CCC BOD Meeting Minutes March 16, 2011

Cloverleaf Center Condominium

Board of Directors Meeting

Upcounty Regional Services Center

12900 Middlebrook Road, Germantown, MD

Conference Room A

March 16, 2011

Minutes

A. The meeting was called to order at 7:06 PM by Farouk Youssef.

B. Proof of announcement was provided by a notice of the Regular Board Meeting schedule sent by Summit Management on December 15, 2010, and by a sign that was posted for this meeting at the front entrance to the community on March 13.

C. A quorum of the Board was established by presence of:

Farouk Youssef, President, Townhouse Representative;

Andrew Kim, VP, Plex Units representative;

Peter Franke, Treasurer, Plex Units representative; and

Diana Smith, member at large, Plex Units representative.

Hinaya Jainoor, member at large and Townhouse Representative was unable to attend due to work responsibilities and provided a proxy to Mr. Youssef for voting purposes. 

D. Mr. Youssef moved to approve the February 16, 2011 minutes, as written. Mr. Franke seconded. He also noted that the minutes are posted on the website in order to make them available to all homeowners before the next BOD meeting. Vote: 5 Aye, 0 Nay.

E. Elan Kreuger, Summit Management, reported the following:

I. State Farm Insurance: Mr. Kreuger requested correction to the Unit listing and endorsement. He expects a $103 per year reduction in the liability portion of the bill.

II. Guardian Fire Alarm: The February 7 annual inspection report noted numerous items that need repair. Some are minor. Others are more pressing and the Association may be in non-compliance. This could compromise fire safety and result in fines. Mr. Kreuger therefore recommended that the BOD promptly accept or modify the $9562 Guardian proposal (which excludes additional sales taxes and fuel surcharges), and repair of these items. Ms. Smith asked how soon the work will be completed. Mr. Kreuger answered within a month. Mr. Franke moved to approve the work order proposal. Mr. Youssef seconded. Vote: 5 Aye, 0 Nay.

III. Spring Grounds Clean-Up: The Association of Retarded Citizens (ARC) will pickup trash from the grounds at 9:30 AM March 17 for $100. Mr. Youssef instructed Summit Management to send out a post card to all Unit owners to include the following four reminders:

1. Pick up trash.

2. Pick up their pets’ droppings, and utilize the dog stations for the droppings.

3. Pick up cigarette butts.

4. Please, limit vehicle speed to 15 MPH when driving inside the community, especially now since the warm weather is coming and more children will now be playing outside.

Mr. Kreuger stated that Summit will send on the same card a reminder of the April 27 bulk trash pick up.

IV. Accounts Receivable:

1. Mr. Kreuger announced that on March 3, Mr. Youssef and Mr. Franke met with representatives of Summit Management and with representatives of Whiteford, Taylor, Preston in order to estimate ($79,636.78) the bookkeeping and auditing category “Allowance for Uncollectable Debt”.

2. He stated that DeLeon & Stang can now finish the 2010 audit.

3. He also requested that any further discussion of delinquencies be in closed session.

V. Verizon:

1. Mr. Kreuger stated that in his numerous contacts with Verizon, that company had said that the boxes installed (previously described as “tombstones”) are mini-boxes and that complaints of unsightliness normally disappear after the landscaping has a chance to grow back naturally.

2. Mr. Youssef stated that a CCIIIC Unit that was connected prior to a contract and that wire had caused a trip-hazard, as the wire was left on the surface. Mr. Youssef reported that he contacted County Executive Ike Leggett’s office and was referred to Mr. Watkins of the Office of Cable & Communications, who resolved this hazard within 24 hours.

3. He sent a letter of thanks to Mr. Watkins on behalf of the Association.

VI. Refinance request for delinquency rate:

1. Mr. Kreuger stated that Summit Accounting will recalculate the delinquency rate given to Unit owners seeking to refinance.

2. Mr. Youssef stated that the CCC governing documents define a delinquency as an assessment that has not been paid 60 days or more from the date it is due.

3. Mr. Kreuger stated that in order to calculate the risk of a refinance request, a lender is not obligated to use that CCC definition, and may choose to use the FHA definition of 30 days.

F. Continuing Business (7:30 PM):

I. Association Secretary:

Mr. Franke asked for a volunteer Association Secretary. He reminded the Association that an election will be held in October and that several positions (Secretary, Treasurer) may be held by someone other than a Director. He urged all in the Association to participate in the community as an elected Director or other officer, or on a Committee.

II. Preparation for July, 2011 approval of FHA status:

1. Mr. Youssef stated that the Board’s immediate priority is for all unit owners to pay their assessment payments on time. This will allow owners who seek to refinance and/or sell their property the opportunity of FHA approval, and also will allow the forward movement of the residing project. He also stated that so far six companies have expressed interest in bidding on the residing project proposal (still in draft.)

2. Mr. Franke summarized the cash status of the project in order to rationalize why the Board requires all unit owners to pay all of their assessment on time.

a. First, in regard to the reserves:

2/28/11 UB MM reserves:     

$206,210.11

12/31/10 UB CD reserves:    

$ 35,505.34

12/31/10 due to reserves:    

$ 35,861.22
Approximate reserve cash:    

$277,576.67

b. Mr. Franke calculates that about 57.3% of the reserves are usable for Plex unit limited common elements that relate to the project (e.g., roofs, siding, caulking, etc.)  Note: Only Plex unit owners have paid for this portion of the reserve funds. Mr. Franke stated that at this time about $158,947.59 of the reserves may be used for this project.

c. Second, the operating fund account (RBC) on March 15, 2011 was $154,336.49. After subtracting what is “due to reserves” (plus an outstanding Structura bill of $8,918.45), and leaving four months of operating expenses ($79,600), the remaining $29,956.82 in the operating account may be added to the UB special assessment checking account ($34,896.07 on 2/28/11.)

d. With that amount of cash available at the present time for construction (total $223,800.48), Mr. Franke calculates that CCC could leverage, at 20%, an additional $1,119,002.38 for a construction loan. Mr. Youssef stated that Cloverleaf Center Condominium is now in a more favorable light for obtaining such a loan than a year ago.

3. Mr. Youssef stated that APM and TMGA were paid about $14,000 a year for management. CCC engaged Summit Management at considerably higher cost because of their reputation for being modern and for providing superior service, e.g., a fully engaged and licensed accountant.

a. Mr. Youssef stated that the BOD is at a disadvantage in regard to negotiations for a loan if it does not get up-to-date financial figures (e.g., February’s FS not available at tonight’s meeting.) Mr. Youssef stated that the Board would also like to receive real-time information of the payments of the assessments.

b. Mr. Franke stated that Ms Conway had provided an Activity Report for 01/01/2011 to 01/31/2011, and also an Activity Report for February (March 3.)  

c. The Activity Reports are needed to follow the payments of the assessments. Mr. Franke asked that Ms. Conway continue to provide them as early each month as possible.

4. Mr. Kreuger stated that the monthly accounts are done during the week following the 15^th of the month, and suggested that after the current schedule expires in July, the meetings could be delayed an extra week. Meanwhile, Summit will prioritize the CCC accounts. He also stated that the firm that will file for FHA approval for CCC agrees with the steps taken so far to reduce the delinquencies. Further, the audit will be finalized before processing the FHA paperwork.  

 

5. Discussion of the application of payments to delinquencies and late fees:

a. Mr. Kreuger stated that the practice of first applying a payment to late fees before applying that payment to the current assessments is a common practice, and is, in his opinion, not in conflict with the Act. He said that of around $50,000 outstanding, about $2100 is for late fees.

b. Mr. Franke stated his opinion that the priority of payments currently applied hurts rather than helps the Association. Proposed MD bills address the issue, but these bills may not pass.

c. Mr. Youssef stated that two Unit owners trying to refinance had reported to him that Summit had reported very high rates of delinquency, which had hindered the refinance process. Documentation from one of the Unit owners was presented.

d. Examining this documentation, Mr. Kreuger stated that there is a problem in the figures given to the Unit owners. The Whiteford, Taylor, Preston and the Summit Accounting delinquency rate does not match the figures given to the Unit owners. Mr. Youssef insisted that Summit Management in the future provide accurate figures to the BOD and to the Unit owners.

6. Mr. Youssef moved to close the meeting later to discuss delinquencies and the Whiteford, Taylor, Preston, LLC report. Mr. Franke seconded. Vote: 5 Aye, 0 Nay.

III. Mr. Kreuger said yes to Mr. Youssef’s request to draft a letter to all Unit owners in order to create a lessee database. Mr. Youssef stated that the BOD was unified in the desire to have an up-to-date list of units that are not owner occupied, especially in light of the pending submission for FHA re-approval.

IV. Mr. Youssef stated that Structura Engineering has now submitted draft plans for the repair project. The BOD is studying these plans, and a meeting with Structura has been scheduled for March 23 to discuss changes for the final draft and plans for bids. He stressed that that it is highly desirable that all BOD members attend this meeting.  

V. Mr. Franke moved to transfer $35,861 from the operating funds to the reserves. Ms. Smith seconded. Vote: 5 Aye, 0 Nay.

   

VI. There are no new reported ACC violations. Mr. Kreuger reported he sent a letter to 13035 Bridger Dr regarding the garage door violation. He has contracted Brickman to remove the pavers at 13049 Bridger Dr., and to sod or seed. Other current ACC violations remain tabled at this time due to foreclosure status, etc.

VII. Mr. Kreuger stated that CCIIIC has agreed to sign a contract with Verizon for FIOS.

VIII. Mr. Franke stated that he will place new keys in the fire-alarm room keys boxes where needed.

IX. Mr. Youssef stated that any residents interested in the April 27^th bulk trash pick should put any appropriate items out the night before.

X. Ms. Smith asked if the Association needs to retain the very large volume of records remaining at EZ Storage, or should those records be cataloged and/or purged. Mr. Kim stated there is a non-profit organization which performs such services, and will look into cost.

G. New Business (8:15 PM):

I. Mr. Youssef stated that CCC has paid the previous $9,012 Structura invoice, and will pay the February invoice ($8,918.45) pending any necessary corrections to the draft report subsequent to the March 23 meeting between Structura and the BOD.  Approximately $3500 additional cost may be expected for Structura’s services during the bidding/review.

II Mr. Franke moved, per the Act, to discuss in closed session the letters received from 13055 Bridger Dr., and the correspondence between 13019 Bridger Dr. and Summit. Mr. Youssef seconded. Vote: 5 Aye, 0 Nay.

H. Community Forum (8:20 PM):

I. Aileen Kelly, 20557 Golf Course asked whether Verizon will repair their damage (e.g., the plates between each two town houses.) Ms. Kelly stated her opinion that the town houses are paying esthetically for FIOS at Cloverleaf.

II. Several other Unit owners also expressed their complaints about Verizon’s FIOS wiring installation.

III. Anna Prisutti, 13009 Bridger Drive, stated that the FIOS wiring to her unit was not done, and that her calls to Verizon had not resolved this. She will email the specifics to Summit .

IV. Steve Colferai, 20553 Golf Course Drive, asked about repair of a pothole near the entrance. He also complimented Summit Management for its prompt response to a street light outage. He asked that Brickman do more tree pruning.

V. George Filsinger, 13005 Bridger Drive, asked that the pine tree now growing onto his deck be pruned. Sandy Filsinger asked what items will be taken in the bulk trash pick-up. Furniture and household items are acceptable, but no electronics (esp. no TVs), no chemicals.  Those items should be taken to the Shady Grove Recycling Center.

I. Mr. Youssef closed the meeting, as previously announced. (8:30 PM):  Mr. Youssef, Mr. Kim, Mr. Franke, Ms. Smith, and Mr. Kreuger remained.

I. The BOD discussed the March 14, 2011 Whiteford, Taylor, Preston Assessment Collection Status Report.

II. Mr. Youssef and Mr. Kreuger plan to attend the CCC delinquency court hearing scheduled on April 13, 2011.

III. The BOD answered two letters regarding 13055 Bridger Dr. by return letter sent to the Unit owner’s address, the owners’ realtor, and to Whiteford, Taylor, Preston. A copy was also given to Mr. Kreuger for the Association’s records.

IV. In regard to the correspondence between 13019 Bridger Dr. and Summit:

1. The BOD and Summit Management affirm their desire to maintain the continuity of a reasonable and fiscally sound policy toward payment plan proposals, while considering any mitigating circumstances presented by a Unit owner. Payment plans of one year or less have in the past been approved, with the condition that the Unit owner must remain current in payment of all assessments.

2. The BOD again emphasizes that Unit owners shall mail their requests by signed letter (to P.O. Box 2346, Germantown, MD, 20875,) so that the request may be handled in a legal manner.

J. Mr. Youssef adjourned the meeting at 9:00 PM.