Summary of ECA Board Meeting March 27, 2018

Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row, Lyle Schwartz, Rhonda Taller

Others Present: ECA General Manager MaryAnn Hall, Assistant Manager Romaine Cureton, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer)

President’s Report:

Unit 10—Z Beca confirmed that his mother has agreed in writing to rent the Association-owned unit 10. This created an unnecessary firestorm as documented by a letter from Steven Schattman (portions read at the Board meeting) accusing Beca and MaryAnn Hall of having given a Board member’s relative priority over other renters as well as offering a lower rental price. Schattman also called for Beca’s resignation which Beca declined to effect.

None of these accusations were true. After consulting a local relator, the ECA GM (Hall) asked for a rental price ($1800/month) above the average suggested by the realtor. While others expressed interest in the apartment, no one except Beca’s mother was willing to sign a lease agreement for an apartment which real estate agents noted had several drawbacks. Beca also pointed out that this accusation took time away from condo business as well as Beca’s time to attend to his personal business career. He said if anyone has additional problems with this matter, he or she is free to file a complaint with Montgomery County’s Officeof Common Ownership Communities (CCOC). 

Subsequently the Board voted to distribute the lease for Unit 10 to owners via BuildingLink. The rental income will also be included in future financial reports.

Party Room Use and Community Postings—Beca invited volunteers to work on a short-term Task Force to set policy for use of the ECA party room and communications within the ECA. This includes researching what policies other condos in our area employ.

Election Committee—Beca called for volunteers to work on the Election Committee which oversees such activities as the April 17 Meet the Candidates event and the annual meeting itself scheduled this year for May 2.

Anyone interested in working on these activities should contact the Board or GM Hall.

Legal Report:

ECA legal counsel Jeremy Tucker reported on a complaint filed against the ECA with the CCOC pertaining to an ongoing noise issue. The CCOC held a hearing and determined that no action was warranted and has dismissed the case.

Financial Report:

MaryAnn Hall reported there are currently 45 delinquencies pending which is a slightly higher number than last month.

Treasurer’s Report:

Connie Row reported that the ECA has turned a financial corner and has rebounded from our 2016 situation that put us on the brink of bankruptcy. (This included near loss of our Master insurance policy for the commonly-owned building components. In 2016, our reserve fund had been spent down and this caused us to lose our Master insurance. With help from our insurance broker Robin Manougian, we got insurance coverage in the much more expensive secondary market. This coverage also depended on good faith action from a new board taking action to resolve some of our pipe and water leak issues since the building had been suffering many exceptionally large insurance claims for water damage. This good faith action was the EPipe project.)

The role our general manager MaryAnn Hall has played in turning our financial situation around is substantial. (Since she was employed at the Elizabeth, she has saved us hundreds of thousands of dollars via renegotiated contracts.) She continues to help us save money most recently by assuming the responsibilities associated with such things as follow up on delinquencies. Our contract with Gates Hudson is now a Financial Only Contract. This was made possible now that we have a full-time Assistant General Manager and all our other staff positions such as Assistant Engineer are fully staffed.

Management Report:

Garage Project—March 19, two highly capable garage repair contractors—KGS and CPR—were publicly interviewed. CPR said they could begin on May 14 while KGS could not begin until June or July.

Unit Inspections—The West Tower inspections are complete and the East Side began March 26 with a planned schedule of which floors would be done when. Now that we are fully staffed, our engineers will be able to adhere to a regular schedule of replacing filers, checking for leaks, ensuring fire and smoke detectors are fully functioning.

2018 Budget—nearly complete with expectation that our more robust budget will help us with our insurance renewal in June so that we are restored to the primary insurance market.

West Tower Patio Restoration—completed.

G-1 Emergency Doors—These doors were fixed but they required special parts that had to be manufactured since they are old.

New Business:

A list of Capital Expenditures with related budgetary targets for the FY 2018-2019—was approved unanimously by the Board. This includes: retaining wall repairs ($5,000), roof repairs ($260,000), garage project ($728,000), chlorination equipment & ozone sanitizer for pool ($9,000), replace a/c in passenger elevator ($13,000), improve fire safety in hallways ($20,000), corridor renovation phase 1 ($500,000) for a total of $1,535,925.

Garage Project Contractor—CPR was approved unanimously by the Board.

In-Unit Service Program (IUSP) Charges for 2018—IUSP charges for such services as unclogging a drain, changing light bulbs, adjusting closet doors, etc. moves from $32 per hour to $50 per hour with schedule of lesser amounts for activities taking little time and other amounts for repairs that require parts. The fees are not to make money for the ECA but to cover costs. The charges will be reviewed annually to adjust for parts and labor changes. This motion was approved 5 to 2 with Al Muller and Monique Fridell voting against.

Community News:

Developers are trying to clench a deal across the street from the Elizabeth for a 9-storey seniors facility. They were dismayed that someone leaked news of this project.

Owner Comments:

Charles Bressler petitioned the Board to revisit policy on use of guest parking, particularly by the commercial side of the Elizabeth and in anticipation of the garage project. He pointed out that when the building was in its early stages the commercial side was offered the opportunity to buy parking spaces and some of them did not do this.

(The current policy which allows the Arcade owners to use guest parking for their commercial visitors was made by Jim Santos when he was our Legum & Norman general manager and approved by our legal counsel based on ECA bylaws. The Board has agreed to revisit this policy, but any change to the current policy will require a bylaw change.)

Summary of ECA Board Meeting February 27, 2018

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Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row, Lyle Schwartz, Rhonda Taller

Others Present: ECA General Manager MaryAnn Hall, Assistant Manager Romaine Cureton, Gates Hudson Portfolio Manager Larry Hirschman, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

Highlights of the Meeting:

• ECA’s insurance will now be bid on the primary insurance market which should result in significantly lower budgeted deductibles as well as lower premiums when the building insurance comes up for renewal in May 2018.  This improved situation is the result of ECA’s aggressive maintenance program and the E-Pipe project completion.

• The Board approved  a 24-month contract with Gates-Hudson for $43,000 annually to provide more limited financial services to the ECA rather than the current  full service contract at $73,000/year.  The contract also limits the fee to extend the contract for another period to a 2% increase.

Under the new contract, a Gates-Hudson layer of management activity will be shifted to the ECA management team of General Manager and Assistant GM.  Among other activities, Gates-Hudson will no longer handle resale information/transfer packages, do delinquency notices, and financial reporting to ECA Board and owners.  As a result of the change, additional revenue from some activities will accrue to ECA, estimated at $15,000 annually.  This is another way that our General Manager MaryAnn Hall is saving the ECA significant money.

A shift to this level of contracted services was reviewed in the 6-month competitive bidding process completed 2 years ago and was planned to occur when our ECA staff was at full strength as it now is.   For that reason, the contract was not rebid at this time.  (Vote was 6 directors for and one (Al Muller) abstention.)

• The Board also approved a new $15,000 landscaping contract for 2018 with Legend Landscaping subject to legal review, down $5,000 from the previous contractor.  Three companies bid on the contract. 

• Check Bob Joiner’s The Agenda News for up to date information on Parcel 6 activities. Parcel 6 pertains to the development of property next door to the Elizabeth.

From the Management Report (for full details, ask for a copy of this report from our Management Office)

·      Garage Project—a pre-bid meeting was held with FEA and contractors asked to bid on this large project. Potential start date is first week of April.

·      West Tower Inspections—some questions were raised about cleaning of condensate lines. The process has changed so check with Management Office for further information. GM Hall has assured Association the process being used is addressing all concerns raised.

·      West Tower Patio is under restoration.

·      G-1 Emergency Door—awaiting part to repair it.

·      Unit 10 has been rented effective March 1 for one year with possible renewal.

·      Repairs to windows and doors—Hi Rise Windows has been onsite addressing an array of problems.

Outcome of the Bylaw Changes Vote

While the Association did not approve either of the bylaw changes, among those who voted there was momentum toward a significant approval rate.

Here are the numbers:
On the Board election issue, 166 votes (by unit) were cast in favor and 55 (by unit) against which translated into 40% of the weighted votes for and 15.49% of the weighted votes against.

On the Special Assessment, 148 (by unit) voted for and 76 (by unit) against. This worked out to 40.74% of the weighted votes for and 16.61% of the weighted votes against.

The percent of Association approval required:
What you need to understand is that according to the new Maryland condominium law, in order for condo bylaws to be approved, 60% of the condo association by weighted votes must approve the bylaw change. We needed a 51% weighted vote to call this special meeting and in fact, we got 55.08%.

So what does the outcome of this bylaw vote mean?
The outcome means that:
The 40% shows that a large number of Association members are concerned about how we are going to reduce our debt and pay for maintenance of our home. One should keep in mind that as of the budget meeting held on February 28, 2018, we are facing a significantly large bill for garage repairs ($800,000-$1 million).

What about the 45% who did not vote?
—There are approximately 30% of the Association who are non-resident owners, with some smaller percent of these owners being exclusively investors. Typically investors do not want to invest money in their property because the hope is to make money, not spend money.

—That said, there were non-resident owners who do care about their property at the Elizabeth because they intend to move here in the future or expect family members to live here if that isn't already the case. There was a large effort to reach non-resident owners and there was some success in getting them to vote proxies.

—And sadly, there are some resident owners who refuse to step up and take responsibility for being an Association member. I had one man tell me when I asked if he turned in his proxy for the bylaw changes that he didn't want to participate in "house politics." I said this is about your property value but he didn't want to hear that. Some Association members think they are living in a hotel and therefore cannot understand that all Association members are obligated to pay (in one way or another) for common area improvements and maintenance like fixing the garage, putting on a new roof, replacing windows and balcony doors, fixing pipes, refurbishing elevators, ad nauseum.

Summary of ECA Board Meeting January 23, 2018

Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row, Lyle Schwartz, Rhonda Taller

Others Present: ECA General Manager MaryAnn Hall, Assistant Manager Romaine Cureton, Gates Hudson Portfolio Manager Larry Hirschman, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.), Goldklang Principal Harold Goldklang

HIGHLIGHTS OF THE MEETING

2017 Audit Report

Harold Goldklang, stepping in for Auditor Jeremy Powell, presented the highlights of the 2017 Audit Report. The report is good and presents no financial issues. The balance sheet shows we are recovering from our financial setbacks of the last several years with a slight increase of funds. Treasurer Connie Row said if we continue in the same path that the last two boards have been following, we will continue to show financial improvement.

President’s Report

Due to certain people abusing our General Manager’s open-door policy and taking far too much of her time for repetitive complaints, President Beca has called a moratorium on walk-in visits to the GM. Unscheduled access continues for our able Assistant Manager Romaine Cureton..

Legal Report

Legal counsel Jeremy Tucker said that a general problem in Montgomery County, MD regarding towing companies illegally holding cars hostage until towing fees were paid has resulted in financial penalties throughout the county. The Elizabeth ordered three tows and is libel for approximately $1200 in penalties. Apparently the Elizabeth has no policy on towing and lacks signs saying if you park illegally in our garage, your car will be subject to towing at your expense. One resident said she urges posting of such signs since she had an unknown car in her space for three days. Towing companies say they cannot enter our garage with a flatbed truck because there is not enough clearance. No action was taken on this issue.

Motions

Hallway HVACs—Board voted six to one (dissenting vote was by Al Muller) to approve new controls for the HVAC hallway system to correct hallways that either freezing in cold weather or over heated. GM MaryAnn Hall said after careful consideration the uncompeted contract for this $64,868 repair should go to Noyes, the contractor who has been sorting out all the problems we have had that were not attended to by past contractors.

General Manager’s Report

Garage Project—FEA completed the Scope of Work and it has gone out to potential bidders. It is expected that the work will start April 1.

High Rise Window: Six units report cold air coming through the new windows and doors. High Rise Windows says the windows/doors are no longer under warranty and want to charge $199 just for each service call. Our GM is working on this issue.

New Assistant Chief Engineer—Barry Blanton has accepted the position and began work on January 2. He worked at the Elizabeth for several months under a previous management. He has substantial knowledge of the building and is a Class 1 Engineer.

West Tower Inspections—Checking of smoke detectors, leak inspection, condensate line cleaning is underway.

West Tower Patio and Curbing—Work is being done to discover a leak that is damaging the front of the building.  Curb repairs have been done in the front of the building.

Summary of ECA Board Meeting November 28, 2017

Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row, Lyle Schwartz, Rhonda Taller

Others Present: ECA General Manager MaryAnn Hall, Assistant Manager Romaine Cureton, Gates Hudson Portfolio Manager Larry Hirschman, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

HIGHLIGHTS OF THE MEETING

President’s Report

Rescheduled Special Meeting for Bylaw Amendments—January 23, 2018 is the new date for the Association to vote on changes to two bylaws that address board terms and special assessments. The original meeting scheduled in November was canceled because it was uncertain that the required 51% quorum would be met. All proxies continue to be in effect through to the January 23 meeting. Voted proxies may be taken to the management office.

Ethics Training for the Board—The ECA Board will be given ethics training on December 4 to ensure each Board member is acting in the best interest of the Association.

Holiday Party—There will be an official holiday party for residents on December 17. Dress to impress is encouraged.

Board Secretary Elected

Monique Fridell has agreed to serve as Secretary of the ECA Board.

Financial News

The draft audit report shows our financial picture making positive gains.

Motions

Loan Reporting—Board unanimously approved returning to GAAP principles related to accounting for payments on our loan. Generally Accepted Accounting Principles (GAAP) are widely accepted accounting principles, standards, and procedures that companies follow when they make their financial statements. Why this practice had fallen out of use seems to have been a measure to placate a resident who had been a past Board member.

Service fees for in-unit work orders—The Board tabled a motion to raise the fee charged for such services as repairing a leaking faucet.  The proposal was to raise the fee to $50 per hour which is similar to what other condos charge for such services. The Board asked for more clarity on cost of services, which the General Manager will work up.

Strategic Financial Plan—The Board voted 6 to 1 to approve the long-term project and financing component to complete the Strategic Financial Plan. This plan outlines two options to return The Elizabeth to fiscal health while addressing current capital needs: 

• recommends a special assessment be used to pay off the existing loan as the preferred option subject to a separate owner vote. (This is only feasible if the pending bylaw amendment reducing the size of the required vote passes.)
• or, if necessary raising condo fees for the next several years.

Under current conditions, refinancing of our large loan is not feasible.

General Manager’s Report

Water off in Building on November 30—To repair the cooling tower. The time the water will be affected is from 8:30 am to 4 pm. It may be that cold water will be running but not the hot.

Elevator Inspection: Inspection completed. It is now expected that we can delay major renovations to the elevator for several years.

Cleaning Main Sewer Lines—Lower floors continue to be a problem.

EPipe Inspection—Montgomery County is close to completing inspection of EPipe work with no problems reported.

Holiday Fund—Pam Dillon and others will collect donations to the Employee Holiday Fund. Stay tuned for further details.