Minutes – Monthly Board Meeting
VP Detached Homes
VP Town Homes
ARCHITECTURAL REVIEW COMMITTEE (ARC):
1. ATTENDANCE: (All Present Unless Noted)
2. GUESTS: David Bremer, CPA Orchard Knolls’ Auditor for
Ahlberg & Company (Our Contracted Auditing & Taxes Firm)
3. CALL TO ORDER: Called to order Eileen’s Home. (Thank You Eileen!)
4. MINUTES: (Posted on web one week before
meeting. Hard copy made available to all). Monthly Meeting
5. SCHEDULED HEARINGS: None
6. GUEST PRESENTATION: Jerry introduced David Bremmer noting following
HOA history: We are self-managed. We engage contractors for bookkeeping,
auditing, taxes and several other services.
BOD asked Mohammad (Treasurer) to contact David Bremer to attend tonight’s meeting to meet the board, establish a direct relationship, answer questions and propose future direction. David reviewed our current audit status and made the following points tonight:
a) Ahlberg Engagement: BOD is engaged to Ahlberg for Auditing and Tax services with a 2-Year contract directly with the Board of Directors - renewable 1 or 2 year options. 2-Year options are less money. One Account-Representative visit (such as tonight) is allowed at no cost with each engagement renewal.
b) BOD Communication with Ahlberg has been Poor – David noted that in order for a direct relationship between Ahlberg and BOD to work properly – improvement in mailed communication must be a priority. David noted that in the past, there have been multiple communication failures due to “problems” with Orchard Knoll’s mail and subsequent late responses to Ahlberg. David cited examples of missed and lost tax submissions, and lack of response to audit and tax documents requiring signature. He also noted that several Ahlberg contract renewals have not been responded to within time frames required.
c) Annual Audit
Process: David gave a brief
summary of the annual process consisting of a Preliminary Audit where our
financial books at ABS are examined as well as our BOD practices (Meetings and
Minutes). These are measured by CPA standards,
d) Annual Tax Process: Subsequent to the approved audit, the annual Federal, State, County and Personal Property Tax forms are prepared and sent to HOA president for signature. The Corporate tax is due March 15, but because the audit is not complete at that time, we always apply for a 6-month extension. That way, all taxes are done – after the audit is complete. The tax process is generally invisible to BOD. Treasurer has responsibility for the Tax process. Treasurer (not ABS) keeps binders with all HOA Tax submissions.
e) We are Organized “Not-for-Profit” (Significant Favorable Tax Status) – Most HOA’s are organized as a “Title 528” where income is segregated into Membership and Non-Membership sources. 528 organization’s taxes are high - paid at a flat 30%. However, Orchard Knolls is organized as a “Title 277” Organization” similar to Country Clubs. Taxes for a Title 277 are limited to corporation rates at about 15%. That decision was made in the early 1990’s to keep our taxes at a bare minimum. Because of this favorable tax status, we only pay taxes on interest made from our investments. Our income must from members only.
f) We Are Not Allowed (“Bake Sales” or “Paid Advertisements”) to Make Profit - We are not allowed to make profits on fund raisers or other seemingly innocent practices. We cannot accept monies from advertising in our Newsletter (except ads by existing members). We cannot accept monies from fund raisers.
g) Our Reserves “Reverse Depreciation” Tracking and Forecasting is Appropriate: David validated our reserves tracking method of “Reverse Depreciation” and Annual Reserves Funding Requirements Chart as acceptable and suitable. He noted that we retain our first-cost values, add inflation and correctly use “Reverse Depreciation” method to allocate values to future years. David noted that we are already properly annually tracking and forecasting reserve needs against existing capital assets. Jerry noted that the audits refer to this process (last page) but do not refer to the document. David asked to have the document sent to him mid-March (along with all of 2003 Minutes) and he would see that the audit reflects the document. Jerry agreed to send the data to David electronically in mid March.
Tracking & Forecasting Healthy - No Reserves Study Necessary: David noted that our reserves are audited and
approved by formulas that look at ratios between membership income and
reserves, membership income and operating funds, and reserves vs. operating
income. We have always been, and are
now, fiscally healthy in those measurements.
In response to questions regarding our need for a “Reserves Study”,
David responded that Reserve Studies become necessary for two reasons: 1) Many communities do not track their
reserves against replacement needs. We
do. 2) Many communities do not record
and track “first-cost” for capitalized community assets, nor do they know how
to predict it’s future value. Therefore,
they engage a 3rd party to periodically accomplish that process. That process
is called a “Reserves Study”. However, for us, it is not necessary. He also noted that a reserves study in most
jurisdictions is usually only required every 5-7 years and that
i) Usage of
Reserves is Restricted to Replacement of “Existing” Capital Assets - David stressed that every item in the
reserves must already exist. Because of
tax status resulting from the way are organized, we are not allowed to use Reserves for anything other than replacement of
existing assets. If we do, we will
be taxed, and, we may jeopardize our favorable tax status with State of
j) Can we “Save” for a Future Project within Reserves? – No. In response to a question, David advised that we are not allowed to implement a line item in our reserves which “saves” or even allocates money for a future project. He again stressed that every item in reserves must already exist.
k) How do We “Save” For A Defined Future Project? Add a budget line item to next Operating Budget, then accumulate and carry over funds year to year until line item is complete. The line item must identify item and the term. Example: New $12,000 East Stone Marque – 3 Yrs @$4,000/Year (becomes a $4,000 budget line Item). We can have as many line items like this as will fit into assessment income.
l) Can we have an “Emergency Fund” for Unexpected Events like Storm Damage? Yes. However the only approved method is same as (above) “Saving for a Defined Future Project” – it must be a line item in the Operating Budget and total budget must equal assessment income.
7. ARCHITECTURAL REVIEW COMMITTEE BUSINESS:
ARC Change Requests: None Submitted. Preliminary review of a future submission.
8. NEW BOD BUSINESS
BOD Re-election & Internal Officer Assignments – President congratulated Eileen Solomon on her re-election to the board for another 3-Years. President opened opportunity for all members to volunteer for, or shift, existing officer positions on the board. No adjustments were requested.
2004 Landscape Contract Awarded - BOD upgraded our Request for Proposal (RFP) again this year to include solutions to contractor failures and other recently identified landscape needs. Contract extras and disappointments from 2003, and new community requirements were identified in a 2004 Addendum for this year’s seasonal RFP. Additional scope of work will increase contract cost this year. Landscape Innovations Inc is a new firm formed by recent merge of Meade Landscape and Landscape Innovations Inc. Meade Landscape has been an on-call contractor for us for several years. Our 2003 landscape contractor’s proposal (G and G Landscape) for 2004, came in several thousand dollars higher for same services, materials and work scope than Landscape Innovations Inc. Both proposals were examined in detail by several board members. Addendum items were subsequently merged into the base RFP. Landscape Innovations was asked to be sure they could meet new work scope with their quote. They agreed and signed the contract.
There is not enough money in the 2004 budget to pay for the additional work scope. However, we plan to use some reserve operating funds (not capital reserves) from a CD about to mature in April to cover the difference.
Poll Results; Capital Investment Projects - Eileen tabulated the written submissions (See minutes of Annual Meeting): Results are:
|Priority||Item||Project Name||Estimated Cost|
Install 2 Matching Street Lights in
|19||Improve Marque Lighting (Replace Florescent)||1,000|
|Two||14||Upgrade lettering (black, gold, red) at entrance||1,400|
|Three (Tied)||8||Upgrade Landscape in 5 of 6 Cul-de-sac(s)||* 10,000|
|12||Upgrade Landscape in
|Total Estimated Cost: (* Revised upward due to new quote)||17,400|
See Minutes of Annual Meeting – there are no funds these projects. Board will utilize poll results as one data point to development a needed assessment increase. Further discussion deferred to March BOD meeting.
Common Area Behavior
Rule 2003-1 Adopted -
This rule provides definition for unacceptable behavior while on common
areas of our community. It also provides
legal follow up enforcement methods including hearings, and fines. This legal, rule development effort has been requested
by the community for several years. The
initial document provided by our attorney and used by other communities, was edited
independently by each member of the board to conform it to Orchard Knolls
environment. The resulting consensus
document was presented as a draft at 2003 Annual Meeting. Membership provided further
suggestions for additions and adjustments requesting a final membership review
before adoption. After those adjustments
were made, it was mailed to all owners for comments in July. Further community suggestions were again edited
into a final document. In October, the final
document was reviewed and approved (again) by our attorney. In November, exact
pre-adoption text was read aloud by our president to all attending the monthly
BOD meeting. The president requested any
last minute changes. There were none. The
Rule was again introduced at Annual Membership Meeting
Common Area Behavior Rule 2003-1 stands approved by our attorney, approved by board of directors, and twice approved by membership. A motion was made tonight to adopt and execute Common Area Behavior Rule 2003-1. The motion was seconded. Passed Unanimously. Copies of the adopted rule will be mailed to each member with next newsletter.
Received Proposal to Upgrade Cul-de-sacs – At the request of many members, BOD was prepared to remove the Azaleas and generally upgrade the Cul-de-sacs landscape some time in 2004. When Landscape Innovations Inc requested to bid on our 2004 Season landscape contract, they also requested to bid on our intent to upgrade landscape of 5 of 6 cul-de-sac(s). (Existing landscape in Gooseberry Ct Cul-de-sac is ideal because it is maintenance-free and still quite attractive). Landscape Innovation Inc provided the following beautifully detailed graphic proposal with an alternate for additional decorative trees, in the 5 remaining circles:
Location Alt A (One Crepe Myrtle) Alt B (Three Crepe Myrtles)
Pineapple Grove 2,380 2,998
Citrus Grove 2,420 3,038
Blackberry Ter #1 1,620 2,238
Blackberry Ter #2 1,620 2,238
Citrus Grove 2,120 2,738
Total Cost 10,160 13,250
Proposal includes removing existing flowering Bradford Pear trees including stumps. Existing Azaleas are proposed to be transplanted to other common areas more suitable for that variety. Marble benches and existing crepe myrtle remain. New soil and mulch is added. Grass and sod upgrades are excluded. Upon initial review, BOD was surprised at unexpectedly high cost. Upon closer examination, it appears that Landscape Innovations has incorporated much new plant variety and color. BOD general consensus is the cost is too high and there are implications of very high repeated seasonal maintenance.
There are no funds for this project. Board will utilize proposal costs as another data point to development a needed assessment increase. Further discussion on this project deferred to March BOD meeting.
Mailbox(s) Access and Gazebo Walk Plowed Under - Snow Removal Complaints –
Several verbal and one email complaint was received noting our contractor (JL
Landscape) plowed recent snow over the sidewalk making it nearly impossible to
access Townhome mailbox(s). The
contractor did not clear the access way.
The same contractor (again) piled snow high against the light post in
Townhome Snow Removal Complaints – Several BOD members noted
that SHA plowed snow high in the intersection of Rt 28 - on the bull-nose
island at the end of
Begin Newsletter Development – Brian Zarchin has again volunteered to develop the next Orchard Knolls Flyer (newsletter) for us. Jerry noted that adoption of the new Rule 2003-1 requires distribution to all owners – therefore it may be desirable to distribute it along with a newsletter in late March. This timing is appropriate in that it coincides with next community inspection in early April. The newsletter could also address BOD progress on development of assessment increase. Many other issues and information should be addressed. BOD members should prepare and submit their articles to Eileen. Eileen will edit and submit them to Brian. Jerry will alert Brian to the desired timing.
Escalated on Disposition of
Recent heavy rains have now eroded the east bank so deep that one of four support legs is hanging in the air. The structure is twisting because of the unsupported leg. The bridge has become costly to maintain and will soon become unstable. It is even now unsafe after heavy rains with high water under it.
In 2000, Vandals broke off all the rails costing about $900 to restore. In 2001, a heavy rain storm caused two west side support legs to wash out costing about $1500 to restore In 2002, the entire bridge washed downstream 25 yards in another heavy rainstorm costing about $2000 to restore. Repairs for the current condition are expected to be about $4-5,000… Contractor needs $350/day for estimated 3 days to repair bridge and about $3,000 in medium size boulders (delivered to site) , wire mesh and heavy equipment time, to reinforce the west side bank at the bridge. There are is no warranty of future stability. There is no flood insurance.
This bridge serves to provide a shorter path between SE and SW Tot-Lots than the existing bike path. It is not a bike path. Blackberry Drive access has steps. Blackberry Drive bike path already provides a no-step access to the SE side Tot-Lot along the creek ridge behind the townhomes. Blackberry Drive Tot-Lot is least-used and is winding down. BOD has no plans to upgrade this lot and is recommending an attrition closure. Rick advised that a decision must be made in 2004 to either remove the bridge or address the erosion which is again breaking up the bridge. BOD has been pursuing solutions with several contractors. These are current alternatives:
$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 Permanent Solution Remove and dispose of bridge – ignore erosion.
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.
BOD is leaning toward the $2,500 permanent solution by removing
the bridge and allowing nature to take it’s course with erosion. This is the least cost solution. The process will close 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 only known downside is another 50 yards
walk to get to the SE Tot-Lot from
Reserves $17,000 Shortfall Must be Addressed - Add Funds to Meet EOY Requirement - Jerry provided copies of Reserves Fund Requirements focusing on EOY 2004 needs. Jerry noted we ended 2003 with a $9,637 deficit as identified in our overhead and handout at annual meeting. 2004 Reserves require an additional $8,000 due annual allocations for recently added Tot-Lot equipment, Blackberry Drive Center Island Lighting and Sprinklers, as well as normal replacement cost increases for every asset of the community.
New Vehicle Parking and Covenant Violation Warning Signs Distributed: Jerry handed out bright yellow copies of warning signs to be placed under windshield wiper of vehicles violating our related covenants and fire lanes. Eileen, Mohammad, and Jerry will primarily install the signs on violating vehicles. Current plan is to call in tag numbers to local police for repeat firelane violations, but to install the new signs under wipers for all other violations. After 48 hours, we will tow the offending vehicle.
9. TREASURER’S REPORT, BOOKKEEPING AND FINANCIAL MATTERS:
ABS’ Financial Statement, December 1 thru 31, 2003:
ABS’ Financial Statement, January 1 thru 31, 2004:
The Balance Sheet for
10. OLD BOD BUSINESS (Pending, Not Discussed)
Rick has begun steps to produce a new directory. He will contact Lisa Goodman and Rita Becker to arrange and schedule remaining logistics, reproduction and distribution work.
East Entrance Flower Bed Below Grade
Due to SHA’s increased elevation of Blackberry Drive/Rt 28 East – flower bed is below grade due new height sidewalk.
28 White Fence Violates SHA/Pepco Right-of-Way – Also Appears to be “Sinking”
Due to increased elevation of Rt 28 East, the addition of a sidewalk, and the original elevation of our berm – about ½ of our white fence appears to go “downhill” and disappears behind the sidewalk. SHA says their surveyors noted that our fence is on their right-of-way. It is an unkempt appearance from Rt 28. A bottom rail fell out in December.
(Editorial Comment): HOA should relocate fence higher on berm, or remove the section east of Verizon switch unit.
Dead and Wind Damaged Trees Cut and Not Replaced; Stumps Remain
Probably our most frequent complaint. There are three costs for each tree; Tree Removal, Stump Removal, Tree Replacement. For several years, various contractors have been expeditiously cutting dead trees above grade leaving exposed ugly and dangerous stumps. The benefit to that approach is that it is fast and keeps initial cost low. The trees have not been replaced. There are now many exposed, unsafe and ugly stumps in the common areas.
(Editorial Comment): This situation will become a very expensive future project if not undertaken soon. BOD needs to revise tree cutting policy to include removing stump – unless in a remote area. Further, if a tree is cut down, it should be replaced or grass over the area. Not every tree needs to be replaced, but the location should be restored
Citrus Grove Cul-de-Sac Needs Trees Replaced
Restore East Entrance Zone 1 Sprinkler System along Rt. 28
SHA damaged this zone beyond repair and agreed to replace it.
New Streetlights for
Quote received for $2,750 to accomplish this project by
bringing power through our conduit under
Fully Loaded Townhome Streetlight Circuit Upgrade Delayed
Capacity on this circuit is needed for 3 proposed future
projects: 1) Additional uplights for
center island trees, 2) Two new center island streetlights, 3) New colonial
lamps at entrance to Townhomes. Circuit
Blackberry Drive Crosswalk at Playground
Lisa is working with
Blackberry Drive & Terrace Stop Sign to Replace Yield
Lisa is working with
Most Common Area Lawns Adjacent to End-Unit Townhomes are Neglected
Inequity in common area landscape. End unit townhomes own only 4-feet from side
brickwork. Remaining side lawn is community
responsibility. Community lawn care is
neglecting weeding, feeding and trimming these areas. Most have become eyesores. However, an exception is
Inefficient Townhome Curb Parking
Limited curb parking is permitted and posted by signs on
Unlicensed Business in
Owner recently rented a townhome to ARC of Montgomery County:
According to our attorney, this
Dog Waste Sign Intentionally Smashed - Citrus Grove Cul-de-sac
In-ground sign has been intentionally smashed as if by a heavy hammer, beat, split and wrapped around the steel pole. Some members of the board wanted to remove it. BOD decided to replace it.
Gazebo Mailbox Unit Damaged by Children
Gazebo & Mailbox unit needs painting again. Need to construct a defense against children climbing to top of unit.
ABS Requests Disposal of Orchard Knolls’ Pre-1996 Records
Last month, BOD declined, requesting that Mohammad obtain ABS’s storage costs.
Should HOA Mail (Distributed by ABS) go to Owner’s Alternate Addresses?
Some owners have “blind” addresses for their actual residence. Their assessment bill is mailed to and paid by another financially responsible agent. ABS continues to ask BOD - Should HOA mail, prepared by ABS, be mailed to owner’s “alternate” address? Should it be duplicated for resident’s HOA property?
Previous Communication to BOD - (BOD has not responded):
Annoying Home Alarm
Cherry Blossom Lane owner wants
BOD to take action - Alleges that a
loud, continuous, and obnoxious exterior alarm in Cherry Blossom Ct. goes off
frequently (at least once a month)... alarm continues all day and does not get
shut off until occupant comes home at 5pm. Says he visited owner who
explained that it is an interior alarm therefore no county law applies.
Trim Color Not Approved
Owner responded to our letter citing property for unapproved white color trim rails. Owner says they have been white for 3 years and declines to change color now.
Two Neighbor’s Down Spouts Flooding Area
Owner requested help at 2003 Annual Meeting. Area of concern is between 15728 & 15732. Down spout runoff from 15732 and 15734 floods common area and this owner’s property with constant water/mud. In addition shrubs on common area are so overgrown that sunlight is totally blocked exacerbating the water and mud.
Water Pooling at Gazebo; Mosquito Breeding Ground
Owner requested that HOA regrade this area to eliminate water from pooling and risk of mosquitoes breeding. .
Limbs Over South Townhome Parking
Dangerous limbs overhanging
striped parking in
Two Large Dead HOA Trees in Front of Home
Two HOA trees directly in front of her front door have been dead all year and requested they be removed and replaced. Jerry took photos of the trees for BOD. Rick added to the list to be removed by JL Landscape.
Preserve South West Tot-Lot Equipment
Requesting South West Lot’s baby-swings and see-saw be preserved.
Two Removed Trees not Replaced, Stumps Remain
In 2002, BOD removed 2 dead trees directly across street from home and left two stumps exposed above grade.
Possible Unapproved Day Care
Major increase in adults with children entering and leaving
a unit in
11. UNFUNDED COMMUNITY IMPROVEMENT REQUESTS (Some now escalated to “New Business”:
Duplicate Entrance Stone Marque
Matching Colonial Lamps at Townhome Entrance
Brass “Orchard Knolls Towns” Plaques on Existing Stone Columns
Permanent Flagpoles with Uplighting at Front Entrance
Increase Berm Height at Senior Housing Boundary
Security Lighting along Creek and Bike Path
Add 2 Missing Red Maples at each
Upgrade North-East Tot-Lot
Upgrade South-West Tot-Lot
Covered Picnic Pavilion over
Trim All Common Area Trees.
Add Streetlight to
Transformers Screening in
Replace Sprinkler Enclosure - Larger unit Needed
Paint Curb Parking “Tics” on
12. UNFUNDED REPAIRS;
Paint Gazebo and Mailbox Unit.
Upgrade Streetlight Power Circuit Running at Capacity.
Remove Common Area Stumps; Replace Previously Removed Trees
Regrade Gazebo Landscape; Eliminate Flooding Water
Reroute Water Flooding Common Area Adjacent to 15728 CBL
13. ISSUES CURRENTLY WITH OUR ATTORNEY(S):
Townhome Landscape Issues (Do Covenants Apply?)
Delinquent Assessment Collections
Tot-Lot Contractor Dispute
Identifying Non Approved Day Care Operations
Common Area Behavior Rule
Blackberry Drive/Rt 28 Intersection Pepco Illumination
14. VOLUNTEER COMMITTEES AND SUPPORT:
Tot-Lot Upgrades Harris Leonard, Kathy Wyatt, Rita Becker, Maria Siravo, Lisa Goodman
Newsletter Brian Zarchin, Eileen Solomon
Directory Rita Becker, Rick Schinner, Lisa Goodman
Grounds Mohammad Homaitabar, Rick Schinner, Rita Becker
15. CONTRACTORS AND SUPPLIERS :
Assessment Collections and Bookkeeping
Audit and Tax Preparation Ahlberg & Company - David Bremmer, Auditor
Delinquent Collections Attorney
Electrical Power Systems Electric
Insurance State Farm
Lawn Care & Landscape Landscape Innovations Inc.
Legal Counsel Attorney David Gardner
Post Office Diamond Farms
Printing & Reproduction Kinko
Sign Store (
Snow Removal JL Landscape
Sprinkler Systems Unity Irrigation
Trash Collection Titus
Tree and Stump Removal Landscape Innovations Inc
Web Site Interland Inc
16. ADJOURNMENT AND NEXT MEETING - Monthly meeting adjourned at .
Next regularly scheduled meeting will be