ECA Board Minutes March 19, 2013

THE ELIZABETH CONDOMINIUM ASSOCIATION

4601 North Park Avenue

Chevy Chase, MD 20815

Minutes of Board of Directors Meeting    March 19, 2013

Board Present:

Ted Ariev                        President

David Robinson..............Vice-President

John McNerney ............  Treasurer

Herman Stekler .............  Asst. Treasurer..................

Steven Schattman ............Director

Board Absent:
Charles Bressler                Director

Ilo-Mai Harding...............Secretary

Others Present:

Gregory Roby ..............   Senior Vice President, Legum & Norman
James M. Santos ..............ECA General Manager, Legum & Norman

Samantha Levine-Finley ...ECA Recording Secretary, On the Record

On February 26, 2013, in accordance with Section 11.109.1 of the Maryland Condominium Act, the Board met in executive session to conduct personnel and legal issues.

Call to Order: Mr. Ariev called the meeting to order at 7:34 p.m.

Approval of Meeting Minutes:

MOTION        Mr. Schattman moved Dr. Robinson seconded that the amended minutes of the meeting of the Board of directors on February 26, 2013 be approved. The motion passed unanimously (5-0-0).

Mr. Ariev stated that Mr. Schattman would serve as acting secretary for this meeting.

President’s Report:

Mr. Ariev reported that the election for the Board of Directors is approaching. He stated that election officials who will help oversee the submissions of the statements of candidacy and count the ballots have been identified: Diana Brosnan, Ellen Cohen and Maurice Trebach.

Mr. Ariev reported that the statements of candidacy have been mailed and he encouraged all interested owners and residents to consider running for the Board. He stated that the statements of candidacy are due to the secretary or the management office by April 5.

Mr. Ariev reported that the name of the Architectural Control Committee will be renamed the Design Control Committee due to a misunderstanding of the bylaws regarding the role of an Architectural Design Committee. Such a committee must be appointed by the Board and act for the Board, which is not the current status. The Design Control Committee will retain the same members and tasks.

Mr. Ariev reported that Mr. Schattman and Robin Schattman have agreed to participate with website supervision for The Elizabeth.

Mr. Ariev reported that the red arcade business sign has been removed.

Treasurer’s Report: The following report was provided by Mr. McNerney:

The amounts included herein are rounded to the nearest $1,000:

As of February 28, the Association had $3,090,000 in cash and investments, an increase of $88,000 from the prior month.

Expenditures from the reserve fund in January totaled $41,000. The amount expended from that fund so far this year is $260,000.

Delinquencies through the end of January were $56,000, a decrease of $7,000 from the prior month. Four accounts are in collections, including one that is in bankruptcy.

Since the Board moved this month’s meeting up a week, copies of the balance sheet and statement of income and expenses as of 28 February will be available next week at the front desk.

There was a Board workshop on the FY2014 budget last week attended by a number of residents. The budget is close to being finalized. After tonight’s meeting, the finance committee will review it again and then copies will be mailed to all owners. Owners will again have an opportunity to express their opinions, in writing, to either the Board or the finance committee. The Board’s final vote on the budget will be held at the April 23 Board meeting.

The finance committee, with management assistance, has begun work on the capital budget. That budget details the projected expenditures from the Reserve Fund for Fiscal 2014. A draft of that budget will be presented at the April Board meeting.

Respectfully submitted:

John C. McNerney
Treasurer

Mr. Santos recommended that Mr. McNerney share information about the 2012 audit. Mr. McNerney said the auditors from DeLeon and Stang have sent a draft audit to the finance committee. The committee has reviewed the draft and found some inconsistencies, but Mr. McNerney said the issues are being reviewed with the company and he expects them to be quickly resolved.

Mr. McNerney reported that the finance committee and Mr. Roby are identifying other auditors who could replace DeLeon and Stang. Mr. McNerney explained that while DeLeon and Stang are doing an adequate job, it is a best practice to change auditors every 5-6 years. He said a new auditor will look at all of the details and be very conscientious, while a longer-term auditor may become less diligent over time and complete the work too quickly. Mr. McNerney reported that Mr. Roby and the finance committee have each identified two potential auditors. The committee and Mr. Roby will meet soon to narrow the list down to two; will interview those auditors; and hope to have a new auditor in place before the next Board meeting.

Management Report:

Mr. Santos reported on the following:

a)     Current work-order delinquency totals $1,285.00, of which $933.00 is at or greater than 60 days. Those residents have had their in-unit maintenance privileges suspended.

Mr. Stekler commented that the building’s only option to obtain collections is to not allow residents to request additional work orders. Mr. Santos said that is the first approach. Mr. Stekler asked how many of the delinquencies are related to renters and owners. Mr. Santos said about 30 percent is renters. In some cases, he said, the leases require the owners to pay for work orders, in others, the owners require renters to pay for repairs associated with wear and tear. Mr. Stekler asked if management could turn off the access key fobs belonging to residents with delinquencies; Mr. Santos said management cannot restrict access to residents’ homes. Mr. Stekler said he would like to do something to further the collections and get the attention of those in delinquency. Mr. Santos said he does not feel that the delinquencies have reached a level of pursuing additional sanctions.

b)     The Association has a $150,000 CD maturing on March 25, 2013. M

r. Santos recommended that the Association keep the funds in a liquid instrument, such as a money market fund, to pay for upcoming repair projects. Mr. McNerney agreed. Mr. Santos said he has communicated with the building’s Morgan Stanley representative to help manage cash and investments so there are funds available to take care of expenses. He said there will be a meeting soon between him and the representative, along with Mr. McNerney.

c)     The Washington Gas meter was pulled and tested. Mr. Santos received confirmation that the meter was within the limits of what the device should report. He stated that the issue is not with the hardware, but with the software used to calculate consumption. Mr. Santos said he will complete a comparison of past three years’ usage and share the findings with Washington Gas.

d)     Management is ready to mail the FY2014 budget to owners. Once received, owners will have 30 days to submit comments.

e)     The master insurance policy and all associated coverage will expire in May. Mr. Santos said Legum & Norman’s insurance expert has reviewed the policies. He said the Board can bid out the policies or keep the insurance with Greater NY, which is held by the John Manougian Insurance Agency.

Mr. Schattman asked if there is a downside of bidding it. Mr. Santos said the Board has bid out the insurance for several years and not changed companies, so vendors might stop participating. Mr. Roby recommended that the Board go through Legum & Norman’s office to request a renewal quote from Greater NY, and possibly also ask for comparisons with the same underwriter. Mr. Santos said the Board members have a letter from Greater NY regarding their property inspection. The company recommended that the Board approach owners to replace the hoses for washers with a braided hose, which is more reliable. The Board will consider this recommendation.

Committee Reports:

Design Control Group: Dr. Robinson reported that the committee had discussed having the building enhanced with different windows. The committee met and asked the attorney, Jason Fisher, to provide an interpretation of the bylaws regarding ownership of drywall in the interior of units. Mr. Fisher reported that unit owners own the drywall on the inside of their units, meaning the building cannot change the drywall without the permission of owner (unless there is an emergency). Dr. Robinson said therefore the committee will not present the Board with a proposal for floor-to-ceiling windows for the building. He said the committee will continue to meet with the designers to make recommendations to the Board regarding window options. Mr. Stekler asked if it would be possible to renegotiate the contract for the design work since the scope has changed. Dr. Robinson said the designers are still going to define what type of windows will be installed. Mr. Ariev said the design work is a fixed cost.

Website: Mr. Schattman said he and Robin Schattman would oversee the website. The website is hosted by the parent company of Legum & Norman. Mr. Schattman said the website can be customized for the building’s needs. He said 14 people are currently signed up. He said there is no way to transfer residents’ log-in accounts to the new site; residents can sign up by putting in their Legum & Norman account number and creating a password. Mr. Schattman listed enhancements they may make to the website:

-       Begin to use the calendar feature to post events such as Board meetings and committee events

-       Clarify the process to enter a work order through the website, including having the orders go directly to the management offices, sending a confirmation that the work order was received, and creating a message describing the work order, how it was addressed, and the date of completion

-       Use the classifieds feature for residents to be able to rent parking spaces, sell furniture, offer babysitting services, or list other items for sale

-       Use the feature that allows residents to list recommended vendors, contractors or other service providers

-       Make it easier to access and copy the condominium bylaws and house rules

-       Make the website more attractive and easier to read

-       List the Board of Directors and directors’ contact information, including adding a link so that residents can write a letter to the Board.

-       List all of the committees and their contact information

-       Create a bulletin board to house the same types of information that is included in the flyers posted in the elevators

-       List and link to all commercial owners

-       Post minutes of the Board meetings

-       Post issues of the newsletter

-       Post Jim Jones’ photos of the building

Mr. Schattman asked that residents send him ideas for other improvements and that they sign up for the website.

Fitness Room: Mr. Schattman reported that all of the equipment is now functioning properly. He said there was a budget request for corrective maintenance to address several items: replacing broken and dirty ceiling tiles; removing the carpet on the wall and painting the facility; replacing the ceiling lights in the back fitness room with wall lighting, given the low ceiling heights in that room; containing the cable wiring in boxes off of the floor; and installing pegs on the walls so residents can hang up clothes and bags.

Making a Difference: Ms. McNerney said the committee had a successful drive on March 12 to collect clothing for A Wider Circle’s new professional development center. The committee will continue the project by sending out notices and using the bulletin board to tell residents where they may bring professional clothing for future donations. Ms. McNerney said they would like to change the signage over the bins on G-1 to keep it cleaner and make it easier for residents to donate. The committee does not have any other large projects planned until the box party in December. She said yarn and needles are available if anyone wants to knit scarves for the boxes.

Social Committee: Mrs. Ariev - reported that Brian Murphy, a legal expert and justice advisor for Afghanistan, will speak on May 5 at 7 p.m. She encouraged residents to send her ideas or questions for Mr. Murphy. On May 19 at 5pm, Nino Mkheidze will give a piano recital in the library. She noted a time change; the recital was originally scheduled for 6 p.m. The pianist will play Chopin, Schumann and Schubert. Mrs. Ariev reminded those who participated in the Food Fest those recipes are being collected to create a cookbook from the event; residents are encouraged to email their recipes to Mrs. Ariev or leave them at the front desk.

Storage Issues: Jim Jones said the storage areas in the building that are in a state of disarray. He reported that on or about April 1, the management office will issue a directive to all residents telling them to look at what they have in storage and make sure it is in compliance with the house rules. He added that he or the management office can provide residents with the relevant sections of the rules. Mr. Jones said residents may have been given a card indicating the location of their stored items. Management personnel will be available to assist residents in locating and taking down any items in storage. Items not in compliance will be placed in a temporary location before they are discarded.

Old Business:

There was no old business.

New Business:

1.     Contract Approval for Sump/Sewage Ejector Pumps

The G-4 garage level is where the sump pumps which evacuate ground water are controlled, as well as the pit where sewage ejection pumps are located for the commercial condominiums. These devices are beyond their expected life and the sewage pumps have cracks in the piping/casing and are not evacuating waste as designed. Mr. Santos recommends approving the bid from Shapiro & Duncan, Inc., to replace G-4 sump pumps and sewage ejection pumps for $67,380.00.

Mr. Santos said half of the project—the replacement of one sump pump and one sewage ejection pump—was scheduled for this year and the other half for 2022. However, the negotiated price to do everything now represents a significant savings versus budget, which had been $134,600 for all four pumps.

MOTION        Mr. Schattman moved Mr. McNerney seconded to accept the recommendation of the Maintenance and Repair Committee and Engineer (Mendoza, Ribas and Farinas) to award the project for replacement of the existing sump pumps and sewage ejector pumps to Shapiro & Duncan in the amount of $67,380. The motion passed unanimously (5-0-0).

2.              Chiller Replacement Project: This project addresses the replacement of the failing York chiller

(approaching 20 years old and the oldest of the two), associated condenser and supply pumps/motors, and the expired refrigerant evacuation system. Mr. Santos said the current proposal offers a more efficient chiller than originally budgeted and a greater rebate from electric utility company. The project budget is $476,016 (with a rebate of $44,400), resulting in an over-budget variance of $36,134. Mr. Santos said the energy cost analysis determined that the variance may be paid off in 1.35 years through utility savings.

Mr. Stekler said the bid sheets show a possible savings of $100,000 with a different chiller. Mr. Santos explained the process by which it was possible to reach a final bid of $554,600 with Densel Co., which represents a savings and includes a Carrier chiller. He noted that the chiller manufacturer is part of the United Technologies family, which is used for the building’s energy management, elevator software and chiller software.

MOTION        Dr. Robinson moved Mr. McNerney seconded to accept the recommendation of the Maintenance and Repair Committee and Engineer (Mendoza, Ribas and Farinas) to award the project for the replacement of the York chiller, associated pumps/motors (with backup) and refrigerant evacuation system to Densel Co. in the amount of $554,600. The motion passed unanimously (5-0-0).

3.              FY2014 Operating Budget Draft-Mailing: Mr. Santos said the FY2014 Operating Budget draft is ready to mail to owners for comment.

MOTION        Mr. Stekler moved, Dr. Robinson seconded to accept the recommendation of the Treasurer and Finance Committee to mail to all owners the last draft (draft 7, March 17, 2013) of the FY2014 Operating Budget. A cover letter will request that owners review the budget and return comments within 30 days. The motion passed unanimously (5-0-0).

Mr. Stekler requested a new business item regarding the four-pipe central plant discussion. He said there are certain months of the year when it is not necessary to have all four pipes in operation; for instance, residents do not need air conditioning in December and January and do not need heat from July to September. He recommended that management consider running the four-pipe system only in months when residents might need both cool and warm air. He said he understands the need for a closed system to benefit residents with allergies, but if the building is trying to save money, then the chillers should not be run in December and January.

Mr. Santos said the equipment operates with outside air temperature sensors, so when the demand for air conditioning is non-existent, the chillers will not turn on. He added that as old equipment is replaced it will have even better controls and be more efficient than the current system. Mr. Santos said there are transitional months when some residents cannot expose themselves to the exterior climate.

No Board action was taken on this issue.

4.     Insurance Issues: Mr. Santos asked whether the Board wants to go through the exercise of bidding out the insurance policies or allowing the Legum & Norman insurance expert to negotiate with the company. The policies expire May 15. Mr. Roby said if the Board does not want to take action, his recommendation is to go straight to the insurance agent. He added that it is almost too late to begin the bidding process, and noted that the Board bid out the insurance for the past three years but never accepted proposals from any competitor.

Resident Comments:

-       Karren Alenier, 301, wanted to know whether the annual meeting will include a vote on changing the bylaw percentage. Mr. Ariev said the Board is not planning to proceed with that now, but added that the Board does not have to wait for another annual meeting to address this issue and can work on bylaw revisions over the coming year.

-       Jim Rich, 301, said that when the four-pipe system went back online a few years ago a mysterious noise in his apartment, related to water moving through the pipes, subsided completely.

-       Rita Miller, 607, said the Board at 8101 Connecticut Avenue banned smoking on residents’ balconies. She said she hoped that the condos in this area will follow suit and that the Elizabeth’s Board would reconsider its vote.

-       Pam Dillon, 718, asked whether the $150,000 CD is related to the operating or reserve fund. Mr. Santos said it is an operating reserve CD. Ms. Dillon asked why the building had a $100,000 overage in expenditures for utilities. Mr. Santos said he registered online with Pepco to get online data directly from the company. He will perform a comparison of consumption for past three years and will have an answer in the near future. Ms. Dillon noted that the extra expense would affect the new operating budget; Mr. Santos said he already added additional consumption into the 2014 budget.

-       Ms. Dillon said that residents on the east side of the building have a problem with an owner on the 5th floor who has hygiene problems. Ms. Dillon said residents are asking whether the Board or management will do anything about it. Mr. Santos said has been trying to work with that resident for some time. The estate of that person’s parents was turned over to a county organization that provides assistance to residents in need. Mr. Santos has been working with that organization and a social worker for the past 18 months to get that person additional help and assistance. The county entity (PLAN) has partially renovated the resident’s apartment and provided him with soap and a hygiene schedule. However, regarding the hygiene issues, management will be sending the resident a letter stated that the resident is in violation of the building’s bylaws and house rules and will get help from the social worker to ensure he does not enter public areas in unacceptable condition. Mr. Santos said there was an incident regarding a person who visits the resident and the police were called. Mr. Santos authorized a no-trespass order for this visitor and has instructed the security guard and staff that this person is not allowed on the property for a period of one year. The resident is not permitted to escort the person on the building’s property. If this is seen, management can call the police immediately to remove the visitor. Ms. Rudenko, 512, said she feels that both the resident and his visitor are a threat to others. She is concerned that the visitor will be snuck into the building. She said the resident is unable to care for himself and that many other residents are afraid of him. Ms. Rudenko said her floor representative suggested placing an additional camera on the floor or adding security doors.

-       Ruby Tang, 06, asked whether there is a standard response time for open work projects. Mr. Santos said the response time depends on the work order, but that management prefers to have orders taken care of within 24 hours. He asked Ms. Tang to let him know whether she has any outstanding work orders so that he can look into it.

-       Judy Gann, 711, said that when she was on the Board the building had problems with the resident mentioned above. She said the resident had an attorney who worked with the Board and suggested that management see whether that attorney was still involved. Mr. Santos said he has communicated with that attorney, who was the trustee of the estate before it was handed over to the county agency. Mr. Santos said he is also communicating with one of the resident’s relatives to provide updates and attempt to get assistance with influencing his habits.

-       Sharon Bobb, 911, asked why residents in fear don’t contact the Montgomery County police. A resident responded that many people don’t want to argue with a mentally unstable person. The resident also said she was told by police that they cannot do anything until the visitor hurts someone. Mr. Santos said he feels confident that the no-trespass order will be effective. If the visitor is found coming onto the property, the resident will receive another cease and desist letter. The county organization will also take matters into its own hands if the person cannot comport themselves appropriately and follow the building’s rules. Mr. Ariev encouraged owners to bring issues forward to the Board and reminded residents that they can make a formal complaint to the Board or management.

Adjournment: The President adjourned the meeting at 9:07 p.m. The next meeting will be held on April 23, 2013.

The initial draft of the minutes, upon which these minutes are based, was prepared by Samantha Levine-Finley of On the Record.

Respectfully submitted,

_____________________________________

Steven Schattman, Acting Board Secretary