Call to Order
Stan Bowers called the meeting to order at 10:00am in the Clubhouse.
Establish Quorum of Directors
Board members in attendance: President Stan Bowers, VP Margherita Ramsay, Treasurer Bob Shrader, Secretary Frank Sullivan, and Director Richard Isom. Michelle Davis from Reconcilable Differences, and 10 unit owners attended.
Approval of Minutes from Previous Annual Meeting
Frank motioned to waive the reading of the minutes and approve the annual minutes from the Budget Meeting on November 1, 2018 as written and posted on the website. Bob seconded the motion; all were in favor.
Bob stated that as of April 2019, the Association is $400.00 under budget. Considering the total budget is $160,000, Bob is very happy with being right on target.
It was discovered that some of the parts that are causing the elevators to shut down are no longer manufactured, due to the age of the building. Otis repaired the broken part with a used replacement but said it would cost approximately $14,000 to modernize that elevator part. Management sent a termination notice to OTIS, the vendor currently servicing the elevators. Their contract is up in November and we must take these steps to obtain a revised contract and not just roll over the same contract for another 5 years. Management is obtaining more bids as well. Stan recommended tabling this repair right now, because Premier Elevator said, in their bidding visit, that they could obtain some parts within days of trouble. For now, the elevator is working and this issue will be reviewed with the decision on a new elevator company.
The Association was lucky to have both the pool heater and spa heater last about twice their expected life expectancy. The spa heater was replaced in spring of this year. The heat exchanger in the pool heater has burned out and is irreparable. The Board would like to replace the entire heater with a similar product, that will be installed by Labor Day. The Board wants to purchase another LockinVar because the last heater lasted 6 years past life expectancy. The replacement will cost $12,200. Bob made a motion to purchase the replacement pool heater and have it installed by Labor Day. Margherita seconded, all were in favor. Margherita made a motion to pay for the heater from Pool Reserves. Bob seconded, all were in favor. A question was asked about gas cost increase since heating the pool more often. Year to date is just a little more than budgeted.
Stan stated that all Associations are required to put money into a Reserve fund for any item that would cost more than $10,000 to replace. The Association budgets an annual contribution to the Reserve fund based on the life expectancy of that item. Stan explained that there are 2 ways to allocate money in Reserves. The “component” method only uses the money accumulated for each specific item. The “pool” method puts the money for all items together, and the money is used as needed, regardless of how much has accumulated for that specific item. The Association is currently using the “component” method, but the state allows the Association to change to the “pool” method to greatly reduce the risk of future Assessments. The Board still needs to sit down and review all of the information provided by the Reserve Study and decide what changes to the Budget are needed. The ultimate goal is to avoid future Assessments to the residents. Residents will have to vote on any changes to the way reserves are funded.
Several members recommended that the Reserves be increased to cover more of the repair/replacement costs. It was stated that every year when the budget is approved, the members have voted in a large majority to maintain a partially-funded reserve budget, with the understanding that assessments would be required for any major repairs.
A resident expressed concern about water leaking through the concrete planters around the base of the building. The Board is going to discuss these concerns with her at another time.
Frank made a motion for the Board to study the effects of ‘pool’ versus ‘component’ budgeting. If the Board agrees the ‘pool’ method would be a wiser method, a proxy ballot will be sent to all members to vote on making the change. Bob seconded, all were in favor.
The entire report will be released for all residents to review after it has been completely finalized.
Adjournment: There being no further business to discuss, Bob motioned to adjourn the meeting at 10:53 pm. Richard seconded, all were in favor.
Michelle Davis, CMCA, AMS, LCAM #17226
Community Association Manager
Reconcilable Differences, Inc.