MINUTES of a Regular Meeting of the Board of Directors of the Elizabeth Condominium Association, Inc. (“Association”), held on March 17, 2009 in the Party Room of the Condominium pursuant to notice in accordance with the Bylaws. Present were: George “Woody” Cunningham, Jeffrey Axelrad, Judith Gann, Monique Fridell, Alexandra Kielty, Judith Barth and Alfred Muller.
The President called the meeting to order at 7:35 p.m.
MINUTES:
A motion to accept the minutes of the Regular Meeting conducted on February 17, 2009 was made by Dr. Muller with a second by Ms. Kielty. The minutes were approved unanimously. Ms. Fridell asked whether the Manager had been given the opportunity to comment on the Minutes as recommended by the auditors, Deleon & Stang. Ms. Farrell had not seen the Minutes. The Board agreed that future draft Minutes will be sent to the Manager for comment prior to being voted upon.
PRESIDENT’S REPORT:
Mr. Cunningham reported that the Board had begun
negotiations with Legum & Norman on a contract for outside management. It is anticipated that by April an informational meeting will be held for residents with Legum & Norman professionals present and available to answer questions.
The Board and Management are in the process of preparing a
budget for 2009-2010 which should be finalized within the next two weeks.
The President has appointed a Nominating Committee comprised of Pat Peyser, Gerald Feldman and Peg Downey. April 23rd will be the “Meet the Candidates” night. Resumes of candidates for the Board are due to the committee by April 15th. Pursuant to the By Laws, the Annual Meeting and Election will take place on May 6th.
There are several contracts that will be voted on this evening.
TREASURER’S REPORT:
News
The
FY 2008 audit was finalized last week. We apologize for the delay. As you may remember, we decided to await the final results of the Reserve Study to be able to include more solid numbers for the next five years in the Supplemental Information section of the audited statements. Tracy Geiger from Deleon & Stang will be attending this evening’s meeting and will be available to answer your questions. We will be presenting the final audit results to the Board this evening for approval. Residents have already received the financial reports in their mailboxes.
Pursuant to a recommendation of the auditors, a copy of the monthly cash management report will be available to residents prior to Board meetings and is attached as part of these minutes.
Reserve Advisors made a presentation to residents on 3/9/09 summarizing the analytical methodology and conclusions of the Reserve Study. The Board will be using the Reserve Study to make decisions in the coming weeks about the annual budget, capital expenditures and condo fee increases for FY 2010.
We have filed a
lien against a delinquent owner; we expect to take this case to court in May 2009.
Asset Allocation
As of 2/28 we had almost $2.7 MM in cash and investments, 13 % higher YOY. We have slightly over $2 million in reserves, also 13% higher.
We have been investing at slightly longer maturities in an effort to earn an interest rate over 1% p.a.; however, we will start shortening tenors to ensure additional liquidity for major capital expenditures relating to the refurbishing project.
Monthly Performance
In February we had net income of $17K. We were in line with or under budget in all categories with the exception of Utilities and Cleaning & Trash Removal due to high usage of natural gas and electricity and a timing difference in Marble Maintenance. In February, we transferred almost $44K to reserves and spent almost $19K from reserves mostly on the emergency generator.
FY 2009 Year to Date (YTD) Results
For the eight months ending 2/28, we are running almost exactly at budget for the year in terms of total expenses, which are 4% higher than last year’s total expenses. Specific line items not meeting budget are:
• Interest income lower by 31% and 42%, respectively, for operating and Reserve investments, due to lower prevailing interest rate environment
• Printing 202% over budget due to printing of revised House Rules booklet, coupon books from previous years, and updated Resident Directories
• Accounting due to extra services incurred due to wait for Reserve Study
• Utilities as a category is 7% higher than last year, with electricity almost 14% higher due to higher usage, and to a lesser extent, increase per KwH price since December
• Office Equipment due to purchase of new phone system
• Other personnel due to replacement of time clock
• Sauna & Exercise Room due to purchase of new rower machine
• Other Amenities due to purchase of TV for West Lobby
• Elevator maintenance due to inspection and repair work on several elevators out/malfunctioning
• Inspections due to fire system/sprinkler inspections
• Association activities due to social activities Board has sponsored that were not in original budget
We have transferred $349K to reserves this year to date and spent $208K, or 62% less than last year, from reserves mostly on façade repairs, fire horn installation and correction of electrical system deficiencies.
MANAGEMENT REPORT:
A copy of the Management Report, dated March 17, 2009 is attached hereto. Ms. Farrell also noted that the Arcade owners would like changes to brighten up their area. They have suggested planters (there are two or more we own that are not currently being used) and benches. Ms. Farrell will discuss this matter with the landscaping company.
In addition, Ms. Farrell said that on April 11th, our Building Engineers will provide a tour of the building. Residents may sign up for the tour. If more people than feasible sign up, a second tour will be provided.
OLD BUSINESS:
The Energy Committee will present an update on the Energy Audit at the April Board Meeting.
NEW BUSINESS:
Committee Reports:
Energy Committee: Mr. Drazin, acting Chair, reported that a Committee meeting would be held shortly to review the Energy Audit and prepare a report for the April Board Meeting. A notice of the meeting will be posted in the elevators.
Refurbishment Committee: Ms. Gann reported that Jason Fisher, our ECA Counsel, has completed negotiations with
Hartman Design Group, Inc. on the design contract. The contract will be voted on this evening.
Social Committee: Ms. Barth reported no activities are planned for April or May, but there will likely be a “summer kick off” party and a “fall end of summer” event. Due to budget constraints, residents may be asked to contribute toward these programs. In addition, Ms. Barth is asking Ms. Farrell to make the remote control to the new television available for residents who would like to watch a program.
Exercise Room Committee: Ms. Kielty reported that the Committee has met twice and has identified several pieces of equipment that would enhance the facility. The Committee has asked for funding in the 2009-2010 budget. In addition, the Committee is asking that refurbishment funds be set-aside in 2011 to work on the Exercise Room. Mr. Trebach (#1007) asked what type of equipment is being considered and was told it would be elliptical equipment. Mr. Jones (#307) noted that many existing machines are not well maintained and/or are antiquated.
Security: Dr. Muller reported that the
new computerized system, which Securitas guards use for checking in, while patrolling, has been installed. This will verify how many times and at what times guards check a specific area. He also suggested that during refurbishment, lobby doors might be changed to provide for better security.
Contracts:
Dr. Muller moved that the Board approve Densel Company’s service contract to maintain the
chillers. The cost is $15,463 or 3.5% higher than previously. Ms. Barth seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Tracey Geiger from
DeLeon & Stang arrived at this point, and business was suspended to allow for comments on the Audit Report. Ms. Geiger stated that overall the Elizabeth is financially healthy with no deficit. She noted that Management and the Board executed improvements in internal controls, which have strengthened the safety of the financial statements.
Dr. Salcetti (#319) asked Ms. Geiger for her evaluation of the Reserve Study. She noted that the company, which performed the study, Reserve Advisors, is well known and she commented ECA for commissioning a Reseerve Study. However, she stated that she could not answer questions relating to engineering concerns as that was not in DeLeon & Stang’s audit purview.
Ms. Winthrop (#1114) asked Ms. Geiger if she thought the Elizabeth should be looking at outside management or should remain self-managed. Ms. Geiger stated that among self-managed buildings that DeLeon & Stang audits, ECA ranked at the top. She also noted that Legum & Norman is an excellent company and can tailor their management services to the specific needs of the Elizabeth. She indicated that the majority of condominiums are managed by outside firms. She also indicated that we are currently using accounting software that should be updated, or, alternately, we might consider using an outside financial company for the accounting functions.
Mr. Feldman (#1819) noted that using a professional management company would allow the Elizabeth to obtain only those services it wants and could possible renegotiate down several service contracts based on volume discounts an outside management company may be able to realize.
Ms. Cook (#1620) stated that an outside management company would be too expensive for the services provided.
Mr. Bosma (#1818) inquired why contracts were not discussed at public meetings. He was informed that all contracts are discussed at public meetings.
Ms. Kielty asked Ms, Geiger for her recommendations for next year. In addition to having management review Minutes prior to approval, she indicated that the Treasurer should monitor owner delinquencies; we should upgrade our accounting software, and the Treasurer should also be alert to changes in the amount of FDIC insurance on deposits.
Mr. Stevens (#121) asked how much an upgrade to the accounting software would cost. Ms. Geiger replied that a professional version costs about $10,000 and would come with yearly updates. She also stated that many small businesses use QuickBooks, ECA’s existing software, since it costs only about $300, but that they use a more updated version.
Ms. Bobb (#911) asked whether the individual residents or the Elizabeth would receive the tax credits for window replacements. Ms. Geiger cautioned that tax issues were not her specialty; she indicated that since windows are a common element, any tax credit for such a purchase, if available, would accrue to the Elizabeth.
Mr. Cunningham thanked Ms Geiger for coming to the meeting, and she left. The Board unanimously approved the FY 2008 audited financial statements.
THE MEETING RESUMED WITH CONTRACT APPROVALS.
Mr. Axelrad moved that the Board approve
Otis Elevators’ contract for renewal of
elevator maintenance with an increase of almost 10% or $2,385.29 for a total contract price of $27,478.26. Ms. Barth seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Dr. Muller moved that the Board ratify
Structural Preservation‘s contract to repair and overlay membrane on G-3. The cost would be $160,296. Ms. Kielty seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Ms. Kielty moved that the Board approve a
contract for Densel to provide three variable speed drives on the fan motors of the Cooling Tower for a cost of $13,725. The drives will save energy. Dr. Muller seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Ms. Barth moved that the Board
approve the contract presented by the Hartman Design Group. Dr. Muller seconded the motion.
Mr. Axelrad presented another motion to include the following text into the Hartman contract. “The parties understand that the entire total cost of all commitments under and pursuant to this agreement is not to exceed $1.2 million unless and until the Elizabeth Condominium Association’s Board of Directors explicitly approves raising this ceiling on costs incurred under this agreement and any approval is communicated to Hartman Design Group, Inc. in writing by an authorized officer of the Board.” Ms. Gann seconded the motion.
Given the fact that Hartman Design Group has rejected the possibility of including a
price cap in the design contract, Ms. Fridell asked that the Board pass a resolution specifying a dollar limit on the amount it is willing to spend on design work. She stated that Mr. Fisher has advised the Board that, in his opinion, the Hartman contract is a one sided contract. Ms. Fridell also noted that there is no explicit commitment, in the contract, that Hartman Design Group would assist us with selecting contractors, holding a bidders’ conference, etc., in contrast to what Ms. Hartman has represented to Board members verbally.
Ms. Kielty agreed that there must be a design cap for monitoring purposes.
Dr. Muller agreed that there should be a cap on the design fee.
Mr. Axelrad explained that his motion would provide a cap on the total refurbishing project expenditure.
Ms. Fridell asked the members of the Refurbishing Committee what was the cost estimate provided by Hartman Design Group for design fees. She said that the resolution limiting design fees ought to be based on that figure.
Ms. Barth said that there is no price cap in the contract or the fee. She said Phyllis Hartman says interior design is a process, and we will need to make decisions on spending as we go along.
Ms. Gann said that she agrees with Mr. Axelrad’s addition to the contract but would like to include a resolution limiting the design fee also.
Dr. Muller agreed that the Board should make a decision on a cost limitation for design.
Ms. Kielty again recommended a limitation on the design fee.
Mr. Axelrad indicated that his addition to the contract would add legal protection for ECA.
Mr. Cunningham called the question.
Ms. Kielty moved that the Board approve the contract with Mr. Axelrad’s amendment specifying an overall limit on the refurbishing project that can be increased only by Board decision. There was no second.
Dr. Muller suggested tabling the motion and presenting a new motion with a spending limit for the design phase of the refurbishing project. Ms. Gann seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, and Dr. Muller voted in favor of the motion. Ms. Barth voted against the motion. The motion passed.
Dr. Muller made a motion providing a cap of $250,000 for the design fee. Ms. Fridell seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
The original motion to approve the contract as amended by Mr. Axelrad was untabled. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
Ms. Gann moved that the Board ratify the purchase of a pool heat exchanger from A.D. Heath Company for $12,995. Ms. Fridell seconded the motion. Mr. Cunningham, Mr. Axelrad, Ms. Gann, Ms. Fridell, Ms. Kielty, Ms. Barth and Dr. Muller voted in favor of the motion. The motion passed.
COMMENTS FROM THE FLOOR:
Ms. Bobb, #911, asked if the Board had looked into leasing, rather than purchasing, exercise equipment. Ms. Kielty said the Committee had looked into it, but few companies provide leasing options. Ms. Bobb said she is impressed with Ms. Hartman and questioned if the design fee would exceed $250,000. Ms. Fridell reiterated that there is not a price cap in the present contract nor did Hartman Design Group accept such a cap during negotiations.
Mr. Feldman, #1819, said that the amount spent should be the sum of “people” time not the $250,000 that the Board has determined to be the cap. He indicated that this information should be kept within the purview of the Elizabeth and should not be discussed with Hartman Design Group or anyone else.
Mr. Bason, #110, asked if there would be an informational session for the owners once the design is completed. Ms. Gann assured him there would be.
Ms. Olshan, #1014, asked if the Elizabeth would receive plans for all areas and was told we would.
Ms. Gann presented Ms. Brosnan’s (#1402) letter regarding removal of cars with expired tags, flat tires, etc. from the garage. Mr. Trebach, #1407, concurred that such cars are in the garage and complained about cars left idling in the garage for long periods of time spewing noxious fumes. Ms. Farrell was directed to inspect the garage and to notify owners of those cars that are not in compliance with the House Rules.
Dr. Aaronson, 201, commended former Social Committee Chair, Ruby Brooks, “as a real gem” and thanked her for her contribution to the Social Committee over the years. He said “she treats others, as she would like to be treated.” He asked that this comment be included in the Minutes. Dr. Muller suggested that a letter of appreciation be sent to Ms. Brooks for all her work on behalf of the Elizabeth.
Mr. Bason, #110, asked why Mr. Lawson’s letter regarding residents’ raising ballot issues had not been discussed. Mr. Cunningham replied that the letter had been referred to ECA counsel for review.
Mr. Feldman, #1819, noted that the baggage carts are frequently not available for use. He said there should be check in/check out procedures in place, and everyone should follow them. Mr. Trebach, #1407, said the front desk should call a residents listed on the sign-out sheet if carts have not been returned.
Ms. Alenier, #301, said the front desk person should answer the main phone line rather than calls being directed first to an auto-attendant. Mr. Cunningham assured her that in the future, the front desk person will answer the phone at all times. Management was directed to change the telephone programming immediately.
The meeting was adjourned at 9:40 p.m.
[These minutes were prepared by Judith Gann, Secretary of the ECA, and Karren Alenier posted these minutes to this blog. Alenier has bolded some of the issues for ease of locating specific topics. The ECA Board Meeting Minutes is a public document and available in paper copy at the ECA Management office.]
