22 August 2012

Following are Minutes for the Cloverleaf Center Condominium Board of Directors Meeting held 22 August, 2012, in Conference Room A, Upcounty Regional Services Center, Germantown, MD 20874.

Farouk Youssef called the meeting to order at 7:05 PM. Mr. Youssef received Kreg Williams’ written proxy for this meeting.  Andrew Kim and Peter Franke were present. Noorul Hinaya Jainoor is expected to arrive later [Ms. Jainoor arrived at 7:45 PM during the discussion of the County easement, see below.]. This meeting—delayed from the third Wednesday of August—was announced by a special postcard and by the sign. A motion (FY/PF) was made to close the Meeting at 8:30 to discuss WTP & delinquencies (Vote: 4 Aye/0 Nay.) Motion (FY/PF) to approve the May 16, June 20, and July 18, 2012 Minutes (Vote: 4/0.)

Continuing Business and Management Report

Elan Krueger (Management) reported that letters were sent yesterday calling for candidates for the four Board positions (two Plex and two Town House positions) that will be open in October, and announcing that the Annual Meeting will be held on Wednesday, October 24, at 7 PM, Conference Room A. Management sent a letter to 13015B regarding a satellite dish, as the wire may not penetrate the building and may not be tucked into the siding or trim. That issue has been resolved.  Letters were sent to four owners for Contractor access to their units to pull the sliders, in order to apply flashing. The four owners were all present at the time requested. Some discrepancies were noted during the Quarterly fire alarm inspection, but we have not received a proposal for fixes, yet, and have not seen any life safety issues. An advance draft budget was sent to the Board for review. It assumes no fixed contract for snow. [Later in the meeting, Mr. Krueger announced that Bridget (Brickman) will accept a fixed contract for snow removal at $12,000. Audience response was highly favorable. See below.] The draft proposal also asks for no increase in Management fees, as last year’s—from July 1, 2011 to June 30, 2012—inflation rate was about 1.4%. The Auditor was confused about the schedule for the field work, which is now scheduled for Sept 5. We requested that the Auditor send the Draft at least three days before the September 19 meeting. The next Audit Engagement Letter will specify sending the Draft before the March Board meeting, as the loan documents require that the Audits be submitted to the Bank within 120 days of the end of the fiscal year (Dec 1.) The WTP Collections printout and the July 31 Financial Statement were sent to the Board for review. The MD Court of Appeals “Pit Bull Decision”, briefly, is that anyone who has control over the presence of dogs has an absolute liability over a pit bull attack. Thus, by association, a Condominium can be liable. Various attorneys are talking to us about this, saying to muzzle the dogs, to grandfather existing dogs, and to shift the burden of proof to hold the owners liable. The Insurance Industry is behind on this and our insurance will cover this for now, but that could change overnight. Attempts were made to talk with Direct TV and with Dish Network [an owner noted that the satellite TV providers offer otherwise unavailable international stations]—in order to inform these providers that the Association owns the Plex buildings and the grounds, and that the Board requires written approval prior to their touching the building—but these attempts have been refused. Management therefore recommends sending a card to each owner to inform them that the Board requires ACC approval before installing a dish, regardless whether the Board can notify the provider companies.

Mr. Youssef, speaking about the Plex Project, announced that each Plex owner will need to provide inside access so the Contractor can remove the sliders and add the flashing. About every 15 days, the President, Treasurer, Manager, Engineer and Contractor have held progress meetings. Last Thursday, the Contractor stated that the reason that “Bldg 2” has not yet been finished is that there has been extreme difficulty gaining inside access to perform these changes. The side of Bldg 2 on Bridger Dr is about finished, but the back side looks like a horror show. Nevertheless, Bldg 2 will be finished and closed within 15 days.  To advance the project to an end on Oct 15, the Contractor has been opening the other buildings, and to date all of the decks have been shored with brackets and hangers. When the time comes to remove the sliders and windows, the remaining work will go fast. Mr. Youssef asks that the people in the remaining buildings be aware of that on short notice, we will ask to be let into the unit. [An owner commented that during the installation of a new slider, the measurement was short and a panel to the slide plate needed to be removed.] [Another owner mentioned pop-up nails.] Mr. Youssef replied that as the Contractor has previously written in a letter to the community, nail pops are expected; when the owner hammers in any pop-up nails, it is better to seal them. Other mishaps will be taken care of. Finally, the Engineer found some excess in the prices of some items, and we will be able to save about $30,000.

Mr. Youssef opened the floor for any other audience questions regarding the project. “Will you remove rotted wood under the slider?” (Yes.) “Is replacement of a French door mandatory?” (No.) (In some cases, in spite of the care of the Contractor, a door, because of its age, may be unusable after removal. In that circumstance, the owner pays for it.) (Owners will get a letter about 72 hours ahead of time to notify them when they will need to be available for the Contractor to enter into their units.) (The Contractor will try to schedule the work by tier (utility stack),so as to avoid moving the scaffolding back and forth.) “I cannot now open the utility door, and there is still a gap by the edge of the deck.” (The Engineer will look into this, as the shoring cannot be removed without the approval of the Engineer.) (The subflooring cannot be leaked into after the repair, so you won’t need to change that.)

The Board previously voted to delay the payment of WTP legal fees for collections for sixty days, but that didn’t work. The problem is that WTP has not yet fought to collect the legal fees—which the Association has paid-for, up-front, without delay, to WTP—after collecting delinquencies. That is not acceptable to us. In one example, a case resulted in garnishment of wages. Why did not WTP collect by garnishment the legal costs of collection? We will put a stop to that. A motion was made (FY/PF) to pay WTP their fees upon written approval of the Board. Vote: 4/0.

Easement Update: A year and a half ago a County representative (Dennis Robinson) unexpectedly broke off negotiations that they had initiated with Cloverleaf Century Condominium regarding a request for a temporary lease of some of the Association’s property, for the purpose of installing carbon filters (on County land) to remove pollution from drainage from Fr Hurley Blvd, a part of the plan to extend Century Blvd to Kinster Dr. The County cited at the time lack of developer funds. The Association, by a vote of the Directors, accepted that offer, pending then-Director Diane Smith’s and the County Forester’s choice of tree and shrub species for planting a barrier strip near the edge of Cloverleaf’s and Cloverleaf III’s property. At the time, the County had rejected as “too expensive” Cloverleaf’s suggestion for a structural sound barrier. After an eighteen month lull, the County has now made a new, unexpected offer. The previous offer was $6000 for an 18 month lease. The new offer was $6000 for a ten year lease, without provision for a planted barrier. That is unacceptable.

 In a related development, Directors FY, PF and KW note that County representatives were present at (or supervising) a massive earth-works project that has occurred adjacent to the end of Kinster Dr in Cloverleaf II, eastward toward the 270 SW exit, NW toward the edge of the golf driving range, and SW to the edge of the riparian forest, deer, fox, frogs, old growth oaks, and other natural habitat that is the current border of Cloverleaf and Cloverleaf III. A surface water collection basin—now partially filled with water from recent rains—has been created near the Cloverleaf II edge of the forest. There was a small sign at the end of Kinster Dr indicating that the re-grading project is to improve drainage. We note that this means that drainage was not in conformity with EPA rules. We note that the resurfacing may be to accommodate an office building, and the procession of dump-trucks involved in the re-grading has already heavily impacted the formerly quiet flow of traffic on Crystal Rock Dr to Kinster Dr.  We note that altering the drainage may affect the Condominium’s insurance risk, should the resurfacing of the former drainage pond and flood plain make any part of Cloverleaf or Cloverleaf III more vulnerable on the 100-year flood plain map. We note that for the past five years there has been testing of the soil to see if it is solid enough for a road, and that these tests have failed every time. Finally, we note that noise impact studies anticipate that there will be unacceptable levels of noise at certain locations within our community. We therefore ask: What are the County and the developer hiding, and why have they not informed our community representatives? [A member of the audience stated that a sign on 270S indicates that an office complex is coming soon.] FY and PF note that Cloverleaf III representative Larry Harris has said that he also received notification (not yet in writing) from the Mr. Robinson, and that he told Mr. Robinson that CCIIIC will not sign any agreement, nor accept their offer of money, without coordination with Cloverleaf. A motion was made (FY/AK) to draft a letter to the County Executive requesting that the Executive inform Cloverleaf Center Condominium what is happening in regard to the roads, buildings and drainage, and copies to our County Representative, State Delegate [identified by a member in the audience as Aruna Miller], and the County EPA (notification of the US EPA pending.) Vote: 5/0.

The Treasurer reported that various reserve bank accounts have been consolidated to separate the Reserve Fund from the Special Assessment Fund. The intention is that 57% of current reserves and future reserve contributions (the portion specified in the Reserve Study for items related to the repairs covered in the Plex project, such as roofs, siding, etc.) remain in Access National Bank (per the loan documents.) The remaining 43%, not related to the project, is at TD Bank. After the Sept 7 maturity of a CD at UB, the Treasurer recommends opening CDs of $50,000, the remainder as cash.

The Treasurer thanked Mr. Krueger for preparing the first draft of the 2013 budget.  The loan documents require the special assessment income and fund and the project expenses on the budget, and quarterly cash-based accounting statements. The extra cost for these statements will be a Plex special assessment expense. In addition to the $12,000 Brickman offer for fixed contract snow removal which Mr. Krueger arranged, the Board would like some competitive bids for the next annual audit (guaranteeing that the loan document conditions will be fulfilled,) collections, insurance, and other contracts. A meeting will be arranged at the earliest convenience with the new collections attorney at WTP, to discuss among other matters FHA approval (estimate this date 15.3% delinquency), the above mentioned need to collect the accumulated legal fees, and estimates of bad debt in 2013.

New Business and Community Forum

Motion (FY/PF) to pay Katchmark for Invoice #4, dated 6 Aug, 2012, and to submit same to the bank, in the amount of $111,971.62. Vote: 5/0. Motion (FY/PF) to pay SRG Invoice #7756, dated 31 July, 2012, in the amount of $15,758.90. Vote: 5/0. Motion (FY/PF) to authorize automatic payment of the next five loan payments to ANB (the interest only period.) Mr. Youssef noted that the Board intends, after January, to pay a large lump sum ($250-300K), and to pay about $18,000 monthly, rather than the minimum (about $14,000) P&I payments, in order to avoid a balloon payment at term. Our cash flow was examined by the bank prior to authorizing the loan. Mr. Franke cautioned the Board to anticipate any “ups and downs” in the future and to keep a large amount in reserve.

The Board received a letter from 12915B, written under the Unit owner’s company letterhead. The letter states that due to our negligence, the owner incurred damages, and asks for a new door, slider and paint. As soon as the Board knew of that Unit’s pattern of leakage, the Board addressed the problem, at a cost to the Association so far of about $10,000. Several Directors have examined the ceiling and found no water stain. The owner harassed them about the $25K Special Assessment as they tried to stop the cause of the complaints. It is now known that will not stop until the siding is changed. The slider, which shows internal water condensation due to its age, was not damaged by a leak, as claimed. The Board answers letters sent to the PO Box; a similar claim was recently rejected. Motion (FY/PF) to answer the letter and to refuse the claim. Vote: 5/0.

The Manager asked whether the Board will allow a tenant to operate a daycare business at 20513 GCD. Mr. Youssef responded that there is a licensed day care facility in another Unit, 20537 GCD, run by the tenant.  According to our rules, the owner must ask the Board for permission.  The owner of 20537 GCD wrote that the tenant living there has his permission to operate a day care facility on the premises. In this instance, the owner should have written to the Board to ask for permission. Mr. Youssef requested that Mr. Krueger take care of this. Now in the situation at 20513 GCD, a real estate agent called Mr. Krueger to say that a possible renter is interested in opening a day care center.  That situation is more complicated. The prior owner fell behind in the mortgage, and arrived at a compromise with the bank. The bank paid what the prior owner owed, and the prior owner is staying in the unit as a renter. Motion (FY/PF) not to approve this until we get in touch with the bank. Vote: 5/0.

Motion (PF/FY) to send letters to owners to notify them of Bylaws Art V, Section 14 (Restrictions on Use of Units), part (b), which states (in part): “Nothing shall be done or kept in any Unit or in the Common Elements which will increase the rate of insurance for the Condominium applicable for residential use without the prior written consent of the Board of Directors.” In one instance, a Unit owner did not ask the Board for permission prior to putting a water slide on the grounds.

Open discussion: An Plex Unit owner brought examples of boards with nails left on the ground during the construction, and said that a downspout was left lying across a pathway. (These issues will be addressed.) A Plex Unit owner asked that the branches of a tree be trimmed away from the roof, so as to stop an ant pathway; a TH unit owner asked that branches from a common element tree be trimmed away from his property. (Mr. Krueger pointed out that in the second case, by MD &English common law the encroaching branch is the responsibility of the Unit owner.) A TH owner asked for Association help regarding continued Verizon disruption of the landscaping. (Asked Management to look into the agreement by which the Board allows a utility easement to Verizon for FIOS.)

The meeting was closed to discuss collections, and adjourned at 9:20 PM.