Highview Condominium II
Board of Directors - Meeting Minutes
February 9, 2005, 7:30 p.m.
The fifth regular meeting of the 2004-2005 Highview II Board of Directors was called to order at approximately 7:45 p.m. by VP Marjorie Cannon. Board members in attendance: Victor Bellini, Miriam Biren, Sanchie Bobrow, Robert Boynton, Marjorie Cannon, and Richard Re. Board members absent: Stephanie Greenberg, Tamara Keshecki, and Frank Mattera. Jennifer Ogman attended from J.A.L. Diversified Management. Judy Minale attended as an invited guest for discussion of the building's insurance.
1) Approval of prior meeting Minutes: Minutes of the December 1, 2004 meeting were initially distributed on 12/04/04, approved on 01/31/05, and have been posted. The January Minutes were distributed by email on 01/23/05 for approval. A majority of the Board has yet to reply.
2) Insurance review discussion: At the building's most recent annual meeting in September, Judy Minale (6-G) volunteered to assist the Board in a review of the building insurance policies (including liability, workmen's comp, umbrella policy, and boiler repairs.
Judy Minale offered comments and recommendations at this evening's meeting.
a) Concerning our Workmen's Comp policy: Jennifer will check when the policy was last audited by the insurance company. Relating to both Workmaen's Comp. and General Liability, there was discussion of the importance of not allowing anyone to work on the building who does not provide proof of adequate insurance.b) Concerning our General Liability policy: is the building accurately appraised for a value sufficient for property replacement. Jennifer Ogman will report back at the next meeting.
c) Our umbrella policy is not Highview's alone, but part of a group policy. Judy recommended getting an cost estimate of a Highview exclusive policy.
d) Loss runs have been requested, but were not available at this meeting.
e) Highview has a very low deductible of $1,000 on property damage claims. With a concern for preserving the building's excellent history of few claims, Judy suggested that the building might wish to increase the deductible - depending on the savings at higher limits. Ogman indicated that her other buildings typically have a $2,500 deductible.
f) Judy was surprised to learn that Highview does not require unit owners to maintain liability insurance to cover in-unit damage to other units and the common building. The Board agreed to explore this situation further and consider the possibility of adding an insurance rule for unit owners at a future meeting.
Judy will continue research and discussion with JAL (Jennifer Ogman and Matina Monioudis), keeping in mind that one of the building's major policies is due for renewal in March.
3) Roof Replacement update:
a) The Phase-1 pre-design report was received from Becht Engineering on 01/28/05. Their inspection determined that there are three separate roof systems (layers) in place. Using an impedance meter, consistently high levels of moisture were found throughout the roof, indicating a state of failure. In addition to continuing the damage to wooden structures from the moisture, the water saturation eliminates insulating properties of the roof. Becht indicates that it is likely that the last roof was installed over a water-saturated failed system (in which case the last roof should not have been installed over prior systems). However, it is impossible to determine if this was the case. At this time the roof does require a full teardown at this time.b) Evaluation of possible legal suit: As part of the Phase-1 report, Becht Engineering was to evaluate the possibility of suing either the previous installer and/or managing agent at the time of the installation. No current Board members were on the Board at the time of the prior roof installation and Finnerty Management was the managing agent at the time. No documents from the period in question have been found which would indicate the Board or Finnerty Management's understanding and/or evaluation of the possible moisture damage. Becht'sPhase-1 report indicates that it is impossible to determine whether the water saturation was present prior to installation of the present (top layer) roof. As part of this liability evaluation, Michael Swaaley was asked to advise on the possibility of suing the previous contractor and/or managing agent. Swaaley indicated that under one of the conditions explored, the statute of limitations has expired.
c) Preliminary roof replacement costs: Becht's preliminary estimate for the roof replacement is $158,000. This is only a preliminary estimate and the actual bidding of Phase-2 will begin shortly. Becht indicates that bidding will not include firm totals for any damage/rot that may exist below the wood deck (base layer), but a cost per foot for such repair work will be specified in the submitted bids.
d) Phase-2 go-ahead: Per Board instructions to Becht Engineering not begin the Phase-2 bidding until the Board discussed the pre-design Phase-1 report, there was discussion of the Phase-1 report. The Phase-1 report was distributed to all Board members a week in advance of this meeting. The only question raised by the Board concerned the incinerator bulkhead. Becht indicated that the incinerator bulkhead is structurally sound and only the chimney on top of it should be removed. The building is currently covered with a rubberized paint and a board member indicated that there have been several incidents in the last few years of the coating peeling from the brick and water leaking into the building through cracks in the brick. The condition of the brick under this paint was called into question and if the building is not going to be entirely removed whether it should be stripped of this paint and the brick properly pointed.
Becht will be asked for guidance on this question. Otherwise, Phase-2 bidding was authorized by the Board to proceed - noting that the Phase-2 contract with Becht was approved and funded at the November Board meeting. Boynton will call Becht and distribute an email to the full-Board with Becht's answers - including an estimated time-frame for bidding and proposed start-date for construction.
e) Funding the project: As there are no Capital Reserve funds to support this project, the work will have to be entirely funded by either building loan or special assessment. There was discussion of building loan costs. Jennifer Ogman indicated that a variable-rate loan from North Fork Bank for 5 years would currently be at about 6.5% (2 ¾ % over current prime). In addition to the loan amount, costs for the loan would be 1% of the loan amount, plus $3,000 application fee, plus about $2,500 for an attorney representing Highview to review the bank documents and attend the closing.
Ogman was asked to get additional information (fixed rate versus variable, terms of 5/7/10 years, and credit lines high enough to cover the structural repairs that if required will only be known once the roof is apart).
Boynton expressed concern for any loan extending beyond five years and cited the Board's recent Capital Reserve Study by Becht Engineering which indicated a potential for $750,000 in capital repairs and replacements over the next 15 years (including this current project which has was budgeted by Becht at $105,000 with an additional $30,000 for a bulkhead removal). He questioned whether spreading out the currently discussed loan beyond five years might force a second loan being imposed before the first one is completed for something like the building's $100,000 boiler, which although healthy at the moment, has technically exceeded its life-span. Rich Re acknowledged Boynton's concern, but felt that it was important for the Board to consider all possible options.
On another point, the Board discussed whether the currently anticipated loan should cover additional building repairs that will be required this year or could those repairs be adequately covered by the regular FY2005 operating budget.
There was discussion of the timing of a loan relative to bid completion, contractor selection, the timing of contractor payments as the project progresses. How long would it take for a loan to move from application to approval? Other legal and tax deductibility issues were raised about loans. There was discussion about allowing unit owners to opt out of the loan and pay their share up front.
4) Legal Report:
a) Cycle #6 inspection under Local Law 11, Salomon Engineering indicated that there would not be a cost savings in conducting the current cycle's Local Law 11 Inspection early in the cycle. Estimated cost for the inspection will be approximately $5,000.b) Abassi will be making repairs in the spring for last year's Local Law 11 inspection notation of weep holes plugged with mortar (mortar work previously performed by Abassi).
c) Awning replacement: Legal action against Access-a-Ride is with Swaaley. JAL has indicated that the awning frame is scheduled to be replaced in the spring.
d) Discussion of common area versus unit owner boundary involving window leak. Swaaley will be consulted for legal opinion.
e) Two unit owners submitted appeals for Building Rule violation fines. Violations were for improper disposal of bulk garbage ($100 fine) and failing to comply with the Repair & Renovation Rule ($500 fine). The Board reviewed the appeals. One $500 fine was reduced to $250 on account of the Rule's wording with respect to the specifics of the violation and the unit owner's attempt to comply, the other fines were allowed to stand. All votes were unanimous.
f) Lease violation: Unit owner fined $500 for non-compliance of Lease procedures has been notified in writing that they will be fined additional $500 on March 1st if they continue to violate the rule. Swaaley has been in communication with owner to negotiate compliance, but owner has not complied. Non-compliance creates a legal exposure for Highview and the Board according to the building's attorney.
g) Common charge arrears were reviewed. Legal agreement for catching up reached in one case. Other cases moving to court. As usual in delinquency cases, all legal expenses of Highview are passed along to the unit owner's account.
h) Recycling area's fire code compliance: At the January Board meeting, there was discussion of the recycling area and need to completely eliminate combustibles from the area since the area is not fire resistant and is not protected by the building's limited sprinkler system. The urgency of moving ahead with the addition of 2-3 chutes into the compactor room was mentioned, as well as keeping combustible recycling from accumulating on weekends. There was no progress reported at this meeting.
5) Repairs:
a) As noted at the January Board meeting, painting of all unit doors has not been completed. JAL will send a letter to unit owners requesting that they make arrangements for the super to paint - since the door edges require the doors to be opened.b) The elevator floor was waxed this past week. Ogman reported discussing this with the super and the task will be performed twice a month from now on.
c) Motion detector and timer for the garage exhaust fan. Jennifer Ogman reported that the super completed installation. Bellini indicated that it is not operational. Ogman will confirm status of project.
d) No estimated were available for fire escape painting and repair/welding of the elevator bulkhead stairway railing.
Meeting was adjourned at approximately 10:30 p.m.
Robert Boynton, Secretary