Present at the meeting: Alexandra Kielty, Judi Barth, Charles Bressler, Molly Frantz, Monique Fridell, Seth Levine, Al Muller, Jason Fisher, Scott Murdoch, Jim Santos, and recorder of meeting minutes.
Landscaping: Bill Angelus from Ruppert Landscaping discussed the landscaping design for the Elizabeth and answered questions from Board members and attendees.
After hearing the report from the Landscape Committee, the Board asked for clarification on one contract that had been written for a three-year period. Next step asked for by the Board was for Jim Santos to review all proposed contracts. Lasting Impressions was awarded the irrigation contract but the contract for plant installation and maintenance has not yet been decided by the ECA Board.
Budget & sequencing of large projects: The debate continued about how to raise the fund level of the ECA reserves. Scott Murdoch presented 3 scenarios for how to address the issue. First proposal raised condo fees in 2012 by 4% and then in 2013 by 10%. Second proposal flipped the two condo increases so that 10% increase happened in 2012 and 4% in 2013. The third proposal was a 7.5% increase in 2012 and 4% in 2013. Then taking these three budget scenarios, in 2012-2013 the project of choice was hallway renovation followed by 2014-2016 was replacement of window & balcony doors.
The Board decided to create a budget based on a 5% increase using the above suggested sequencing of these two projects. This budget will be presented to the Association at the end of April in a special meeting.
Some of the board members seemed to express that replacement of windows/balcony doors is an optional project that can wait indefinitely.
Building Operations: The Board made numerous decisions based on recommendation by Jim Santos to replace, repair, or maintain failing items such as a new computer server for security, the garage floor sweeper, re-keying of common area doors, etc.
Thursday, March 24, 2011
February 23, 2011 Minutes of ECA Board Meeting
THE ELIZABETH CONDOMINIUM ASSOCIATION
4601 North Park Avenue
Chevy Chase, MD 20815
Minutes of Board of Directors Meeting February 23, 2011
Board Present:
Alexandria Kielty .........................President
Dr. Alfred Muller .........................Vice President
Monique Fridell ...........................Treasurer
Molly Frantz ...............................Assistant Treasurer
Charles Bressler ...........................Secretary
Judith Barth ................................Director
Seth Levine .................................Director
Others Present:
Scott Murdoch ...............Community Manager, Legum & Norman
James M. Santos ...........ECA General Manager
Jason Fisher .................Counsel, Lerch Early & Brewer
Jana Bowcut .................Recording Secretary, On the Record
Call to Order: Ms. Kielty called the meeting to order at 7:32 p.m.
Jason Fisher, Lerch, Early & Brewer: Based on his reading of the Association’s governing documents, Mr. Fisher provided guidance on some upcoming projects, such as McQuay units, windows and doors and their financing. Mr. Fisher stated that under the Association’s governing documents, building unit items can be classified in one of three ways: items of the unit, general common elements, and limited common elements. General and limited common elements are covered as part of the Association’s maintenance assessments, the maintenance repair obligations or through the assessment budget. Any item that is part of the unit is generally paid for by the owner for maintenance, repair or replacement. Mr. Fisher repeated verbally the Opinion of Counsel which he had provided twice previously in writing to the Board to the effect that the McQuay units are not the responsibility of the Association, but rather are the responsibility of each unit owner. In the governing documents, the McQuay unit is classified as an item of the unit. Also, in Article VIII, Section 3 of the by-laws, under “Duty to Maintain,” it states that the obligation for maintenance, repair and replacement of the heating and air conditioning unit is that of the unit owner.
At prior meetings, some Board members had inquired whether the Association can take on the obligation to replace the McQuay units as an Association managed project. Under the existing by-laws, the Board does not have that authority. Mr. Fisher had previously provided two Opinions of Counsel confirming this responsibility (these Opinions of Counsel are available from the Management Office). Any amendment to the by-laws would require a 66 and 2/3 supermajority vote by all owners. Citing the following language: “The corporation from time to time through its by-laws may accept the obligation to make certain repairs or perform maintenance services to facilities owned by the individual co-owners…” Some members of the Board questioned why the Association could not voluntarily assume common element responsibility for McQuay replacement as part of the Association’s capital expenditure plan. Mr. Fisher clarified that according to this language, only repairs or maintenance services may be undertaken, not replacement.
Mr. Fisher addressed a question previously raised by Ms. Fridell about financing programs and tax savings that may apply to certain energy replacements. Mr. Fisher stated that there are some highly beneficial financing programs that could apply to corporations and associations for bulk projects for energy saving initiatives. Windows are considered to be part of the limited common element aspect of the units. Because windows are an interior and exterior component of the unit, their replacement not only benefits individual units, but the overall structure of the building as well. There are energy savings initiatives through Montgomery County or general loans that may be obtained for this project.
Ms. Frantz inquired if Mr. Fisher could provide this opinion in writing. Mr. Fisher stated that his previous two Opinions of Counsel already addressed these issues, but if the Board needed additional clarification, he will provide another Opinion of Counsel. Ms. Frantz asked if he could address Article VIII, Section 1 (Management) which states that the cost of supplies is left “in the discretion of the Board of Directors shall be necessary or proper for the operation of the general common elements.” Mr. Fisher responded that this provision refers to general common elements, whereas McQuay units are unit elements. The discretionary language must be read it in context of the entire set of by-laws. Article VIII Section 3, which is more specific to heating and air conditioning, and which prohibits the Board from moving forward with McQuay unit replacement.
Mr. Fisher clarified additional sections of the by-laws and verified that there is nothing in the by-laws that would override Article VIII, Section 3. He stressed that the Board must have additional authority to carry out this project. Ms. Frantz suggested that putting this opinion in writing would be valuable, but Mr. Fisher said he would wait for direction from the Board.
Mr. Fisher added that the Board does have the authority to replace a specific McQuay unit if the Board determined that replacement were necessary because the owner breached his/her maintenance and repair duty under the by-laws. The Board could force replacement of the unit and then charge the owner, after due process to confirm the owner’s negligence.
Mr. Fisher stated that if the by-laws are not amended, another option for the Association is to negotiate a bulk rate with a contractor and encourage owners to undertake replacement work voluntarily on the presumption of a cost that would be lower than that which they might be able to find on their own. Owners could contract directly with the contractor, and would be expected to sign a release understanding that the Association has negotiated the bulk pricing, but is not guaranteeing the work of the contractor. Ms. Frantz stated that when the McQuay units are replaced, it would require access to common element pipes, which would require opening up owners’ walls. She asked if this would have any legal implications, to which Mr. Fisher responded, “No.”
Dr. Muller inquired if there are advantages or disadvantages to replacing all the units at once, rather than allowing the owners to replace them at will. Mr. Santos stated that there are over 700 McQuay units in the building and it would be most cost-effective to replace them simultaneously. There are logistical considerations involving water shut off, air conditioning and heating which would need to be coordinated. Ms. Barth reminded the Board that the Mendoza Report suggested that replacement of Mcquay units be done in tiers and that the units are 37-years-old and are failing.
Dr. Muller asked Mr. Santos and Mr. Fisher about the best way to replace the windows. Mr. Santos stated that windows can be changed from either the outside and inside, but in order to minimize inconvenience to owners, inside would be best because a crew will already be there to do painting, trim work, caulking, etc. Mr. Fisher stated that this is a practical issue and he has no opinion on how to execute this project.
Ms. Kielty asked Mr. Fisher for guidance on seeking out a loan for this project. Mr. Fisher stated that there are three ways to fund a project: assessments can be increased to improve budget resources, a special assessment can be levied through owner supermajority vote, or secure financing through banks or lending institutions to finance projects over a long period of time. Debt financing has become more viable over the last 10 to 15 years as banks have recognized that condominium associations need for major renovations. He had previously provided a list to Ms. Fridell of some banks that are willing to extend credit to condominium associations. Generally banks will require that an association pledge its current/future monthly assessments as collateral for a loan. If an association were to default on the loan, the bank could offset the default with monthly assessments receivable from owners.
A resident inquired if the Board could authorize paying for repair of the McQuay units, with the owners paying the difference of the replacement. Mr. Fisher responded that the Board has the authority to take on maintenance and repair only; characterizing a payment for repair when in actuality the payment would be towards replacement would be highly inappropriate. . Amending the by-laws or getting a bulk rate and managing it as a joint project are the best options.
The resident also inquired if it is feasible to create a legal arrangement where owners could donate money to a specific project. Mr. Fisher responded that there would be some legal issues to consider such as managing the funds effectively in trust and the Association’s liability thereon.
A resident inquired if there is a limit to how much the Board can raise condominium fees. Mr. Fisher stated that if the Board establishes a budget, there is no limit to how much the fees are raised to meet the operating expenses. The only exception to this is stated in the Maryland Condominium Act. If an association’s board needs to increase the assessments more than 15 percent mid-way through a budget year, that board is required to obtain a vote from the owners.
Approval of Previous Meeting Minutes:
MOTION Dr. Muller moved, Mr. Bressler seconded, to approve the January 19, 2011 regular meeting minutes as amended. Mr. Santos stated that there were some recent changes inserted by Ms. Frantz to the minutes that the Board may want to still consider. Ms. Kielty decided that Ms. Frantz’s comments should be considered, and that the minutes should be finalized and voted upon at the next meeting.
Ms. Fridell requested that there be a definitive declaration of the final minutes before the Board meeting. Mr. Santos stated that he has tried to do that. Dr. Muller stated that it is the Board Secretary’s responsibility to assimilate all changes and declare the final draft. Mr. Santos stated that he will incorporate Ms. Frantz’s recommended changes within the next couple of days.
President’s Report: Ms. Kielty stated that it is a pleasure to be in the newly refurbished lobby and to have the furniture, fixtures and accessories in place. She noted that more residents are using the space and it is the end product of four years work by residents, management and design and construction experts. She has heard from many residents about how pleased they are with the space and understands that some are not. All board members were involved in the project, and there were many opportunities for owner input. Ms. Kielty requested that the Association move on from this project to other major issues that have been neglected for many years. The refurbishment was projected to cost $1.5 million and ultimately cost less, including the party room and bathroom.
There will be three open Board positions in the upcoming election. Ms. Kielty encouraged residents to run for election. She emphasized that all board members are concerned about fiscal responsibility in this building, and used the best judgment possible within the budget. With the completion of the lobby refurbishment, it is now in the hands of residents, owners, management and the cleaning staff to care for the building Treasurer’s Report: Ms. Fridell stated that on February, 16, 2011, she held a review session of the FY 2010 audited financial statements for the residents. The session also included a trend analysis of financial performance and expenses over the past five years.
Ms. Fridell stated that she had contacted all of the banks recommended by Lerch Early for a possible project loan. She stated that it is an option that should be considered, but that the condo fees would be held as security and that payments for interest and principal would not be available for other discretionary reserve expenses. She stressed that entering into this type of obligation requires serious consideration and great prudence.
The following FY 2011 expense categories are over-budget: payroll, repair and maintenance and utilities. Ms. Fridell stated that the Board should focus on expense control. She added that in addition to major project management, Management also oversees the day-to-day operations of the building and the front desk operations, and needs to be given the time to focus on these. Delinquencies decreased by $20,000 over the past month and Ms. Fridell applauded management’s efforts in improving collections.
Old Business:
Project Updates: Mr. Murdoch stated that there are some expense issues to review regarding the renovation project. The design fees for the project are currently around $275,000, exceeding the $250,000 budgeted amount, and there will be another $2,200 that Hartman Design Group (HDG) will still bill for February. Total fees include $4,000 for lighting consulting; $4,000 for reimbursable expenses; and $2,500 for presentations to the Board. Dr. Muller inquired what were the results of the discussion between the designers and the lighting expert. Ms. Kielty responded that it involved discussions of lighting positioning, where electricity is available, and energy efficient lighting. Ms. Barth stated that there would be more lighting than in the past, but less energy will be used because of the type of lighting.
Ms. Fridell expressed concern that when a specific project budget is exceeded, this will appear in the footnotes of the Association’s financial statements, which will be viewed by current and prospective owners and potential lenders. Ms. Fridell stated that when a budget is set and exceeded, albeit even for legitimate reasons, by re-raising the budget, the Board is hiding the fact that the original budget was exceeded. Ms. Kielty stated that perhaps the $250,000 design expense budget should never have been set because the contract with HDG was based on hourly rates. She added that it is helpful to have a limit for discussion purposes, but ultimately, flexibility is needed to complete a project. Ms. Fridell stressed that the purpose of setting a limit on the design fees was because the Board, Lerch Early and Legum & Norman were unable to negotiate any expense limits with HDG at the time the design contract was approved, and that she had opposed approval of the HDG contract for precisely that reason. She believed that design expenses should have been controlled by being prudent with time and cost control. Dr. Muller reminded the Board that there were a number of instances in which HDG’s design reduced cost, for example, by not using marble as the back-drop behind the front desk.
Mr. Murdoch stated that the original project budget was for $1.6 million and was then reduced to $1.2 million. Over the course of the project, there were sub-projects such as replacing window framing and improving front door access that were outside of the original scope, but made good sense to undertake. Ultimately, $1,470,000 was spent on the project, still below the original budget of $1.6 million.
Ms. Fridell raised the issue that the Board previously made a motion for a budget and this was not adhered to. She questioned what was the true meaning of the Board’s word if the Board did not adhere to its stated/voted objectives. Mr. Murdoch stated that the Board discussed and agreed upon the changes along the way, which are reflected in past meeting minutes. Dr. Muller stated that the budget is a guideline and should be followed in good faith, but should be flexible. Mr. Murdoch suggested that in the future, certain aspects of projects should be more tightly defined, and designers be given a limit about what the Association can afford to spend.
The Board agreed to postpone a vote to adjust the design budget until the final tally of payments to HDG can be calculated.
Ms. Kielty stated that the Association’s auditor, Deleon & Stang recommended that the Board needed to retroactively vote for approval of the acquisition of a piano. Ms. Fridell had consulted the auditor on how to proceed because she did not feel comfortable signing off on a request to reimburse Dr. Muller $19,500 for payment of the piano because the expenditure had not been authorized by the Board and it had been made on Dr. Muller’s personal credit card. Ms. Fridell stated that there was some controversy exchanged among Board members as to whether the piano could be considered a piece of furniture, and as such, whether the expenditure was part of the overall furniture budget.
Dr. Muller, who led the efforts on the piano purchase, provided the statement : an appendix to these February 23, 2011 minutes.
Ms. Frantz inquired that if the piano was purchased on December 18, 2011, and there have been two board meetings since that time, why the purchase was not discussed. She stated that few individuals knew about the purchase, and the Board knew that this was a controversial topic among owners. In the October 2010 Board meeting, a resident asked about the decision to acquire a piano, and the Board President responded that a decision had not yet been made. Dr. Muller responded that HDG assured him in early December 2010 that the furniture budget would be sufficient and that furniture expenditures would not exceed $326,000 without the piano. The audio visual equipment was never part of the furniture budget. Ms. Kielty stated that the piano was also not discussed at the prior two Board meetings because she preferred that all items be discussed at one time after the furnishings arrived and the project was completed. Also, Ms. Kielty was not going to be present at the December 2010 Board meeting and she believed it would have been inappropriate to raise the topic. Dr. Muller stated that he had been prepared to mention the piano at the January 2010 Board meeting, but the piano had not yet arrived.
Ms. Kielty added that she felt that it was important for residents to see the piano and there was no opportunity to return it. She had hoped that when residents saw the piano in the space, they would accept it. In retrospect, she feels that it was not the best way to handle the purchase, and apologized to the Board for the way the purchase was handled. Her rationale for approving the purchase of the piano was that it fit within the furniture budget line and she did not believe that buying a less expensive piano would be a worthwhile investment. She added that the piano will be in place for generations and is an amenity for those who do not use other amenities, such as the pool or exercise room. The Association spends $44,000 a year on the pool for a small number of people, in contrast to the one-time cost of a piano to use at parties and gatherings. Ms. Kielty added that there is still money in the budget for fitness room equipment and the Board can soon move ahead on that purchase. She stated that there were no votes on specific furnishings, but rather an overall budget for the furniture.
Mr. Bressler read the attached statement : an appendix to these February 23, 2011 minutes.
MOTION Mr. Bressler moved that the Board of Directors of the Elizabeth Condominium has not, will not, and should not vote to purchase, nor reimburse, the cost of a piano bought without the Board’s approval. Board members were unclear on the wording of the motion, and there was not a second for this motion. Mr. Bressler later retracted this motion so that Ms. Fridell could propose another motion with more precise wording to reflect Deleon & Stang’s recommendation.
Mr. Fisher opined that the wording of Mr. Bressler’s motion was not appropriate and that the Board should consider the issue in two parts: 1) Was the purchase of the piano authorized? 2) Does the Board authorize the reimbursement of the piano to Dr. Muller? The Treasurer was not comfortable with approving the purchase and has brought the retroactive approval and reimbursement request to the Board.
In response to Mr. Bressler’s statement, Dr. Muller asserted that he purchased the TV on sale, and that the Board was never under any obligation to reimburse him; he would have kept the TV if the Board opted not to buy it for the lobby. Dr. Muller stressed that he did not make a unilateral decision, and at the request of the Refurbishment Committee, he researched pianos over a three-month period. There was no opportunity to discuss the piano purchase with the Board on a Saturday afternoon.
Ms. Fridell expressed that it is not clear to everyone that a piano could be considered a piece of furniture, and stated that in her opinion it is a discretionary item. She added that given the price of $19,053 and the fact that not everyone would assume it was covered under the furniture budget, she believed it merited being discussed specifically by the Board in the context of the refurbishment and reserve expenditure priorities. Since the piano was not purchased through a third party invoice, and because it is not universally categorized as a piece of furniture, she sought Deleon & Stang’s advice and the auditor recommended that the Board vote retroactively to authorize the purchase so that there would be a record of the decision in the Minutes.
MOTION Ms. Fridell moved, Ms. Barth seconded, to retroactively approve the purchase of the piano for $19,053, as requested by DeLeon and Stang. The motion failed with three approvals (Dr. Muller, Ms. Barth and Ms. Kielty) and four disapprovals (Mr. Bressler, Ms. Frantz, Ms. Fridell and Ms. Kielty).
Dr. Muller noted that the disapproval of the piano purchase could set a precedent for future Board decisions regarding every new item that residents dislike and that the process should be clarified in the next phase of the refurbishment. He emphasized that the purchase was not done any differently from any other article of furniture purchased under the furniture budget. The purchase was executed in good faith, over a few months, and was done at the request of a committee to be helpful.
Ms. Barth stated that at the first meeting with the HDG on May 29, 2009, the design concept was presented, which included a baby grand piano. The Refurbishment Committee discussed this with the resident Advisory Committee, which also liked the idea. In June 2009, the Board saw and approved this design (with the exception of Ms. Frantz and Mr. Levine who were not on the Board at that time). The committee delayed purchasing the piano in order to see whether there were funds left in the furniture budget after purchase of furniture and accessories. Ms. Barth affirmed that Dr. Muller led the search for the piano because of his specific knowledge and that the piano had always been considered to be part of the furnishings of the lobby. Ms. Barth also noted that she has seen the piano being used on four occasions after 10:00 p.m. in the last week, and that it was purchased for the enjoyment of the residents.
Dr. Muller asked Mr. Fisher if he could provide a legal opinion about a reimbursement request to a Board member for a purchase that was executed in good faith. Ms. Fisher responded that he could not provide an ad hoc opinion at the meeting. Dr. Muller asked Ms. Frantz ,who had voted against the motion to authorize the purchase, to reconsider her vote, and stated that he believed the issue is exacerbating personal differences.
There was some confusion about whether the Board could vote to reimburse Dr. Muller even though it had voted against the purchase of the piano. Mr. Fisher stated that the Board could not authorize the reimbursement to Dr. Muller if it did not approve the underlying purchase.
MOTION Ms. Frantz moved, Mr. Bressler seconded, that $3,276, which were the proceeds from the sale of the old lobby furniture, be moved from the Operating to the Reserve fund, as requested by the auditor. Ms. Barth stated that this had already been done in August 2010 based on a previous Board motion. Ms. Frantz explained that the amount had been discussed with the auditors in November 2010. The amount had been credited to the refurbishing budget, but the actual cash proceeds had not been transferred to the Reserve Fund. The motion passed with one abstention by Dr. Muller (5-0-1).
Ms. Kielty expressed frustration about the decision making process of the Board; in her opinion it is inefficient and issues are over-analyzed. She added that hostile feelings among residents about how decisions are made have created an unpleasant environment. The community should be thrilled about the completion of the project, and that she made the decision to authorize the purchase of the piano because she believed it to be in the best interest of the community.
[Ms. Kielty left the meeting at 10:02 p.m. to use the restroom], Ms. Fridell questioned who was in charge of the Board meeting. Dr. Muller, as Vice President, assumed control of the meeting,]
New Business:
A brief discussion resulted in the conclusion that the expenditures for audio visual equipment should not be included in the furniture budget. Mr. Murdoch stated that the change would be reflected in the next report.
FY2012 Proposed Budget Schedule: Mr. Murdoch stated that a draft budget will be given to the Treasurer on Monday and that the Board will need to proceed with workshops to discuss the FY 2012 budget.
Annual Meeting Schedule/Elections Committee: Mr. Murdoch reported that the Election Committee met that afternoon. The Committee is appointed by the President and consists of: Linda Kontnier, Jim Rich, Mary McGuire, Diana Brosnon, and Jim & Evelyn Vuko. The call for candidates will go out in a letter from the Board President on February 25, 2011. The nomination deadline is March 27, 2011, and the official ballot and Annual Meeting notice will be mailed on April 11, 2011. The Annual Meeting will be held on May 4, 2011. The Election Committee elected to use the computerized ballot system from Legum & Norman which was used in the 2010 elections.
[Ms. Kielty returned at 10:11 p.m and reassumed control of the meeting.]
Mr. Santos stated that the key FOB distribution has been ongoing for more than a month. Notices were sent to residents that the Management office will be open on a Saturday and late hours for Mondays and Tuesdays to continue distributing key Fobs. The building is not completely secure until all external access doors are locked 24/7. Eventually residents will need to use their key fobs for any entry to the building and guests will have to call from the front entry in order to be admitted.
At the January 19, 2011, meeting, the Board approved the disposal of hazardous waste stored/accumulated around the building for $4,917.50. Between the time of the approval and the disposal, additional waste was discovered in other storage rooms, which increased the cost of disposal to $6,675.75.
MOTION Mr. Bressler moved, Ms. Fridell seconded, to approve the increase of $1,758.25 to pay Environmental Management Services, Inc. for the disposal of hazardous waste. The motion passed with one abstention by Dr. Muller (5-0-1).
Mr. Santos reported that there was a hard drive “crash” of the camera monitoring system and that the system was inoperable. Mr. Levine has been helping Mr. Santos to evaluate options; there will be an upcoming expense to replace the computer equipment and augment the capacity of the server. The cost will likely be around $6,000.
The garage floor sweeper machine is failing. Management and staff are trying to salvage it and replace the engine, which could possibly cost $6,000 to $7,000. The machine is about 15 years old, and a replacement would cost about $30,000.
Mr. Santos asked for Board approval of the winterization of the cooling tower in order to have heat and air conditioning accessible year-round. The winterization can be done any time of the year; however, in order t have both available in transition months such as April and May, the work would need to commence within 30 days. Mr. Santos obtained three proposals from Carrier, Densel and Noyes Air Conditioning and recommended the Board approve Densel. Densel’s comprehensive bid of $45,000represented the lowest cost.
Mr. Murdoch noted that this expenditure could be covered with the $50,000 allowance for mechanical work in the Five Year Plan for this fiscal year. Ms. Fridell pointed out that the Association would likely incur additional energy costs as a result of making both air conditioning and heating available during transitional months and asked if Management could estimate what the additional costs might be. Mr. Santos stated that it is impossible to measure the utility costs because of the individual temperature preferences of each resident. He added that once the work is completed, all of the heating and air conditioning equipment will constantly run. Ms. Barth noted that this could diminish the life expectancy of HVAC equipment. Dr. Muller stated that the decision to make available both air conditioning and heating at all times could be reversed at any time.
MOTION Dr. Muller moved, Ms. Barth seconded, to accept the proposal from Densel for $46,331. The motion passed unanimously (6-0-0).
MOTION Mr. Levine moved, Ms. Frantz seconded, to reconsider the previous motion which did not pass earlier in the meeting to approve the purchase of the piano for $19,053.00. Mr. Levine stated that if the Board does not reimburse Dr. Muller, it could cost the Association even more money in legal costs. The motion passed with objections from Ms. Fridell and Mr. Bressler (5-2-0).
Committee Reports:
Landscaping Committee: The committee is in the process of determining cost and arrangement of plantings in the front of the building. Ruppert Landscape is in the process of planning a design, and an open meeting will be held next week. The committee has formulated a list of objectives to share with residents and a questionnaire will be distributed to all residents to obtain their feedback. The meeting will be held on Thursday, March 3, 2011, at 7:30 p.m. in the west lobby and is open to all.
Floor Representatives Committee: The committee eulogized Ms. Helen Soderberg, who had recently died and had previously served on the committee and made many contributions to the Elizabeth. Management gave the committee information on new move-ins from January and February. A questionnaire was designed for floor representatives about how to enhance their efforts for welcoming new residents. Dr. Muller announced that the Board had approved the use of the West lobby area by the Soderberg family and friends on March 26, 2011 for a memorial service.
Comments from the Floor:
• A resident inquired about how a change can be made to the by-laws. Mr. Fisher stated that there are two ways: 1) A presentation can be made by the Board and communicated to the owners; or 2) owners, by petition, can submit something to the Board in writing to request approval. He recommends that an owner who would like a change to the by-laws, submit a request in writing to the Board for consideration. Ultimately, an amendment requires a supermajority approval of 66 and 2/3 of all owners.
• The same resident also inquired about whether the front glass doors were going to be replaced because they were too heavy, in her opinion. Ms. Kielty clarified that they were previously replaced during the refurbishment project because of structural issues, but that there are no plans to replace the current doors.
• A resident stated it is important that residents be active in voicing their opinions in the community. She suggested that another option to solve the piano issue would have been to sell the piano and the Association could have reimbursed Dr. Muller the difference. The resident stressed that all purchases should be transparent. She added that the Board’s second vote on the issue was motivated out of panic to reimburse Dr. Muller, and in her opinion did not reflect the truer issue. The resident felt that the purchase of the piano was egregious and that it could have been purchased at another time.
• A resident inquired why a Board member would use a credit card to make such a large purchase on behalf of the Association. Dr. Muller responded that the piano had to be purchased that day and he had credit available to affect the purchase.
• A resident repeated his previous observations about a corner in the hallway leading to the west elevators that is repeatedly damaged by passers by, and that a plastic corner should be applied to avoid repeat damage. Mr. Santos stated that this will be taken care of this week.
• A new owner who will be soon moving into the building expressed her opinion that the refurbishment lobby was impressive. She stated that she is looking forward to living in the community and hopes that the experience will be a positive one.
Adjournment:
The President adjourned the meeting at 10:49 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
Appendix to February 23, 2011 Minutes from the Board of Directors’ Regular Monthly Board Meeting.
Charles Bressler’s summary regarding piano purchase:
The last time the Board approached the subject of the piano was at the October board meeting when the president said in answer to a question that “no decision has been taken.” The Board clearly decided then to postpone a decision on whether to get a piano or not, to sometime in the future. There were three board meetings on November 22, December 20, and January 19, with no mention of the piano.
On January 31, 2011, there was a special board meeting, chaired by Dr. Muller, to discuss financing future projects. Well, that was certainly not the ideal time to talk about a piano at a meeting schedule to discuss borrowing a few million dollars to finance the replacement of the exterior windows, the AWAC system, possibly the doors of each apartment, etc.
Then the piano lands in the lobby a day after the new furniture is delivered early February. Well, guess when this piano was purchased? It is hard to believe. The piano was purchased on December 19, 2010, by Dr. Muller and charged on his credit card two days before our December board meeting. At that meeting, the purchase of a $19,000 piano purchased and charged on his personal credit card still fresh in his mind, but no mention of the piano.
No mention on the January 19th meeting, no mention on the January 31st meeting, but when the piano lands into the west lobby, an invoice is presented to Mr. Santos. This invoice is dated December 18, 2010, in the amount of $19,053 for a Boston piano with matching bench. I assume that Ms. Kielty, our president, approved it since it bears her initials, on the 29th of January, more than a month later. It was then presented to the treasurer, Monique Fridell, who did not approve of this expenditure and refused to sign the check.
Thank God Monique has an excellent memory. She knew very well, as most of us on the Board and in the audience, that we never did vote to purchase a piano. She also knew that the Board would not under the circumstances purchase a $19,000 piano when we have so many expensive projects that are indispensable to the building.
I have already expressed to the Board via numerous e-mails, that I, for the reasons expressed here above, would vote “no” to purchase the piano, nor would I vote for Dr. Muller to be reimbursed for $19,053. I even suggested that Dr. Muller return the piano, but as of February 11th, he never approached Steinway piano gallery to even discuss the issue.
To help out, I asked Mr. Murdoch to contact Mr. Manougian, our insurance agent, to check if this could be considered an error by a board member and obtain a refund for the Elizabeth Condominium Association.
It is very clear to me as it should be to many, that Dr. Muller made a unilateral decision to withhold the facts that he purchased the piano back in December from at least four board members and the owners.
It is not the first time Dr. Muller comes to the Board to ask for a retroactive vote to reimburse him for something he purchased without prior vote by the Board. If you remember, some two and a half years ago, before I joined the Board, he asked the previous board to vote retroactively to authorize the purchase of a flat television on the wall of our then library. It had already been installed a few days before, which meant that it had been ordered and paid before, again on a credit card.
Now, having the facts, I urge the Board to vote no for the purchase of the piano and therefore no to the request for reimbursement.
You and I have a fiduciary duty to the Elizabeth Condominium and its owners, not to Dr. Muller who has acted irresponsibly and with total disregard toward the Board and most
Appendix to February 23, 2011 Minutes from the Board of Directors’ Regular Monthly Board Meeting.
Dr. Muller’s summary regarding piano purchase:
The Board President has asked that I present a comprehensive, factual report concerning the acquisition of the Boston piano which was installed in the west lobby last month. I am happy to do so. To the best of my knowledge and memory, the facts are as follows:
By way of background and to refresh our collective memory: the original Hartman design , including a parlor grand piano in the west lobby, was presented to the Refurbishment Committee in May, 2009. The design, including the piano, was presented to the Board in June, 2009. It was presented to the Elizabeth membership by Hartman Design Group (HDG) at a public meeting on 3/9/2010. The plan, including the piano, was pictorially displayed in our main entrance lobby from then until late August, 2010, when work started on the project. Hartman's estimated price for such an instrument was $15,000. Hartman agreed to advise the Committee but left the final selection to them, just as they left the final selection of the TVs to the Committee or their designee, Management.
Members of the Refurbishment Committee visited many piano stores during 2010 without arriving at a decision, mainly because it was not clear what amount of money would be available in the furniture budget for a piano after all other furnishings had been selected.
I was never a member of the Refurbishment Committee, but because I had been a concert pianist many years ago (in college and medical school), committee members asked for my assistance in late October, 2010. Specifically, they asked me to evaluate the musical quality of various pianos and recommend one for purchase.
My recommendation would be based on three criteria:
1. The Hartman design for a grand piano, polished black approximately 5'3" in length, large enough for full tones but intimate in size for the lobby space;
2. The Committee desire for a structurally sound instrument which would endure for the lifetime of The Elizabeth, with the warranty of a reliable firm;
3. The Board's desire to remain within their budgetary furniture line item, ($350,000) last discussed and voted in public session, July 2010.
With these limiting criteria, a number of possibilities were immediately eliminated. Used pianos in private ownership, either within the surrounding community or the larger Internet community, would not provide the desired warranty or company backing. In addition, some of these pianos (such as one offered by the Community Center) would have required extensive, expensive refurbishment. The Refurbishment Committee also noted that older, cheaper models were less likely to be as durable and would not have as lengthy a lifespan.
The "gold standard" for excellence in pianos is, of course, a Steinway. But a new Steinway of the preferred size would cost between $40,000- $50,000, and even a used/refurbished Steinway of this size would be between $25,000 and $30,000, clearly not in our budget.
With these facts in mind, I visited four different locations for a piano. First, sometime in November I accompanied a member of the Refurbishment Committee to Jordan Kitt Pianos in Rockville. They were displaying new Yamaha pianos and recently used ones that had been loaned to Georgetown University. The prices were in the $15,000 range. The musical quality of the pianos was excellent and this information was reported back to other members of the committee. However, since it was still not clear what the final cost of remaining furniture would be, no decision was made.
A second visit was made later that month to The Piano Company in White Flint Mall, to evaluate Kawai pianos, the "Toyota" to Yamaha's "Honda," both excellent companies headquartered in the same Japanese city. Both Japanese pianos have a "brighter" tone than the more "mellow" Steinway, and are preferred by many because of their excellent workmanship but more modest price. Here again, I found at least one piano in the $15,000 range and reported such to the committee members. Again, there was no decision because of the uncertain furniture costs yet remaining.
In early December I visited Rick Jones Pianos in Beltsville. His establishment has an excellent reputation established over many years selling refurbished Yamahas and Steinway pianos. There were at least two such Yamaha pianos that were in the $12-15,000 price range, which I again reported back to the committee as candidates for purchase. However, the fact that they were 10-20 years old, even though refurbished with a 10 year warranty, made the committee members reluctant to pursue purchase.
Over this same time period, in an attempt to elicit fresh input, I also spoke to two members of the Board who had not been on the Board when the original presentation was made by HDG.
One of these members wished assurance that the piano would actually be used and not merely serve as decoration. While no survey could predict an accurate measure of such use, I did approach a number of people whom I know play the piano. Four of them, representative of ages from 9 to 90, wrote back notes of support whose copies I share with the Board.
Finally, in mid-December, I spoke again with HDG, who assured me that their final furniture costs would be roughly $326,000, leaving about $24,000 in the furniture line item. At about this same time, Steinway pianos announced their annual, one day public sale of pianos which they had loaned to the Kennedy Center for a year. I obtained an invitation to inspect these pianos on the Saturday immediately prior to the public offering, and invited Ms. Marianne Cook, our resident master pianist to accompany me and provide me with her expert, independent judgment concerning the pianos' comparative tone and touch. Together, we spent the afternoon evaluating and playing the various Kennedy Center pianos, at the end of which time we both judged the 2009 Boston Performance Edition piano to be superlative in quality. This piano would sell new for about $22,000, but because it had been played professionally for about a year, Steinway was asking $19,000. I negotiated the price down to $17,500 and then phoned the Board President to report the situation. She inquired whether the piano could be "held" with a refundable down payment, but this was not acceptable to Steinway, since all the pianos were expected to be sold the following day during the public offering.
The Board President asked my advice and I summarized the situation by repeating my original three criteria, all of which I believe had been met:
1. A polished ebony parlor grand, measuring 5'1.5" met the Hartman Design proposal
2. A 10 year Steinway warranty met the Committee's concern for a highest quality piano and
3. The cost was close to the original $15,000 estimate and within the furniture budget voted by the Board.
Since this was the best "fit" of all the pianos that I had seen and/or researched, and since there was not, in my opinion, the likelihood of a better option in the foreseeable future, I strongly recommended the purchase. This would be an amenity that could be enjoyed by generations of Elizabeth residents and visitors, since a piano's life-time would easily span 50 years or more.
The cost to each condominium unit would be approximately $1/week for a year, not even presuming amortization. The first tune-up at six months would be half-price from Steinway, and annual costs thereafter would only include a tune-up, whose cost would be between $100-200 depending on the tuner of our choice. The 10-year warranty from Steinway would protect the structural integrity of the piano.
The Board President agreed and the purchase was made. Following the usual procedure, the credit card charge was presented to Management for reimbursement when it arrived in January, and this in turn was presented to the Board Treasurer for her review, just as all other furniture bills had been processed.
4601 North Park Avenue
Chevy Chase, MD 20815
Minutes of Board of Directors Meeting February 23, 2011
Board Present:
Alexandria Kielty .........................President
Dr. Alfred Muller .........................Vice President
Monique Fridell ...........................Treasurer
Molly Frantz ...............................Assistant Treasurer
Charles Bressler ...........................Secretary
Judith Barth ................................Director
Seth Levine .................................Director
Others Present:
Scott Murdoch ...............Community Manager, Legum & Norman
James M. Santos ...........ECA General Manager
Jason Fisher .................Counsel, Lerch Early & Brewer
Jana Bowcut .................Recording Secretary, On the Record
Call to Order: Ms. Kielty called the meeting to order at 7:32 p.m.
Jason Fisher, Lerch, Early & Brewer: Based on his reading of the Association’s governing documents, Mr. Fisher provided guidance on some upcoming projects, such as McQuay units, windows and doors and their financing. Mr. Fisher stated that under the Association’s governing documents, building unit items can be classified in one of three ways: items of the unit, general common elements, and limited common elements. General and limited common elements are covered as part of the Association’s maintenance assessments, the maintenance repair obligations or through the assessment budget. Any item that is part of the unit is generally paid for by the owner for maintenance, repair or replacement. Mr. Fisher repeated verbally the Opinion of Counsel which he had provided twice previously in writing to the Board to the effect that the McQuay units are not the responsibility of the Association, but rather are the responsibility of each unit owner. In the governing documents, the McQuay unit is classified as an item of the unit. Also, in Article VIII, Section 3 of the by-laws, under “Duty to Maintain,” it states that the obligation for maintenance, repair and replacement of the heating and air conditioning unit is that of the unit owner.
At prior meetings, some Board members had inquired whether the Association can take on the obligation to replace the McQuay units as an Association managed project. Under the existing by-laws, the Board does not have that authority. Mr. Fisher had previously provided two Opinions of Counsel confirming this responsibility (these Opinions of Counsel are available from the Management Office). Any amendment to the by-laws would require a 66 and 2/3 supermajority vote by all owners. Citing the following language: “The corporation from time to time through its by-laws may accept the obligation to make certain repairs or perform maintenance services to facilities owned by the individual co-owners…” Some members of the Board questioned why the Association could not voluntarily assume common element responsibility for McQuay replacement as part of the Association’s capital expenditure plan. Mr. Fisher clarified that according to this language, only repairs or maintenance services may be undertaken, not replacement.
Mr. Fisher addressed a question previously raised by Ms. Fridell about financing programs and tax savings that may apply to certain energy replacements. Mr. Fisher stated that there are some highly beneficial financing programs that could apply to corporations and associations for bulk projects for energy saving initiatives. Windows are considered to be part of the limited common element aspect of the units. Because windows are an interior and exterior component of the unit, their replacement not only benefits individual units, but the overall structure of the building as well. There are energy savings initiatives through Montgomery County or general loans that may be obtained for this project.
Ms. Frantz inquired if Mr. Fisher could provide this opinion in writing. Mr. Fisher stated that his previous two Opinions of Counsel already addressed these issues, but if the Board needed additional clarification, he will provide another Opinion of Counsel. Ms. Frantz asked if he could address Article VIII, Section 1 (Management) which states that the cost of supplies is left “in the discretion of the Board of Directors shall be necessary or proper for the operation of the general common elements.” Mr. Fisher responded that this provision refers to general common elements, whereas McQuay units are unit elements. The discretionary language must be read it in context of the entire set of by-laws. Article VIII Section 3, which is more specific to heating and air conditioning, and which prohibits the Board from moving forward with McQuay unit replacement.
Mr. Fisher clarified additional sections of the by-laws and verified that there is nothing in the by-laws that would override Article VIII, Section 3. He stressed that the Board must have additional authority to carry out this project. Ms. Frantz suggested that putting this opinion in writing would be valuable, but Mr. Fisher said he would wait for direction from the Board.
Mr. Fisher added that the Board does have the authority to replace a specific McQuay unit if the Board determined that replacement were necessary because the owner breached his/her maintenance and repair duty under the by-laws. The Board could force replacement of the unit and then charge the owner, after due process to confirm the owner’s negligence.
Mr. Fisher stated that if the by-laws are not amended, another option for the Association is to negotiate a bulk rate with a contractor and encourage owners to undertake replacement work voluntarily on the presumption of a cost that would be lower than that which they might be able to find on their own. Owners could contract directly with the contractor, and would be expected to sign a release understanding that the Association has negotiated the bulk pricing, but is not guaranteeing the work of the contractor. Ms. Frantz stated that when the McQuay units are replaced, it would require access to common element pipes, which would require opening up owners’ walls. She asked if this would have any legal implications, to which Mr. Fisher responded, “No.”
Dr. Muller inquired if there are advantages or disadvantages to replacing all the units at once, rather than allowing the owners to replace them at will. Mr. Santos stated that there are over 700 McQuay units in the building and it would be most cost-effective to replace them simultaneously. There are logistical considerations involving water shut off, air conditioning and heating which would need to be coordinated. Ms. Barth reminded the Board that the Mendoza Report suggested that replacement of Mcquay units be done in tiers and that the units are 37-years-old and are failing.
Dr. Muller asked Mr. Santos and Mr. Fisher about the best way to replace the windows. Mr. Santos stated that windows can be changed from either the outside and inside, but in order to minimize inconvenience to owners, inside would be best because a crew will already be there to do painting, trim work, caulking, etc. Mr. Fisher stated that this is a practical issue and he has no opinion on how to execute this project.
Ms. Kielty asked Mr. Fisher for guidance on seeking out a loan for this project. Mr. Fisher stated that there are three ways to fund a project: assessments can be increased to improve budget resources, a special assessment can be levied through owner supermajority vote, or secure financing through banks or lending institutions to finance projects over a long period of time. Debt financing has become more viable over the last 10 to 15 years as banks have recognized that condominium associations need for major renovations. He had previously provided a list to Ms. Fridell of some banks that are willing to extend credit to condominium associations. Generally banks will require that an association pledge its current/future monthly assessments as collateral for a loan. If an association were to default on the loan, the bank could offset the default with monthly assessments receivable from owners.
A resident inquired if the Board could authorize paying for repair of the McQuay units, with the owners paying the difference of the replacement. Mr. Fisher responded that the Board has the authority to take on maintenance and repair only; characterizing a payment for repair when in actuality the payment would be towards replacement would be highly inappropriate. . Amending the by-laws or getting a bulk rate and managing it as a joint project are the best options.
The resident also inquired if it is feasible to create a legal arrangement where owners could donate money to a specific project. Mr. Fisher responded that there would be some legal issues to consider such as managing the funds effectively in trust and the Association’s liability thereon.
A resident inquired if there is a limit to how much the Board can raise condominium fees. Mr. Fisher stated that if the Board establishes a budget, there is no limit to how much the fees are raised to meet the operating expenses. The only exception to this is stated in the Maryland Condominium Act. If an association’s board needs to increase the assessments more than 15 percent mid-way through a budget year, that board is required to obtain a vote from the owners.
Approval of Previous Meeting Minutes:
MOTION Dr. Muller moved, Mr. Bressler seconded, to approve the January 19, 2011 regular meeting minutes as amended. Mr. Santos stated that there were some recent changes inserted by Ms. Frantz to the minutes that the Board may want to still consider. Ms. Kielty decided that Ms. Frantz’s comments should be considered, and that the minutes should be finalized and voted upon at the next meeting.
Ms. Fridell requested that there be a definitive declaration of the final minutes before the Board meeting. Mr. Santos stated that he has tried to do that. Dr. Muller stated that it is the Board Secretary’s responsibility to assimilate all changes and declare the final draft. Mr. Santos stated that he will incorporate Ms. Frantz’s recommended changes within the next couple of days.
President’s Report: Ms. Kielty stated that it is a pleasure to be in the newly refurbished lobby and to have the furniture, fixtures and accessories in place. She noted that more residents are using the space and it is the end product of four years work by residents, management and design and construction experts. She has heard from many residents about how pleased they are with the space and understands that some are not. All board members were involved in the project, and there were many opportunities for owner input. Ms. Kielty requested that the Association move on from this project to other major issues that have been neglected for many years. The refurbishment was projected to cost $1.5 million and ultimately cost less, including the party room and bathroom.
There will be three open Board positions in the upcoming election. Ms. Kielty encouraged residents to run for election. She emphasized that all board members are concerned about fiscal responsibility in this building, and used the best judgment possible within the budget. With the completion of the lobby refurbishment, it is now in the hands of residents, owners, management and the cleaning staff to care for the building Treasurer’s Report: Ms. Fridell stated that on February, 16, 2011, she held a review session of the FY 2010 audited financial statements for the residents. The session also included a trend analysis of financial performance and expenses over the past five years.
Ms. Fridell stated that she had contacted all of the banks recommended by Lerch Early for a possible project loan. She stated that it is an option that should be considered, but that the condo fees would be held as security and that payments for interest and principal would not be available for other discretionary reserve expenses. She stressed that entering into this type of obligation requires serious consideration and great prudence.
The following FY 2011 expense categories are over-budget: payroll, repair and maintenance and utilities. Ms. Fridell stated that the Board should focus on expense control. She added that in addition to major project management, Management also oversees the day-to-day operations of the building and the front desk operations, and needs to be given the time to focus on these. Delinquencies decreased by $20,000 over the past month and Ms. Fridell applauded management’s efforts in improving collections.
Old Business:
Project Updates: Mr. Murdoch stated that there are some expense issues to review regarding the renovation project. The design fees for the project are currently around $275,000, exceeding the $250,000 budgeted amount, and there will be another $2,200 that Hartman Design Group (HDG) will still bill for February. Total fees include $4,000 for lighting consulting; $4,000 for reimbursable expenses; and $2,500 for presentations to the Board. Dr. Muller inquired what were the results of the discussion between the designers and the lighting expert. Ms. Kielty responded that it involved discussions of lighting positioning, where electricity is available, and energy efficient lighting. Ms. Barth stated that there would be more lighting than in the past, but less energy will be used because of the type of lighting.
Ms. Fridell expressed concern that when a specific project budget is exceeded, this will appear in the footnotes of the Association’s financial statements, which will be viewed by current and prospective owners and potential lenders. Ms. Fridell stated that when a budget is set and exceeded, albeit even for legitimate reasons, by re-raising the budget, the Board is hiding the fact that the original budget was exceeded. Ms. Kielty stated that perhaps the $250,000 design expense budget should never have been set because the contract with HDG was based on hourly rates. She added that it is helpful to have a limit for discussion purposes, but ultimately, flexibility is needed to complete a project. Ms. Fridell stressed that the purpose of setting a limit on the design fees was because the Board, Lerch Early and Legum & Norman were unable to negotiate any expense limits with HDG at the time the design contract was approved, and that she had opposed approval of the HDG contract for precisely that reason. She believed that design expenses should have been controlled by being prudent with time and cost control. Dr. Muller reminded the Board that there were a number of instances in which HDG’s design reduced cost, for example, by not using marble as the back-drop behind the front desk.
Mr. Murdoch stated that the original project budget was for $1.6 million and was then reduced to $1.2 million. Over the course of the project, there were sub-projects such as replacing window framing and improving front door access that were outside of the original scope, but made good sense to undertake. Ultimately, $1,470,000 was spent on the project, still below the original budget of $1.6 million.
Ms. Fridell raised the issue that the Board previously made a motion for a budget and this was not adhered to. She questioned what was the true meaning of the Board’s word if the Board did not adhere to its stated/voted objectives. Mr. Murdoch stated that the Board discussed and agreed upon the changes along the way, which are reflected in past meeting minutes. Dr. Muller stated that the budget is a guideline and should be followed in good faith, but should be flexible. Mr. Murdoch suggested that in the future, certain aspects of projects should be more tightly defined, and designers be given a limit about what the Association can afford to spend.
The Board agreed to postpone a vote to adjust the design budget until the final tally of payments to HDG can be calculated.
Ms. Kielty stated that the Association’s auditor, Deleon & Stang recommended that the Board needed to retroactively vote for approval of the acquisition of a piano. Ms. Fridell had consulted the auditor on how to proceed because she did not feel comfortable signing off on a request to reimburse Dr. Muller $19,500 for payment of the piano because the expenditure had not been authorized by the Board and it had been made on Dr. Muller’s personal credit card. Ms. Fridell stated that there was some controversy exchanged among Board members as to whether the piano could be considered a piece of furniture, and as such, whether the expenditure was part of the overall furniture budget.
Dr. Muller, who led the efforts on the piano purchase, provided the statement : an appendix to these February 23, 2011 minutes.
Ms. Frantz inquired that if the piano was purchased on December 18, 2011, and there have been two board meetings since that time, why the purchase was not discussed. She stated that few individuals knew about the purchase, and the Board knew that this was a controversial topic among owners. In the October 2010 Board meeting, a resident asked about the decision to acquire a piano, and the Board President responded that a decision had not yet been made. Dr. Muller responded that HDG assured him in early December 2010 that the furniture budget would be sufficient and that furniture expenditures would not exceed $326,000 without the piano. The audio visual equipment was never part of the furniture budget. Ms. Kielty stated that the piano was also not discussed at the prior two Board meetings because she preferred that all items be discussed at one time after the furnishings arrived and the project was completed. Also, Ms. Kielty was not going to be present at the December 2010 Board meeting and she believed it would have been inappropriate to raise the topic. Dr. Muller stated that he had been prepared to mention the piano at the January 2010 Board meeting, but the piano had not yet arrived.
Ms. Kielty added that she felt that it was important for residents to see the piano and there was no opportunity to return it. She had hoped that when residents saw the piano in the space, they would accept it. In retrospect, she feels that it was not the best way to handle the purchase, and apologized to the Board for the way the purchase was handled. Her rationale for approving the purchase of the piano was that it fit within the furniture budget line and she did not believe that buying a less expensive piano would be a worthwhile investment. She added that the piano will be in place for generations and is an amenity for those who do not use other amenities, such as the pool or exercise room. The Association spends $44,000 a year on the pool for a small number of people, in contrast to the one-time cost of a piano to use at parties and gatherings. Ms. Kielty added that there is still money in the budget for fitness room equipment and the Board can soon move ahead on that purchase. She stated that there were no votes on specific furnishings, but rather an overall budget for the furniture.
Mr. Bressler read the attached statement : an appendix to these February 23, 2011 minutes.
MOTION Mr. Bressler moved that the Board of Directors of the Elizabeth Condominium has not, will not, and should not vote to purchase, nor reimburse, the cost of a piano bought without the Board’s approval. Board members were unclear on the wording of the motion, and there was not a second for this motion. Mr. Bressler later retracted this motion so that Ms. Fridell could propose another motion with more precise wording to reflect Deleon & Stang’s recommendation.
Mr. Fisher opined that the wording of Mr. Bressler’s motion was not appropriate and that the Board should consider the issue in two parts: 1) Was the purchase of the piano authorized? 2) Does the Board authorize the reimbursement of the piano to Dr. Muller? The Treasurer was not comfortable with approving the purchase and has brought the retroactive approval and reimbursement request to the Board.
In response to Mr. Bressler’s statement, Dr. Muller asserted that he purchased the TV on sale, and that the Board was never under any obligation to reimburse him; he would have kept the TV if the Board opted not to buy it for the lobby. Dr. Muller stressed that he did not make a unilateral decision, and at the request of the Refurbishment Committee, he researched pianos over a three-month period. There was no opportunity to discuss the piano purchase with the Board on a Saturday afternoon.
Ms. Fridell expressed that it is not clear to everyone that a piano could be considered a piece of furniture, and stated that in her opinion it is a discretionary item. She added that given the price of $19,053 and the fact that not everyone would assume it was covered under the furniture budget, she believed it merited being discussed specifically by the Board in the context of the refurbishment and reserve expenditure priorities. Since the piano was not purchased through a third party invoice, and because it is not universally categorized as a piece of furniture, she sought Deleon & Stang’s advice and the auditor recommended that the Board vote retroactively to authorize the purchase so that there would be a record of the decision in the Minutes.
MOTION Ms. Fridell moved, Ms. Barth seconded, to retroactively approve the purchase of the piano for $19,053, as requested by DeLeon and Stang. The motion failed with three approvals (Dr. Muller, Ms. Barth and Ms. Kielty) and four disapprovals (Mr. Bressler, Ms. Frantz, Ms. Fridell and Ms. Kielty).
Dr. Muller noted that the disapproval of the piano purchase could set a precedent for future Board decisions regarding every new item that residents dislike and that the process should be clarified in the next phase of the refurbishment. He emphasized that the purchase was not done any differently from any other article of furniture purchased under the furniture budget. The purchase was executed in good faith, over a few months, and was done at the request of a committee to be helpful.
Ms. Barth stated that at the first meeting with the HDG on May 29, 2009, the design concept was presented, which included a baby grand piano. The Refurbishment Committee discussed this with the resident Advisory Committee, which also liked the idea. In June 2009, the Board saw and approved this design (with the exception of Ms. Frantz and Mr. Levine who were not on the Board at that time). The committee delayed purchasing the piano in order to see whether there were funds left in the furniture budget after purchase of furniture and accessories. Ms. Barth affirmed that Dr. Muller led the search for the piano because of his specific knowledge and that the piano had always been considered to be part of the furnishings of the lobby. Ms. Barth also noted that she has seen the piano being used on four occasions after 10:00 p.m. in the last week, and that it was purchased for the enjoyment of the residents.
Dr. Muller asked Mr. Fisher if he could provide a legal opinion about a reimbursement request to a Board member for a purchase that was executed in good faith. Ms. Fisher responded that he could not provide an ad hoc opinion at the meeting. Dr. Muller asked Ms. Frantz ,who had voted against the motion to authorize the purchase, to reconsider her vote, and stated that he believed the issue is exacerbating personal differences.
There was some confusion about whether the Board could vote to reimburse Dr. Muller even though it had voted against the purchase of the piano. Mr. Fisher stated that the Board could not authorize the reimbursement to Dr. Muller if it did not approve the underlying purchase.
MOTION Ms. Frantz moved, Mr. Bressler seconded, that $3,276, which were the proceeds from the sale of the old lobby furniture, be moved from the Operating to the Reserve fund, as requested by the auditor. Ms. Barth stated that this had already been done in August 2010 based on a previous Board motion. Ms. Frantz explained that the amount had been discussed with the auditors in November 2010. The amount had been credited to the refurbishing budget, but the actual cash proceeds had not been transferred to the Reserve Fund. The motion passed with one abstention by Dr. Muller (5-0-1).
Ms. Kielty expressed frustration about the decision making process of the Board; in her opinion it is inefficient and issues are over-analyzed. She added that hostile feelings among residents about how decisions are made have created an unpleasant environment. The community should be thrilled about the completion of the project, and that she made the decision to authorize the purchase of the piano because she believed it to be in the best interest of the community.
[Ms. Kielty left the meeting at 10:02 p.m. to use the restroom], Ms. Fridell questioned who was in charge of the Board meeting. Dr. Muller, as Vice President, assumed control of the meeting,]
New Business:
A brief discussion resulted in the conclusion that the expenditures for audio visual equipment should not be included in the furniture budget. Mr. Murdoch stated that the change would be reflected in the next report.
FY2012 Proposed Budget Schedule: Mr. Murdoch stated that a draft budget will be given to the Treasurer on Monday and that the Board will need to proceed with workshops to discuss the FY 2012 budget.
Annual Meeting Schedule/Elections Committee: Mr. Murdoch reported that the Election Committee met that afternoon. The Committee is appointed by the President and consists of: Linda Kontnier, Jim Rich, Mary McGuire, Diana Brosnon, and Jim & Evelyn Vuko. The call for candidates will go out in a letter from the Board President on February 25, 2011. The nomination deadline is March 27, 2011, and the official ballot and Annual Meeting notice will be mailed on April 11, 2011. The Annual Meeting will be held on May 4, 2011. The Election Committee elected to use the computerized ballot system from Legum & Norman which was used in the 2010 elections.
[Ms. Kielty returned at 10:11 p.m and reassumed control of the meeting.]
Mr. Santos stated that the key FOB distribution has been ongoing for more than a month. Notices were sent to residents that the Management office will be open on a Saturday and late hours for Mondays and Tuesdays to continue distributing key Fobs. The building is not completely secure until all external access doors are locked 24/7. Eventually residents will need to use their key fobs for any entry to the building and guests will have to call from the front entry in order to be admitted.
At the January 19, 2011, meeting, the Board approved the disposal of hazardous waste stored/accumulated around the building for $4,917.50. Between the time of the approval and the disposal, additional waste was discovered in other storage rooms, which increased the cost of disposal to $6,675.75.
MOTION Mr. Bressler moved, Ms. Fridell seconded, to approve the increase of $1,758.25 to pay Environmental Management Services, Inc. for the disposal of hazardous waste. The motion passed with one abstention by Dr. Muller (5-0-1).
Mr. Santos reported that there was a hard drive “crash” of the camera monitoring system and that the system was inoperable. Mr. Levine has been helping Mr. Santos to evaluate options; there will be an upcoming expense to replace the computer equipment and augment the capacity of the server. The cost will likely be around $6,000.
The garage floor sweeper machine is failing. Management and staff are trying to salvage it and replace the engine, which could possibly cost $6,000 to $7,000. The machine is about 15 years old, and a replacement would cost about $30,000.
Mr. Santos asked for Board approval of the winterization of the cooling tower in order to have heat and air conditioning accessible year-round. The winterization can be done any time of the year; however, in order t have both available in transition months such as April and May, the work would need to commence within 30 days. Mr. Santos obtained three proposals from Carrier, Densel and Noyes Air Conditioning and recommended the Board approve Densel. Densel’s comprehensive bid of $45,000represented the lowest cost.
Mr. Murdoch noted that this expenditure could be covered with the $50,000 allowance for mechanical work in the Five Year Plan for this fiscal year. Ms. Fridell pointed out that the Association would likely incur additional energy costs as a result of making both air conditioning and heating available during transitional months and asked if Management could estimate what the additional costs might be. Mr. Santos stated that it is impossible to measure the utility costs because of the individual temperature preferences of each resident. He added that once the work is completed, all of the heating and air conditioning equipment will constantly run. Ms. Barth noted that this could diminish the life expectancy of HVAC equipment. Dr. Muller stated that the decision to make available both air conditioning and heating at all times could be reversed at any time.
MOTION Dr. Muller moved, Ms. Barth seconded, to accept the proposal from Densel for $46,331. The motion passed unanimously (6-0-0).
MOTION Mr. Levine moved, Ms. Frantz seconded, to reconsider the previous motion which did not pass earlier in the meeting to approve the purchase of the piano for $19,053.00. Mr. Levine stated that if the Board does not reimburse Dr. Muller, it could cost the Association even more money in legal costs. The motion passed with objections from Ms. Fridell and Mr. Bressler (5-2-0).
Committee Reports:
Landscaping Committee: The committee is in the process of determining cost and arrangement of plantings in the front of the building. Ruppert Landscape is in the process of planning a design, and an open meeting will be held next week. The committee has formulated a list of objectives to share with residents and a questionnaire will be distributed to all residents to obtain their feedback. The meeting will be held on Thursday, March 3, 2011, at 7:30 p.m. in the west lobby and is open to all.
Floor Representatives Committee: The committee eulogized Ms. Helen Soderberg, who had recently died and had previously served on the committee and made many contributions to the Elizabeth. Management gave the committee information on new move-ins from January and February. A questionnaire was designed for floor representatives about how to enhance their efforts for welcoming new residents. Dr. Muller announced that the Board had approved the use of the West lobby area by the Soderberg family and friends on March 26, 2011 for a memorial service.
Comments from the Floor:
• A resident inquired about how a change can be made to the by-laws. Mr. Fisher stated that there are two ways: 1) A presentation can be made by the Board and communicated to the owners; or 2) owners, by petition, can submit something to the Board in writing to request approval. He recommends that an owner who would like a change to the by-laws, submit a request in writing to the Board for consideration. Ultimately, an amendment requires a supermajority approval of 66 and 2/3 of all owners.
• The same resident also inquired about whether the front glass doors were going to be replaced because they were too heavy, in her opinion. Ms. Kielty clarified that they were previously replaced during the refurbishment project because of structural issues, but that there are no plans to replace the current doors.
• A resident stated it is important that residents be active in voicing their opinions in the community. She suggested that another option to solve the piano issue would have been to sell the piano and the Association could have reimbursed Dr. Muller the difference. The resident stressed that all purchases should be transparent. She added that the Board’s second vote on the issue was motivated out of panic to reimburse Dr. Muller, and in her opinion did not reflect the truer issue. The resident felt that the purchase of the piano was egregious and that it could have been purchased at another time.
• A resident inquired why a Board member would use a credit card to make such a large purchase on behalf of the Association. Dr. Muller responded that the piano had to be purchased that day and he had credit available to affect the purchase.
• A resident repeated his previous observations about a corner in the hallway leading to the west elevators that is repeatedly damaged by passers by, and that a plastic corner should be applied to avoid repeat damage. Mr. Santos stated that this will be taken care of this week.
• A new owner who will be soon moving into the building expressed her opinion that the refurbishment lobby was impressive. She stated that she is looking forward to living in the community and hopes that the experience will be a positive one.
Adjournment:
The President adjourned the meeting at 10:49 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
Appendix to February 23, 2011 Minutes from the Board of Directors’ Regular Monthly Board Meeting.
Charles Bressler’s summary regarding piano purchase:
The last time the Board approached the subject of the piano was at the October board meeting when the president said in answer to a question that “no decision has been taken.” The Board clearly decided then to postpone a decision on whether to get a piano or not, to sometime in the future. There were three board meetings on November 22, December 20, and January 19, with no mention of the piano.
On January 31, 2011, there was a special board meeting, chaired by Dr. Muller, to discuss financing future projects. Well, that was certainly not the ideal time to talk about a piano at a meeting schedule to discuss borrowing a few million dollars to finance the replacement of the exterior windows, the AWAC system, possibly the doors of each apartment, etc.
Then the piano lands in the lobby a day after the new furniture is delivered early February. Well, guess when this piano was purchased? It is hard to believe. The piano was purchased on December 19, 2010, by Dr. Muller and charged on his credit card two days before our December board meeting. At that meeting, the purchase of a $19,000 piano purchased and charged on his personal credit card still fresh in his mind, but no mention of the piano.
No mention on the January 19th meeting, no mention on the January 31st meeting, but when the piano lands into the west lobby, an invoice is presented to Mr. Santos. This invoice is dated December 18, 2010, in the amount of $19,053 for a Boston piano with matching bench. I assume that Ms. Kielty, our president, approved it since it bears her initials, on the 29th of January, more than a month later. It was then presented to the treasurer, Monique Fridell, who did not approve of this expenditure and refused to sign the check.
Thank God Monique has an excellent memory. She knew very well, as most of us on the Board and in the audience, that we never did vote to purchase a piano. She also knew that the Board would not under the circumstances purchase a $19,000 piano when we have so many expensive projects that are indispensable to the building.
I have already expressed to the Board via numerous e-mails, that I, for the reasons expressed here above, would vote “no” to purchase the piano, nor would I vote for Dr. Muller to be reimbursed for $19,053. I even suggested that Dr. Muller return the piano, but as of February 11th, he never approached Steinway piano gallery to even discuss the issue.
To help out, I asked Mr. Murdoch to contact Mr. Manougian, our insurance agent, to check if this could be considered an error by a board member and obtain a refund for the Elizabeth Condominium Association.
It is very clear to me as it should be to many, that Dr. Muller made a unilateral decision to withhold the facts that he purchased the piano back in December from at least four board members and the owners.
It is not the first time Dr. Muller comes to the Board to ask for a retroactive vote to reimburse him for something he purchased without prior vote by the Board. If you remember, some two and a half years ago, before I joined the Board, he asked the previous board to vote retroactively to authorize the purchase of a flat television on the wall of our then library. It had already been installed a few days before, which meant that it had been ordered and paid before, again on a credit card.
Now, having the facts, I urge the Board to vote no for the purchase of the piano and therefore no to the request for reimbursement.
You and I have a fiduciary duty to the Elizabeth Condominium and its owners, not to Dr. Muller who has acted irresponsibly and with total disregard toward the Board and most
Appendix to February 23, 2011 Minutes from the Board of Directors’ Regular Monthly Board Meeting.
Dr. Muller’s summary regarding piano purchase:
The Board President has asked that I present a comprehensive, factual report concerning the acquisition of the Boston piano which was installed in the west lobby last month. I am happy to do so. To the best of my knowledge and memory, the facts are as follows:
By way of background and to refresh our collective memory: the original Hartman design , including a parlor grand piano in the west lobby, was presented to the Refurbishment Committee in May, 2009. The design, including the piano, was presented to the Board in June, 2009. It was presented to the Elizabeth membership by Hartman Design Group (HDG) at a public meeting on 3/9/2010. The plan, including the piano, was pictorially displayed in our main entrance lobby from then until late August, 2010, when work started on the project. Hartman's estimated price for such an instrument was $15,000. Hartman agreed to advise the Committee but left the final selection to them, just as they left the final selection of the TVs to the Committee or their designee, Management.
Members of the Refurbishment Committee visited many piano stores during 2010 without arriving at a decision, mainly because it was not clear what amount of money would be available in the furniture budget for a piano after all other furnishings had been selected.
I was never a member of the Refurbishment Committee, but because I had been a concert pianist many years ago (in college and medical school), committee members asked for my assistance in late October, 2010. Specifically, they asked me to evaluate the musical quality of various pianos and recommend one for purchase.
My recommendation would be based on three criteria:
1. The Hartman design for a grand piano, polished black approximately 5'3" in length, large enough for full tones but intimate in size for the lobby space;
2. The Committee desire for a structurally sound instrument which would endure for the lifetime of The Elizabeth, with the warranty of a reliable firm;
3. The Board's desire to remain within their budgetary furniture line item, ($350,000) last discussed and voted in public session, July 2010.
With these limiting criteria, a number of possibilities were immediately eliminated. Used pianos in private ownership, either within the surrounding community or the larger Internet community, would not provide the desired warranty or company backing. In addition, some of these pianos (such as one offered by the Community Center) would have required extensive, expensive refurbishment. The Refurbishment Committee also noted that older, cheaper models were less likely to be as durable and would not have as lengthy a lifespan.
The "gold standard" for excellence in pianos is, of course, a Steinway. But a new Steinway of the preferred size would cost between $40,000- $50,000, and even a used/refurbished Steinway of this size would be between $25,000 and $30,000, clearly not in our budget.
With these facts in mind, I visited four different locations for a piano. First, sometime in November I accompanied a member of the Refurbishment Committee to Jordan Kitt Pianos in Rockville. They were displaying new Yamaha pianos and recently used ones that had been loaned to Georgetown University. The prices were in the $15,000 range. The musical quality of the pianos was excellent and this information was reported back to other members of the committee. However, since it was still not clear what the final cost of remaining furniture would be, no decision was made.
A second visit was made later that month to The Piano Company in White Flint Mall, to evaluate Kawai pianos, the "Toyota" to Yamaha's "Honda," both excellent companies headquartered in the same Japanese city. Both Japanese pianos have a "brighter" tone than the more "mellow" Steinway, and are preferred by many because of their excellent workmanship but more modest price. Here again, I found at least one piano in the $15,000 range and reported such to the committee members. Again, there was no decision because of the uncertain furniture costs yet remaining.
In early December I visited Rick Jones Pianos in Beltsville. His establishment has an excellent reputation established over many years selling refurbished Yamahas and Steinway pianos. There were at least two such Yamaha pianos that were in the $12-15,000 price range, which I again reported back to the committee as candidates for purchase. However, the fact that they were 10-20 years old, even though refurbished with a 10 year warranty, made the committee members reluctant to pursue purchase.
Over this same time period, in an attempt to elicit fresh input, I also spoke to two members of the Board who had not been on the Board when the original presentation was made by HDG.
One of these members wished assurance that the piano would actually be used and not merely serve as decoration. While no survey could predict an accurate measure of such use, I did approach a number of people whom I know play the piano. Four of them, representative of ages from 9 to 90, wrote back notes of support whose copies I share with the Board.
Finally, in mid-December, I spoke again with HDG, who assured me that their final furniture costs would be roughly $326,000, leaving about $24,000 in the furniture line item. At about this same time, Steinway pianos announced their annual, one day public sale of pianos which they had loaned to the Kennedy Center for a year. I obtained an invitation to inspect these pianos on the Saturday immediately prior to the public offering, and invited Ms. Marianne Cook, our resident master pianist to accompany me and provide me with her expert, independent judgment concerning the pianos' comparative tone and touch. Together, we spent the afternoon evaluating and playing the various Kennedy Center pianos, at the end of which time we both judged the 2009 Boston Performance Edition piano to be superlative in quality. This piano would sell new for about $22,000, but because it had been played professionally for about a year, Steinway was asking $19,000. I negotiated the price down to $17,500 and then phoned the Board President to report the situation. She inquired whether the piano could be "held" with a refundable down payment, but this was not acceptable to Steinway, since all the pianos were expected to be sold the following day during the public offering.
The Board President asked my advice and I summarized the situation by repeating my original three criteria, all of which I believe had been met:
1. A polished ebony parlor grand, measuring 5'1.5" met the Hartman Design proposal
2. A 10 year Steinway warranty met the Committee's concern for a highest quality piano and
3. The cost was close to the original $15,000 estimate and within the furniture budget voted by the Board.
Since this was the best "fit" of all the pianos that I had seen and/or researched, and since there was not, in my opinion, the likelihood of a better option in the foreseeable future, I strongly recommended the purchase. This would be an amenity that could be enjoyed by generations of Elizabeth residents and visitors, since a piano's life-time would easily span 50 years or more.
The cost to each condominium unit would be approximately $1/week for a year, not even presuming amortization. The first tune-up at six months would be half-price from Steinway, and annual costs thereafter would only include a tune-up, whose cost would be between $100-200 depending on the tuner of our choice. The 10-year warranty from Steinway would protect the structural integrity of the piano.
The Board President agreed and the purchase was made. Following the usual procedure, the credit card charge was presented to Management for reimbursement when it arrived in January, and this in turn was presented to the Board Treasurer for her review, just as all other furniture bills had been processed.
Tuesday, March 22, 2011
January 19, 2011 Minutes of ECA Board Meeting
THE ELIZABETH CONDOMINIUM ASSOCIATION
4601 North Park Avenue
Chevy Chase, MD 20815
Minutes of Board of Directors Meeting January 19, 2011
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 7:33 p.m.
Announcements:
Approval of Minutes:
MOTION Dr. Muller moved, Mr. Bressler seconded, to approve the December 10, 2010 regular meeting minutes as amended, with one correction. An asterisk/footnote should be added to Tracy Geiger’s (DeLeon & Stang auditor) report of the final draft of the audit to refer to the corrected results reported by Mr. Murdoch in the January 19, 2011 board meeting. The motion passed with two abstentions by Mr. Levine and Ms. Kielty (4-0-2).
President’s Report: Ms. Kielty thanked Dr. Muller for conducting the last board meeting in her absence and dealing with some issues while she was out of town. She also thanked Elin Winthrop and Peg Downey for organizing the staff holiday fund. Another group of residents was thanked for restocking the library. Appreciation was expressed to Mr. Santos for the complimentary letters he wrote to the HBW construction group for their work on the lobby refurbishment. Ms. Kielty added that she attended most of the meetings with the HBW project leads and was impressed with their professionalism and integrity.
Ms. Kielty stated that placement of the furniture and accessories in the lobby will occur over three to four days next week. The next refurbishment project under consideration is the resident hallways. The Board will next meet for a working session on January 31, 2011 to begin discussion of this and other capital improvement projects including window and balcony door replacement, McQuay fan coil unit replacement and entry canopies. Ms. Kielty stated that the Elizabeth is a 35-year old building and requires updates to maintain its value. She added that she has served on the Board for the last four years, along with Dr. Muller and Ms. Fridell, and during that time there has been increased opportunity for residents to share input. The Board is responsible for making some difficult decisions and uses the best judgment possible. Board members take their positions seriously and volunteer many hours of their time in the best interest of the Association.
Treasurer’s Report: Ms. Fridell explained that the revision to the audited financial statements was due to a FY 2010 Pepco bill that arrived after the audit firm had concluded its audit work in October 2011 . Correct application of this bill to FY 2010 results will reduce the year’s surplus by $55,000. Both Legum & Norman and DeLeon & Stang have been involved in making these changes. Ms. Fridell stated that in the future, the Association will need to be more patient in waiting for audited statements to ensure that all bills are accounted for. DeLeon & Stang has recommended that its team perform the on-site audit in mid-October instead of mid-September to be sure that all August and September billing has cleared L&N Accounting and has been posted. Ms. Fridell stated that ECA needs to ensure that Legum & Norman Accounting and Controller review and provide comments regarding the draft audited statements and adjusted journal entries recommended by D&S, which was not done for this audit.
An explanation for the late PEPCO invoice was described by Mr. Murdoch: in early July 2010, the June Pepco bill for $63,000 was received, which was paid. Subsequent to that, another bill for the same period for $110,000 was received and reported in the July management report. Instead of paying the difference, the balance was carried over to the next bill, which was about $160,000. When DeLeon & Stang conducted the audit, it appeared based on documentation that the Association had overpaid Pepco by $50,007, and made an adjusted journal entry to the account, which resulted in a year-end surplus of $118,000. In December 2010, when Legum & Norman accounting department was reviewing the FY 2011 accounts because of high utility usage, the adjusting journal entry was questioned and discussed with DeLeon & Stang. The operating surplus was then reduced from $118,000 to $68,000. DeLeon and Stang will adjust the audit by that amount. Ms. Fridell clarified that as a result, the utility expense will go up in FY2010 and the net income will go down. Dr. Muller asked if there was any legal requirement to have the audit done in a certain amount of time. Ms. Fridell stated that according to association by-laws, there is no requirement; however, she believes that six months is certainly a long time after FYE to wait for audited statements. Dr. Muller also noted that Pepco has sent bills late in the past, which management should be aware of.
Old Business:
Lobby Renovation/Furniture Installation: Mr. Santos stated that the lobby refurbishment is complete, with the exception of the furniture and artwork placement. Final inspections have been done and there are some small changes that need to be made. Furniture and accessories will be placed beginning on Tuesday of next week and should be completed by Friday.
Management Expenditure Authority/BOD Approval: Mr. Murdoch stated that the management contract allows Management signing authority for up to $3,000 per expense, and anything exceeding that requires board approval, which would be done by e-mail. Ms. Fridell asked if a vote of endorsement will be needed at the next board meeting for expenditures made by management. Management and the Board agreed that if there is a statement of endorsement, then no vote is necessary. Actions that take place in between meetings should be identified for the minutes.
New Business:
Collections Procedures/Delegation of Authority: Mr. Murdoch stated that he has discussed with Ms. Fridell delegating authority to the treasurer to handle minor collection issues, such as writing off small balances rather than waiting for the next board meeting. Also, management should be given the authority to interact with the attorneys about collection issues.
MOTION Ms. Fridell moved, Dr. Muller seconded, to approve delegation to the Treasurer/Assistant Treasurer to handle minor collections and settlement issues. The motion passed unanimously.
MOTION Ms. Fridell moved, Dr. Muller seconded, to approve delegation to management to handle minor collections issues and interact with legal counsel. The motion passed unanimously.
Mr. Murdoch stated that as of December 31, 2011, delinquencies dropped by $2,000. Subsequent to that, another $12,500 has been collected, which has reduced the overall delinquency rate from three percent to two percent.
Items for Approval:
Marble floor: Mr. Santos stated that HBW Group, as part of its scope of work for the lobby renovation, is responsible for cleaning and sealing the marble floors throughout the lobby area. However, the lobby renovation plans only included about half of the work that needs to be done to completely restore the marble floors. Mr. Santos requested through e-mail that the Board endorse the expense for polishing the marble after cleaning. HBW will ensure that the floors are cleaned, and for $3,646.00, the floors would then be polished and sealed to protect the finish. The work will be done in the next two weeks after the furniture is placed.
Six of seven Board members approved with President Kielty not required to respond since majority was achieved: $3,646.00 was approved and endorsed via e-mail on January 10, 2011 for Odyssey Restorations to polish and seal marble floors. Odyssey is the same company that performed the polishing of the brass elevator doors.
Dr. Muller inquired about $825 that was authorized for waste pipe cleaning of three tiers, and wanted to make sure that tier 11 was done as that tier had experienced major pipe problems. Mr. Santos stated that cleaning is to be done for tiers 11, 12, 18, 19 and 21 by JP Seworooter, Inc.
Environmental Waste Removal: Mr. Santos stated that there is a large amount of waste throughout the building that needs to be disposed of properly. HBW recommended Environmental Management Services, Inc. and completed a credit application on the Elizabeth’s behalf. Ms. Fridell inquired if owners’ environmental waste could be included for disposal. Mr. Santos said that was possible, but would increase the price. Board members thought that this was a larger project and could be done as a special project in the future. Mr. Bressler suggested sending a memo to residents to explain how to properly dispose of environmental waste materials themselves.
MOTION Ms. Frantz moved, Dr. Muller seconded to approve $4,917.50 to HBW Construction for further credit to Environmental Management Services, Inc. for the removal of Association environmental waste. The motion passed unanimously.
Energy Tax Credits: Mr. Frantz stated that owners need information about their portion of the energy tax credit for recent improvements made, such as the party room A/C unit and window replacement in the lobby. Each owner is eligible for energy tax credits relating to his/her share of the total costs. Mr. Murdoch will request a tax basis letter from the auditor and will confirm that these items qualify. He will also write a memo that outlines the costs and share of the tax credit for each unit. He will complete this within two weeks and Mr. Santos will circulate a notice to residents that information about the tax credits is coming.
Board Work Session regarding Major Projects: This meeting will be on January 31, 2011. Mr. Santos stated that he has provided the Board with three cost projections as a basis for discussion. The projects to be discussed will be capital improvement reserve expenditure projects, and will include apartment windows, sliding glass doors, common hallways floors, and the HVAC central plant. Dr. Muller asked if the exterior canopy is included in these projects, to which Mr. Santos responded, “no”, but canopy refurbishment could be discussed at the February 2011 board meeting. Ms. Frantz asked if the estimates coming in for the canopy are near the budget estimate. Mr. Santos replied “yes”.
Ms. Frantz inquired what role the owners will have in this meeting. Ms. Kielty stated that the Board will have a lot to discuss and most likely will not be reaching any conclusions. The budget documents can be made available to the owners. Ms. Fridell requested that Mr. Santos’ projections be made available to the audience before the meeting. Ms. Fridell also suggested that there be a discussion meeting with owners to solicit their feedback about preliminary decisions/suggestions. Dr. Muller stated that the Board does not yet know how it will proceed, but that there will likely be further meetings. Mr. Murdoch stressed that no decisions will be made at the working session, and that discussion should be limited to Board members. Ms. Frantz stated that in regard to the lobby refurbishment, owners were only allowed to comment directly before votes were taken on some major decisions. She added that some residents were frustrated that they had no voice. Ms. Kielty stated that residents can share their views at any time, and a decision on how to proceed is not needed now. Ms. Frantz stated that she will raise it again at a later time.
Dr. Muller inquired about the estimate of $144,000 for repair/replacement of the front canopies. Mr. Santos stated that this estimate is for using the current structure and improving the design. Mr. Santos is reviewing proposals and will give a projection of when the estimates will be done at the working meeting.
Ms. Kielty asked if there will be new microphones. Mr. Santos stated that there are currently two new wireless microphones, but the library is the area where they are to be used. Additional microphones have been ordered. He has also ordered one new luggage cart to test before ordering additional ones. Management is also considering other ideas for locating carts when residents don’t return them to the lobby.
Mr. Santos stated that all resident data has been loaded into the computer and each unit is assigned two electronic key fobs. He is staging notices to be sent out to four to five floors at a time to pick-up their key fobs. Separate arrangements will be made for those who cannot get to the office. Once residents have been given enough time to pick up their key fobs, the original lock cylinders on the doors will be changed and the glass doors will be locked on a regular basis. Securing additional doors can always be done in the future.
Committee Reports:
Landscape Committee: The committee is waiting to hear from Ruppert Landscaping for the first draft of the landscape master plan.
Energy Committee: The committee advises residents to turn off unneeded lights to conserve energy. The committee will meet within the next month and report if necessary.
Library Committee: No Report.
Floor Representatives: The committee does not meet on a regular basis, but will report as needed.
Mr. Santos encouraged residents to use the Association website, which has meeting announcements, and allows residents to submit work orders. He added that the business center has a computer with the website as its home page, which is “www.elizabethcondo.com”.
Comments from the Floor:
A resident inquired if the Fob system replaces the Medeco key. Mr. Santos responded that it does, but the Medeco lock cylinders will be kept in place and “re-keyed” to act as a back-up in case the Fob system fails. He added that in case of an emergency, the generator will be able to keep the Fob system running. There is no need to keep the old Medeco keys; they can be recycled through the Management office.
Concern was expressed about residents who smoke in their units because the smoke often spreads through the vents to other units and Elizabeth employees are also subjected to the smoke when they perform in-unit work. Dr. Muller responded that legal counsel has advised the Association that unless there is a documented medical situation, the law is unclear as to whether a resident could be prohibited from smoking in his/her own apartment. He added that the Board has a dispute resolution process where residents can bring unresolved disputes to the Board for legal resolution.
A resident asked whether parcels delivered to the building would be listed on the website. Mr. Santos stated that he attempted to use a module on the website to do this, but it is too rudimentary. The Board has previously approved the purchase of an upgrade of the existing software to keep a record of packages and it will be in use by January 31, 2011. The Association will not be using the website for notification of parcels at this time; an e-mail account must first be secured.
A resident asked if there is a way of tracking those who use the Fob system. Mr. Santos stated that usage is automatically recorded. Another resident asked if the entry into the East garage will remain the same. Mr. Santos responded that it will be and he is also pursuing the installation of a key fob reader at the entry keypad for residents who ride bicycles to enter the garage, then another key fob reader inside the garage for exiting with their bicycles. When leaving or returning to The Elizabeth they could use the garage for access rather than the lobby.
A resident inquired if the Board has considered redesigning the exterior canopy so that it extends further out into the driveway area, so residents are protected from the rain when they get out of cars. Mr. Santos stated that he discovered a design in the office archives that explored this option, but is not feasible because the height of the canopy has to be high enough to allow trucks and the shuttle bus to pass under it. The resulting canopy would be so high that it would not protect residents from the elements. This would multiply tenfold the estimated cost of the canopy replacement.
A resident stated that a West side ground floor unit has a new door with a knocker and knob, and wanted to know if all doors will eventually look this way. Mr. Santos stated that the five West ground floor units were fitted with new doors because of their proximity to the newly refurbished West lobby and to serve as potential prototypes for unit doors throughout the building.
Ms. Kielty reminded residents to treat the front desk staff courteously.
A resident voiced concern about large expenditure items that the Association was undertaking. A petition has been circulated that reflects this concern. While the working session of the Board at the end of the month is open to residents, he objects to the fact that residents are not allowed to participate in the discussion. The resident added that the Board is not responding to the residents who are concerned about potential large expenditures. Currently, there are 70 signatures on the petition representing 60 units. The resident expressed that in his opinion board members are not being sensitive to the financial concerns of many residents and that a special meeting should be convened to address issues with the refurbishment. Ms. Kielty responded that residents can express concerns to board members at any time and the working meeting is public and completely transparent. The resident asked if a change of course was being considered given some of the concerns and requested that the Board have a plan in mind as to how to conduct future business and eliminate those issues.
Ms. Fridell stated that there will be subsequent meetings after the working session and affirmed that some board members are very cost conscious. The resident replied that there is no evidence of cost consciousness and believes that everyone should see a listing of the costs associated with the lobby refurbishment. Ms. Kielty responded that the lobby refurbishment costs came in lower than originally projected and as a result the Association was able to do more extensive renovations – such as bathrooms and Party Room -- than originally expected.
The next board meeting will be held on February 23, 2011 at 7:30 p.m.
Adjournment
The President adjourned the meeting at 9:25 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
4601 North Park Avenue
Chevy Chase, MD 20815
Minutes of Board of Directors Meeting January 19, 2011
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 7:33 p.m.
Announcements:
Approval of Minutes:
MOTION Dr. Muller moved, Mr. Bressler seconded, to approve the December 10, 2010 regular meeting minutes as amended, with one correction. An asterisk/footnote should be added to Tracy Geiger’s (DeLeon & Stang auditor) report of the final draft of the audit to refer to the corrected results reported by Mr. Murdoch in the January 19, 2011 board meeting. The motion passed with two abstentions by Mr. Levine and Ms. Kielty (4-0-2).
President’s Report: Ms. Kielty thanked Dr. Muller for conducting the last board meeting in her absence and dealing with some issues while she was out of town. She also thanked Elin Winthrop and Peg Downey for organizing the staff holiday fund. Another group of residents was thanked for restocking the library. Appreciation was expressed to Mr. Santos for the complimentary letters he wrote to the HBW construction group for their work on the lobby refurbishment. Ms. Kielty added that she attended most of the meetings with the HBW project leads and was impressed with their professionalism and integrity.
Ms. Kielty stated that placement of the furniture and accessories in the lobby will occur over three to four days next week. The next refurbishment project under consideration is the resident hallways. The Board will next meet for a working session on January 31, 2011 to begin discussion of this and other capital improvement projects including window and balcony door replacement, McQuay fan coil unit replacement and entry canopies. Ms. Kielty stated that the Elizabeth is a 35-year old building and requires updates to maintain its value. She added that she has served on the Board for the last four years, along with Dr. Muller and Ms. Fridell, and during that time there has been increased opportunity for residents to share input. The Board is responsible for making some difficult decisions and uses the best judgment possible. Board members take their positions seriously and volunteer many hours of their time in the best interest of the Association.
Treasurer’s Report: Ms. Fridell explained that the revision to the audited financial statements was due to a FY 2010 Pepco bill that arrived after the audit firm had concluded its audit work in October 2011 . Correct application of this bill to FY 2010 results will reduce the year’s surplus by $55,000. Both Legum & Norman and DeLeon & Stang have been involved in making these changes. Ms. Fridell stated that in the future, the Association will need to be more patient in waiting for audited statements to ensure that all bills are accounted for. DeLeon & Stang has recommended that its team perform the on-site audit in mid-October instead of mid-September to be sure that all August and September billing has cleared L&N Accounting and has been posted. Ms. Fridell stated that ECA needs to ensure that Legum & Norman Accounting and Controller review and provide comments regarding the draft audited statements and adjusted journal entries recommended by D&S, which was not done for this audit.
An explanation for the late PEPCO invoice was described by Mr. Murdoch: in early July 2010, the June Pepco bill for $63,000 was received, which was paid. Subsequent to that, another bill for the same period for $110,000 was received and reported in the July management report. Instead of paying the difference, the balance was carried over to the next bill, which was about $160,000. When DeLeon & Stang conducted the audit, it appeared based on documentation that the Association had overpaid Pepco by $50,007, and made an adjusted journal entry to the account, which resulted in a year-end surplus of $118,000. In December 2010, when Legum & Norman accounting department was reviewing the FY 2011 accounts because of high utility usage, the adjusting journal entry was questioned and discussed with DeLeon & Stang. The operating surplus was then reduced from $118,000 to $68,000. DeLeon and Stang will adjust the audit by that amount. Ms. Fridell clarified that as a result, the utility expense will go up in FY2010 and the net income will go down. Dr. Muller asked if there was any legal requirement to have the audit done in a certain amount of time. Ms. Fridell stated that according to association by-laws, there is no requirement; however, she believes that six months is certainly a long time after FYE to wait for audited statements. Dr. Muller also noted that Pepco has sent bills late in the past, which management should be aware of.
Old Business:
Lobby Renovation/Furniture Installation: Mr. Santos stated that the lobby refurbishment is complete, with the exception of the furniture and artwork placement. Final inspections have been done and there are some small changes that need to be made. Furniture and accessories will be placed beginning on Tuesday of next week and should be completed by Friday.
Management Expenditure Authority/BOD Approval: Mr. Murdoch stated that the management contract allows Management signing authority for up to $3,000 per expense, and anything exceeding that requires board approval, which would be done by e-mail. Ms. Fridell asked if a vote of endorsement will be needed at the next board meeting for expenditures made by management. Management and the Board agreed that if there is a statement of endorsement, then no vote is necessary. Actions that take place in between meetings should be identified for the minutes.
New Business:
Collections Procedures/Delegation of Authority: Mr. Murdoch stated that he has discussed with Ms. Fridell delegating authority to the treasurer to handle minor collection issues, such as writing off small balances rather than waiting for the next board meeting. Also, management should be given the authority to interact with the attorneys about collection issues.
MOTION Ms. Fridell moved, Dr. Muller seconded, to approve delegation to the Treasurer/Assistant Treasurer to handle minor collections and settlement issues. The motion passed unanimously.
MOTION Ms. Fridell moved, Dr. Muller seconded, to approve delegation to management to handle minor collections issues and interact with legal counsel. The motion passed unanimously.
Mr. Murdoch stated that as of December 31, 2011, delinquencies dropped by $2,000. Subsequent to that, another $12,500 has been collected, which has reduced the overall delinquency rate from three percent to two percent.
Items for Approval:
Marble floor: Mr. Santos stated that HBW Group, as part of its scope of work for the lobby renovation, is responsible for cleaning and sealing the marble floors throughout the lobby area. However, the lobby renovation plans only included about half of the work that needs to be done to completely restore the marble floors. Mr. Santos requested through e-mail that the Board endorse the expense for polishing the marble after cleaning. HBW will ensure that the floors are cleaned, and for $3,646.00, the floors would then be polished and sealed to protect the finish. The work will be done in the next two weeks after the furniture is placed.
Six of seven Board members approved with President Kielty not required to respond since majority was achieved: $3,646.00 was approved and endorsed via e-mail on January 10, 2011 for Odyssey Restorations to polish and seal marble floors. Odyssey is the same company that performed the polishing of the brass elevator doors.
Dr. Muller inquired about $825 that was authorized for waste pipe cleaning of three tiers, and wanted to make sure that tier 11 was done as that tier had experienced major pipe problems. Mr. Santos stated that cleaning is to be done for tiers 11, 12, 18, 19 and 21 by JP Seworooter, Inc.
Environmental Waste Removal: Mr. Santos stated that there is a large amount of waste throughout the building that needs to be disposed of properly. HBW recommended Environmental Management Services, Inc. and completed a credit application on the Elizabeth’s behalf. Ms. Fridell inquired if owners’ environmental waste could be included for disposal. Mr. Santos said that was possible, but would increase the price. Board members thought that this was a larger project and could be done as a special project in the future. Mr. Bressler suggested sending a memo to residents to explain how to properly dispose of environmental waste materials themselves.
MOTION Ms. Frantz moved, Dr. Muller seconded to approve $4,917.50 to HBW Construction for further credit to Environmental Management Services, Inc. for the removal of Association environmental waste. The motion passed unanimously.
Energy Tax Credits: Mr. Frantz stated that owners need information about their portion of the energy tax credit for recent improvements made, such as the party room A/C unit and window replacement in the lobby. Each owner is eligible for energy tax credits relating to his/her share of the total costs. Mr. Murdoch will request a tax basis letter from the auditor and will confirm that these items qualify. He will also write a memo that outlines the costs and share of the tax credit for each unit. He will complete this within two weeks and Mr. Santos will circulate a notice to residents that information about the tax credits is coming.
Board Work Session regarding Major Projects: This meeting will be on January 31, 2011. Mr. Santos stated that he has provided the Board with three cost projections as a basis for discussion. The projects to be discussed will be capital improvement reserve expenditure projects, and will include apartment windows, sliding glass doors, common hallways floors, and the HVAC central plant. Dr. Muller asked if the exterior canopy is included in these projects, to which Mr. Santos responded, “no”, but canopy refurbishment could be discussed at the February 2011 board meeting. Ms. Frantz asked if the estimates coming in for the canopy are near the budget estimate. Mr. Santos replied “yes”.
Ms. Frantz inquired what role the owners will have in this meeting. Ms. Kielty stated that the Board will have a lot to discuss and most likely will not be reaching any conclusions. The budget documents can be made available to the owners. Ms. Fridell requested that Mr. Santos’ projections be made available to the audience before the meeting. Ms. Fridell also suggested that there be a discussion meeting with owners to solicit their feedback about preliminary decisions/suggestions. Dr. Muller stated that the Board does not yet know how it will proceed, but that there will likely be further meetings. Mr. Murdoch stressed that no decisions will be made at the working session, and that discussion should be limited to Board members. Ms. Frantz stated that in regard to the lobby refurbishment, owners were only allowed to comment directly before votes were taken on some major decisions. She added that some residents were frustrated that they had no voice. Ms. Kielty stated that residents can share their views at any time, and a decision on how to proceed is not needed now. Ms. Frantz stated that she will raise it again at a later time.
Dr. Muller inquired about the estimate of $144,000 for repair/replacement of the front canopies. Mr. Santos stated that this estimate is for using the current structure and improving the design. Mr. Santos is reviewing proposals and will give a projection of when the estimates will be done at the working meeting.
Ms. Kielty asked if there will be new microphones. Mr. Santos stated that there are currently two new wireless microphones, but the library is the area where they are to be used. Additional microphones have been ordered. He has also ordered one new luggage cart to test before ordering additional ones. Management is also considering other ideas for locating carts when residents don’t return them to the lobby.
Mr. Santos stated that all resident data has been loaded into the computer and each unit is assigned two electronic key fobs. He is staging notices to be sent out to four to five floors at a time to pick-up their key fobs. Separate arrangements will be made for those who cannot get to the office. Once residents have been given enough time to pick up their key fobs, the original lock cylinders on the doors will be changed and the glass doors will be locked on a regular basis. Securing additional doors can always be done in the future.
Committee Reports:
Landscape Committee: The committee is waiting to hear from Ruppert Landscaping for the first draft of the landscape master plan.
Energy Committee: The committee advises residents to turn off unneeded lights to conserve energy. The committee will meet within the next month and report if necessary.
Library Committee: No Report.
Floor Representatives: The committee does not meet on a regular basis, but will report as needed.
Mr. Santos encouraged residents to use the Association website, which has meeting announcements, and allows residents to submit work orders. He added that the business center has a computer with the website as its home page, which is “www.elizabethcondo.com”.
Comments from the Floor:
A resident inquired if the Fob system replaces the Medeco key. Mr. Santos responded that it does, but the Medeco lock cylinders will be kept in place and “re-keyed” to act as a back-up in case the Fob system fails. He added that in case of an emergency, the generator will be able to keep the Fob system running. There is no need to keep the old Medeco keys; they can be recycled through the Management office.
Concern was expressed about residents who smoke in their units because the smoke often spreads through the vents to other units and Elizabeth employees are also subjected to the smoke when they perform in-unit work. Dr. Muller responded that legal counsel has advised the Association that unless there is a documented medical situation, the law is unclear as to whether a resident could be prohibited from smoking in his/her own apartment. He added that the Board has a dispute resolution process where residents can bring unresolved disputes to the Board for legal resolution.
A resident asked whether parcels delivered to the building would be listed on the website. Mr. Santos stated that he attempted to use a module on the website to do this, but it is too rudimentary. The Board has previously approved the purchase of an upgrade of the existing software to keep a record of packages and it will be in use by January 31, 2011. The Association will not be using the website for notification of parcels at this time; an e-mail account must first be secured.
A resident asked if there is a way of tracking those who use the Fob system. Mr. Santos stated that usage is automatically recorded. Another resident asked if the entry into the East garage will remain the same. Mr. Santos responded that it will be and he is also pursuing the installation of a key fob reader at the entry keypad for residents who ride bicycles to enter the garage, then another key fob reader inside the garage for exiting with their bicycles. When leaving or returning to The Elizabeth they could use the garage for access rather than the lobby.
A resident inquired if the Board has considered redesigning the exterior canopy so that it extends further out into the driveway area, so residents are protected from the rain when they get out of cars. Mr. Santos stated that he discovered a design in the office archives that explored this option, but is not feasible because the height of the canopy has to be high enough to allow trucks and the shuttle bus to pass under it. The resulting canopy would be so high that it would not protect residents from the elements. This would multiply tenfold the estimated cost of the canopy replacement.
A resident stated that a West side ground floor unit has a new door with a knocker and knob, and wanted to know if all doors will eventually look this way. Mr. Santos stated that the five West ground floor units were fitted with new doors because of their proximity to the newly refurbished West lobby and to serve as potential prototypes for unit doors throughout the building.
Ms. Kielty reminded residents to treat the front desk staff courteously.
A resident voiced concern about large expenditure items that the Association was undertaking. A petition has been circulated that reflects this concern. While the working session of the Board at the end of the month is open to residents, he objects to the fact that residents are not allowed to participate in the discussion. The resident added that the Board is not responding to the residents who are concerned about potential large expenditures. Currently, there are 70 signatures on the petition representing 60 units. The resident expressed that in his opinion board members are not being sensitive to the financial concerns of many residents and that a special meeting should be convened to address issues with the refurbishment. Ms. Kielty responded that residents can express concerns to board members at any time and the working meeting is public and completely transparent. The resident asked if a change of course was being considered given some of the concerns and requested that the Board have a plan in mind as to how to conduct future business and eliminate those issues.
Ms. Fridell stated that there will be subsequent meetings after the working session and affirmed that some board members are very cost conscious. The resident replied that there is no evidence of cost consciousness and believes that everyone should see a listing of the costs associated with the lobby refurbishment. Ms. Kielty responded that the lobby refurbishment costs came in lower than originally projected and as a result the Association was able to do more extensive renovations – such as bathrooms and Party Room -- than originally expected.
The next board meeting will be held on February 23, 2011 at 7:30 p.m.
Adjournment
The President adjourned the meeting at 9:25 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
Monday, March 14, 2011
Budget Woes
I have attended part of the two ECA budget work sessions held this month and I believe that there will be no solution that will please many Association members. This is not to criticize the current Board, but we all need to face extremely hard facts.
• We have an ageing building that has not been properly cared for for far too long.
• We have not planned well over the years to maintain a reserve fund that can adequately address the money currently needed to start three large projects—replacement of windows/balcony doors, refurbishment of the heating/cooling system that supports our McQuay units, and refurbishment of the hallways in our two towers.
• Managing all three projects at the same time is not reasonable for a variety of factors that include the disruptions that would be imposed on the residents as well as the feasibility of any management team being able to control these three big projects if they were started at the same time.
• Historically speaking, the ECA has not been able to get 75 percent of the Association to agree on any many issues of importance. This means that getting the Association to approve a special assessment is likely to be extremely difficult. This directly relates to how our bylaws are written.
As I understand what was said in the first budget meeting, the cost of borrowing money for these afore-named projects would exceed over $1 million. The sitting Board does not think borrowing the $4 million that it would take for these three projects is a financially responsible approach.
In the second meeting, the discussion centered on how to raise the reserve funds to make it possible to begin only one of the projects in the near future, followed by a second project. As I left the meeting, the suggestion was to raise the condo fee 10 percent in our next fiscal year (which begins in July) followed by a campaign to see if it would be possible to get the Association to agree to a one-time assessment of $1100. If the Association does not approve an assessment, it seems inevitable that condo fees would have to rise again the following the year, but probably at a lower rate. There was some discussion that it might be possible in the future, if the reserve funds were adequate and the big projects were completed, that the condo fees could be decreased. However, that seems unlikely. The most economical way to retain our property values (since high condo fees affect getting mortgages and therefore the flexibility in selling units at the Elizabeth) is to have a one-time assessment. As assessments go in other condominium buildings, $1100 is a remarkably small sum.
Coupled with this approach was a discussion about how to sequence the projects. Clearly, the heating/cooling refurbishment is at the bottom of the list. The question then remains whether to go for the lower-cost refurbishment of the hallways versus the replacement of windows/balcony doors. More of the Board seemed to favor the hallway refurbishment because they feel the Association will have the money needed for this project.
Two factors affecting the Board’s thinking are that replacement of windows/doors will be done from the outside of the building and therefore there would not be doing the damage to newly refurbished halls feared in their original discussions. The Board also seems to believe that the energy savings would not be so dramatic that we would be gaining much by immediately replacing our severely leaking windows/doors. This remains to be proven to people like me.
Because the Board is under a time constraint to produce a budget by the end of the month, it’s a safe bet to assume that they will be making conservative decisions. The six Board members present (Seth Levine was absent for both of these meetings) asked Scott Murdoch to get more info to them, including a comparison of what 4620 North Park charges for condo fees. Short of a deus ex machina, we are not going to improve our individual quality of living at the Elizabeth any time soon.
• We have an ageing building that has not been properly cared for for far too long.
• We have not planned well over the years to maintain a reserve fund that can adequately address the money currently needed to start three large projects—replacement of windows/balcony doors, refurbishment of the heating/cooling system that supports our McQuay units, and refurbishment of the hallways in our two towers.
• Managing all three projects at the same time is not reasonable for a variety of factors that include the disruptions that would be imposed on the residents as well as the feasibility of any management team being able to control these three big projects if they were started at the same time.
• Historically speaking, the ECA has not been able to get 75 percent of the Association to agree on any many issues of importance. This means that getting the Association to approve a special assessment is likely to be extremely difficult. This directly relates to how our bylaws are written.
As I understand what was said in the first budget meeting, the cost of borrowing money for these afore-named projects would exceed over $1 million. The sitting Board does not think borrowing the $4 million that it would take for these three projects is a financially responsible approach.
In the second meeting, the discussion centered on how to raise the reserve funds to make it possible to begin only one of the projects in the near future, followed by a second project. As I left the meeting, the suggestion was to raise the condo fee 10 percent in our next fiscal year (which begins in July) followed by a campaign to see if it would be possible to get the Association to agree to a one-time assessment of $1100. If the Association does not approve an assessment, it seems inevitable that condo fees would have to rise again the following the year, but probably at a lower rate. There was some discussion that it might be possible in the future, if the reserve funds were adequate and the big projects were completed, that the condo fees could be decreased. However, that seems unlikely. The most economical way to retain our property values (since high condo fees affect getting mortgages and therefore the flexibility in selling units at the Elizabeth) is to have a one-time assessment. As assessments go in other condominium buildings, $1100 is a remarkably small sum.
Coupled with this approach was a discussion about how to sequence the projects. Clearly, the heating/cooling refurbishment is at the bottom of the list. The question then remains whether to go for the lower-cost refurbishment of the hallways versus the replacement of windows/balcony doors. More of the Board seemed to favor the hallway refurbishment because they feel the Association will have the money needed for this project.
Two factors affecting the Board’s thinking are that replacement of windows/doors will be done from the outside of the building and therefore there would not be doing the damage to newly refurbished halls feared in their original discussions. The Board also seems to believe that the energy savings would not be so dramatic that we would be gaining much by immediately replacing our severely leaking windows/doors. This remains to be proven to people like me.
Because the Board is under a time constraint to produce a budget by the end of the month, it’s a safe bet to assume that they will be making conservative decisions. The six Board members present (Seth Levine was absent for both of these meetings) asked Scott Murdoch to get more info to them, including a comparison of what 4620 North Park charges for condo fees. Short of a deus ex machina, we are not going to improve our individual quality of living at the Elizabeth any time soon.
Wednesday, March 9, 2011
Notes from the March 3, 2011 Landscape Committee Briefing
The purpose of a public landscape meeting was to update the Elizabeth community and to get feedback from them. About 25-30 people attended the briefing.
The landscape project is based on a three-parts process.
Part 1: Develop a Landscape Master Plan.
Part 2: Have plants installed based on the master plan.
Part 3: Plant and garden maintenance.
The Landscape Committee has been working to finalize the Master Plan. The reasons for this plan are to:
• Create a unified look throughout the property.
• Provide a lower-cost systematic way to maintain the landscape.
• Ensure more curb appeal by avoiding a mismatch of plants.
• Allow landscaping to be in increments as funds become available.
• Have plants that can be guaranteed for life If the installation company does the maintenance
In the course of the Committee activity, the Committee Members developed a list of guiding principles or objectives. These objectives will be used to keep the project focused on what the Committee believes are important attributes for the Elizabeth’s garden areas. The objectives include:
• Maintain attractive plants year round.
• Be cost effective.
• Be easy to maintain.
• If possible re-use original plants.
• Maintain a unified landscape design throughout the building grounds.
• Be Low cost & low maintenance.
The purpose of discussing the objective were to get feedback from ECA members.
While there are seven area where there will be gardens, the committee
focused on
• The front areas of the Elizabeth.
• The upper driveway/arcade and trash area.
• The front driveway garden area. (Left & right of the doors, the circle).
• The front street facing garden. (Below the driveway above the West
garage).
And lastly,
• Over 70% of the original plants are planned to be used.
• Some plants will stay in place.
• Some plants will be used at the:
•• Front of the building
•• West Terrace
•• Rear Garden
•• Terrace by the pool.
The Committee also pointed out that the Members are considering a fence for two street-facing garden areas and a sign for the Elizabeth’s name and street number. No decisions have been made about these two items.
The Landscape Committee discussed sending a survey to all building residents about what the residents think about the Landscape Committee activities, including a fence and a sign.
Comments from the survey are due to the Committee Member Tobi Esler #1206 no later than Sunday, March 13, 2011.
The following pictures are concepts of plants in full bloom. These plants will not be in bloom all year. The Committee will consider suggestions that fit the criteria developed and that is in keeping with natural conditions (such as a very sunny driveway garden and a shady area between the driveway & the West garage door).
The landscape project is based on a three-parts process.
Part 1: Develop a Landscape Master Plan.
Part 2: Have plants installed based on the master plan.
Part 3: Plant and garden maintenance.
The Landscape Committee has been working to finalize the Master Plan. The reasons for this plan are to:
• Create a unified look throughout the property.
• Provide a lower-cost systematic way to maintain the landscape.
• Ensure more curb appeal by avoiding a mismatch of plants.
• Allow landscaping to be in increments as funds become available.
• Have plants that can be guaranteed for life If the installation company does the maintenance
In the course of the Committee activity, the Committee Members developed a list of guiding principles or objectives. These objectives will be used to keep the project focused on what the Committee believes are important attributes for the Elizabeth’s garden areas. The objectives include:
• Maintain attractive plants year round.
• Be cost effective.
• Be easy to maintain.
• If possible re-use original plants.
• Maintain a unified landscape design throughout the building grounds.
• Be Low cost & low maintenance.
The purpose of discussing the objective were to get feedback from ECA members.
While there are seven area where there will be gardens, the committee
focused on
• The front areas of the Elizabeth.
• The upper driveway/arcade and trash area.
• The front driveway garden area. (Left & right of the doors, the circle).
• The front street facing garden. (Below the driveway above the West
garage).
And lastly,
• Over 70% of the original plants are planned to be used.
• Some plants will stay in place.
• Some plants will be used at the:
•• Front of the building
•• West Terrace
•• Rear Garden
•• Terrace by the pool.
The Committee also pointed out that the Members are considering a fence for two street-facing garden areas and a sign for the Elizabeth’s name and street number. No decisions have been made about these two items.
The Landscape Committee discussed sending a survey to all building residents about what the residents think about the Landscape Committee activities, including a fence and a sign.
Comments from the survey are due to the Committee Member Tobi Esler #1206 no later than Sunday, March 13, 2011.
The following pictures are concepts of plants in full bloom. These plants will not be in bloom all year. The Committee will consider suggestions that fit the criteria developed and that is in keeping with natural conditions (such as a very sunny driveway garden and a shady area between the driveway & the West garage door).
Saturday, February 26, 2011
Comments on Piano Controversy and Upcoming Election
COMMENTARY ON THE PIANO CONTROVERSY: The following is my opinion. I was not in favor of buying a piano, given the money we need to spend on fixing our infrastructure. However, because the piano is now here in our beautifully refurbished West lobby and people, including me, are enjoying it both as a handsome item of furniture and as a high-quality musical instrument, I feel it is absolutely mandatory that if the Board is seriously considering selling the piano that it must send a questionnaire to every unit owner asking them to vote on whether to keep or sell this valuable item. However, I would like to point out that after spending $300,000 on furnishings, we have sofas that cost $$8,000 and $12,000, chairs that cost over $3,000 a piece, barstools that cost just under $1,000 a piece, and etc. We also have a first floor adorned with artwork that cost a total of $35,000. Does that mean we should also consider selling these items, and that the Association should vote item by item on what to keep and what to sell? I say it is time to move on.
The piano was no secret. It had always been part of the design plan and that design plan was presented in public forum to owners and residents by The Hartman Design Group. It is inconceivable that any Board member could have been unaware of the intention to purchase a piano. Furthermore, there had never been any Board decision to discuss, much less debate, whether to purchase a piano. What is unfortunate is that the Board failed to solicit comments from Association members starting at the very beginning of the refurbishment project. This is basic psychology in how leaders need to deal with a large group of people who share common space. Getting agreement and buy in on the basic goals guiding the refurbishment process would have probably headed off many of the problems we are hearing people complain about.
COMMUNICATING WITH THE BOARD: Recently I learned that the most effective way of delivering praise or complaints to the Board is to submit these letters to the management office. Why? Because these letters will then be made part of the monthly management report and then become part of the official Association record.
COMMENTARY ON THE ECA BOARD & UPCOMING ELECTION: One other comment that I feel must be made is that very idea of punishing a Board member for following the direction of the President of the Board is petty and completely unacceptable. All too often, those of us who attend monthly Board meetings see Board members act unprofessionally. Furthermore, Board members act like they are adversaries instead of teammates looking out for the good of the entire Association.
We are approaching our annual meeting where three Board members, if they choose to run, will be up for re-election. It’s time to think hard about who you want to represent you. I want Board members who communicate well; have no axes to grind; can work together respectfully while making hard choices; are honest, impartial, dependable, competent; have a track record of sound financial responsibility; promote community; and enforce the rules equitably.
The piano was no secret. It had always been part of the design plan and that design plan was presented in public forum to owners and residents by The Hartman Design Group. It is inconceivable that any Board member could have been unaware of the intention to purchase a piano. Furthermore, there had never been any Board decision to discuss, much less debate, whether to purchase a piano. What is unfortunate is that the Board failed to solicit comments from Association members starting at the very beginning of the refurbishment project. This is basic psychology in how leaders need to deal with a large group of people who share common space. Getting agreement and buy in on the basic goals guiding the refurbishment process would have probably headed off many of the problems we are hearing people complain about.
COMMUNICATING WITH THE BOARD: Recently I learned that the most effective way of delivering praise or complaints to the Board is to submit these letters to the management office. Why? Because these letters will then be made part of the monthly management report and then become part of the official Association record.
COMMENTARY ON THE ECA BOARD & UPCOMING ELECTION: One other comment that I feel must be made is that very idea of punishing a Board member for following the direction of the President of the Board is petty and completely unacceptable. All too often, those of us who attend monthly Board meetings see Board members act unprofessionally. Furthermore, Board members act like they are adversaries instead of teammates looking out for the good of the entire Association.
We are approaching our annual meeting where three Board members, if they choose to run, will be up for re-election. It’s time to think hard about who you want to represent you. I want Board members who communicate well; have no axes to grind; can work together respectfully while making hard choices; are honest, impartial, dependable, competent; have a track record of sound financial responsibility; promote community; and enforce the rules equitably.
Summary of Feb 23, 2011 Elizabeth Condo Board Meeting
Present at the meeting: Alexandra Kielty, Judi Barth, Charles Bressler, Molly Frantz, Monique Fridell, Seth Levine, Al Muller, Jason Fisher, Scott Murdoch, Jim Santos, and recorder of meeting minutes.
JANUARY MINUTES: Approval of the January minutes was tabled until next month because the ECA Secretary was unable to perform this job in a timely manner. This is not the first time this has happened under his assignment as the ECA Secretary. The approved meeting minutes are important for setting the record straight and if they are not delivered in a timely fashion, we Association members are at a terrible disadvantage, especially when problems occur and we need to refer to what decisions have been made by our Board of Directors.
LEGAL DETERMINATION: The ECA condo lawyer Jason Fisher was present for this particular meeting. He was invited to comment on two large projects: the replacement of (1) windows/balcony doors and (2) the McQuay heating/cooling units. What he said was the responsibility for replacing windows/balcony doors falls to the Elizabeth Condominium Association. However, the responsibility for replacing the McQuay heating/cooling units that reside in individual units must be paid for by the owners. None of these projects are simple.
REPLACEMENT OF WINDOW & BALCONY DOORS: Replacement of windows/balcony doors will require the ECA to borrow money. According to our treasurer Monique Fridell, we are positioned to borrow, though more data and decisions are needed before the Board moves on this. According to our house manager, if the Board decided to move ahead and procured the necessary loan now, then it would be possible to start the project as early as July 1, 2011.
REPLACEMENT OF HEATING/COOLING UNITS: Replacement of the McQuay heating/cooling units is much more complicated. The Association would have to replace and fix the infrastructure that supports the individual McQuay heating/cooling units before any individual McQuay units could be replaced. Replacement would logically proceed tier by tier and not floor by floor. The average estimated cost per unit (don’t forget some units are much larger than others and have more than two units) is somewhere between $6,000 to $12,000.
BYLAW ISSUE: As it stands right now, it would be up to the unit owner to voluntarily cooperate with the project. According to our house manager, if every unit owner cooperated, the project would take two to three years to complete with the minimal amount of disruption for all involved. If a majority of unit owners failed to cooperate, the project could take 10 or more years to complete with untold hours of disruption of water, heat and cooling services for many residents. Therefore, our lawyer suggested an amendment to the ECA Bylaws that would allow the ECA Board to have more control over projects that are for the good of the entire Association. Any changes to the Bylaws will require agreement of 66 and 2/3 percent of the Association to amend the Bylaws. This means unit owners need to be made aware of the critical nature of fixing the heating and cooling system, which is so overdue for replacement that it’s a train wreck waiting to happen.
HALLWAY REFURBISHMENT: To further complicate this discussion, there are actually three large projects on the ECA table. The third project is renovation of the hallways. At this time, design work is being done by The Hartman Group on the hallway renovation. All discussion about design costs at the February Board meeting pertained to this new phase of work for the hallway renovation. The lobby renovation work was completed and, according to the Board, it was completed under the projected and approved budget cost of $1.5 million.
SEQUENCING OF BIG PROJECTS: At a working meeting of the Board that took place a number of weeks ago (they discussed budget planning, including the 5-year plan), our house manager made it clear that these three projects cannot be accomplished simultaneously. He suggested that the priority be: (1) replacement of windows/balcony doors, (2) replacement of the McQuay heating/cooling units, and (3) renovation of the hallways. The importance of this order is to realize immediate energy savings, avoid costly interim repairs on failing equipment, and avoid damaging newly refurbished areas (hallways).
FOUR-PIPE SYTEM REFUBISHMENT & WINTERIZATION OF THE COOLING TOWER: Also feeding into the discussion of fixing the heating and cooling infrastructure, the house manager requested a decision on making immediate repair to something called the four-pipe system and winterizing the cooling tower. The four-pipe system, which was installed when the building was built, allows for the spring-fall situation when some units in the building require heat while other require air-conditioning. The house manager said we have always been set up to accommodate these opposing needs but the system has been in disrepair for quite some time. The Mendoza Engineering Study recommended fixing these infrastructure systems. Therefore the Board decided to move ahead with both repairs. The four-pipe system involves pipes exposed to weather that sit on our roof and need replacement which will cost $13,000 and the other, the enclosed cooling tower refurbishment, costs $32,000. $50,000 had been budgeted for this project so this expenditure appears to be well within that limit. There are some energy implications that also need to be managed.
COMMITTEE & COMMUNITY UPDATES:
The Landscape Committee reported on the status of its activities, including a public event for owners and residents on March 3 to update Association members on project work to date and to solicit ideas, comments, and questions. To get advance information on the project, visit the official Elizabeth website.
An elections committee was named and announced.
On Saturday March 26 in the West Lobby from 3:30 pm to 6:30 pm, the family of long time resident Helen Soderberg will commemorate her life. Those wishing to attend need to RSVP. Consult the flyer hanging on the bulletin board in our mail corridor for more information, including how to notify her family that you would like to attend.
PIANO CONTROVERSY: A contentious discussion about the piano that was procured as part of the refurbishment budget took up a big chunk of time during this meeting. Refurbishment Committee members (an ECA Board-led group) asked Al Muller, who had been a concert pianist, to research a piano to meet the requirements set by the Hartman Design Group as well as find a piano that would be an asset for generations to come who live in the Elizabeth. Dr. Muller consulted with Alexandra Kielty on the piano, which met all the requirements, and asked for permission to purchase the piano which was a year-old instrument being sold by the Kennedy Center. She said yes and he purchased the piano using his credit card since the nature of the sale required immediate action.
At this February meeting, the treasurer Monique Fridell stated she was unwilling to sign a check for something over $19,000 to reimburse Dr. Muller for the piano. Ms. Fridell felt this was not an approved expense and tied it to comments from the ECA auditors. Charles Bressler tried unsuccessfully to state a motion to deny reimbursement to Dr. Muller. Jason Fisher clarified and stated that first a motion must be brought to the Board requesting retroactive approval of the purchase of the piano. What was not entirely clear was that if the purchase of the piano was not approved then Dr. Muller could not be reimbursed for the cost of the piano. Ms. Fridell proposed the motion for requesting retroactive Board approval for the purchase of the piano. Fridell, Bressler, Molly Frantz, and Seth Levine voted against this motion with the balance of the Board, Kielty, Muller and Judi Barth voting for. Seth Levine then proposed a motion to reimburse Dr. Muller at which point the ECA lawyer intervened saying this was not possible if the purchase had not been approved. Dr. Muller stating Robert’s Rules of Order suggested that someone who voted against the motion could then call for a new vote on the same topic. After some discussion, Levine, realizing this situation opened up the prospect of a lawsuit against the ECA, reversed his first vote and then orchestrated a new vote requesting retroactive approval of the purchase of the piano. In the second vote, Fridell and Bressler voted against approval and Kielty, Barth, Franz, Levine, and Muller voted for. This cleared the way to reimburse Dr. Muller.
JANUARY MINUTES: Approval of the January minutes was tabled until next month because the ECA Secretary was unable to perform this job in a timely manner. This is not the first time this has happened under his assignment as the ECA Secretary. The approved meeting minutes are important for setting the record straight and if they are not delivered in a timely fashion, we Association members are at a terrible disadvantage, especially when problems occur and we need to refer to what decisions have been made by our Board of Directors.
LEGAL DETERMINATION: The ECA condo lawyer Jason Fisher was present for this particular meeting. He was invited to comment on two large projects: the replacement of (1) windows/balcony doors and (2) the McQuay heating/cooling units. What he said was the responsibility for replacing windows/balcony doors falls to the Elizabeth Condominium Association. However, the responsibility for replacing the McQuay heating/cooling units that reside in individual units must be paid for by the owners. None of these projects are simple.
REPLACEMENT OF WINDOW & BALCONY DOORS: Replacement of windows/balcony doors will require the ECA to borrow money. According to our treasurer Monique Fridell, we are positioned to borrow, though more data and decisions are needed before the Board moves on this. According to our house manager, if the Board decided to move ahead and procured the necessary loan now, then it would be possible to start the project as early as July 1, 2011.
REPLACEMENT OF HEATING/COOLING UNITS: Replacement of the McQuay heating/cooling units is much more complicated. The Association would have to replace and fix the infrastructure that supports the individual McQuay heating/cooling units before any individual McQuay units could be replaced. Replacement would logically proceed tier by tier and not floor by floor. The average estimated cost per unit (don’t forget some units are much larger than others and have more than two units) is somewhere between $6,000 to $12,000.
BYLAW ISSUE: As it stands right now, it would be up to the unit owner to voluntarily cooperate with the project. According to our house manager, if every unit owner cooperated, the project would take two to three years to complete with the minimal amount of disruption for all involved. If a majority of unit owners failed to cooperate, the project could take 10 or more years to complete with untold hours of disruption of water, heat and cooling services for many residents. Therefore, our lawyer suggested an amendment to the ECA Bylaws that would allow the ECA Board to have more control over projects that are for the good of the entire Association. Any changes to the Bylaws will require agreement of 66 and 2/3 percent of the Association to amend the Bylaws. This means unit owners need to be made aware of the critical nature of fixing the heating and cooling system, which is so overdue for replacement that it’s a train wreck waiting to happen.
HALLWAY REFURBISHMENT: To further complicate this discussion, there are actually three large projects on the ECA table. The third project is renovation of the hallways. At this time, design work is being done by The Hartman Group on the hallway renovation. All discussion about design costs at the February Board meeting pertained to this new phase of work for the hallway renovation. The lobby renovation work was completed and, according to the Board, it was completed under the projected and approved budget cost of $1.5 million.
SEQUENCING OF BIG PROJECTS: At a working meeting of the Board that took place a number of weeks ago (they discussed budget planning, including the 5-year plan), our house manager made it clear that these three projects cannot be accomplished simultaneously. He suggested that the priority be: (1) replacement of windows/balcony doors, (2) replacement of the McQuay heating/cooling units, and (3) renovation of the hallways. The importance of this order is to realize immediate energy savings, avoid costly interim repairs on failing equipment, and avoid damaging newly refurbished areas (hallways).
FOUR-PIPE SYTEM REFUBISHMENT & WINTERIZATION OF THE COOLING TOWER: Also feeding into the discussion of fixing the heating and cooling infrastructure, the house manager requested a decision on making immediate repair to something called the four-pipe system and winterizing the cooling tower. The four-pipe system, which was installed when the building was built, allows for the spring-fall situation when some units in the building require heat while other require air-conditioning. The house manager said we have always been set up to accommodate these opposing needs but the system has been in disrepair for quite some time. The Mendoza Engineering Study recommended fixing these infrastructure systems. Therefore the Board decided to move ahead with both repairs. The four-pipe system involves pipes exposed to weather that sit on our roof and need replacement which will cost $13,000 and the other, the enclosed cooling tower refurbishment, costs $32,000. $50,000 had been budgeted for this project so this expenditure appears to be well within that limit. There are some energy implications that also need to be managed.
COMMITTEE & COMMUNITY UPDATES:
The Landscape Committee reported on the status of its activities, including a public event for owners and residents on March 3 to update Association members on project work to date and to solicit ideas, comments, and questions. To get advance information on the project, visit the official Elizabeth website.
An elections committee was named and announced.
On Saturday March 26 in the West Lobby from 3:30 pm to 6:30 pm, the family of long time resident Helen Soderberg will commemorate her life. Those wishing to attend need to RSVP. Consult the flyer hanging on the bulletin board in our mail corridor for more information, including how to notify her family that you would like to attend.
PIANO CONTROVERSY: A contentious discussion about the piano that was procured as part of the refurbishment budget took up a big chunk of time during this meeting. Refurbishment Committee members (an ECA Board-led group) asked Al Muller, who had been a concert pianist, to research a piano to meet the requirements set by the Hartman Design Group as well as find a piano that would be an asset for generations to come who live in the Elizabeth. Dr. Muller consulted with Alexandra Kielty on the piano, which met all the requirements, and asked for permission to purchase the piano which was a year-old instrument being sold by the Kennedy Center. She said yes and he purchased the piano using his credit card since the nature of the sale required immediate action.
At this February meeting, the treasurer Monique Fridell stated she was unwilling to sign a check for something over $19,000 to reimburse Dr. Muller for the piano. Ms. Fridell felt this was not an approved expense and tied it to comments from the ECA auditors. Charles Bressler tried unsuccessfully to state a motion to deny reimbursement to Dr. Muller. Jason Fisher clarified and stated that first a motion must be brought to the Board requesting retroactive approval of the purchase of the piano. What was not entirely clear was that if the purchase of the piano was not approved then Dr. Muller could not be reimbursed for the cost of the piano. Ms. Fridell proposed the motion for requesting retroactive Board approval for the purchase of the piano. Fridell, Bressler, Molly Frantz, and Seth Levine voted against this motion with the balance of the Board, Kielty, Muller and Judi Barth voting for. Seth Levine then proposed a motion to reimburse Dr. Muller at which point the ECA lawyer intervened saying this was not possible if the purchase had not been approved. Dr. Muller stating Robert’s Rules of Order suggested that someone who voted against the motion could then call for a new vote on the same topic. After some discussion, Levine, realizing this situation opened up the prospect of a lawsuit against the ECA, reversed his first vote and then orchestrated a new vote requesting retroactive approval of the purchase of the piano. In the second vote, Fridell and Bressler voted against approval and Kielty, Barth, Franz, Levine, and Muller voted for. This cleared the way to reimburse Dr. Muller.