements: Dr. Muller stated that Ms. Kielty asked him to conduct the meeting in her absence. Dr. Muller reported that a resident was recently struck by a car behind the Community Center. She is stable and is at Suburban Hospital. He advised residents to be careful. A New Year’s party will be hosted by the Village Council from 2:00 to 3:30 p.m. Dr. Muller thanked the staff who decorated the lobby for the holidays, despite not having furnishings in place. He noted the three staff members who have worked at the Elizabeth for 35 or more years -- Cynthia Edwards, Hollis Alleyne and Jimmy Keating -- and remarked that their dedication will be recognized formally when Ms. Kielty returns. A successful “Box” party was held on December 4, 2010 where toiletries were gathered and packaged for the beneficiaries of the charity So Others Might Eat. Residents may contribute to the holiday fund for staff until December 23, 2010. Dr. Muller also thanked the Social Committee and Ms. Barth for a successful holiday party held on December 19, 2010.

Approval of Minutes:
MOTION
Mr. Bressler moved, Ms. Fridell seconded, to approve the November 15, 2010 regular meeting minutes as amended with one correction (Ms. Frantz noted that on page 29 the first full paragraph should read “expenditures exceeded income by $241,000”). The motion passed with one abstention by Ms. Barth (4-0-1).

Treasurer’s Report: Ms. Fridell introduced Tracy Geiger and Josephine Laleye from DeLeon & Stang, CPAs and Advisors to provide an overview of the audit for fiscal year ending June 30, 2010. The audit was deemed to be unqualified (favorable). Delinquent assessments increased, mostly due to past due fees from one particular owner. Overall, delinquencies stood at 1.3 percent of annual assessments as of 6/30/10, which is favorable compared to the industry standard. The Treasurer and volunteer residents did a lot of valuable work going through accounting records and clearing fully depreciated assets from the fixed asset schedule. Net income of $120,000 in the Operating Fund, which is about three percent of annual assessments compared favorably to last year’s loss of $120,000, mainly due to a decrease in repairs/maintenance costs by $250,000, a decrease in courtesy patrol/security costs of $70,000, and a decrease in utilities which were about $80,000 under budget. The professional management fee for Legum & Norman was $90,000 and is reflected in a new line item expense on the income statement. The overall operating equity of the community is about 22 percent of annual assessments, which falls within the target of 20 to 30 percent.

Dr. Muller noted that the decrease in utility costs can be attributed to the efforts of the Energy Committee, which is chaired by Joan Rosenbach.

Ms. Geiger asked if there were any questions about financial management or the auditors’ findings from Board members or residents present in the audience. There were no questions. MOTION Ms. Fridell moved, Mr. Bressler seconded, to approve the audited financial statements for fiscal year-end June 30, 2010. The motion passed unanimously. Ms. Fridell asked that Management proceed immediately to send the approved FY 2010 audited statements to the printers so that they could be distributed to owners by 1/31/11.

Old Business:

Lobby Renovation: Mr. Murdoch noted that the chart in his Management Report reflected the fact that design fees incurred on the refurbishment project now exceed the original estimate by $6,000. Ms. Fridell expressed concern about this given that the Board had passed a motion that design expenses paid to Hartman Design Group would not exceed $250,000. Ms. Barth stated that there is little work remaining, principally the final walk through and sign-off. Ms. Fridell requested that the Hartman Design Group provide an estimate of how many hours worth of work are remaining. Ms. Barth stated that placement of furnishings will require two days of HDG time, and probably another half of a day for the final sign-off. Dr. Muller suggested talking to HDG to see if there might be some negotiation possible regarding the invoices for the last part of the refurbishing project.

Ms. Frantz asked about a numerical discrepancy between two charts in the Management Report regarding the design fees. Ms. Frantz requested that in future tables for cash management and planning, there be an additional column for “funds required to complete project” so that it could be clear which amounts were still estimated to be paid and which amounts were over budget.

Emergency Generator: Mr. Murdoch stated that the project is complete, and has been signed-off. The generator is in operation and is run for 30 minutes every Wednesday morning. The generator project was budgeted for very carefully, but unfortunately ran significantly over-budget due to Montgomery County Code Compliance issues, additional engineering time required to redesign the air intake and relief duct equipment.

New Business:

Collections Procedures: Ms. Fridell stated that although the auditor was not concerned about ECA’s delinquency rate of 1.3 percent, she is concerned about the tripling of delinquencies since L&N assumed financial management and felt that Management needs to be more proactive and assertive in managing collections. In a memo to L&N dated 11/21/10 she proposed as a formal objective to the Board and Management that ECA restore its historically lower delinquency amounts and requested that Legum & Norman review the collections process and take the following actions: 1) Report on each delinquent case in greater qualitative and quantitative detail, documenting dates, contacts, situational information. 2) Provide a memo to explain whose responsibility it is to perform day-to-day collections responsibilities and to serve as liaison with Lerch Early. 3) Make recommendations to the Board as a delinquency nears the 60 day past due point when a case needs to be turned over to counsel for legal action, per ECA Collections Policy. 4) Confirm in writing that all L&N personnel involved in collections activities have read and understood ECA Collections Policy.

On advice of the Association’s legal counsel, Lerch, Early & Brewer, Ms. Fridell recommended eliminating the courtesy demand notice that is sent by Lerch Early, as such a letter would have already been sent at least twice by ECA itself. She remarked that this is what many condo associations are doing to accelerate the collections process and reduce legal fees. Instead, legal counsel would immediately send the delinquent owner Notice of Intent to Create a Lien. Ms. Fridell stressed that owners who may be experiencing hardship in paying their assessments should contact Management as soon as possible.
MOTION Ms. Fridell moved, Ms. Frantz seconded to eliminate the courtesy demand notice sent by Lerch, Early & Brewer to owners who are over 60 days delinquent in condominium fees. The motion passed unanimously.

MOTION
Ms. Fridell moved, Mr. Bressler seconded to set a goal (excluding the balance of a current large delinquency case) to lower delinquencies to $20,000 or below by June 30, 2011. The motion passed unanimously.

MOTION
Ms. Fridell moved, Dr. Muller seconded to pay a bonus to those employees whose collections efforts/actions result in achieving the target goal of lowering delinquencies to $20,000 or below by 6/30/11. Mr. Bressler stated that the Association already pays employees for this purpose and that a bonus will not make delinquent owners any more responsive. Ms. Frantz stated that bonuses can serve a good purpose, but feels that progress is already being made since Ms. Fridell’s memo to L&N in November and that a bonus is not yet needed. Dr. Muller suggested tabling this discussion to the next meeting when additional board members are present. The motion did not pass.

Items Requiring Board Endorsement:

-Valve Replacement: Mr. Santos stated that the Washington Suburban Sanitary Commission (WSSC) discovered two valves that no longer operated properly. These valves would not close allowing water to be controlled during the backflow preventer code compliance project. The valves were original equipment and inoperable, therefore requiring replacement. These repairs were identified as desirable in the Mendoza report.

MOTION
Mr. Bressler moved, Ms. Fridell seconded to endorse the proposal from Poole Mechanical Corporation for $2,980.00 for valve replacements. The motion passed unanimously.

-Replacement copper pipes: The piping for large water supply lines was corroded and had to be replaced to complete the backflow preventer project. This was not cited in the Mendoza report, but can be done now as Management would have recommended this project in the HVAC renovation master plan.

MOTION
Ms. Frantz moved, Mr. Bressler seconded to endorse the proposal from Poole Mechanical Corporation for $7,520.00. The motion passed unanimously.

-Replacement of aluminum ventilation louvers: Five ventilation louvers were obstructed and had to be replaced.

MOTION
Ms. Frantz moved, Ms. Fridell seconded to endorse the proposal from Macon Metal for $2,440.00 for the replacement of aluminum ventilation louvers. The motion passed unanimously.

-Bulk Trash Removal: Management and staff have been working on cleaning debris and old items from many areas in the building. Through coordination with the HBW Construction Group, bulk trash dumpsters were brought on site to dispose of these items.

MOTION Ms. Frantz moved, Ms. Fridell seconded to endorse the proposal from HBW Construction Group for $3,660.00 to provide labor, supervision and trash containers to remove the bulk debris stored in common areas around the building for the past 30 years... The motion passed unanimously.

-Planet Aid: Mr. Santos stated that Planet Aid contacted the Elizabeth to see if there was interest in installing their donation containers on the G1 level. There is no cost to the Association, and the bins are cleaned out regularly and may be removed with a 30-day notice. Ms. Frantz presented her research that the American Institute of Philanthropy does not rank this organization highly, and suggested that other alternatives be explored. Mr. Santos said he would review this further. Ms. Frantz offered her assistance in identifying some other possible organizations.

Ms. Fridell expressed concern that the above endorsement motions represent about $16,000 worth of expenditures authorized Management without prior Board approval. She offered that for the sake of efficiency the Board could grant advance signing authority to Management up to a certain dollar amount. She asked Management to propose an amount for the Board to consider.

Environmental Solutions, Inc. (recommended by HBW) conducted air quality tests in the party room, based on concerns about air quality in common areas. No health or environmental risks were found. Ms. Fridell inquired why tests were only done in the party room. Mr. Santos explained that that is the only common area that is enclosed and would provide a reliable reading. Air transfer in other common areas would result in a greater margin for error.

Mr. Santos stated that the brass plates around the call buttons for the elevators on the lobby level in both the east and west towers are original and will be replaced.

Mr. Murdoch praised the efforts of Mr. Santos in coordinating the work of the contractors throughout all of the renovation and improvement projects, while being considerate of the comfort of the residents. Board members and residents agreed and thanked him for his work.

Ms. Fridell inquired when projected reserve expenditures/projects would be discussed by the Board. Mr. Murdoch stated that a work session will be scheduled in January. Mr. Santos is preparing a master planning document that will outline all these items and include cost projections. Management will distribute this information to Board members prior to the work session.

Ms. Barth expressed her desire to see greater professionalism reflected in the uniforms of front desk employees. Mr. Santos stated that he will soon be making recommendations to the Board regarding male and female dress codes.

Ms. Barth also inquired about the Board’s previous discussions/concerns about allowing only licensed contractors in the building. Mr. Santos stated he plans to edit the Board’s previously provided comments on Management’s proposed Contractor Policy and to provide a second draft to the Board for the January meeting.

Mr. Bressler expressed concern about the new filing and organizational system for the staff behind the front desk. Mr. Santos stated that the system has not been in place for long, and that time should be given to see if it works. The plan will be amended if needed. Ms. Fridell asked that Mr. Santos emphasize to staff that they need to be accurate in placing items in the correct folders for each unit. Ms. Barth added that much design effort went into streamlining the front desk and providing more package space. The previous bulky wooden cubby-hole cabinets were removed to provide more space for the package room and business center.

Committee Reports:

Energy Committee: No report.

Library Committee: No report. Mr. Santos stated that the committee will review books on Wednesday and will begin placing them on the shelves.

Exercise Committee: No report.

Floor Representatives Committee: No report.

Social Committee: The holiday party was a great success with almost 300 residents in attendance. The annual box party was held on December 4, 2010, and 268 boxes with hats, scarves, gloves and toiletries were collected for contribution to beneficiaries of the charity So Others Might Eat (SOME). Peg Downey, the sponsor and organizer of the Box party, would like to expand the project in the future.

Landscaping Committee: The committee held its first meeting with Ruppert Landscape last week to discuss ideas for the landscape master plan. Ruppert will share its proposed design in January.

Open Comments:
A resident expressed disapproval of the petition that is circulating among residents criticizing the refurbishment process. She stated that the money for this project had been set aside for five years and that the cost of refurbishment is not responsible for the Association’s current financial state. She added that several past boards were reluctant to raise condo fees, resulting in potential under-funding of reserves. . Previous statements regarding the fire-rating and integrity of apartment doors were corrected.

Another resident explained the rationale behind the petition that has been circulating throughout the community. A number of residents are concerned about the way decisions were made about the refurbishment and are worried that the upcoming plans to refurbish the hallways of both towers will dwarf the costs of the lobby. Currently 68 individuals representing 58 units have signed the petition, representing 15.12 percent of the Association’s membership. He expressed concern about Hartman Design Group (HDG) performing the next stage of refurbishment work, and considers the firm’s fees to be too high. The petition calls for a restructuring and expansion of the membership of the refurbishment committee to include three new members.

Former Board president, Mr. Cunningham, complimented the Board on the near completion of two major projects – the lobby renovation and the emergency generator -- and also praised Mr. Santos’ project management skills . Mr. Cunningham stated that the cost of these projects was provided for and published in several five-year plans, with the exception of the unexpected budget excess for the emergency generator. He also noted the sound financial statements and recommended that some clear project priorities should be set for the future given the size and scope of upcoming projects.

Dr. Muller announced that a new snow blower has been purchased.

A resident stated that in his opinion the lobby area is very cold and the space heaters that staff are using are dangerous. Dr. Muller replied that Management had received opinions to the contrary, noting that it is difficult to please everyone. The resident stated that a wall with a sharp corner near the west elevators has been damaged and repaired several times, and something is needed to prevent recurrence of the damage. The resident also suggested putting glass inserts in the cabinet doors of the library so that books can be visible.
-A resident expressed his satisfaction with the lobby refurbishment and considers that his condominium fees are being used appropriately. He added that the trend of increases in condo fees seemed reasonable.

Adjournment
The President adjourned the meeting at 9:30 p.m.
The initial draft of the minutes, upon which these minutes are based, was prepared by Jana Bowcut of On the Record.

Respectfully submitted,

Charles Bressler, Board Secretary

Accomplishments in 2010

Let’s give a pat on the back to the ECA Board of Directors and Jim Santos & Scott Murdoch for the outstanding management leading to these accomplishments.

Completion of the physical Lobby Renovation Project
Even if certain aspects of the project aren’t to your taste, you have to appreciate that:
--Traffic flow on the lobby level was seamless.
--Work areas were kept clean.
--Residents were mostly unaware of the day-to-day issues.
--Our property values are on the way up.

Mendoza Rivas Engineer Study & Recommendations
--Finally no one has to convince anyone that windows, balcony doors, McQuay units have to be replaced as soon as possible.

Installation Emergency Generator
--a hard job that inconvenienced few people.

Completion of Landscape Master Plan
--We have one contractor who will do a professional job for all aspects of our landscaping. Look for results in the spring.

Regular Inspections of the Building
--House manager Jim Santos is quietly working behind the scenes to save us money by correcting old problems and addressing issues before we get citations.

Summary of December 20, 2010 Elizabeth Condo Board Meeting

Present at the meeting: Judi Barth, Charles Bressler, Molly Frantz, Monique Fridell, Al Muller, Scott Murdoch, Jim Santos, recorder of meeting minutes and two representatives from Deleon & Stang. Alexandra Kielty and Seth Levine were absent.

Audit Report:
Audit report ending on June 30, 2010, was approved as an “unqualified” audit which the lead Deleon & Stang representative explained was good.

Delinquencies:
Monique Fridell reviewed delinquency procedures that she recommended. She raised various questions:
--How long has the delinquency been overdue?
--Is this a hardship case or a bounced check?
--Who is responsible for collecting the overdue money?
--When should the case be turned over to legal counsel?

Recommendations included:
--Avoid delay in notice of intent to create a lien by cutting out courtesy letter from legal counsel.
--Advise owners that it is their responsibility to communicate with the ECA in the case of hardship so something can be worked out to avoid legal action.
--Give bonuses to employees for successful collection of fees due from delinquent owners.

Renovation:
Physical renovation of the lobby is complete. (Furniture on order.) Design fees exceeded budget by $6000.

Backflow prevention project: An unexpected set of expenditures (just under $13000) to address a citation issued by the Washington Suburban Sanitary Commission against the ECA. plumbing code requires a potable water supply to be protected from contamination by non-potable water, gases and solids. backflow preventer is a device installed on the pipes carrying drinkable water to prevent a "crossover" from other water which is non-drinkable. In other words, this device prevents water from our central plant (for heating and cooling) to blend with water going to residents, showers, kitchens, etc. This might happen if only there was a catastrophic failure in our plumbing system where negative pressure sucked water from the central plant into our domestic water supply; but a device is required. The backflow preventers must be inspected annually by WSSC and a licensed plumber. In the case of The Elizabeth's violation, three new backflow preventers were required for the boiler/cooling tower systems and a replacement to an existing device was needed.

Clean up projects: To avoid a Fire Marshall citation, 35 years of debris that had to cleared out of various places in the building but mostly the garage required an extra expenditure of $3660. Recommendation from our general manager to install a Planet Aide give away bin in the building but Molly Frantz suggested there were better organizations to use and asked Santos to look into that.

Concierge dress code was discussed.

Lobby level library set to reopen in December.

Social Committee:
300 people attended the holiday party.

Comments from the floor:
One owner expressed unhappiness with the renovation and asked for changes in who sits on the renovation committees as it pertains to the hall renovations. Judi Gann provided additional insight into the process of the lobby renovation. [Some of these pro and con discussions can be seen on this blog.]

Former ECA president Woody Cunningham expressed praise for the outstanding work done by Jim Santos during his short tenure here.

November 2010 Minutes of ECA Board Meeting

THE ELIZABETH CONDOMINIUM ASSOCIATION
4601 North Park Avenue
Chevy Chase, MD 20815

Minutes of Board of Directors Meeting November 15, 2010

Board Present:
Alexandria Kielty .........................President
Dr. Alfred Muller .........................Vice President
Monique Fridell ...........................Treasurer
Molly Frantz ...............................Assistant Treasurer
Charles Bressler ...........................Secretary
Seth Levine .................................Director

Board Absent:
Judith Barth ................................Director

Others Present:
Scott Murdoch ...............Community Manager, Legum & Norman
James M. Santos ...........ECA General Manager
Jana Bowcut .................Recording Secretary, On the Record


Call to Order: Ms. Kielty called the meeting to order at 7:30 p.m.

Approval of Minutes:
MOTION Dr. Muller moved, Ms. Fridell seconded, to approve the October 18, 2010, regular meeting minutes as amended. The motion passed unanimously.

President’s Report: Ms. Kielty stated that a community meeting was held last night to discuss protocols for use of the refurbished lobby common areas. Many residents attended the meeting and provided what Ms. Kielty considered valuable feedback.

Ms. Kielty thanked those who donated funds for a contract employee who lost her son. About $5,000 was collected. A special thank you to Elin Winthrop and Peg Downey who managed the donations, performed the necessary administrative effort to secure the funds and presented the gift.

Treasurer’s Report: Ms. Fridell reported that DeLeon and Stang delivered the draft audited financial statements on November 12, 2010. The draft audit and attachments will be reviewed and comments will be given to the accountants within the next few weeks. The audit manager from DeLeon and Stang will attend the December board meeting.

This year’s Management Letter to the Board cites several issues that Ms. Fridell has been raising over the last few months, which include:
• The auditor was concerned about the increase in delinquencies and advises the Association to improve its collections efforts.
• DeLeon and Stang cited the miscoding of invoices leading to the account posting errors that Ms. Fridell and Mr. Murdoch have been working to correct.
• There is a promptness issue relating to the reimbursement transfers from the operating to the reserve funds.

Ms. Fridell stated that there are some general financial trends of which the Board should be aware. First, at the end of the 6/30 Fiscal Year, on a draft basis, there was a combined net loss (expenditures exceeded contributions to reserve fund) of $241,000 mostly due to the spending from reserves on the lobby refurbishment project. There was also a 19% increase in total expenses from the previous year. This month for the first time, the Association’s reserve balances dropped below the one million dollar mark, which was projected, but which requires careful monitoring.

Second, Ms. Fridell expressed concern about the increase in delinquencies, which have tripled since June 2009. Almost half of all uncollected fees are from one owner. Ms. Fridell repeated her previous statements that the Board needs to make an effort to be cost-conscious and be aware that the reserves are earning very little interest.

Old Business:
Lobby Renovation: Mr. Santos reported that he will review a punch list with Hartman Design Group and HBW Group to identify items that need to be touched up. The public restrooms behind the post office boxes are in working order, and the front desk staff is expected to return behind the new front desk in the coming week.

Emergency Generator: Mr. Murdoch stated that testing is scheduled for the coming week. The project is nearing completion, possibly by the week after Thanksgiving assuming the tests pass this week.

Mr. Murdoch discussed the impact that the growth in costs of these two projects is having on the year end and reserve fund balance. There have been many issues that have increased the cost of the lobby project. The cost of the generator project grew by approximately $90,000, and the lobby project grew by approximately $120,000. Mr. Murdoch’s management report included updated projections of the reserve fund balances. On July 1, 2010 the beginning balance of reserves was $1,669,000. After adding the individual owners’ monthly contributions for fiscal year 2010-2011, then deducting the approved expenditures for the lobby renovation, emergency generator replacement and projected expenses from the five-year reserve expenditure plan, the projected balance by the end of the 2010-2011 fiscal year will be $463,253. Looking forward, Mr. Murdoch added that the Association should consider decreasing spending and increasing savings for a period of time.

Dr. Muller, referring to page 4 of the management report, asked whether the figure for furnishings and fixtures under lobby renovation costs should be increased from $326,000 to $350,000. Ms. Frantz answered “no” because $25,000 was removed for audio visual costs and placed in a separate line item. Ms. Kielty stated that the vote in July was to provide a budget of $350,000 for furnishings and fixtures and this did not include audio visual costs.
Ms. Fridell asked about an $8,000 change order relating to the generator project, and specifically whether this was a result of additional diligence by the project manager or poor planning. Mr. Murdoch responded that, in general, assumptions made about existing conditions for the generator were proven incorrect. This project, especially in regard to the exhaust system, code compliance, sound concerns, electrical room renovation requirements and value-engineering by the construction management team proved complicated when incorporating all parties concerns into the design.

Ms. Kielty stated that she has discussed with Mr. Murdoch the plan to hold a working meeting for the Board, possibly the second week of December, 2010 to discuss funding and planning for upcoming large projects. These capital improvement projects include the corridors in each tower, windows and sliding glass doors, and individual condominium fan coil units. Mr. Santos mentioned that he needed more time to do research and gather more information for discussion purposes and it was decided that the working session of the Board would be held some time in January.

Ms. Frantz stated that she attended a seminar at the offices of Lerch, Early and Brewer, which was designed to inform condominium associations about borrowing money and to introduce possible lenders. There are many considerations in borrowing, and Ms. Frantz thought that the Association would be a good candidate for borrowing. Most lenders prefer to have the reserves from a borrowing association housed with them, but this is not essential, as long as there is an arrangement to give the lender access to the cash as collateral. Ms. Frantz also stated that there was discussion about typical environmental concerns in buildings, such as asbestos and hazardous waste, and that it would be useful to obtain this type of building review. Also, it would be prudent to seek legal counsel for advice on the matter.

Ms. Fridell stated that when she began investigating loans two years ago, the Association requested and received an Opinion Letter from Lerch, Early and Brewer affirming that the Association has the authority to enter into borrowings. Ms. Fridell added that the Association also has back up sources of liquidity such as operating savings of over $485,000 and a line of credit established with Morgan Stanley. The potential line of credit available to the Association is linked to the cumulative investments placed at Morgan Stanley with a maximum loan balance set at one million dollars.

New Business:
Landscape Master Plan: The landscape committee presented proposals for the landscaping master plan and provided the Board with a written comparison.

MOTION: Dr. Muller moved, Ms. Fridell seconded, to approve the Ruppert Landscape proposal for developing a landscape master plan at a cost of $2,250. The motion passed unanimously.

Ms. Kielty noted that if Ruppert is hired to carry out the execution of the landscaping design, then the cost of the master plan will be credited to cost of that work. Ms. Fridell thanked the committee for its analysis memo, particularly since Ruppert’s bid was higher than those of its competitors, and the memo provided supporting rationale for choosing Ruppert.

Package Tracking Software Upgrade: Mr. Santos explained that the building receives 30 to 40 packages per day for residents. The front desk and management office strives to be diligent about managing these packages, but the package tracking software has failed and is an old version that the manufacturer (IntelliTrack) will no longer support. Other software packages were considered, but management determined that the best option is an upgraded version of the current software. Mr. Levine added that this is a one-time cost that also offers ongoing technical IT support. Management attempted to use the recently-established “Elizabethcondo.com” website provided by “AtHomeNet.com” to track packages, but discovered that once a package is delivered to the resident, the name is deleted from the archives, leaving no historical record available for future reference.

MOTION: Mr. Levine moved, Ms. Fridell seconded, to accept the contract from IntelliTrack for upgrading to version 8.0 of the package tracking software at a cost of $5,003.70. The motion passed unanimously.

ECA Rental Apartment Rent Increase: Mr. Santos made a recommendation to increase the rent on a unit owed by the Association. He stated that the current resident has lived there since January 2003 and has received two rent increases, at $50 per month each, since then. The current rent is $1300 per month and the resident pays on time. The lease renews on a month-to-month basis. Mr. Santos stated that the current rent is probably within market range, but it has not been increased for three years.

MOTION: Ms. Fridell moved, Dr. Muller seconded, to approve Management’s recommendation to increase the rent by 4.25%, or $55 per month. The motion passed unanimously.

The Board discussed whether the Montgomery County, MD required landlords to offer tenants a two-year lease agreement. Mr. Murdoch stated that he will confirm.

Window Washing: Mr. Santos reported that his due diligence on the Board approved contractor revealed improper insurance coverage and improper roof-anchoring techniques. Accordingly, he recommended postponing the work and seeking out alternatives in the spring of 2011. The Board agreed by consensus.

Energy Tax Credits: Ms. Frantz stated that the Association has completed several projects, such as the energy-efficient garage lighting, which may be eligible for energy tax credits that could be passed back to owners. Mr. Murdoch stated that he would investigate. He also recommended that the Association seek a tax basis letter from DeLeon & Stang to document for owners capital spending by the Association that would increase the tax basis value of their property.

Roof Canopies: Dr. Muller stated that there was discussion at a previous board meeting to obtain input from the HBW Construction Group and the architectural firm, NSA Architects, to replace the canopy roof. Mr. Santos stated that he already obtained a proposal from NSA Architects (which has been involved in the lobby renovation project) and also solicited another proposal from a competing architect. He plans to present this information to the Board in December.

Website: Mr. Levine reported that 70 people have registered on the website and he is willing to train residents on its use. His office is located at Great Oak Title, next to the tax and accounting office, on the Arcade level, East side of building. Dr. Muller inquired what equipment will be available in the new business office. Mr. Santos stated that there will be a desktop computer and copy machine in the business office and wireless internet capability throughout the lobby level. A phone line (for fax machine use only) and printer could also be made available for use in the business office. Mr. Levine stated that he would donate a fax machine to the space as well. Mr. Santos stated that the business center will be secured with a key fob reader.


Committee Reports:
Energy Conservation: Committee Chairwoman Joan Rosenbach stated that order forms for CFL (Compact Fluorescent Lamps) bulbs have been placed in mail boxes. The bulbs are on-site and orders can be filled quickly. There are new types of CFLs on the market, such as three-way dimmers, etc, but the committee is not offering these at this time due to their cost. The committee is considering holding an education seminar on the new types of bulbs. Residents who are considering purchasing new appliances for their kitchens are encouraged to take advantage of PEPCO rebates available for Energy Star rated items.

The committee will investigate different types of toilets to provide residents with information in the event they are interested in purchasing new water-saving toilets for their units.
Many residents have expressed concerns regarding the McQuay fan coil units including: inaccurate thermostats, presence of mold, etc. The Board has received an Opinion Letter from Lerch Early indicating that McQuay fan coil units are the responsibility of individual owners, but the committee requested more clarification. Ms. Kielty responded that the Opinion Letter would be sent to the committee. However, Ms. Frantz is seeking further legal clarification, stating that her reading of the by-laws indicates that when a mechanical component is of importance to the entire building, the Association can assume financial responsibility for that component.
A new member has joined the committee, Afrouz Assadian, and Mrs. Rosenbach encouraged others to join as well. David Drazin will be chairing the committee from December through April while Mrs. Rosenbach is away.

Floor Representatives: Committee Chairwoman Stephanie Olshan reported that she met with Mr. Santos and Co-chairwoman Ms. Tobi Esler. The committee is not receiving information on new move-ins and is trying to devise a system to identify and welcome new owners. The committee will report to the Board following any future meetings.

Common Area Protocol Meeting: Dr. Muller provided a summary of the open meeting held in the party room on November 14, 2010. Many constructive comments were given and the following points were summarized:

1. Newspapers should continue to be in a visible location such as a basket or desk tray at the front desk, not in the business office. Management should decide what location is best.

2. Meeting minutes should be accessible and easily readable for those who are unable to stand for a long time; locations such as the Management office, library or bulletin board were suggested.

3. Use of one display enclosure at a time was suggested for the elevator.

4. Concierge carts should be released only after the name and unit number of the user are obtained. Management will monitor the system.

5. A suggestion was made to exclude from the house rules the requirement that “exercise attire should use the mailbox corridor for passage on the lobby level”.

6. Legal counsel should be consulted about whether it is possible to forbid minors from gathering in the lobby area. Many comments were made about the safety of the furnishings and minors, and concerns about the Association’s liability were expressed.

7. Residents discussed imposing monetary penalties in addition to those already in House Rules; however, they preferred that infractions be brought to the attention of Management for resolution.

8. The party room is locked throughout the day; residents should contact Management to use the room for private gatherings/meetings.

9. Residents discussed the possibility of not returning party room deposits. The board needs to discuss this further with Management.

10. There was consensus among residents that pets should not be allowed on carpeted areas of the lobbies and party room.

Open Comments:
A resident thanked the Board for its time and dedication to the refurbishment efforts and engineering work. However, he stated that a substantial number of residents are concerned about the financial burden these could have on condominium fees in the future. The resident stated that verbal statements and letters have been sent to the Board expressing such concerns. A petition is currently in circulation throughout the community which requests that the cost of further refurbishing of the tower corridors needs to be coordinated with infrastructure improvement costs. The petition also requests that the Board expand the refurbishment committee from three to seven members, and that three of these members be signers of the petition. Residents who are interested in reviewing the petition may contact the resident in Unit 307.

Another resident voiced that she agreed with the concerns about financial strain. She suggested that the Board look for ways to trim back such as eliminating items like TVs, or imposing non-refundable fees for use of the party room or the exercise room. Dr. Muller stated that all savings are important; however, eliminating minor items such as TVs would have little effect on the overall costs of large projects. He stressed that the refurbishment committee has been very judicious in saving money while at the same time making the building attractive.

A question was asked about when a resident is considered “delinquent.” Ms. Fridell responded that this occurs when a resident does not pay the condominium fee within 10 days of the due date. The resident is notified in writing by Management, overdue interest accrues and after 90 days, delinquencies are forwarded to legal counsel for legal action. Forty percent of the Association’s current delinquencies are related to one unit, although the overall Association delinquency rate is 1.3% of total annual assessments, a figure which is lower than that of other comparable condominium buildings. Another resident asked what is being done about the large delinquent account. Ms. Fridell responded that the Association is taking every legal action available to it under the law to pursue collection.

The social committee will organize a “care” box preparation party supporting “So Others Might Eat” charity for the homeless on Saturday December 4, 2010, from 2:00 to 4:00 p.m. in the West Lobby. Notices will be posted. A holiday party for all residents will be held, but a date is not yet set.

A resident expressed her views about the cavalier ways in which the party room was treated by residents at the previous day’s open meeting. She stated that she observed a resident sitting on a serving counter with her feet on it. Trash was left on counters and residents leaned against the newly renovated walls and wallpaper. The resident requested that if this type of behavior is observed again, the leaders of the meeting should correct the behavior immediately to preserve the quality of the renovated amenities.

Adjournment
The President adjourned the meeting at 9:15 p.m.

The initial draft of the minutes, upon which these minutes are based, was prepared by Jana Bowcut of On the Record.

Respectfully submitted,
Charles Bressler, Board Secretary