Minutes – Board Meeting – June 4, 2013

Sunland Division 17 Homeowners Association

Board of Directors Meeting June 4, 2013

Location: Sunland’s “The Gathering Place” Ground Floor Meeting Room

Minutes—Approved July 2, 2013

Homeowner Forum.

Continuing a new procedure implemented at the May 7 meeting, the board scheduled an open Homeowners Forum from 9:00 AM to 9:30 AM, immediately preceding the board meeting itself. There were seven observers in attendance, but none indicated a desire to speak. There being no homeowner comments, the board started its regular meeting.

Call to Order.

The regular meeting of the Sunland Division 17 Owners Association board of directors was called to order at 9:04 AM by president Jim Karr.

Roll Call and Quorum.

In attendance were Jim Karr (president), Cindy Rhodes (secretary), Lee Cox (treasurer), and Gene Ross. Jerry Schmidt having resigned before the previous meeting, there was no one absent, and the chair confirmed a quorum with all four board members present.

Review and approval of minutes.

Motion by Lee Cox that the minutes be approved as distributed in the board meeting packets; the motion was seconded and approved.

NOTE: Previous minutes for the 2012-13 board year referred to the “board of trustees,” which is the term used in the current bylaws; the board confirmed that henceforth, they would be referred to as the “board of directors,” which is the term used in the revised Division 17 bylaws.

President’s Report:

Jim Karr provided a number of announcements and updates, including a reminder that nominations are being sought for the board election that will be held as part of the August annual meeting, and confirmation that election monitors and counters will be Dick Helmenstine and Fritz Field, as appointed at the 2012 annual meeting. NOTE: Nominations are due no later than June 20.

Committee Reports

1. Treasurer’s Report: Treasurer Lee Cox reported that as of May 31, the association had $168,721.48 in Reserves and $47,642.58 in its checking account, for total funds of $216,364.06. Jim added that only one homeowner was more than 30-60 days late in paying their assessments.
2. Developed Landscape: In the absence of volunteer landscape coordinator Eldon Dennis, the chair reported that the current landscape contract had been extended for four months (thru December 31, 2012), so that a new contract will coincide with the association’s budget year. He also said that mulching, last implemented in 2010 but not included in the budget for 2013, would be included in the proposed 2014 operations budget.
3. Greenbelt Landscape: The chair reported that following two spring mowings and the previous spraying, plus plant-by-plant action continued by volunteer greenbelt coordinator Tim Paschal, the noxious weed problem currently appears to be under control. Control will require another end-of-year spraying, and eradication efforts are expected to continue for 3-5 years total.
4. Exterior Change Requests: In the absence of volunteer coordinator Cindy Meek, the chair communicated her report that there were no new change requests since last month, and that previous projects approved by Jerry Schmidt were either in process or about to start.
5. Exterior Maintenance and Inspection: Volunteer coordinator Richard Helmenstine reported on an unscheduled repair to the connection and water pipe outside 120 Cascadia; he also stated that some fencing tops that have rotted will be replaced with pressure-treated cedar this summer.
6. Governing Documents Review: Board member Cindy Rhodes, who serves on the Governing Documents Committee, reported that work had begun on the CC&Rs, which will include reconciling differences in the CC&Rs for each phase of Division 17. Committee chair Gene Ross summarized his assessment of six attorneys he had identified who appear to have the necessary experience to review the new Division 17 bylaws, including hourly cost for each, their estimates of how long the work would take, and whether they could complete the task within the timeframe needed. He estimated the cost of the review would be about $1,000. It was noted that the revised CC&Rs would also probably need a legal review.

Motion: Gene Ross moved that the Board select Alan Millet to review the proposed bylaws. The motion was seconded and approved, following a general discussion that concluded that the cost of the review be limited to $1,000.

7. Secretary: Secretary Cindy Rhodes provided ten updates on owner/renter contact information, as well as overall contact statistics. She also reported that the next Division 17 newsletter would be distributed by July 10, and that all copies would be mailed to homeowners of record, since it will contain annual meeting and election materials. She is also coordinating with Celeste Lilly, the SLOA office administrator re: design of the proxy and mailed ballots.

Old Business

1. Meeting schedule: The chair reminded the board and audience of the next regularly scheduled board meetings on Tuesday, July 2, from 9:00 to 11:30 AM, at Sunland’s “The Gathering Place” meeting room.
2. Annual meeting August 6: The chair reminded the board and audience of the Division 17 annual meeting, scheduled for Tuesday, August 6, in the Poolside Room of the Sunland Golf & Country Club, from 1 to 4 PM. He recommended that board members and volunteer committee chairs prepare short, clear reports that communicate to owners the work being done. He also noted that the agenda is also expected to include approval of the 2014 operating budget, adoption of revised bylaws, and announcement of the new board election. IN addition, a representative of CAU (Community Association Underwriters), the association’s insurer, will make a short presentation and answer questions about Division 17 insurance coverage.

Action Needed: The August 2012 annual meeting minutes were approved at the November 2012 board meeting; clarification is needed whether those minutes actually need to be approved at the next scheduled annual meeting, i.e., August 2013.

3. Discussion of proposed 2014 budget. The chair reviewed a revised budget proposal, for continued board discussion. He noted the board will need to adopt a 2014 budget at the July 2 board meeting, to then take to the membership at the August annual meeting. Currently projected expenses for 2014, including projected Reserves contributions, exceed projected revenues by $10,945. The new cost items are for mulch application throughout the division, weed control and expanded mowing in the green belt, and the costs associated with administrative (fiscal assistant), reserve study, and audit expenses. These increased expenses could be covered with an increase in annual assessment of $100, the first assessment increase since 2010. Alternatively, the proposed budget will need to be reduced by about $11,000.
4. Proposal to move 2012 funds to Reserve Accounts. The chair reminded the board that past practice appears to have been to wait six months after the close of each budget year before making a transfer to the Reserve Account. He said this timing was probably to ensure sufficient cash flow at the start of each new budget year, since homeowner dues come in over the entire year; and that the association is again now reaching that point in the fiscal cycle. The remaining balance at the end of 2012 was just $21,128. The chair recommends a transfer of $20,000 to the reserve account (money market fund) in July.

Motion: Gene Ross moved that after July 1, $20,000 be moved out of the association’s checking account and into the Money Market account, as the 2012 Reserves Fund contribution. The motion was seconded and approved.

5. Proposal re: changes in CD accounts: The chair recapped the previous meeting’s information on the association’s CD rates, maturity dates, and required minimum balances. He suggested a plan for implementation by the next board that would hopefully maximize returns by keeping the money market account large enough to earn a higher rate than the CDs that were maturing.

Motion: Gene Ross moved that the current board recommend to the board elected in August, 2013, that, when the association’s two smaller CDs mature on September 5 and 25 of 2013, they be rolled into the money market account, which, if maintained above $100,000 is expected to still be earning a higher rate than did the smaller, short-term CDs. The board also recommends that the third, two-year CD, currently earning .85 of 1%, be maintained as a CD, if the rate is comparable. The motion was seconded and approved.

6. Reserve Study Planning: Board member Cindy Rhodes stated that August 2011 Washington legislation now requires all homeowner associations to conduct annual reserve studies (previous requirements applied only to condo associations), and also requires that they be conducted by an independent consultant. Reserve studies are intended to help associations project how much money they should be setting aside for major repairs and replacement, over a 30-year horizon. She reviewed component data she has been compiling for the Reserve Study, in consultation with both online sources and with individuals involved in division maintenance and repair noting items added since the associations previous two reserve studies, and what items are not included. Previous Reserve Studies for Division 17 were done in 2008 and 2010, by the firm “Association Reserves.” She recapped three different “levels” of studies that are done by this firm: (a) update with site visit @ $1800; (b) update with phone interview @ $600; and (c) a “Do-It-Yourself” update @ $299, in which the company inputs the information compiled by the association and generates the required projections as a report. Given the expanded data already compiled, Cindy stated the firm could generate the reserve study and recommend reserve contributions before finalizing the 2014 budget.

Motion: Lee Cox moved that Cindy proceed with having the consulting firm “Association Reserves” complete the “Do-It-Yourself” study at a cost of $299; the motion was seconded and approved.

7. Fines for late assessment payments: The chair noted that past documents distributed by the association stated there would be a $10/month penalty for late payment of assessments, but that the CC&Rs say there will be a 12% interest rate; he said he had informally surveyed board members and the $10/month penalty seemed acceptable to everyone.

Motion: By consensus, the board approved the $10/month penalty for late payment of dues.

Action: Gene Ross will make this correction in the proposed new bylaws.

New Business

1. Resale Certificate: The chair noted an ongoing problem that the association is not being notified when a unit is sold. [NOTE: This is a problem because the association is required by law to notify all legal owners of certain things, as well as for purposes of general communication.] Each possible sale requires research, calculations and paperwork by the association, which is not currently being reimbursed. If a fee were charged to the escrow companies for this service, payment of the fee would also serve to notify the association of an ownership change. SLOA charges a $100 fee for this service.

Apparently, the decision to charge $100 for a resale certificate was made in 2012 by the Division 17 Board at that time. The current board discussed and endorsed the idea to begin to include that charge as a fee for all future sales.

2. Water Damage: There was discussion of water damage, its possible causes and implications, based on a recent extreme example within the division. The chair reported that an insurance adjustor hired by CAU recently made a site visit to the home with water damage. Routine maintenance checks by homeowners are encouraged to ensure early identification and avoidance of potential problems.

Adjourned at 11:15 AM

Motion by Cindy Rhodes to adjourn the meeting; it was seconded and approved.