Minutes of the
Call to Order: Stan Bowers called the meeting to order at 10:00am in the Clubhouse.
Whitley Bay Condominium Meeting
Friday October 18, 2019
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 11 owners attended.
Approval of Minutes from Previous Annual Meeting: Margherita motioned to approve the minutes of the August 21st meeting as posted on the website. Bob seconded the motion; all were in favor.
Financial Report: Bob stated that through August 31st, the Association was budgeted for $323,000 and has only spent $322,000. There are no large projects forecasted, so the Association should remain in good shape.
Results of Pooled versus Component Reserve Funding Vote: Michelle reported that 41 Owners voted for Pooled and 3 Owners voted for Component. A simple majority was needed to pass the vote. Stan explained that this change will make it easier for the Board to cover expenses without needing votes from the Owners.
Discussion and Approval to Mail Draft Budget to Owners: Stan explained that a reserve study was completed earlier in the year, and the report predicted that the Association was in a poor financial position for future expected needs, which would require an assessment. Frank explained that the recommended solution from the contracted study (not the committee’s analysis) to fully fund the Reserves was to nearly double the monthly reserve contribution, by putting $136,500 into Reserves each year. Frank and his committee reviewed the analysis to try and develop an alternate plan. The Committee included Ed Mango, Mike Mervis, and Jim O’Leary. They believe that less money is needed immediately, and it can be built up over time to prepare for the impending projects in the future. Major project years with low funds are predicted for 2023, 2027, and 2030. Predicted projects over the next ten years include building restoration, recoating walkways, replacing boilers, modernizing the elevator, recoating the roof, replacing common area air-conditioning units, and replacing the cooling tower. The current monthly Association fee is $630 per Unit. 15% of that fee goes to Reserves; the rest goes to the operational budget. The Committee developed two proposals for increasing the monthly reserve contribution without going above $700/month. The first proposal for $689/month gives the Association an 85% Funded Reserve until 2027, when a large Assessment (approximately $3,900 per Unit) would have to be charged. The second proposal for $669/month would give the Association a 73% Funded Reserve and require a $6,000 Special Assessment in 2027. The Committee confirmed that there is no way the Association will be able to fund all of the impending projects for the next 10 years without at least one Special Assessment if the Reserve analysis is taken as 100% accurate. A resident asked what the Special Assessment would be if the monthly fee remained at $630/month. Jim stated it would be approximately $8500 per unit. The Committee believes that the “costs” of material and labor as provided by the report are high, and they would be able to save money by shopping wisely. The Board and Committee unanimously agree that something must be done to rebuild the Reserves to prevent an Assessment to complete the anticipated updates. The Committee will continue researching the impending projects and costs and develop a plan to build the Reserves over 10 years and beyond. Treasurer Bob Shrader then said his recommendation would be to maintain the current $630/month fee in 2020, and have a $1,000 Assessment in the same year to have a 100% fully funded Pooled Reserve fund. A resident asked Sheila Bonvallant if increasing the monthly fee would make the condos less marketable. Sheila stated that there is a point where monthly fees will affect marketability, but she didn’t think $669 was too high. She further explained we need to do a better job in making buyers aware of the things that go into the fees, and she further stated agents look at assessment history for their clients. She supported doing research over time to budget for projects and rebuild the reserves.
She thanked all the volunteers who helped her with the landscaping last month. Residents coming together to improve their home together is one way the Association can save a lot of money. Margherita expressed concern over increasing expenses in Owners’ personal budgets. A resident stated that the building must be cared for and the Association’s budget must be treated as a business, even though all residents are financially invested in the outcome.
Bob made a motion to give the Ownership a choice. He motioned to offer 2 options: One would be to remain at $630/month and to have an Assessment of $1,000 to have a fully funded Reserves in 2020. The second option would be the committee’s recommendation to increase the monthly fee to $669/month to fund reserves at 73% of pooled need. It was noted that the Board is in a planning mode for the next 30 years to prevent future Assessments. A resident emphasized that this only solves the problem for next year, and then it will have to be reviewed again. Frank seconded; all were in favor.
Michelle stated that the vote will pass based on the majority of those who take the time to vote, as long as at least 51% of owners vote. The Board has the right to override the majority vote on the Budget, but she does not recommend that.
Declaration Revisions Committee (tree & inspections requirements): Frank stated that he sent a copy of the revised declarations for the Board’s review. It will be available and be discussed at the next Board meeting.
Confirm Next Meeting: The Budget meeting will be held on Friday, November 15th, at 6pm. The Annual Meeting will be tentatively held on Wednesday, February 19th.
Adjournment: There being no further business to discuss, Richard motioned to adjourn the meeting at 11:20am. Bob seconded; all were in favor.
Michelle Davis, CMCA, AMS, LCAM #17226
Community Association Manager
Reconcilable Differences, Inc.