The Lauren, A Condominium
Minutes of the Annual Meeting
June 6, 2006
Call to Order
President Dwight Clark called the meeting to order at 7:45 pm at the Washington Marriott Hotel, 1221 22nd St., N.W. on June 6, 2006.
Proof of Notice of Meeting
Attendees acknowledged the disbursement of the meeting notification
Attendance
Present were Board Members President President
Dwight Clark, Treasurer Joseph Morris, Secretary Elizabeth
VanderPutten, First Vice President John Filice, Second Vice President
Roger Hirschland and a sufficient number of owners in person or
represented by proxy (44.6128%) to constitute a quorum. Also present at the meeting were
Property Manager Walter Krolman and legal counsel Joe Douglass from the
firm of Whiteford,
Reading of Minutes
Reading of the 2005 Annual Meeting Minutes was waived by consent of Membership.
President's Report
Mechanical Systems have been the dominant focus of this years work, the president reported. The projects are integral to maintaining the comfort of the building and to enhance to the extent possible the energy efficiencies
Following the recommendations of last year's meeting, a second engineer was hired to review the work of the first engineering consultant. The two reports were substantially consistent.
This year we will test the current system to make more accurate predictions about the life expectancy of the current unit. The board will also look at the possible alternatives in terms of cost, length of time to install, timing of installation, increased comfort and energy savings.
During the year, a new air-conditioning unit was installed in the elevator shaft as an effort to reduce the outages. So far, so good. The board had cables replaced in the elevators.
Sale prices remain high. Fourteen units changed hands; prices are not increasing as rapidly as before but are reflective of the market. The rental market is strong.
Utilities continue to be very high. Roughly 75% of the increase in condo fees is the result of energy cost increases, mainly in natural gas. Insurance costs are also going up so the board is investigating alternative carriers.
Staff has remained stable and excellent. One new porter was hired this year.
The president thanked Brian Larkin for maintaining the Lauren web site; Don Benedict for landscaping; Erin Erlenborn for noise control and garbage truck patrol. He also thanked the HVAC committee headed by John Filice with Eileen Collins and Brian Larkin.
Treasurer's Report
The graphs distributed summarize the history of the finances of the association. These are updates of the graphs handed out at last year's meeting. The dollar amounts are from the annual audited statements through 2004. 2005 data are from the December monthly statement from the financial management company and are subject to correction.
The first graph shows the history of operating expenses since 1990. The three components are labor costs, utilities (gas, electricity, water, and office telephones), and other (i.e., everything else). The second graph shows annual percentage increases in total operating expenses, labor, and utilities. Most noteworthy are the increases in utilities the past several years. Utility bills were up 8 percent in 2003, 11 percent in 2004, and 9 percent in 2005. An even bigger percentage increase is projected in the 2006 budget, although gas rates have declined somewhat recently.
2005 was a second consecutive slow year for capital expenditures (third graph), only about $50,000, mainly related to the HVAC system. Several capital projects contemplated in the 2005 budget (including electrical system upgrading and HVAC work) did not progress as far as had been anticipated or were not begun, and so were carried over to the 2006 budget. The President has described possible upcoming capital expenditures.
The fourth graph shows how the association has been preparing for needed capital expenditures. The graph, labeled "net cash" shows the sum of all our bank account and CD balances, less all amounts currently owed to employees and outside parties. In other words, we could pay all our current bills and have this amount left over. This measure excludes the association's other principal asset (in addition to bank accounts and CDs), which is the Lauren apartment we own. The unit has substantial market value, but is carried on the books at less than $10,000, because its original purchase price has been almost fully depreciated.
This net cash measure rose sharply in 2005 because of the budgeted regular annual contribution and because capital expenditures were below budget.
The fourth graph shows budgeted versus actual operating and capital expenditures. Historically, we have tended to over-budget for operating expenses and under-budget for capital expenditures. The last three years, the operating budget has been reasonably close to actual expenditures. Under-budgeting for capital expenditures occurs because in many years there are unexpected capital expenditures, which are not provided for in the budget.
The increase in utilities expenses raises the question of usage trends. The last two graphs show electricity and gas consumption in the Lauren for various years between 1989 and 2005. Electricity usage has been nearly constant over the period, with a slight upward trend the last few years. The increase in gas usage in the early 1990s reflects the removal of a backup oil burner that was used during peak heating periods in the winter. Gas consumption has been declining a little in recent years.
Other Board Member's Report
Vice President Roger Hirschland noted that the Embassy Suites renovation ended up in rental rather than condominiums. Had this been a condominium, there might have been downward pressure on prices for the Lauren Units. Conversely, the rents there are very high may have positive effects on the Lauren.
Committee Reports
HVAC Committee
John Filice summarized the finding and activities of the HVAC committee. Getting a second opinion from Michael Moore P.E. on the report prepared by John McNabb was an excellent idea. Both worked together but professionally disagreed on some points. John thanked the members of the committee, especially Eileen Collins, a former owner.
He said that the next year the Board will study in detail the reports. The Board would like very much to avoid any special assessment for this needed work.
He encourages owners and renters to come to regular meetings.
Election of the Board
A Board of electors was voted on. Members were Megan Kirkland, Natalie Peter and Brian Larkin.
Election Results
The five serving board members were nominated. There were no additional nominations. The nominees were elected by acclimation. The 2006-2007 Board of Directors is:
- Dwight Clark
- John Filice
- Roger Hirschland
- Joseph Morris
- Elizabeth VanderPutten
Other Discussion
Will there be an increase (or decrease) in condo fees if energy prices change? One reason for the increase was the increase in gas prices. Until now, we have been paying the gas rates at the price known at the time of the budget preparation. Hopefully, the gas prices will be lower and therefore will affect next year's budget.
Do we have sufficient capital reserves? If we are able to phase in the HVAC we may be able to do so without major increases in capital reserves. There are other major capital reserve expenses coming up. These include upgrading in electrical system, replacing the circuit break system, elevators, and hallway redecorating. D.C. code is fluctuating with regard to a number of modernization enhancements. Right now, the Lauren is in compliance, but the code is likely to change.
About energy efficiencies, there may be some changes including install two small boilers and putting in a system to recover heat/cool from the hallways.
How will D.C.'s proposal for "green buildings" affect the Lauren? The Lauren attorney Joseph Douglass said the situation is not clear. No tax breaks exist or are now planned. It is an issue.
Jeffrey Wertkin and Erin reported on efforts to reduce noise. While this is a city and therefore there will be noise, but some noise is over the top. The early pick up of trash, particularly on Saturdays, was too much. Thanks to many letters and calls, the time has been moved back to 8:30 which is at least better.
He also reported with enthusiasm on efforts to reduce sound through installing soundproofwindows.com that is in effect a second window. It reduces up to 70% of the sound. The cost is about $1,000 per window.
There are still noises in the area that are "over and above." Front page bottles breaking still is annoying. The Blue Bus continues to make noise while idling or when it stops to let folks off. A permanent parking space needs to be created for the bus and they will continue to work on this.
Another problem is the testing of the emergency power generator in the building behind the Lauren which gives off strong odors. Joe Douglas reported that it is unclear whether they are violating D.C. codes, but said the he would look into the code.
David LIlling pointed out that it is a very long process to work through the city bureaucracy to get something new like a permanent parking space.
Has the Board looked into programmable thermostats? Yes, but no final one was found.
Kudos
Brian Larkin thanked Dwight Clark and Joe Morris for their useful, comprehensive and concise reports and for their brevity. He said he particularly appreciate the research and analysis that were evident in Joe Morris's reports. Dr. Larkin also thanked the entire board for their unstinting work on behalf of The Lauren and fellow owners and residents.
Jeffrey Wertkin thanked John Filice for his leadership and effort as chair of the HVAC Committee.
Adjournment
The Annual Meeting was adjourned at 9:30 pm
Respectfully submitted,
Elizabeth A. VanderPutten, Secretary