October 27, 2003
Meeting Time
Meeting called to order at 7:05pm
Board Members
Bruce Howard (BH)
Brian Madurzak (BM)
Ken Sherman (KS)
Debra Siena (DS)
The Building Group
Fred Waldman
MEETING NOTES / ACTION
1. Approval of Minutes
1.1. Minutes of August 25, 2003 Board Meeting Approved by board
2. Financial Overview (BH)
2.1. BH presented the September P&L and Reserve balance.
2.2. Court case to collect delinquent assessments from one of our tenants went in RNC's favor.
2.3. BH presented background for Special Assessment/Loan
At the beginning of 2003 we started on a budget that was only 3% higher than the 2002 with the plan and intent of doing more with less or getting the most bang for our assessment buck. We made a number of changes and improvements that either reduced our costs or got more performance for the same money.
Unfortunately, events conspired to completely wipe out any gains we made and to put us in very precarious financial position. Excluding the planned cost for the lobby renovation, our total expenses will exceed our total budgeted expenses by $215,000 by December 31st. Here are the major items that will be over budget, based on Actuals thru September and Projections for Oct-Dec:
$64,683 over budget in Utilities, the largest portion being People's gas at $46,000 over budget.
$32,923 over budget in our Contractual category. The big surprises were an overage of $16,000 in Insurance and $10,000 in old 2002 Janitorial bills "lost" by our prior management company.
$47,328 over budget in our Repairs, Maintenance, and Security category. The largest portion was an overage of $22,000 in old 2002 Security bills that were not paid nor forwarded by our prior management company. The balance of the overage is spread among various repair and maintenance categories such as garage repairs being $9,800 over budget.
$8,300 over budget in our Admin & Services category due largely to an overage in legal fees to press our claim against Enterprise Development and in unbudgeted City fees/permits.
$62,500 over budget (or un-budgeted) for services and repairs related to our brickwork and garage door replacement.
We need an immediate cash infusion by way of a Special Assessment to partially fund the necessary brickwork repairs and cover the surprise expenses.
If we do a Special Assessment of one month's assessments due December 1, 2003 and actually receive 95% of it in December that will provide about $57,000 in additional funding. In effect, each owner would need to make a double payment on December 1st.
Please note that this funding is NOT sufficient to cover the cost of completing the leaking brick repairs that have been identified as being most critical and should be done before 12/31/03. We do not yet have firm quotes for this work, but preliminary estimates put it at around $100,000. To fund this, we will need to obtain a loan or line of credit from a bank. At current interest rates and with five-year amortization, repayment of this amount will be budgeted at $2000 per month starting in January 2004.
2.4. The finalized 2004 budget will be distributed to residents by Nov1. Assessments will increase by approximately 20%.
2.5. Floor was opened to residents for Special Assessment/Line of Credit discussion/questions.
2.5.1. Resident asked when repairs to his brickwork would start. He was told that building permits had been applied for and the construction company hired. The priority is the most critical 4 units. Optimally, the work will begin in November.
2.6. The board approved a one-time Special Assessment due and payable on December 1, 2003 in an amount equal to one-month's regular assessment. On December 1st each owner will need to pay his or her regular assessment plus this Special Assessment in an equal amount.
2.7. The board approved entering into a line of credit agreement with a reputable lending institution and draw down up to $100,000 of that line between now and December 31, 2003. This authorization anticipates a 5-year authorization and an interest rate of about 6.5%. Repayment of this would be about $2,000 per month beginning in January 2004.
3. Old Business
3.1. Building façade repairs
3.1.1. KS Building Engineer Tommy Thompson was hired to scope the work. Bral Construction was hired and has applied for the necessary permits.
3.2. Three bids were received for the Building Emergency lighting and signage project. Work will begin shortly.
3.3. The 2 interior garage doors will be replaced with high volume (100,000 cycle) doors. The cost will not exceed $10,000 and the doors come with a 1-year warranty.
4. New Business
4.1. High Speed Internet
4.1.1. BM presented the results of the High Speed Internet Committee. Residents will have 3 options to choose from: a) SBC/Earthlink/AOL or any other DSL provider - this option will work for units with Copper phone cabling - you can determine if you have the necessary wiring by going to SBC.com and entering your phone number; b) Comcast will be wiring our neighborhood in early 2004; c) Ex-Wire will offer a Wireless option to our building. They will hold a sign-up in November.
4.2. The board approved an increase of move/in - move/out fees from $150 to $300. This will allow for a security guard to be hired to inspect the hallways before and after the move, as well as guard the open loading dock during the move.
4.3. A low voltage wiring issue which was causing excessive heat in the Huron building hallways will be addressed for no more than $500.
4.4. The annual meeting will be held at Rezas on Dec 1 st at 7:00 p.m.
4.4.1. The meeting will include approving the 2004 budget.
4.4.2. Elections for 2 board seats will also occur.
5. Committee Updates
5.1. Decorating - Geof Shives reported that final touch ups will be completed shortly.
5.2. Website - Rick Edel reported that the Building Declaration would be added to the site.
5.3. Social Committee - Terry Halverson will host this years Loft walk on December 7th.
5.4. The 1st RNC Newsletter was edited and distributed by Terry Halverson. We hope to continue this quarterly.
6. The meeting was adjourned at 8:10