These are personal notes taken by Rick Basch at the December 5, 2011 Board Meeting.
They are not the official Minutes of the meeting.

Unit Owners' Forum:
The unit owners forum started at 7:15 pm. Fourteen owners were present.

- A unit owner who owns several units asked why there was no income from the vending machines, dry cleaning, and move-in/out fees in the budget. He was told that the vending machine income is in Miscellaneous Income [$500/yr. total] and it's not a lot of money. The move-in/out fees, at $150 per move, are shown in the budget [at $1,500/yr.]. Regarding the dry cleaning room, Dave said we've never gotten income from that. It's a service to the residents. Board member, Jerry, also mentioned that the dry cleaning attendant also handles the receiving of packages and doesn't charge us for that. The owner said maybe we should have the doorman handle the receiving of packages. Dave said other buildings have a receiving room clerk and he thinks they might get paid the same as a doorman. Some buildings do have doormen receive packages, but it depends on the volume. Jerry said maybe we would have to check on the doorman union rules regarding handling of packages. The discussion also included comments that we didn't have room to store packages by the doorman and we didn't want packages laying around in the lobby.

- I asked about the City's garbage rebate and that when the Board put together the proposed budget, the Mayor was proposing doing away with the garbage rebate for condos, which was about $22,000/yr. for us, and the Board included zero income from the rebate in our budget. Since that time, the City decided to keep 75% of the rebate, which would be about $15,000 income for us. I asked if the Board was going to revise the budget to include the rebate income. Board president, Chris, said no, that the proposed budget had already been sent out and they didn't feel the amount of the rebate [$50/unit] warranted changing the budget. However, making this correction would reduce our assessment increase by about 40% in 2012.

- I asked about the resident reimbursement repair income that was incorrectly budgeted at $2,000 expense when it should be about $8,000 income, a difference of $10,000 extra income. [NOTE: the resident reimbursement income is what the building charges residents when work is done in their units, other than the free work such as plumbing leaks, torn screens, etc]. I asked if they were going to correct the budget for the proper amount of income. Chris said he was unaware of this. Dave said the budgeted amount was incorrect. I also commented on the fact the Board hired a part-time maintenance "helper" this year, which was supposed to allow more work done in residents units, and the expected extra income would help offset the cost of the new hire. Chris said the new "helper" position had been eliminated as unnecessary, and the cost not included in the payroll budget for next year [which was news to me because the Board never approved this in an open meeting]. Eventually they said they would not correct the budget. Making this correction would reduce our assessment increase by another 27% in 2012. [Between the two corrections, our assessment increase would be reduced by 67% without any cuts in expenses.] .

- I commented that the exterior Christmas lights used to be put up by our maintenance staff, but this year it appeared that the Board had hired our landscaper to put up the lights. Chris said that was incorrect, that they hired the landscaper to put up the lights only on the trees because they have the equipment to do it right so the lights don't blow down in the wind. The rest of the exterior lights were put up by our staff. I didn't ask how much we paid the landscaper to put up the tree lights.

The management company representative further commented on the resident reimbursement budget error and said it was just a guesstimate anyway, and there was also a small error in parking income [being too high given the expected loss of parking spaces in Winona]. She said our reserves were too low [at $1.6 million] and that from what she's seeing, our reserves will get down to near zero by the end of 2015. She said she would have recommended a larger increase in assessments, except for it being a difficult year for everyone. She said our assessments may have to increase again next year [2013] to try to build up our reserves by 2015. Board member, Sajed, asked about the FHA requirement for reserve funding. Management said FHA requires associations to put 10% of the budget into reserves each year, and we're putting in more than that.

NOTE: I think the issue is that management is projecting the riser replacement project to cost $300,000 per riser for 14 risers, or $4.2 million, where the reserve study engineer estimated the cost at $100,000 per riser, or $1.4 million. If the engineer is right, we have enough money in reserves right now to replace all the risers, if management is correct, we don't. I can't imagine the reserve engineer being of by so much, but I'm not an engineer.

There being no other questions, the Board meeting was started at 7:30 pm.

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Board Meeting:

The Board meeting started at 7:30 pm and ended at 8:11 pm (41 minutes). All Board members, the property manager, and management company representative were present. There were 14 unit owners present.

The Board Minutes from the October 4 meeting were approved after a correction requested by Board member, Joanne, to indicate she and Jerry voted no on something, rather than abstaining.

Management Report:

- Dave, the property manager, said the proposals for the building automation system were received and reviewed. It's on today's meeting agenda.

- Halloween festivities were held on October 30. Feedback was that the event was a great success.

- The 2012 proposed budget was prepared and sent to unit owners and is on today's agenda.

- A dedicated emergency notification phone line for 5100 is being set up with RCN cable.

- Work orders are being completed on a timely basis by Robert and the staff.

- "Green" cleaning supplies are being considered and tested.

- New LED holiday lights were procured and Brinkman was retained to put up the tree lights because they have the right equipment to do this. The two Christmas trees were put up in the lobby and party room by the maintenance staff.

- The new elevator timer was set up for "all-call" service during morning and evening weekday rush hours.

- The neighbor's fence on the west side of the Winona lot was damaged by high winds November 29. The neighbor was contacted and our staff fixed the fence [?].

- Robert repaired a hot water pump bearing and the pump is now working. New water riser pumps will be purchased in 2012 to make sure we have a replacement pump available in case it's needed.

- The sensor for the center light on the Winona parking lot was fixed so it automatically goes off at daylight and on at dark.

- Dave said there was one sale for the Board to approve. Studio unit 3C, in foreclosure, sold for $51,000. There were also two leases, 3C for $850/mo., and 9E for $1,100/mo. Dave said the owner occupancy is 70%. [NOTE: After the meeting, I noticed that unit 4H, a one-bedroom, also sold in the past month for about $65,000 and will be leased. Dave said he forgot to include this unit for Board approval and will include it in the next meeting.].

Treasurer's Report:

The Treasurer, Sajed, read the Treasurer's report prepared by management as of October 31 in about one minute. A copy of the report was not available to owners at the meeting this month, and the report was read so fast, it was hard to follow the numbers being read. I'm pretty sure I heard we had a net income (operating surplus) of about $117,348 year-to-date through October, but I'm not sure. [NOTE: No explanation was given for the numbers]. The total investments as of the end October totaled $1.55 million.

New Business:

- Building Automation System. Robert, the building engineer, explained what the proposed system would do. It would convert the hallway heating on floors 2 through 14 from the current electric heat to hot water heat coming from the boiler in the basement. Gas heat is less expensive than electric. Above the 14th floor, the hallway heat would stay electric. Robert said they couldn't extend the hot water above the 14th floor. Robert said the control part can be expanded in the future. Joanne and an owner from the 16th floor commented that the hallways on some floors are too cold, and cool air gets into units through gaps under the doors. Robert mentioned that the hallway temperature is kept at about 68 degrees in the winter. Joanne wanted to know why they were fixing the lower floors and not the higher floors. [Note: this project was being proposed for cost savings, not as a repair]. Robert said they'd have to install a boiler on the roof to do the upper floors. Robert said he would look into having our HVAC vendor increase the hallway temperature [which would increase our electric costs]. The owner from the 16th floor commented that in the summer some of the upper hallways get too hot. Robert said the air conditioning system for the upper floors is at capacity. There was a lot of discussion on this, including the need to keep a positive air pressure in the building to keep water and air from coming in from outside, and for fire safety. Sajed asked whether the rubber seals under the hallway doors could be replaced to seal out some of the drafts. Robert said some of the seals are well worn, and management said they will look into this.

Regarding the proposed building automation system, the lowest bid to do the work was $114,830, including the control work. The energy savings expert who proposed the system estimated an annual energy savings of $26,740, so the payback period would be almost 4.5 years. Jerry said the estimated savings were based on current electric rates, and that the current natural gas prices are very low, so if they increased, the savings would decline. An owner from the 27th floor asked whether this is the right time to be spending this money since nothing was broken, and that there are other ways to save money. Someone asked how much we had paid to do the energy savings study. Management said it was about $4,800. The Board voted not to approve the project. The vote was two abstain (Joanne and Jerry), two no (Sajed and Nancy), and one vote yes (Chris). About 25 minutes was spent on this item.

- The proposed budget for 2012 was approved without changes. Nancy asked if they were going to make the two corrections in the budget, but the management company representative again said no. She said correcting the proposed budget would require making new copies and sending it out again and waiting another 30 days before the Board could approve it. She also said the budget is only a guesstimate anyway and the changes wouldn't make a big difference.

- The agenda included Parking Rules and Regulations, but apparently they were still waiting for some information from the association attorney and the Board tabled this discussion until next meeting.

Old Business:

- There was no old business.

Adjournment

The Board meeting adjourned at 8:11 pm. Dave said the Board needed to have a short "executive session" regarding an assessment delinquency. The management company representative said she had a legal matter to discuss too. The Board met in "executive session" until about 9:05 pm.