The Lauren Condominium Association

MINUTES OF THE BOARD OF DIRECTORS
JANUARY 27, 2009

The meeting was called to order at 7:08 p.m. by Roger Hirschland. Present were other board members Dwight Clark, Elizabeth VanderPutten, and John Filice, and property manager Walter Krolman. 

READING, MODIFICATION, ACCEPTANCE OF MINUTES OF THE MEETING OF DECEMBER 16, 2008

The Board approved the December minutes as a true record of the prior meeting.

ACTION ITEMS

Board Vacancy Filled

The Board acknowledged with regret the resignation of Jeff Wertkin from the Board, who has temporarily moved from the Lauren.

The Board commended Jeff for his evenhandedness, clear thinking, foresight, and commitment to fellow owners.  In ways large and small, short term and long term, he consistently contributed in positive ways to the board and to the condominium association.

The board appointed Aaron Tax (unit 516) to fill the vacancy. Dwight Clark will become First Vice President and Aaron will be Second Vice-President.

COMMITTEE REPORTS

Decorating Committee Report

Four bids for redecoration have been received and more are expected by the board-imposed deadline of February 10, 2009.

DISCUSSION ITEMS

Late Payments

Late payments are a serious concern to the condominium and when payments are not received for months, there are weighty penalties. The Board reviewed the letter that goes to owners when a condo payment is late and suggested some changes.  The board was concerned that a delinquency letter was sent to persons who submitted their January payments by January 12^th.  The Board had extended the date for this one month because of delays in sending out the new coupons. Owners will not be charged a late fee if the condo fees for January were credited to the account by January 15.  The Board asked that Simmons send a letter of apology to anyone inappropriately charged a late fee.

The board discussed the fees charged by Simmons for sending delinquency notices.  For each late notice that is sent, Simmons charges the Lauren $15.  This charge is for each letter that is sent (first, second, or third notice).

The treasurer was asked to follow up and obtain a response from Simmons on resolving the issue of charges Simmons made to the condominium for handling late payments.

Boiler and Hot Water Heater

Water heater and boiler specifications have been prepared and were sent out for bids, with a mid-February deadline.  The Lauren’s consulting engineer is in the process of arranging for necessary permits.

Holiday Gift Fund

The board acknowledges the generous contributions made by owners and tenants to the holiday gift fund for staff.  A total of $9,399 was contributed this year, of which $515 arrived after distributions were made.  Because several contributions came in after the president’s letter, the sum is higher than mentioned in that letter.  In addition, funds that were carried over from last year were distributed.  The total distribution to staff was $11,010. The current balance in the holiday gift fund account is $808, which is the result of contributions received after the final distribution and the need to maintain a minimum balance in the account.  This will be given to the staff next year.

Within-Unit Smoking

The board requests that persons who smoke in their units be considerate of others and take precautions to limit second-hand smoke from entering other units.  Owners who rent their units are encouraged to include a no-smoking clause in their leases, a practice already followed by many owners.

Within-Unit Circuit Breakers

The board reviewed a request by an owner to replace the circuit breakers in his unit.  The board withheld approval until appropriate permits are received.  The board will also investigate the potential problems that might be associated with the type and age of circuit breakers in the building. The board directed the manager to have an electrical expert advise the board as to the safety and condition of existing breakers. 

Water Leaks

The board discussed recent water leaks and reminds owners that they are responsible for damage caused if the leak emanates from appliances or pipes wholly within their units.  The board also reminds and requests that tenants and owners report any leak immediately to the front desk or to management, and reiterated the need for management to act fast in locating and repairing any water leaks.

FINANCIAL MATTERS

Discussion of Year End Financial Report and Unanticipated Expenditures in 2008

The board discussed the December 2008 financial report from Simmons, which shows operating expenses were higher in some categories than budgeted. One item was the electric bill, which was $29,190 over budget. The overage was caused by the unforeseen energy crisis last spring and summer. The board considers the U.S. Energy Department’s forecasts for gas and for electric prices when developing budgets. DOE had projected a 2.2% increase for electricity costs for 2008, which turned out to be 6.6%, or three times higher than expected. Another unanticipated cost was approximately $5,000 for providing security for the garage and building while the garage door was out of service. Also, there were $30,277 in bills for work done in 2007 but which had not been submitted until 2008, plus $9,135 associated with an insurance claim for water damage.

In addition we had $50,580 in unanticipated capital expenditures in 2008. These unforeseen expenses included replacing the garage door, waterproofing the pool room (unit 1006), replacing various pumps and several smaller pieces of building equipment. An important item was replacing the garage door, which in February could no longer be repaired, and the hiring of a security guard for the garage and building for weeks while a new door was being manufactured, shipped, and installed. Another unanticipated item was waterproofing. For years, leaks around the pool and the pool pump and pool pipes have caused flooding of unit 1006, with water damage often spreading into adjacent units and those below. These have resulted in costly repairs to other units as well as to the Lauren. Following a series of leaks last spring, our consulting company Seal Engineering recommended that the unit immediately below the pool (1006) be waterproofed as a way of containing future leaks and preventing further collateral damage. Smaller items included repairs to the A/C cooling tower and miscellaneous appliances and equipment. One positive surprise was that the insurance company lowered premium costs which saved $8,869.

TREASURER'S REPORT: Month Ending December 2008

A.      Total Owners Equity / Net Cash Available:

Total Owners Equity / Net cash available at the end of December 2008 was

$ 1,224,171.20.

B.     Year-to-date operations, through the end of December 2008:

1. Total operating income was $1,164,931 per Simmons Management Financial Report for Month Ending December 2008.
   Note:

·         Total income includes a $72,669 transfer from reserves, which was required throughout 2008 to cover Capital Expenses ($50,580) and Operating Expenses ($ 22,089)  

2. Total expenses were $ 1,211,385:

Total Expenses include $ 50,580 in Capital Expenses per note above, along with other miscellaneous expenses as referenced elsewhere in these minutes, including but not limited to the following:

·         $ 30,277 in bills paid in 2008 that were actually part of our 2007 budget

·         $ 5,000 in security guard fees for underground garage while door was out of order

·         $29,190 relating to our electric bill, which was over budget as a result of the unforeseen energy crisis last spring and summer.  

3. Laundry Income: 

a.      December Coin Deposits made 12/18/08,

which includes November earnings:                    $ 1,472.25

b.      December “Net” Credit Card Income:                  $ 1,360.19

Total Laundry Income December 2008      $ 2,832.44

C.     Fund Balances as of the end of December 2008

1.      Operating cash balance as of the end of December 2008: $ 17,969.85  

2.      Reserve Funds:

a.      Unrestricted capital reserves:                   $ 1,001,745.73

b.      HVAC dedicated replacement reserve

fund booked balance:                                $    220,568.00     

Total Reserves         $  1,222,313.73  

Note 1 re Reserve Funds:

Monthly Condo Reserve Contributions for 2008 are $18,670.00  

Note 2 re Reserve Funds:

The HVAC reserve fund includes a transfer of $ 61,296 from the general reserves as of January 1, 2008, plus a portion ($3,405.33 per month) of Monthly Condo Reserve Contributions.

D.     Miscellaneous Treasurer Notes:

1. 2006 Audit Re Koger Bankruptcy: 

·         Our 2006 audit revealed we were missing monies due to the Koger Management Company’s bankruptcy / embezzlement.

·         Goldklang provided the figure of $ 64,735.00

·         The recovery of this money is being pursued through The Lauren’s legal counsel and our insurance carrier.

·         Travelers Insurance sent a January 16, 2009, letter requesting further backup regarding the figure of $ 64,735.00 provided by Goldklang.  Walter Krolman, Property Manager, is following up with Goldklang.  

2. 2007 Audit

·         The revised draft includes the revisions we requested.

·         Walter Krolman has inquired at Goldklang re final copy for our records.  

3. Monthly Reserve Contributions

·         Simmons Management has been successfully conducting electronic transfers of our Monthly Reserve contributions.  

4. Certificate of Deposit / Smith Barney Investment Activity in July 2008

1.      The monthly Smith Barney statement of account for The Lauren Condominium Reserves has been reviewed and determined to be accurate.

2.      Interested owners are free to request a copy from our Property Manager in writing.

3.      CD purchases / activity during the month are reflected in the monthly statement.

5. CD Activity vis a vis Potential Capital Expenditures

 The Treasurer and Property Manager discuss the following with Smith Barney on a regular basis:

a.      Current money market funds

b.      CD  Maturing Dates

c.      Non Smith Barney CDs to be moved into our Smith Barney account.

d.      Potential “Capital Expenditures” such as those listed below:

      Projected Lauren Needs / Capital Improvement Projects may total  

      approximately $ 450,000 through 2009.

·         Boiler: Approximately $220,000

·         Hot Water Heater: Approximately $80,000 per 2009 budget which is reflective of McNabb’s latest estimate

·         Interiors: Approximately $200,000

e.      Currently, our reserve funds are enough to cover such Capital Improvements without concern for compromising our ability to address emergency matters.

f.        Smith Barney has recommended a “laddering” of CD investments that will allow access for needed capital expenditures as they arise.

E.     Remaining CD’s to be transferred to Smith Barney upon maturity:                                    

1.      M&T: Matured1/14/09 (4.62%)                              $76,629.43

·         As of the date of our January 27^th Board

Meeting, $76,629.43 check has been

deposited with Smith Barney for investment

2.      Capital One: Matures 7/28/09 (4.88%)                 $72,691.50

3.      Principal Bank: Matures 2/8/10 (4.89%)               $74,389.98

4.      WA First Bank: Matures 7/24/10 (5.25%)             $ 77,735.79  

NEXT BOARD MEETING

The next monthly Board meeting is scheduled for February 25, 2009

ADJOURNMENT

The meeting was adjourned at 9:15 for Executive Session. 

RESPECTFULLY SUBMITTED