MINUTES
January 12, 2004
| LOCATION: Quince Orchard High School, Rooms 221, 224 TIME: 7:30 p.m. |
| QUORUM: 15 VOTING OWNERS SIGNED-IN: 32 ATTENDANCE: 41 |
President
|
Richard Schinner
|
301-977-5196
|
evantage@aol.com
|
VP Detached Homes
|
Lisa Goodman
|
301-963-3807
|
goodgrl@attglobl.net
|
VP Town Homes
|
Eileen Solomon
|
301-330-2876
|
zeppsol@aol.com
|
|
Mohammad Homaitabar
|
301-318-84466
|
homaitabar@yahoo.com
|
Secretary
|
Jerry Way
|
301-977-0523
|
jerway@comcast.net
|
ARCHITECTURAL
REVIEW COMMITTEE (ARC) PRESENT:
|
Chairperson |
Kathy
Wyatt |
|
Member |
Rita
Becker |
|
Member |
Dennis
Zepp |
GUEST
SPEAKERS: None
CALL
TO ORDER:
President Richard Schinner introduced Board of Directors
and President of Architectural Review Committee, noting that an election for 1
open board position was an agenda item tonight.
Rick thanked all for their participation and effort this year.
1. HANDOUTS – The following handouts were
made available on a table at the entrance door and picked up after each owner
accomplished sign-in validation for obtaining a ballot to vote:
2004
Budget (With 2003 budget and variances)
2003
Balance Sheet (
Asset
Replacement Reserve Funds
Maximum
Assessment Increase Allowed by Board of Directors (Income Analysis)
Unfunded
Discretionary Projects List
Unfunded
Repairs List
Annual
Reserves Fund Requirements (Asset Replacement Needs)
Common
Area Behavior Rule 2003-1
Ballot
(Open BOD position)
2. ARC ACCOMPLISHMENTS: President Kathy Wyatt attends every board meeting to represent
the community and ARC. She has improved
turnaround time and feedback on change requests. She has a concern for maintaining standards
while balancing the need for ongoing change.
Rick reviewed the following
accomplishments and thanked Kathy Wyatt for her volunteer effort.
New President – Kathy Wyatt
Reviewed
and Processed over 50 Architectural
Change Requests
Reviewed and Existing
Chippendale Rail Standard for Townhomes (Affirmed)
Developed
and Approved New Community Awnings Standard (Prohibited in Townhomes)
Developed
and Approved New Community Storm Door Standard (Revised Glass Area)
Developed
and Approved New Townhome Shed Standard (Allowed with Restrictions)
Added all
Approved Changes Since 1998 to Master Architectural
Guidelines Document
Added Architectural Guidelines to Community
Web Page
3. BOD ACCOMPLISHMENTS: Rick reviewed the following accomplishments noting
that all members of the board contributed to accomplishing many other less
visible tasks. Answers to related questions from the floor
are noted in italics.
a) Saved Trees Adjacent to
b) Resolved Significant Problems with SHA’s
Dedicated Right Turn Lane – Early 2003, significant construction errors were
evident. Board spent many hours meeting with SHA representatives to resolve a
myriad of problems such as incorrect outlet location, incorrect traffic control
signal location, incorrect traffic
pattern, sidewalk adjustments, drain and berm adjustments, and foliage
upgrades. SHA will be installing additional signs and large white turn arrows on
the pavement in next few weeks. SHA
declined to install pre-notification signs for Blackberry Drive, however we
have engaged our attorney to insist we receive equal treatment to our sister
communities. SHA is accumulating
accident statistics to determine if further safety signage should be installed.
c) Upgraded SE Tot-Lot – After 2 years of research and
much volunteer committee work, one of three Tot-Lots was upgraded with all new
equipment in November. Board declined
to pursue committee’s $44,000 recommendation to upgrade all three lots due to
lack of funds.
d) Forced PGC to Cleanup and Screen Boundary
- After several years of
legal intervention and our threatened law suit, PGC finally cleaned up their
eastern boundary to our HOA.
e) Conducted Spring and Fall Inspections; Mailed 59
Letters of Concern - Our community inspections are now conducted the weekends we adjust clocks. Exterior
changes and problem areas were matched against ARC approvals (or lack of
approvals). Fifty-nine owners were
notified to restore non-approved changes and/or to resolve problem areas.
f) Engaged New Landscape and Lawn Care
Contractor – Re-bid
our specifications and selected a new contractor for 2003. Board is not pleased with performance and
will re-bid contract for 2004.
g) Installed 25 MPH & Playground Signs on Blackberry Dr – After more than a year
waiting for
h) Published 4-Page Comprehensive Newsletter
– Owner/
neighbor Brian Zarchin donated his skills and time to work with BOD to develop and publish a professional,
multi-page newsletter in July.
i) Added Declaration
of Covenants, Architectural
Guidelines, and HOA Rules to Web
Site – Electronic versions were lost over the years. Eighty pages of original documents had to be
scanned, OCR converted, edited and uploaded to our web page. Now everyone has free, easy access.
j) Completed Tot-Lot(s) Safety Fencing: Due to several years of complaints from
parents of Tot-Lot children wandering on to
k) Relocated Marble Benches: For several years, parents of children using
Tot-Lots expressed concern that marble is a safety hazard to children at play
in the lots. While investigating County
playground permits, BOD discovered that stone benches are not allowed in any
play areas. BOD contracted to relocate
the three Tot-Lot marble benches to just outside existing lots. In
1997, 9 marble benches were installed to replace rotted wood benches. There were 6 in Cul-de-sacs, and 3 in
Tot-Lots. They are much longer life than
the wooden benches and were selected by a community survey.
l) Expanded Sprinkler System to
m) Added Underground Low-Voltage Uplighting to
n) Replaced Blackberry Terrace Cul-de-sacs(s) Fallen
Trees with Flowering Crepe Myrtle - The storm damaged downed trees were replaced
with Flowering Crepe Myrtle trees (choice of neighbors).
o) Successfully Negotiated SHA for Trees in Rt 28
Median - Due to budget
cuts, SHA eliminated trees in our Rt 28 median between
p) Collected All Delinquent Accounts. BOD initiated a law suit to collect
delinquent accounts recovering $4000 in assessments, late fees and attorney costs.
q) Other BOD Significant Events: BOD was forced to initiate legal action in an
unacceptable owner/ tenant behavior situation.
This effort resulted in an unpleasant but necessary eviction. BOD was forced to spend funds to cleanup
spray-paint foul language and vandalism on streets signs and sidewalks in the
townhome areas. BOD was forced to commit
resources to remove an abandoned large heavy treadmill deposited in the bushes
and creek by anonymous owners or tenants.
4. DEMOLISH
$100,000 Permanent Solution Creek Erosion Control (Estimate by Erosion
Control Contractor)
$ 23,000 5-10 Year Solution Limited Erosion Control (Quote by Erosion
Control Contractor)
$ 18,000 10-20 Year Solution Longer span steel humpback bridge – ignore
erosion
$ 12,000 4-8 Year Solution Raise bridge 6-ft, add catwalk, ramp
steps – ignore erosion
$ 4,600 3-5
Year Solution Raise bridge 4-ft,
relocate 8-ft, add end steps – ignore erosion
$ 2,500 Closure Remove and dispose of bridge – ignore erosion.
$ 350 / day + Materials: Stabilize limited
but key erosion area immediately adjacent to the bridge. Contractor estimates about 3 days and $2,000
in wire mesh and boulder materials.
The $100,000 solution includes all permits. The $23,000 solution does not include
permits. The $18,000 longer span
solution is an estimate for a prefabricated steel span originally proposed in
1992. The bottom three are from local
contractors focused on bridge stability that ignore creek erosion. None provide a guarantee against flood
damage.
What is
downside if we close off the split-rail fence connections between the two
Tot-Lots, remove the short pieces of paved walk and grass them over, then
remove and dispose of the bridge? The
answer is attractive, because the only downside is another 50 yards to walk -
to get to the SE Tot-Lot from
5. COMMON AREA BEHAVIOR RULE WITH ENFORCEMENT
PROCEDURES – Rick reviewed need, history, development and
approval process. He explained that over
last few years there was a dramatic increase in many unacceptable behavior
events on our common areas. At request
of owners, BOD directed our attorney to provide common area behavior rules and
enforcement procedures in use by other HOA’s.
BOD edited them to relate to Orchard Knoll’s environment – then mailed a
draft copy to all 150 owners in July asking for comments or acceptance. All comments and suggestions were
incorporated into a final draft. Our
attorney revised the final draft and provided legal approval. BOD unanimously approved the final
document. There was no further comment or discussion from the floor.
6. UPGRADE LANDSCAPE IN TRAFFIC CIRCLES? – A BOD
high priority project is to upgrade the landscape in five Cul-de-sac(s) in
2004. However, funds will have to be
identified. There was considerable discussion from the floor including the request
to at least replace the incorrect variety of azaleas. Item
was deferred to discussions on “Unfunded Projects” below.
7. PUBLISH ANOTHER NEWSLETTER? Rick praised the skills and effort of
neighbor and owner Brian Zarchin in our 2003 effort. Jerry noted that Brian had recently asked to
be re-involved. BOD agreed to again
publish an informative and pleasing newsletter in 2004.
8. UPDATE DIRECTORY? Rick and other
committee members have kicked off an effort to publish an updated directory in
2004.
10.
ADD TWO NEW COLONIAL STREETLIGHTS TO
11.
AMEND RFQ AND RE-BID LANDSCAPE AND LAWN CARE CONTRACT FOR 2004 – BOD is
not pleased with performance vs. contract items from the new contractor of
2003. BOD has already amended the 2003
contract to specify unmet expectations and clarify contract language on behalf
of the contractor and HOA. The amended
contract has been re-bid. Another
contractor has already furnished a professional response, for less money. An analysis is underway. We expect to release the contract after next
board meeting in February.
12.
STUMP INVENTORY – REPLACE REMOVED
TREES? Over many years, trees
that died or were felled by storms were removed under least-cost conditions. The stumps were not removed and the trees
were not replaced. BOD desires a program
to inventory and remove the stumps and replace at minimum – the trees that
would have the most beneficial visual impact on the community. There are no funds to accomplish this
project. Discussion was deferred to
later review of Unfunded Projects (below).
Regarding
the stumps - an assertive comment from the floor charged that BOD
“did not use enough volunteer resources in the community”. When questioned for specifics (the person
making the charges is not a member of the HOA) they clarified that ”BOD should
get Boy Scouts to remove all the stumps.”
BOD asked if they would volunteer to head up such an effort. The response was no – that was a BOD
responsibility. (Editorial Comment - It
is always easy to spend someone else’s time).
13. CASH FLOW PROBLEMS - Twice in 2003, our bookkeeper notified BOD
that there was not enough funds in our checking account to pay bills. Some payments were delayed until quarterly income
arrived.
14. ASSESSMENT INCREASE / NEXT ANNUAL MEETING IN NOVEMBER, NOT
JANUARY - Rick explained that our financial reviews tonight would
likely conclude that an assessment increase was necessary. However BOD elected not to increase with this
budget, in order to better understand the will of the membership after a
detailed community review. The decision
was deferred to later in the evening in order to review current financial
condition and needs. Rick further
explained that BOD would return all subsequent annual meetings to first week in
November to more appropriately schedule budget adjustments into new calendar
year.
15. FINANCIALLY SOUND - (2003 BALANCE SHEET & 2004 BUDGET) - Copies of
2003-2004 Budget, and End of year Balance Sheet, were handed out and reviewed
from overheads. Rick noted that there
was only $166 left over at year end.
Rick and Jerry reviewed the new budget noting that BOD chose not to
raise assessments at this time. An
assessment increase may be needed shortly.
Jerry provided relief in noting that the new budget was financially
sound and adequate. Operating costs
could be met as shown in the 2004 Budget and Reserve funds would hold - if no
new projects were initiated.
16. ASSET REPLACEMENT RESERVES REQUIREMENT CHART–
(Overhead and Handouts) Jerry felt there was
benefit to be confident in the reserves accumulation system and process. However, we must dispel a misnomer that our
reserve funds are an emergency source for purchasing new assets. They are not.
Jerry provided a brief historical overview of the two reserve funds, and
why and how the money is accumulated, and restricted. Handouts included details of each asset,
funds accumulated against that asset, and annual requirements projection
process approved by our auditors in 1996.
a) REQUIREMENT:
Our bookkeeper (ABS) is not responsible for inventory of our capital
assets or justification of reserve funds to support replacement of the
assets. Maintenance of the assets comes
from operating funds. ABS (and our auditors)
depend on BOD to state a target for how much of the quarterly assessment income
should go into reserves. Jerry noted
that from 1990 to 1996, our HOA blindly accumulated thousands of dollars into
two reserve funds (Townhome and General) knowing that covenants required a
reserve fund. There was little tracking
– the fund simply accumulated. In 1996
our auditors, noting we are a not-for-profit corporation, required HOA to
justify our surplus reserves – or - return the surplus to owners. Because we had no justification for monies
greater than that required for townhome streets and roads – the auditors wanted
either a justification, or a return of the surplus. The auditors suggested that all community
assets be identified with an aging value – similar to the reserves account for
townhome streets and roads. The current
system (chart)
of reverse-depreciation over time (to annually allocate and accumulate funds
against every asset) was developed for that purpose. The chart and method was
approved by our auditors. An approval
letter from the auditors is in our file.
b) FUNDS ACCUMULATION REVIEW: Jerry reviewed the summary chart using the
overhead, and identified details in supporting sub charts which make up summary
line items. Jerry explained and
demonstrated the reverse-amortization method of fund accumulation required by
the auditors to justify the two reserve funds.
Jerry noted that the townhome fund was required but that the general
fund was optional. The chart identifies
the appropriate Covenant Article and Section for each fund.
c) ASSET REPLACEMENT RESERVES - NOT SAVINGS FUNDS - Jerry pointed out that both reserve funds are for replacement
of existing assets at end of their useful life – not for maintenance, and not
for purchasing new assets. He explained
and demonstrated the reverse-depreciation accumulation process for all our
assets since 1990. Jerry further
explained that the Townhome Replacement Reserve Fund is required by covenants
(covenant is identified on the handout) and is secured by the covenants from
any spending other than replacement of the assets associated with the townhome
streets and roads. He further noted that
our General Replacement Reserve Fund is optional, but the accumulation of funds
must be assigned to other than townhome streets and road assets, and they must
be identified in their useful life cycle.
Several examples were noted as membership related to details within the
handout. One member countered that the covenants allowed borrowing funds from
reserves for “non-recurring” asset purchases.
Jerry agreed, but noted that by doing so – there is risk in not having
an adequate reserve fund to meet unplanned replacements. A typical example is the recent Tot-Lot play
equipment… it failed early, did not meet it’s useful life, had to be replaced
early in the cycle and it’s cost was four times greater than the amount in the
fund.
d) NO SURPLUS OR RESERVE FROM WHICH TO BORROW - HOA income is applied to operating funds and
two existing asset replacement reserve funds which no longer have any community
enhancement capability. He cautioned
that unfortunately, and contrary to popular belief – there has never been a
reserve fund for future projects, and no savings fund. Jerry noted that a 3rd reserve
fund for future projects could be developed but must be restricted to content
with identified specific projects with specific costs and specific end dates.
17. REPLACEMENT RESERVES HAVE A $9,775 SHORTFALL - A
graphic comparing end-of-year 2003 actual amounts off the Balance Sheet
vs. Equivalent requirement amounts from
the Asset Replacement Reserves Chart, was presented on overhead and with
handouts for both Townhome Reserves and General Reserves . The shortfall is due to our $12,600
playground equipment purchase, less $3,000 credit for amounts accumulated in
the fund (to-date) for replacement of the old equipment in the SE lot as it
reached end of life. There is
insufficient money in the fund because:
a) Our old play equipment failed in fewer years
than expected. (Should have lasted longer)
b) New play equipment cost rose faster than
inflation.
c) BOD elected to retain replacement funds for
other two Tot-Lots in the fund.
18. 2004 AND SUCCESSIVE YEARS, WILL HAVE A
$2,000 / YEAR SHORTFALL IN REPLACEMENT
RESERVES - Using same overhead and handout – it was demonstrated that
as new assets are installed (Tot-Lot equipment, center island sprinklers and
lighting, fencing etc), replacement funds must be set aside in General Reserves
for their eventual replacement (not maintenance) at the end of their useful
life. Using reverse depreciation method
(first Cost / Useful Life) an annual Replacement Reserves funding amount is identified. That straight-line amount is $1,950 per year
excluding inflation. Current income does
not support that need.
19. ASSESSMENT INCREASE? UNFUNDED REPAIRS AND DISCRETIONARY PROJECTS
LIST – (Overhead and Handout) – A list
of 12 unfunded repair requirements and 22 unfunded projects requested by the
community over the last few years was reviewed.
Each item had a brief description and an estimated or quoted cost. Rick and Jerry emphasized that with a few
exceptions, none of them could be accomplished – there is no money. Jerry noted that some of the smaller repair
items could be accomplished from within operating funds of the current year
budget.
a) PRIORITIZE :
A straw vote was taken to identify which items the community was most
interested in accomplishing. There was
mixed participation and lots of discussion on each item – results were
inconclusive. The membership decided
they would prefer to prioritize the items and ask BOD to do an analysis. Results would then guide BOD in identifying
which items to address first, and, provide a justification for size of any
necessary assessment increase. The membership
ranked the items and turned the lists in to Eileen Solomon. Eileen will do the analysis and present
findings at next board meeting. Results
will be also be communicated to the community.
b) ALTERNATIVE METHODS TO INCREASE ASSESSMENT: Using an overhead and handout, Rick and Jerry
explained that there are several covenant approved methods to increase
assessments:
1) UNILATERAL: Covenants allow BOD to unilaterally invoke a
maximum 10% increase (plus cost of living) without vote of membership. If adder was 2-1/2% (total 12-1/2%), maximum
additional income yield would be only $9,637.
BOD felt 12-1/2% was insufficient to meet expressed near-term needs,
and, would result in a succession of assessment increases. Therefore BOD elected not to invoke a
unilateral increase, choosing instead to alert and ask membership for their
direction and size of increase.
2) SPECIAL MEMBERSHIP
MEETING: Rick and Jerry
noted that another method allowed by covenants is for BOD at any time to call
for a “Special Assessment Membership Meeting”.
Like an Annual Membership Meeting – the meeting could be called at any
time during the year. A review of
financial needs is conducted, a vote is taken and the assessment is raised by
the membership. This method can also be
achieved at anytime by petition of the membership itself.
3) NEXT YEAR BUDGET: The most common method (BOD is recommending
this approach) is for BOD to assess financial needs, and include a recommended
assessment increase at time of new year budget submission in November. Multiple budgets may be submitted for
membership review. One must be
selected. However, in order for this to
be implemented properly on January 1 of the new year, annual meeting time must
be restored to 1st week in November.
Rick advised that BOD had already decided to conduct next annual meeting in November 2004 to
accommodate this approach for the 2005 calendar year.
c) ASSESSMENT WILL BE INCREASED:
A motion from the floor was made:
BOD should immediately invoke a
unilateral maximum 10% assessment increase.
After Jerry advised membership that parliamentary procedure does not
automatically require seconding a motion (unless another is in agreement with
the motion and also desires it to be placed on the table for vote) … N o second
to the motion was made. Therefore it
did not come to a vote. Another motion
was made: BOD will attempt to live within current year budget, unless a financial
emergency appears imminent, until next budget submission to 2005 Annual Meeting
to be held first week in November 2004 this year. Fort that submission, BOD will prepare an
updated budget INCLUDING AN ASSESSMENT INCREASE predicated upon membership’s
spending priorities identified by membership’s ranking of unfunded repairs and
projects accomplished tonight. If a
financial emergency appears imminent, BOD will call a Special Membership
Meeting for Assessment Increase.
Motion was seconded and unanimously approved without any objections.
20. EILEEN SOLOMON RE-ELECTED TO BOARD: One position on the board of
directors was open for membership election, or re-election of Eileen Solomon
due to expiration of term of service.
Pre-printed ballots were handed out after sign-in. Owners were pre-screened for delinquencies
from a listing provided by ABS.
Nominations were requested from the floor. After several minutes of no-nominations
forthcoming, a floor motion was made to close nominations and reelect Eileen
Solomon. The motion was seconded. With a show of hands, Eileen was unanimously
re-elected, none opposed. Eileen was
re-elected for a 3 year term ending in November 2007.
21. TRASH
COMPLAINT: A member asked BOD
to contact Titus Trash regarding poor service. Apparently there is an
increasing problem of left over trash at curbside and inside containers after
pickup. Other members agreed they are having similar problems. Rick
recommended the owner call Titus directly, and that he would also call on
behalf of the community. Other members
can contact Titus directly (Robert Fowler) at 301-428-8990.
22. ADJOURNMENT: A motion from the floor to
adjourn was made at