River Place South Board Meeting Minutes February 18, 2020

​River Place South Housing Corporation (RPSHC)
FINAL Minutes From the Board of Directors Meeting
Tuesday, February 18, 2020
 
In Attendance – Board of Directors

• Janice Mays, President
• Waqas Ali, Vice President (via telephone)
• Sara Shahade, Secretary
• Lauren Hall, Director
• James McInerney, III, Director
• Vikram Reddy, Director

 
Regrets - Board of Directors

• Richard Villegas, Director

 
In Attendance – Property Management

• Joette Waters, General Manager
• Bob Porco, Senior Financial Manager with FirstService Residential (FSR)

 
In Attendance – Shareholders

• Marissa Fond, Unit 639
• Nancy Greenberg, Unit 542
• Ronda Harvey, Unit 1106
• Oscar and Crystal Jobe, Unit 1007
• Bonnie Klein, Unit 926
• James Marandi, Unit 642
• Jim Wolfe, Unit 421

 
 

1. Call to Order

The Board of Directors of the River Place South Housing Corporation held a meeting on Tuesday, February 18, 2020.  Board President Janice Mays called the meeting to order at 6:01 p.m. and announced the order of the meeting’s agenda would be revised to allow a financial presentation to take place first.
 
 

1. Financial Reports

Bob Porco, Senior Financial Manager with FirstService Residential, explained FSR is working out issues that arose from switching to a new accounting system.  He then presented on the cooperative’s financial standing through December 31, 2019 (the eighth month of the fiscal year, as the cooperative’s fiscal year ends on April 30, 2020).  The cooperative’s operating cash stood at more than $500,000.  The reserves stood at $1.7 million, with just over $50,000 per month is being contributed to the reserves.  The cooperative is maintaining low delinquencies.
 
As of December 31, 2019, the cooperative had a surplus of approximately $36,000 (5% below budget on operating expenses).  A major contributor to the strong cash position is income from the 70 rental units owned by the cooperative, as well as the cooperative’s reserve funds.
 
The audit for fiscal year ending April 30, 2019 was recently completed.  The results were a clean audit with no issues.  Ms. Mays reported $165,000 in taxes (state and federal combined) were paid for that fiscal year - down from $202,000 in 2018 and $240,000 in 2017.  Mr. Porco stated the taxes are paid on a quarterly basis to avoid a large bill at the end of the fiscal year.
 
A shareholder brought up the cooperative loan that will be due for payment in May 2020.  The cooperative attempted unsuccessfully to refinance the loan with the existing lender.  Therefore, the Board considered several other options, and only one of those options has proven viable.  The cooperative will seek to move forward with that option.  The interest rate on the current loan is 6.25%, but the new loan will include an interest rate of 5.25%.  The original loan had a 25-year amortization.  However, the new loan will have a 15-year amortization, which means it will be paid off five years earlier than the previous loan.  Ms. Mays explained, because of the total amount of the loan, the cooperative’s bylaws requires approval from two-thirds of all shareholders to approve the loan.
 
Following the financial presentations, Mr. Porco, Mr. Wolfe, and the Board of Directors answered questions posed by shareholders:

• Inquiring about the amount of the original and new loans. (The original loan was for $2.5 million, while the new loan will be for $1.950 million.)
• Asking what collateral was used for the new loan. (The 70 rental units.)
• Inquiring whether any of the 70 units can be removed from the collateral package (No.)
• Asking whether the cooperative has a corporate credit rating. (No.)
• Inquiring who will be the new loan holder. (Bank of Charles Town.)
• Asking whether it is necessary for shareholders to vote on the new loan. (Yes, because of the amount of the loan, and because the loan is now due.)
• Seeking clarity about how the vote will be facilitated concerning the new loan. (A ballot specifically for the new loan will be included in the 2020 Annual Meeting mailer.)
• Inquiring why the cooperative does not pay off the existing loan using reserve funds.  (Mr. Porco explained using reserve funds to pay off the loan would result in a low reserve balance, which would lower unit values and leave the cooperative with little funds to pay for capital improvement projects.)

 
 

1. Resident Participation

A shareholder, Jim Wolf inquired why the South Board of Directors is not seeking to exercise control over the Owners Association, as there are four South shareholders on the OA Board; and the fitness center is located in the South Building.  Mr. Wolf also suggested that the South Building seek the presidency of the Owners Association Board.  It was explained, although a South shareholder is not President of the OA Board, the South Building is well represented; and the South representatives work congenially with the other members of the Owners Association Board while working to achieve outcomes that are favorable for the South Building.  Additionally, a Gym Advisory Committee was recently established given the renovations taking place in the fitness center.
 
 

1. Approval of Agenda

Mr. McInerney moved to approve the February 18, 2020 Board of Directors meeting agenda as amended.  Ms. Shahade seconded, and the motion carried unanimously (6-0-0).
 
 

1. Approval of Meeting Minutes (January 14, 2020)

Ms. Shahade moved to approve the minutes from the January 14, 2020 Board of Directors meeting as amended.  Mr. Villegas seconded, and the motion carried unanimously (6-0-0).
 
Ms. Hall stated she will send formatting preferences to Ms. Waters for implementing into future sets of Board meeting minutes.
 
 

1. Reports
2. President’s Report: Ms. Mays reported the following information:

1. It is anticipated that the MP Garage project will be completed by March or April 2020.
2. The current gym project was necessitated by required ceiling repairs.  However, once the project was approved and underway, the vendor caused other damage that they have since corrected.  The OA Board has agreed to order a NuStep recumbent machine for placement in the gym.

 

1. Treasurer’s Report: Please see Section II of these minutes.

 

1. Owners Association (OA) Report: Please see Section VI.A of these minutes.

 
 

  VII.Management Report
A.     Deferred Assessment Resolution: Ms. Mays moved that the cooperative elect to apply all or part of any excess income to the following year’s assessments; and that such final amount shall be at the discretion of the Board of Directors.  Ms. Hall seconded, and the motion carried unanimously (6-0-0).
 
B.     Exterior Building Facade: The façade of the South Building was evaluated for repair by Facility Engineering Associates, P.C.(FEA) - the same company that completed work for the West Building, and performed roof studies for the North and East Buildings.  FEA subsequently prepared and submitted a report of their findings along with recommendations. Board members discussed the information provided by FEA and reviewed photographs, and agreed to pursue the necessary repairs at a reasonable cost while preserving the remaining façade.  Shareholder James Marandi agreed to provide useful information to Mr. McInerney concerning façade work.
 
C.     Asbestos Removal: In November 2019, asbestos was removed from a closet inside the mechanical room at a cost of $9,800.  The next phase will include the removal of asbestos from the boiler room and the re-application of insulation at a cost of $3,800.
 
D.    Fire Department Inspection: The Arlington County Fire Department performed an inspection of the building on January 3, 2020 and January 6, 2020.  A few violations were noted.  The estimated cost of the inspection and the required minor repairs totaled approximately $15,000.  All violations have since been addressed with the exception of the gym violations that will be completed prior to the end of February 2020.
 
E.     HVAC Split Systems: The recent, semi-annual HVAC inspection of individual split systems revealed a need to replace several split units.  Two of those units are in Commercial Suite S300, and will be replaced in spring 2020.
 
F.      Camera for Loading Dock: A new camera will be installed at the loading dock by Stanley prior to the end of February 2020.  The cost will be $2,000, and the camera will cover a blind spot that overlooks the loading dock.
 
G.    Fire System Dialer: The cooperative will receive an upgraded fire system dialer prior to the end of February at a cost of $1,225.
 
H.    Chiller and Cooling Tower: Ms. Waters summarized the work needed on the chiller and cooling tower, including repairs to the coil irons at a cost of $2,215; a major overhaul of the systems in 2021 at an approximate cost of $30,000; replacing the water inlet panel at a cost of $8,234; and replacing the backflow valve on the expansion tank of the cooling tower at a cost to be determined.
 
I.       Fireplace Inspections: Management sent a letter to the 11th floor shareholders on January 30, 2020 requesting their response by February 29, 2020 to provide proof of having their fireplaces inspected.  In March 2020, letters will be sent to those who have dryers asking them to provide proof of cleaning the dryer vents.
 
J.       Loading Dock Facelift: The staff power washed and painted the loading dock; installed new bumpers; installed new signage that includes requirements to have a parking pass, a prohibition on parking for no more than 30 minutes, and a prohibition on smoking at the loading dock or anywhere within 25 feet of the building; and installed a new railing in the rear of the building near the boiler room.  The staff members are now painting in the trash area and around the trash openings.
 
K.    Inspections and Cleanings: The annual convector and maintenance inspections will commence in mid-March.  Prior to that, in early March, the five-year vent and duct cleanings will take place in each unit using heavy duty vacuums with filtration systems and rotary brushes.
 
L.     Trash and Recycling:
1.      The cooperative is being fined $134 to $270 every month for trash and recycling violations.  Ms. Waters presented a summary of the letter sent to each unit regarding proper trash and recycling procedures.
2.      The trash compactor is presently on lease.  Waste Management inherited the lease from CSI, and will not likely renew the lease.  The cost to purchase a new trash compactor and bins would be approximately $32,000.
 
M.    Annual Meeting: The Association’s 2020 Annual Meeting will take place on Tuesday, March 24th.  Shareholders will receive the Annual Meeting notice in early March, and The League of Women Voters is scheduled to supervise the meeting.
 
N.    2019 Audit: The auditor from the Goldklang Group CPAs, P.C. indicated the cooperative’s 2019 audit has been finished, and will get the draft to management as soon as possible.
 
O.    Riv-Star Transfer Agency: Ms. Mays summarized the issues experienced with the Riv-Star Transfer Agency with receiving shares during title transfers.  Richard Villegas has agreed to assist with resolution of the matter as a temporary agent, and will receive payment for his services.  However, Mr. Villegas will recuse himself from any Board decisions that pose a conflict of interest.
 
P.      Hand Sanitizer: Five hand sanitizer stations have been placed throughout the building - two in the lobby, one in the management office, and two in other areas.  Everyone is strongly encouraged to use the sanitizer and keep their hands washed in light of flu season and concerns about the Coronavirus.
 
Q.    Rentals: The cooperative has 100% occupancy for its commercial rentals.  Ms. Waters noted that FSR corrected an issue with improperly classifying some of the cooperative’s rent potential as a vacancy.
 
 

1. Old/Unfinished Business

Please see Sections VI and VII of these minutes.
 
 

1. Resale Notifications

No resale notifications were presented.
 
 

1. New Business

No topics of New Business were presented.
 
 

1. Temporary Adjournment to Executive Session

The Board of Directors temporarily adjourned the Open Session at 7:09 p.m. to hold an Executive Session to discuss an insurance matter.
 
 

1. Decisions from Executive Session

No motions or actions resulted from the Executive Session.
 
 

1. Adjournment

The February 18, 2020 Board of Directors meeting was adjourned at 7:30 p.m.