posted Jan 26, 2014, 3:39 PM by peterc@saxonyhoa.org
Saxony Condominiums 2014 Budget meeting Minutes November 11, 2013
Meeting called to order at 7:07PM Roll call – all members present except Jordan Wallace. Quorum is met. Proof of notice of meeting or waiver of notice Present 2014 budget Patrick Bybee (Property Manager) gave homeowners overview of reserve study results. Explained increases, necessity for increase and purpose of reserve study as it pertains to home owner associations. F105 asked about reserve cap, Patrick explained we don’t have one. C104 places motion on the floor to delay vote, TH20 2nds motion. Motion fails. Discussion - Board explained that vote has already been delayed since July, a delay which has cost significant increases in construction costs and further expert costs to educate homeowners about construction project. C104 insisted they needed more time to familiarize himself, since they were just informed of the project. TH20 asked question regarding maintenance vs repair breakdown on reserve study C305 asked the percentage by which the budget will be increased his year. A103 asked how much of the increase will go to funding reserves D306 asked about association owned units 21 and 38. A104 asked if we can postpone the increase until 2015. Cece Moves to vote on 2014 budget. Peter seconds motion.
Vote on 2014 operating budget Townhomes voting: 10 YEA, 2 NAY, 21 NOT VOTED = Townhomes Budget is Ratified Condos voting: 31 YEA, 6 NAY, 89 NOT VOTED = Condo Budget is Ratified Budget is Ratified
Vote to Repair Vote to Repair (results) With respect to the Construction Defect Repair, 80% owner vote of all owners required NOT to repair. Voting: 42 YEA, 6 NAY, 111 NOT VOTED = Repair is approved
Present 2014 Supplemental Budget C305 asks whether 25 year loan option was considered. C305 asks what are the monthly fees associated and why do we have them? TH19 – Worst case scenario, what if people default what happens? TH19 also asks about clarification as to how long until loan approval? We are expecting about 90 days from now, should the association approve budgets and repair. (*) on presented budget states subject to change. What does this mean? Budget is subject to slight changes due to bid updates or having to obtain new bids altogether due to construction prices going up over the last 6 months. The bid obtained for this project was completed in July. Board is hopeful that Remco Deacon will work with architect to update pricing, without having to undergo a whole new time consuming and costly bidding process.
TH20 states that he wants a less expensive less intrusive solution to the problem that our community faces, and expresses concern that the board has not looked into all possible options. C104 wants to delay voting until his he has had a chance to look through all paper work. TH20 states that free re-amortizations must be available to homeowners. C104 asks why we have to take out a loan to repair future items. Peter answers we are not taking out a loan to repair future items. That is what reserves are for. This loan is to pay construction defect work that must be repaired as soon as possible as the association is under obligation according to the Declaration to do so. We cannot pay for this work with current funds, and the settlement costs do not cover the entirety of project costs.
TH20 asks what other options were considered to fund the project besides the one presented by the Board Board explained that there is a lump sum option, in which the board has the authority to ask that all homeowners pay their share of the assessment at once, right away. Given the economy and the grave concerns expressed from homeowners, the board opted not to follow this option. Construction Loan. This is the option the board is currently seeking to approve, and believes gives homeowners the greatest number of options. Homeowners can pay it off in in one instalment if they wish, they can participate in the loan on a month to month basis, or do a mixture of both, by paying off a later time. The loan will go through the association and is NOT reflected on the credit of individual homeowners. Homeowners are also encouraged to seek out personal loans, which may have lower interest rates, should they choose or have the option to. Stretching the work out in a series of phases over a number of years. In this option the board looked at the potential to stretch work out over a number of phases through a number of years, to potentially minimize costs. The board opted not to do this, as there are concerns over ability of association to fund future work, given the incredibly low reserve account balance. It is unlikely to qualify for multiple loans, over multiple years, and board has been advised by architects, attorneys and loan professionals that it is much more cost effective to qualify and complete one project, rather than multiple ones. There are also issues which need attention right away, and action on repair has already been delayed 3+ years since initial investigative work found defects and damage. Warranty issues are also a concern, as piecemeal work is rarely warrantied. Lastly, homeowners have expressed a want to refinance and sell their condos with a clean resale certificate. This is a HUGE concern, as litigation, damages and pending assesment has kept prices of units at Saxony low compared to market value. This has further burdened homeowners, as banks are unlikely to approve loans on properties with our characteristics. Thusly, a one year project vs an undefined time table was deemed preferable by board.
Vote on 2014 Supplemental Budget Voting: 39 YEA, 11 NAY, 109 NOT VOTED Supplemental Budget is Ratified
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