Minutes July 20, 2011

Cloverleaf Center Condominium

July 20, 2011 Board of Directors Meeting

Upcounty Regional Services Center Conference Room A

12900 Middlebrook Road

Germantown MD

Minutes

              I.      Farouk Youssef called the meeting to order at 7:03 PM.

            II.      Proof of announcement: Notice of this meeting was sent December 15, 2010, and a sign announcing the meeting was placed at the entrance to the community.

          III.      Establishment of a quorum of the Board.

a.        Mr. Youssef, President;

b.       Andrew Kim, Vice President, not present. Mr. Kim gave instructions that Mr. Youssef has his proxy for this board meeting.

c.        Peter Franke, Treasurer, present;

d.       Hinaya Jainoor, not present. Ms. Jainoor has appointed Mr. Youssef as her proxy for all matters being discussed at the Board Meeting on July 20.

e.       Diana Smith, present, establishing a quorum of the Board.

          IV.      Mr. Youssef corrected page 3, item VI.4.c. of the handout, draft minutes of the June 15, 2011 meeting.

a.        Mr. Youssef stated: “What I said is that the 74% delinquency rate might have been the reason we are not getting a loan from the bank, because credit bureaus and banks talk to each other.”

b.       Mr. Youssef moved, and Mr. Franke seconded, a motion to correct the draft. Vote: 5 Aye, 1 Abstain, 0 Nay.

c.        Mr. Franke moved, and Ms. Smith seconded, a motion to approve the June 15, 2011 minutes, as corrected. Vote: 5 Aye, 0 Nay.

            V.      Management report & the progress made by Summit during the past thirty days (7:10 PM)

a.        Tiffany Hope was present to take notes for Summit Management Services, Inc.

b.       Ms. Hope read the following statement from a July 14 Summit Management Memo:

“Mr. Krueger challenges the assertion made under VI (4)(c) of the June 16, 2011 minutes that Summit repeatedly reported a 74% delinquency rate to one bank that turned down the association application for a loan. The wording in the minutes suggests that Summit was asked to provide a delinquency rate to one bank on more than one occasion, and responded more than once by submitting a 74% delinquency rate. Mr. Krueger believes that the bank to which the minutes refer is BB&T, as he was copied on two emails Peter Franke sent to Joseph Inzerillo, the loan officer handling intake of the documents at BB&T, on May 14 and May16th, 2011, respectively, attached to which were aged-owner balance reports that Summit Management had prepared and sent to Mr. Franke and other members of the board. The reports Summit prepared and provided to Mr. Franke and other members of the board do not state a delinquency rate of any percentage; they are listings of aged owner balances, one for the Special Assessment only, dated April 30th, 2011, and one for all owners, also dated April 30th, 2011. At no time did any representative from Summit Management provide BB&T with a report directly. All reports were sent directly to Peter Franke and other members of the board and, presumably, reviewed and approved for distribution by the Board or one or more of its members. Mr. Franke sent these reports to Mr. Inzerillo along with lengthy explanations of the aged balances and clarifications. Therefore, Summit neither explicitly reported a delinquency rate of 74% to any bank or the board for that matter, nor provided any report whatsoever regarding delinquencies directly to any bank.”

c.        The meeting room for the Annual Meeting has been scheduled for October 26 (anniversary), rather than October 19 (third Wednesday.)

d.       The attorney will not submit the FHA forms without authorization from Board.

e.       Action items:

                                                               i.      Reconsider tabled proposal for work (swale and tree replacement) behind 14 DPD;

                                                              ii.      Brickman request regarding the flowers at the community entrance;

                                                            iii.      Status of Chen, Walsh, Techler, McCabe.

          VI.      Continuing Business (7:15 PM)

a.        Oct 26 election of a Plex Director to a two year term. [The Plex Director who was elected with the fewest votes in the last election served a two year term.] Instructed Summit to mail letters to Plex Unit owners:

                                                               i.      Call for Nominations (by August 12, 2011);

                                                              ii.      Notice of Election (on September 26, 2011).

b.       Building envelope Report

                                                               i.      The Board and Kirby McCleary met for two hours on July 13 at Structura (see below) to open the bids and compare them by quantitative price factors and qualitative factors, such as previous work.

1.       The roofs will not be patched as previously thought, as our tiles are no longer legal, and cannot be matched; prices include whole roof replacements.

2.       Eliminated two bids as outliers by quantitative ranking based on price.

3.       Ranked the four remaining bids by quality factors as well as by price.

4.       On July 28, we will interview (with our engineer, who devised a list of questions) the two top ranked bidders. We will choose the final one, and work with that bidder to try to amend the contract price.

5.       Ms. Smith asked if we will consider just these two at the July 28 meeting. Mr. Youssef stated if one of the two defaults, we will go to the other, not restart the process.

6.       Mr. Youssef moved to pay two Structura bills as soon as possible: $481 (June 13) for preparing a list of bids; $999 (June 30) for additional bid items and questions. Mr. Franke seconded. Vote 5 Aye, 0 Nay.

                                                              ii.      Bank loan

1.       Mr. Youssef said last meeting that he believed that we were close to obtaining a loan from PNC. However, at the last minute, their underwriter turned us down for what Mr. Youssef sees as a fictitious reason: Not enough collateral.

2.       This reason is laughable, even to the VP of the bank, who has found for us another source of financing, as he thought we have a healthy package. We will pursue it to see why we don’t have enough collateral: We have more than $300,000 cash ready, and each building is valued above $3,000,000.

c.        Mr. Youssef moved to pay to Guardian $7304 from the operating funds as a deficit for fire system repairs. This expense is to be added to the 2012 budget. Mr. Franke seconded.

                                                               i.      Mr. Franke noted that the amount billed [in the management report] is confusing, and Mr. Youssef asked Ms. Hope if she had a copy of the bill with her. As she did not, Mr. Youssef stated we will discuss this matter without the exact number. Mr. Youssef noted:

1.       Several months ago, the Board approved the recommendation of Guardian (replacement of defective sprinkler heads) as necessary for compliance with Code. The work should have been done a few years ago, but the can was kicked down the road.

2.       Since sprinkler head repairs are not itemized in the current budget, the question is how to pay for these repairs. Some have suggested paying as a reserve fund item. Mr. Youssef says he is not convinced that this ever was a reserve item [it is listed as an unfunded break-out expense in the 2010 annual budget.] Furthermore, the operating account can take care of this, as we have at least four (rather than three) months of operating expenses on hand.

                                                              ii.      Mr. Franke noted that sprinkler system repairs are an LCE budget item; each $10,000 of LCE expense costs each Plex unit owner $8.50/month.

                                                            iii.      Vote: 5 Aye, 0 Nay.

d.       Accounting

                                                               i.      Mr. Youssef moved to close the session at 8:30 PM to discuss collections & errors. Mr. Franke seconded. Vote 5 Aye, 0 Nay.

                                                              ii.      Mr. Youssef moved, and Ms. Smith seconded, a motion not to file with FHA at this time.

1.       Delinquencies: FHA regulations require that no more than 15% of the total units can be in arrears (more than 30 days past due) of their condominium association fee payments.

2.        Mr. Youssef stated that he is appalled that 25% of the units in our community are delinquent in regard to their association fee payments. If those who owe less than $1000 (a total of about $6000) each paid just what they owe, our delinquency rate would be less than 10%, and we would qualify for the other 75% of the market we lose without FHA approval.  Our Vice President will write up a nice letter for the 25% of our community who don’t care either about themselves, or about our community.  [Ira Salins suggested sending the letters to the mortgagees.] One delinquent owner owes just $8-$10. That is a pitiful amount of money, but it is hurting us all. Therefore, forgo a movie or a dinner out, and just pay up! At the end of the day, it is mathematics. The attorney fees will snowball, and the units will be put on the market at auction to collect our dues. That is where we are going, because these delinquencies are hindering us from getting a suitable loan. Once we choose a contractor, we need money.

3.       Vote: 5 Aye, 0 Nay.

                                                            iii.      Motions to correct reports that may cause harm to Association members:

1.       Mr. Franke moved to instruct Summit Management Services, Inc., to correct the language stating “Total Delinquent Special Assessments” so as to state “Pay-off amount” (e.g., the $908,269.21 reported on the last page of the June 30, 2011 Financial Statement, titled Cloverleaf Center Condominium Special Assessment Bank and Owner Account Balances Reconciliation), as agreed. Mr. Youssef seconded, stating that we need the management company to protect us, not stab us in the back. Vote: 4 Aye, 1 Abstain, 0 Nay.

2.       Mr. Franke moved to refer Elan Krueger, President, Summit Management Services, Inc., to email that originated from Accounting@summitmanage.com, Jan 18, 2011 at 9:37 AM, which stated: “110 units delinquent as of today-74% owners are delinquent.” Ms. Smith seconded. Mr. Franke wishes once and for all to have this long standing issue corrected. The issue is not about a bank that is not even our Association’s bank, which Mr. Krueger refers to in the diatribe read into tonight’s minutes [V.b.] The issue is, instead, about consequences of the cited email. Vote: 5 Aye, 0 Nay.

e.       Mr. Youssef stated that it is not so easy to get out of the contract as the litany of stuff Elan has done. We did not breach the contract; we did suggest separating accounting, and keeping the management. There are only two ways that the BOD will release management from the contract:

                                                               i.      We find a suitable replacement which fully satisfies our needs, or

                                                              ii.      December 31, 2011, when the contract runs its course.

f.         Architectural Control Committee report on 13055 Bridger Dr

                                                               i.      The Board held an extraordinary meeting at the site (see below), discussed the space and the disconnect box, and explained that the request as stated would encroach on a neighbor. The Board asked at least three times for the County Code that relates to existing structures, and received the National Code each time.

                                                              ii.      The Board responded within 30 days to the ACC request:

1.       Owner obtained the requested signatures.

2.       ACC approved the ventilation pipe if the owner agrees to mitigate any damages or repairs due to the installation of the ventilation pipe.

3.       ACC did not approve an a/c compressor of larger physical size than one that fits in the existing available space.

4.       ACC did not approve moving an existing breaker box from an existing building.

5.       Existing buildings have a different existing building code. Contractor should find out about that from the office of the DPS.

                                                            iii.      Mr. Youssef stated that if the ACC decision is not acceptable, there is a mechanism to appeal it. The appeal is with a legal authority.

                                                            iv.      The Unit owner mailed a letter to the Board at the PO Box. The Board will respond within 30 days, as required, to letters mailed to the Association’s PO Box, or to the management company.

                                                              v.      In addition, several members of the Board received certified, return receipt letters mailed to their private addresses. The Board will open those letters during this meeting. In that regard, Mr. Youssef stated that the Unit owner must understand one thing: We on the Board are all volunteers. We have private lives. We do not want knocks on our doors, and we do not want to be sent letters in a manner we believe was designed to intimidate us; I will not be intimidated. The letters addressed to the residences of the Directors were opened.

g.        Mr. Franke moved to pay Brickman for the annuals planted at the entrance, in exchange for Brickman’s two for one offer of free Fall color. Mr. Youssef seconded. Vote: 5 Aye, 0 Nay.

h.       Continuation of the $1255 Brickman proposal:  Ms. Smith stated that river birch is an appropriate tree between Phases 6 and 7, other than at the proposed price.  Mr. Franke suggested planting one rather than two trees at that location. Additional discussion:

                                                               i.      Is the dead hemlock by Bldg 1 the other dead tree proposed for removal?

                                                              ii.      Ask Brickman to add to the proposal a cost estimate to replant the bare spot on the berm, adjacent to Crystal Rock Dr. and Bldg 3, so as to discourage the foot traffic through that spot, as has been discussed on occasion during the past two years.

i.         Mr. Youssef moved to table the discussion so that Elan can get answers from Brickman, and a modified proposal. Mr. Franke seconded. Vote: 5 Aye, 0 Nay.

j.         Ms. Smith noted that several service requests, including shrubbery items and concrete work, have dropped out of the discussion, and specifically mentioned 13033 B. landscaping concerns.

        VII.      New Business (8 PM)

a.        Mr. Franke moved to instruct Summit to write a separate monthly check for any expenses over the $2680 monthly management fee, and to itemize & explain in detail disbursements to itself, from January through June, 2011. Mr. Youssef seconded. He stated that the monthly checks written to Summit Management since January are close to $4,000 per month, and that the Board would like to have an itemization and detailed explanation of what it is over the $2680 contract price. Vote: 5 Aye, 0 Nay.

b.       Mr. Youssef asked Ms. Hope for the status of the 2010 audit.

                                                               i.      Ms. Hope stated that although she cannot find the Representation Letter, Mr. Krueger had left instructions that it requires signatures of the Board (President and Treasurer.)

                                                              ii.      Mr. Youssef stated that we don’t have it.

                                                            iii.      Ms. Smith, noting that we are now in the later part of July, also noted that Summit had previously told the Board that the hold-up was that the auditors had been unable to get to the office, and that the audit would be ready July 18.

c.        New ACC business: None

      VIII.      Community Forum (8:20‐8:30)

a.        Issues raised by Ira Salins included: Trash cleanups (there was a sad lack of owner participation when we tried), lawn cutting (bring to the attention of management when its noted), incomplete repairs to a neighboring TH unit (the owner has a contractor), whether the AC request is an ACC issue (not previously; there is a 3 ton AC model that will fit; the ACC will not move the disconnect box), and if a rusted mailbox can be replaced (not until it falls.) Wade Owen asked for a summary how much money is in the reserves and the special assessment (on June 30: $293,795.92 in the reserve account, and $165,548.01 in the special assessment account.) Nicole Youssef noted that some residents are putting out their trash 24 hours before (owners are to ensure that residents do not put trash out before 7 PM the evening before a pick up day.)

           IX.      Adjourned to closed session (8:30 PM)

             X.      Closed session (8:30 PM)

a.        WTP

                                                               i.      The status of specific WTP cases was discussed.

                                                              ii.      Mr. Youssef suggested that WTP mail documents directly to Mr. Youssef, who will sign and mail them back.

                                                            iii.      Owners who have not paid fines for violations: The Board wants to know the progress.

b.       Error corrections: With regard to corrections for two known cases of errors detected this month, Ms. Smith asked if there are errors in other accounts. The Board was told previously that it does not have all the information. The Board expects full access to all information.

c.        McCabe: Mr. Youssef previously told Mr. Krueger that we will not pay the McCabe bill because we have already paid what we found was legitimate.

           XI.      Adjournment (9:00)

Cloverleaf Center Condominium

Continuation of Architectural Control Committee Hearing

June 17, 2011, 7:00-8:00 PM

Farouk Youssef, Noorul Hinaya Jainoor, Andrew Kim and Peter Franke met for the purpose of examining Andrea Ducker’s Architectural Change Application (13055 Bridger Dr) at the site of the air conditioning condenser and breaker box, and within sight of the vent pipes (outside 20546 Golf Course Drive.) Mr. and Mrs. Albert Ducker and George Stillman were also present.

Cloverleaf Center Condominium

Meeting of the Board of Directors

401 North Washington Street Suite 900

Rockville, MD 20850

July 13, 2011, 6:30-8:30 PM

Farouk Youssef, Andrew Kim, Noorul Hinaya Jainoor and Peter Franke met (Article III, Sections 9 and 10, and elsewhere) with Kirby L. McCleary at the offices of Structural Rehabilitation Group, LLC. Diana Smith expressed her regrets, as her workload preempted participation.

The work of the meeting was quantitative evaluation of the bid summary of June 13, 2011 in order to rank the bids, and selection of two top bids for invitation to further interviews. Qualitative factors (generally, negatives) were also considered.

There was unanimous agreement to approach two of the bidders with requests to discuss their qualifications, review similar projects, review their bids, and meet the key personnel they plan to assign to this project should it be awarded to that company.