FRCA Minutes December 14, 2011

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FALLS RUN COMMUNITY ASSOCIATION, INC.

Minutes of the Meeting of the FRCA Board of Directors

December 14, 2011

The Falls Run Community Association, Inc.’s Board of Directors met on December 14, 2011 for an Executive Session, Regular Session and Open Forum at the Center.

The meeting was called to order at 6:30 PM by President Dan Owens.

Present: Dan Owens, Leonard Bogaev, Toni Brown, John Balducci, Nancy Arnn, Stephanie Mounts and Karl Kabza.

Also attending: General Manager Ted Wessel and Armstrong Regional Manager Susan Manch.

**A motion was made by Nancy Arnn, seconded by Karl Kabza to convene in Executive Session to discuss personnel, legal and contracts. Carried unanimously.

At 7:10 PM the Board closed the Executive Session and reconvened in Regular Session at 7:15 PM.

Dan Owens announced incoming officers of the Board for the 2012 term:

Office Name Liaison to

President Dan Owens Property and Grounds

Vice Pres. Leonard Bogaev Modifications

Secretary Toni Brown Covenants

Treasurer John Balducci Finance

At-large Nancy Arnn Villas

At-large Stephanie Mounts Communications & Elections

At-large Karl Kabza Center Committee

**A motion to ratify the selection of officers was offered by Nancy Arnn, seconded by John Balducci. Carried unanimously.

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the general manager, and violation enforcement. The Board responded to all inquiries.

**A motion to waive the reading and approve minutes of September 23, October 26, October 28, and November 2, 2011 was approved unanimously.

Reports:

General Manager’s Report by Ted Wessel is attached (Addendum A).

Members of Activities Director Ad Hoc Search Committee were announced:

Name Representing

Dan Augustine Communications

Bob Brown Concierges

Sharon Hilgert Travel

Susanne Lazanov Gazette

Don McCreary Community Center

Jean Newbrough Social

Casey Naatjes Finance

Chair, Susanne Lazanov, gave a progress report. Of the 27 resumes received so far, nine were selected to move forward after undergoing a ranking system devised by the committee. Interviews have begun. It is expected the position will be filled sometime in January 2012.

Ted Wessel announced a temporary acting Activities Director will be in place in January 2012 until the position has been filled.

A joint legal orientation for the Boards of the FRCA and the Villas will be held in mid-January – date to be determined, potentially the 9th, 10th or 11th. The meeting will be at 10:00 AM and open to observers.

Nancy Arnn reported on the Villas Board meeting of November 29, 2011. Villas Board asks that the FRCA look into the increased parking on certain streets in the Villas.

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Modifications Chair Shirley Sommer asked for clarification as to whether that committee will do the follow-up inspections of approved modifications to be sure work has commenced within the 120 day period following approval. **The BOD agreed the Modifications Committee will perform those inspections.

John Balducci reported on the Finance Committee’s recommendation to move $49,000 of operating equity surplus revenue to the Replacement Reserve account at the close of 2011. A brief explanation followed, in part, of the reasons for the surplus such as a substantial increase in interest income generated by our investments, resale income from increased home sales, and lower utility bills than anticipated.

Finance Chair Casey Naatjes read his report of the Finance Committee Meeting. See the full report attached (Addendum B).

Dan Owens announced his plan to hold a meeting of all committee chairs, the FRCA Board and the general manager sometime in January. Date to be announced.

Old Business

None

New Business

Ted Wessel reported an on-going unresolved problem with the indoor pool’s Desert Aire system. **After discussion, an original motion by Nancy Arnn, seconded by Leonard Bogaev was amended to read: Contingent upon expert opinion that replacing the Desert Aire coil will repair the problem and when the Finance Committee has determined that necessary funds are available, the general manager is authorized to contract with Robert Payne to repair the Desert Aire system at a cost not to exceed $8,495. It was agreed the general manager has the authority without authorization by the BOD, to contract with Revis Engineering to evaluate the system at a cost of approximately $650. See Manager’s Report for details.

** A motion by Nancy Arnn: I move that the Board approve the personnel action discussed in executive session and direct the general manager to implement the action. Seconded by Stephanie Mounts. Carried unanimously.

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Taylor and Preston, draft a due process resolution for Board consideration at the FRCA January Board meeting, at an expense not exceed $900. Seconded by Nancy Arnn. Carried unanimously.

Treasurer John Balducci gave a summary report of recommendations made by the Finance Committee regarding disposition of a $49,000 operating surplus.

** Following his comments, John Balducci, seconded by Nancy Arnn, moved to transfer $49,000 of Operating Equity Surplus to the Replacement Reserve fund at the close of 2011. Carried unanimously.

John Balducci reported GNMA investments currently make up approximately 18% of total investments. He expressed concern about reduced income from interest in coming years. He will continue his analysis and report back to the Board in January.

Secretary Toni Brown appealed to the Board to allow her to publish Notes and Minutes of the Board’s meetings in advance of approval at the next regular meeting. However, there are legal concerns that should be taken into consideration. A decision will be made after conferring with our attorney.

The Board agreed on the need to do a review of delinquent accounts. ** John Balducci will call a meeting of a sub-committee to executive session to complete the review. The members of the sub-committee are John Balducci, Toni Brown, and Leonard Bogaev. Date of meeting to be determined.

Open Session

Susanne Lazanov asked that a schedule of directors’ monthly Gazette articles be created and sent to her. She also suggested the Manager’s Report might be a good monthly insert.

Members in attendance with historical knowledge expressed their concern about the length of time we have struggled with the Desert Aire system.

Another concern included the waiving of late fees. Another resident remarked on the FCC regulations regarding satellites. Questions were also raised about the need for coupon books and their cost. Armstrong Regional Manager Susan Manch explained that the cost is actually a processing fee.

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The meeting adjourned at 9.00 PM without objection.

Approved by the Board of Directors on January 25, 2012.

______________________ Toni Brown, Secretary

______________________ Dan Owens, President

** Motions/Actions by the Board.

Attached:

Addendum A - Manager’s Report

Addendum B - Finance Committee Meeting Report

Addendum A

FALLS RUN COMMUNITY ASSOCIATION

MANAGEMENT REPORT

December 14, 2011

1. Code Violations

1.1. 130 violation notices were sent on August 15th

1.2. 60 of the violations were corrected, and second notices were sent to the remaining 70 in November

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2. Code Enforcement/Due Process Procedure

2.1. Currently FRCA does not have a code enforcement policy and procedure. Administrative Resolution 09-09 Enforcement Policy and Procedures was rescinded by the Board of Directors at their October 26th meeting.

2.2. I recommend that the Board of Directors authorize the General Manager to have the Association’s legal counsel, Whiteford, Taylor and Preston, to draft a due process resolution for Board consideration at their January meeting for an expense not to exceed $900.

3. MBI Contract

3.1. BMI sent a proposal for a year’s license fee of $290; I will ask legal counsel to review it and comment.

4. Community Center Chairs

4.1. The pro-type chair was delivered. It does not meet FRCA’s specifications. Peter Ullstein with CSelect is going to review FRCA’s specifications to determine if CSelect or one of the frame manufacturing companies it works with can modify the frame.

5. Vending Machine

5.1. Many of the drink items are sold out. The vendor has been contacted 4 times, but has not responded. I am exploring alternatives and will report back to the Board at the January meeting.

6. Activities Director Search Committee

6.1. The selection process is going well. Susanne Lazanov, Chair of the Selection Committee will make a report to the Board at the December 14th meeting.

7. Communication Policy

7.1. Based on the advice of legal counsel, FRCA should adopt a communications policy to document that FRCA is in compliance with the Property Owners’ Association Act Section 55-510.2 Distribution of Information by members. I will work with the Communications Committee to draft this resolution.

8. Community Center Space Utilization Study

8.1. A sub-group of the Community Center Committee is evaluating the current use and will make recommendations for changes, if warranted by their findings.

9. Information technology and audio/visual equipment evaluation

9.1. An inventory and evaluation of existing IT equipment, software and audio visual equipment will be done by a 3-5 person task group.

10. Indoor Pool Water Clarity

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causes of the problem; incorrect amount of chemicals, and poor filtering medium are two examples

11. Indoor Pool Desert Aire HVAC System

11.1. Experiencing costly mechanical problems. I will request Board approval to replace the coil at a cost of $8,495. However, before expending those funds to repair the system consideration will be given to expediting the replacement of the system. The Reserve Study plans for replacement of the entire system in 2014 at a cost of $90,000. Revis Engineering is a manufacturer’s certified service company for Desert Aire equipment. For a cost of $600-650, Revis can evaluate our system and make recommendations. I recommend that the Board authorize the GM to negotiate and enter into an agreement with Revis Engineering for a cost not to exceed $650.

12. Lock- box

12.1. Armstrong Management has changed lock- box services because of an increase from $20 to $100-$200. The lock- box charge will remain the same. A letter explaining the impact will be mailed to each unit owner this week.

13. Administrative Resolutions A.R. 11-03 through A.R. 11.09 (committee charters) approved by the Board on September 30 will be posted this week.

14. Administrative Resolution 11.02 (Establishing Rules and Regulations Relating to the Feeding of Wildlife and Imposing Wildlife controls) will be mailed this week.

15. Water Fountain Maintenance Contract

15.1. The waterfall annual maintenance contract with Virginia Water Gardens expires December 31st. Two bids were received Virginia Water Gardens for $2,244 and the second for $3,408. Virginia Water Gardens’ bid is an increase of $204 over the 2011 contract and is less than the 2012 budget of $3,000. I recommend the Board approve the contract with Virginia Water Gardens.

Addendum B

Finance Committee Meeting

Our last meeting was dedicated toward making an assessment of a projected surplus at year-end. The bottom line of that discussion was that it appeared that we would have a surplus of revenue over expenses in the neighborhood of $60,000 plus or minus $10,000. Based on this discussion, the Finance Committee recommended a transfer of $49,000 to the Reserve Fund before year-end.

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We noted that we budgeted $2,000 of Operating Fund interest, but we are projecting $3,500, $1,500 more than we budgeted. We noted that we budgeted $49,600 of Reserve Fund Interest, but we are projecting $63,503, $24,000 more than we budgeted. The reason for these surpluses was our change in investment policy whereby we are now investing in a mix of CD and GNMA Bonds (up to 25% in GNMAs). Our Treasurer will be introducing an item of New Business that is connected to this initiative from last spring.

Resale of homes also resulted in more revenue than we had budgeted by about $15,000.

Those were the main increases in Revenue.

With regard to expenses, it is a bit more difficult to highlight many major reasons for our estimate of the surplus. General Maintenance was $10,000 less than budget based on October experience. That may or may not hold.

We could get lucky on Snow Plowing. We only have 20 days to go for a $10,000 dividend in this area. Of course it could just as easily tilt in the other direction with a very, very White Christmas.

We also expect our Utility bills to be a bit lower than we had budgeted. Nov. and Dec. could change that assessment.

All-in-all, it was an interesting meeting, and one would think we would be able to estimate more closely with 10 months of the year already in the book. However, as I just pointed out, one snow fall (or not) could easily cause a swing of $10,000 in either direction.

On a different front, people can expect to see me in the AD's office more and more in the coming weeks because of the Activity Director’s impending departure. I will be doing the financial postings during this time as well as generating check payments. I will not, however, have check signing authority. I'll be asking one of the Board members (with authority) to sign those checks.