November 16, 2011 Meetings Minutes

Cloverleaf Center Condominium

Reconvened Annual Meeting &

Board of Directors Meeting

November 16, 2011

7:00‐9:00 PM

Upcounty Regional Services Center Conference Room A

12900 Middlebrook Road

Germantown MD

Minutes

              I.      At 7:05 PM, Farouk Youssef called for a vote of those assembled to open a Reconvened Annual Meeting, and the assembly responded with unanimous assent.

            II.      The Reconvened Annual Meeting was announced by a notice to all Unit owners, and by a sign at the entrance to the community. Those present at a Reconvened Annual Meeting constitute a quorum of the Association.

          III.      Mr. Youssef moved to approve the minutes of the 2009 Annual Meeting. The Association approved the 2009 minutes unanimously. [Note: There was neither a quorum at the 2010 Annual Meeting nor a Reconvened Annual Meeting in 2010.]

         IV.      Kreg M. Williams (20518 Bridger Way) has declared his candidacy for election as a Plex Unit Director for a term of two years. Mr. Youssef asked if there were any other candidates who wished to declare from the floor. As there were no other candidates, Mr. Williams was elected by acclamation.

           V.      Discussion, by which a member might bring any business before the Association.

a.      Dividing the Association into two parts has long been debated by some TH members who see themselves as a different class and not compatible with the Plex class members. There is a perception that the TH owners are penalized for the costs of lawsuits, elections and construction.

                                                              i.      The Developer created and filed the Declaration by which the community functions under the laws of the State of Maryland and Montgomery County. To change the Declaration now would require the same filing process and adjudication. That would cost about $12,000, and would need to be driven by Unit owners. The stated requirements to terminate the Condominium project are in the Declaration, Article X Section 5(a).

                                                            ii.      What evidence is there for the perception that TH owners pay for some of the Plex unit owners’ expenses? The budget has been set up according to the governing documents. The Board has repeatedly and heatedly discussed the budget and scrutinized the perceptions of fairness of the assessments. If anyone can show unfairness in the budget, the Board will correct it. How do these perceptions compare to the factual numbers?

1.      Perception that Cloverleaf Center III Condominium, which owns most of the land, does not pay a fair share: The Shared Use Agreement obligates CCIIIC to pay a 22/172 fraction of shared facilities expenses. The Plex and Townhouse owners divide the remaining shared facilities expenses 70% to 30%. CCIIIC may have other obligations beyond that Agreement.

2.      Perception that the assessments for attorney fees are unfair:

a.      Legal costs for common expenses are divided 70/30.

b.      Costs related to a single class of ownership are assessed to that class of ownership responsible for the expense (e.g., the cost of the Palmer Brothers settlement, which was charged to the Plex unit owners.)

c.       Division of attorney fees related to collections is difficult in actual practice. A single case may span several budgets.

                                                                                                                                      i.      The Board agrees in principle to such a division, and with the proposed 2012 budget Summit shall henceforth categorize collection expenses and income by class of ownership.

                                                                                                                                    ii.      If a class of ownership is assessed the entire cost of a collection, that same class must benefit from any recovery of income related to that expense.

3.      Perception that there may have been overlapping coverage between the Association’s master insurance policy and the policies of individual Unit owners.

a.      The Board will scrutinize the insurance question.

b.      Unit owners should scrutinize their insurance coverage.

c.       The budget formulas the Board uses for the master policy are complex because of the various types of coverage.

d.      The Board may amend a budget item at any time.

4.      Perception that the strain of assessments on the Condo-Townhouse units is the cause of our loss of FHA approval.

a.      The delinquency rate of 23% may be over-stated. Our collections attorney recently settled three delinquency cases. Are these cases still delinquencies? If future accounts receivable are to be considered delinquencies, then all Unit owners would be delinquent.

b.      The Bylaws give the Board the right to declare who is delinquent.

b.      Excessive costs to Unit owners for forms related to refinance.

                                                              i.      Summit recently asked $125 for a signature on a refinance package, rather than the cost stated on May 18, 2011 ($35-$50.)

                                                            ii.      Another Unit owner has been charged $287 to answer his agent’s question regarding delinquencies (Summit’s documented answer was “74%”) on a refinance package. The owner has not yet been repaid.

         VI.      A motion was made to adjourn the Reconvened Annual Meeting to an open meeting of the Board of Directors. The motion was approved by voice vote at 7:50 PM.

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              I.      Mr. Youssef immediately called the Board of Directors to order.

            II.      Establishment of a quorum of the Board

a.      Farouk Youssef (TH)

b.      Andrew Kim (Plex)

c.       Peter Franke (Plex)

d.      Noorul Hinaya Jainoor (TH), and

e.      Kreg Williams (Plex) were present and established a quorum of the Board.

          III.      Election of Officers

a.      Secretary: No volunteers. Mr. Kim recommended that we hire a note-taker. Mr. Franke stated that there may be funds in the proposed budget to pay a note-taker, but the duties of the Secretary are specified in the Bylaws. Mr. Youssef emphasized that the nature of the business during closed Board meetings (e.g., delinquencies) requires a Secretary, an Officer of the Association.

b.      Treasurer: Mr. Franke volunteered. Vote: 5 Aye, 0 Nay.

c.       Vice-President: Mr. Kim volunteered. Vote: 5 Aye, 0 Nay.

d.      President: Mr. Youssef volunteered. Vote: 5 Aye, 0 Nay.

         IV.      Words from the President to the Association

a.      Mr. Youssef:

                                                              i.      We now know, based upon an email between the out-going President and the CCOC that proves the point that in July, 2009, the Association was on the brink of bankruptcy and receivership. We have come so far, and I am surprised that once again there is a lack of attendance for a budget meeting. Our annual operating budget is on the order of $250,000. You need to scrutinize that for every penny. I would like for everyone to meet and speak their minds. The budget is important.

                                                            ii.      The Project will be a headache. We need participation and encouragement to go those extra miles. I have done what I could do as President. I’ve sold myself on the corner, met with the President of Becht Engineering, and gone to Court with Palmer Brothers to save you $65,000. After the snow, I got you $20,000. I ask only for your participation. Speak to your neighbors: Tell them “Shame on you” if they’re not paying their dues. We give to the budget exactly what we spend. The project is now $1,700,000, which I negotiated down from $1,900,000. I twisted arms to get that down. Everyone knows that $14,100 will not cover that project.

                                                          iii.      We need to base ourselves on what the judge’s order said. Up to now, until we had a reputable engineering study to get a number to restore buildings that are 16-17 years old, we have been able to appraise the project with only one available number, $14,100. We first thought that we could patch the roofs, like the Cowards, but the contractor informed us that our shingles are no longer legal, so we cannot get a permit, and must change them. The six buildings will be refurbished from the roof down. Construction costs are about $21,000 each. [Note: Plus loan costs.]

                                                           iv.      I will prepare a communiqué to all 98 Plex unit owners in a few weeks to explain exactly what the project is about. The Board will amend the $14,100 stated in the resolution, and file that with the CCOC, because of the prior case. If people disagree, they have the right to collect signatures from 50% and call for a special meeting of the Plex unit owners, at which we will decide.

                                                             v.      The engineering study and the loan are a chicken and the egg type of problem. Once again tomorrow, I will meet with another banker, one who is willing to give us money because we can pay him money. I ask that you bite the bullet and that you ask your neighbors to pay their dues. I will step down on October 26, 2012, and ask that someone else step up at that time to continue the good work.

b.      Discussion:

                                                              i.      Mr. Kim: The special assessment will be for 8 to 8½ years at $235 a month. If a former owner has paid $14,100, the new owner will pay the difference.

                                                            ii.      Mr. Edakandi: Will 8 to 8½ years include the interest? Mr. Youssef: Yes.

                                                          iii.      Mr. Owen: Can we find another means to refinance, like a two year lump sum (self finance?) I ask the Board not to obligate the payback liabilities.

                                                           iv.      Mr. Youssef: In 2007, the decision was made that the community needed renovation. During the study for the project in 2007-2008, $65,000 to $80,000 was spent, and Palmer Brothers’ claim for Bldg 1 was borrowed from the reserves. We were left holding the bag for that.

           V.      Management report (Elan Krueger)

a.      Board meetings have been scheduled at 7 PM at the Upcounty Regional Services Center on the third Wednesday of the month for the first six months of 2012.

b.      The Board has four business items on the agenda: budget, insurance, grounds maintenance, and the representation letter.

         VI.      Continuing Business

a.      Contracts

                                                              i.      Master Insurance Policy: SFIG renewal due November 30. The $16,000 claim has been subrogated, but is counted as a claim on the policy. SFIG would renew at present cost with $7000 deductable or $5000 deductable for $30,000. Manougian offers a $5000 deductable with higher umbrella. CAU offers a $5000 deductable and $10,000,000 umbrella. Mr. Krueger provided CAU’s cost of General Liability, $2420 for $1,000,000. Mr. Youssef moved to contract Manougian for the Association’s master insurance; Mr. Williams seconded. Vote 5 Aye, 0 Nay.

                                                            ii.      Landscaping and snow removal: Brickman offered to renew both contracts at the existing rates; Stolberg proposed contracts totaling about $7200 less. Mr. Youssef expressed reservations about the ability of Stolberg to respond to snow removal as well as the larger Brickman. Mr. Williams said we have to try something new. Motion to approve Brickman, contingent upon reduction of cost by $4000. Vote: 5 Aye, 0 Nay.

                                                          iii.      Motion to approve Summit Management contract for 2012 at $34,200 (includes postage, certified letters, and box storage.) Vote: 5 Aye, 0 Nay.

b.      Audit: The Treasurer and President signed the 2010 Representation Letter and handed it to the Manager for his signature and forwarding.

c.       2012 Operating Budget

                                                              i.      Open discussion: Several Unit owners opined for lower cost landscaping and snow contracts, and commented on Brickman.

                                                            ii.      Motion to approval of the 2012 operating budget. Vote: 5 Aye , 0 Nay.

       VII.      New Business

a.      ACC

                                                              i.      13061 Bridger Dr (D’Arrigo); garage door replacement: Picture does not match existing style. Request denied pending clarification.

     VIII.      Motion to adjourn to a closed session (8:53)

          IX.      Closed session

a.      Noted that 10% interest will be collected on a recent judgment.

b.      Discussed response to a pending CCOC action.

            X.      Adjournment (9:15)

December 8, 2011, 7:30 PM

December 19, 2011, 7:45 PM

Farouk Youssef, Kreg Williams, and Peter Franke, IAW Article III, Sections 9, 10, 15, and elsewhere, met in a public location on the above mentioned dates and drafted a communiqué to the community explaining what the project is all about and drafted a Resolution to amend Resolution 2010-1 of March 17, 2010 to reflect the actual cost of the project. Andrew Kim and Hinaya Noorul Jainoor were unable to attend either meeting.