Minutes of 11/19 Laurel Mews Board Meeting
Board members in attendance: Lawrence Norris, Sheryl Stratton, Andrew Schneider
Owner: John Warner 6703E, Fei Xing 6707C, Nicolas Ulvert; Laurie Gethin;
2023 Budget
Interest income:
Transferred cash to higher earning account and bought some T-bills maturing on different times in the futures. Some tax consequences to T-bill income.
Water rate increased by 7% in July but not one expected in January.
Common area maintenance 81,411 in September. Projects that had been delayed from 2020-2022. (note 1)
Board discussion on reserve spending, understanding from Portugal work was done on which Table 2 reserve calendar of expenditures project, what came out of operating budget, and whether the reserve was adequate for the item (for example gazebo repair restoration project). Did things go according to reserve plan, and if not, are we planning for enough in the future. (note 1)
Ideas: consultant short-term – a CPA, a treasurer – a fresh eye to look at how we are doing things. (note 2)
Owner suggestion on two issues:
- Increasing transparency – sharing documents by posting online, contractor shopping, reach out to owners for help (note 3)
- Democraticizing the process – polling in NextDoor, create auction for contracts (note 4)
Action steps:
- Itemizing Common area maintenance expenditures for 2022 (note 5)
- Updating Table 2 with reserve specialists (Reserve study update will be done as soon –– reserve specialist awaiting information on useful life of EV charger)
- Cobblestone and Exxon wall estimates (next week) but need more options than wood fence
- Additional issue not yet discussed: costs for ADA compliance for neighbors aging in place plus “mommy” spots?
Annual meeting January 7, 11am-1pm zoom
Plan to schedule a board meeting on December 17 – pending board member availability.
Note 1: Hardly anything ever goes according to plan. In our case, looking at Table 2 in our latest reserve study update, we have had a few items move in schedule (e.g., the gazebo and Exxon wall), while others have come out at significantly lower costs (e.g. repair/replacement of the mailboxes) than contemplated. That is, the gazebo deteriorated faster than what the reserve specialist contemplated, while the mailboxes did not require total replacement like they contemplated.
Note 2: The association already spends over $5k for a professional management company, which goes through training, peer review, and certification. Then we spend another $3.5k for an auditor (a CPA), which also goes through training, peer review, and training. Moreover the association has gone through FHA and VA certification at a cost of ~$2k for both. Our management practices have passed with the highest rating in every case in every year. Spending another $2-3K on yet another management consultant, accountant or whatever will not change that.
In fact the cost for this extra CPA/consultation would be far, far more (probably >10 times as much) than whatever possible savings there could be in the unlawful snow policy idea, which is one of the logical disconnects we have to think about.
Note 3: This topic on our website, budget/finance, is pretty comprehensive. Pretty much everything there is to know is posted on the website, including the monthly balance sheet, P/L and quarterly summary. For years we have had open meetings on the budget, the annual audit and items of concern. As mentioned before we have open walk-arounds with the landscaper and other maintenance contractors. Most of the business here is rather routine if not mundane.
Note 4: We’ve spent a lot of time talking about the process by which repair/replacement projects are prioritized and executed. The process is simple, first we look to the reserve study to see what components might be coming to the end of the useful lives. Then we do visual inspections of the material condition of the components. We have open walk-throughs with the contractor, and the board receives owner reports of broken components. That all gets put into the annual maintenance plan, as discussed (https://www.laurelmews.org/budget/), with the objective of minimizing risks. That is, risks of injury, of unlivable conditions, small problems becoming big problems, etc.
But I’d be a little leery of polling on specific projects as people will tend to favor projects they can see and that affect them, and not so much ones that they cannot.
Case in point, earlier this year we had to move a neighbor’s numbered parking space for a couple of reasons, not the least of which is that he has a handicap placard. Also his vehicle was so large that neither he nor his adjacent neighbors could get in/our of their vehicles. I was astonished to get pushback from a few folks that felt like the HOA should spend money on that. What of course those people probably did not know is that there is applicable Virginia law that pretty much required the modification.
We had a similar situation wrt a broken light fixture, which also had color-able disability impact ramifications. So with all the implicit biases in polling, and the quite likely deficiencies in the framing of the polling questions, I think that’s probably not the way to go.
So rather I think it’s better to budget and inspect such that we don’t have to make maintenance/repair/replacement choices like that. I take the position of taking all maintenance items seriously, and that no one should have to wait on a maintenance request to get addressed because of money, and really that the HOA should not do any less (necessarily) for an owner than they might do for themselves if they lived in their own single family home. I can elaborate on that in terms of snow/ice removal, brick walkway and fence repairs, sewage backups, etc.
Plus the HOA board has the explicit fiduciary responsibility to take care of all needs, even ones that might not poll well.
Note 5: We do not get a point by point itemized list Portugal Construction, as it takes time for them to do that, which they would have to build into their pricing. Rather Portugal Construction, who has worked with this community for ~20 yrs only charges us time and materials, which saves us at least 15% in cost. What’s done is an open walk-through with the crew chief and a list of tasks is written up based on the inspection results, and then Portugal offers a contract based on time and materials, which since we are a long-time customer is offered at verifiable discounted pricing with master-level labor. When the crew is on-site there are usually change orders and contingencies, which for the most part get covered in time and materials, with a cap on either or both.