Board Meeting Minutes Jun 22, 2010, 6:00 PM

AGENDA
1. Establish a Quorum/Roll Call. Present: Kahanu, Muny (by phone), Beck, Bradlow (showed up later in meeting), Kelly, and Klamo. Absent: Metelski. Five of seven were present and a quorum was established.

2. Call to Order. President Kahanu call the meeting order at 6:06 PM.

3. Approval of the May 25, 2010 meeting minutes. The Board voted unanimously to waive reading of the May 25, 10 minutes. The Board then voted unanimously to approve the May 25, 10 minutes.

4. Financial Report.

a. May Financial Report: is available from Condominium Associates (CA), call Client Services at, 727.573.9300; or download from CA’s web site, www.condominiumassociates.com, or read at the blog site, www.islandtowersdunedin.blogspot.com. We were under budget in all three operational accounts. The Master (7) was under Budget MTD/YTD by 13.9%/6/5%; the East (15) was under by 11.8%/8.1%; and the West (22) was under by 11.5%/7.3%.

b. Foreclosures Updates: ITC’s foreclosure rate is 3.4%. The average association foreclosure rate is 10-15% with a lot of associations sustaining rates over 40%. Listed below are updates on the three units that are either in, or going through, the foreclosure process.

1. 402W: Almost through foreclosure. There is nothing else to do but wait until the lender gets the property. Once that is completed, the lender will pay us either 1% or 12 months of maintenance fees. Once that is completed we’ll know exactly how much is still owed us. If there is any chance of collecting all or some part of the balance, we’ll probably have a collection agent attempt to collect it. In this case, both owners are deceased, and there probably won’t be any opportunity to collect anything.
2. 705E: We are currently in litigation with this owner and can’t discuss the matter until the litigation is complete.
3. 403E: The lender started the foreclosure process in Dec 09 in circuit court. The average time required to complete foreclosure is about 18-24 months in circuit court. The lender is 6 months into the process. This would imply that the process will take an average of 12-18 more months to complete. We can foreclose in county court, and the process would take about 4-6 months and cost $2,500-3,000. Once we foreclose, we could fix the unit up and rent it for around $1,200/month. During the last two meetings, comments were made that we should do more to collect our money. Katz might be a good foreclosure test case to see if we can do better than waiting around for the lender to finish the foreclosure process. Richardson brought up some important questions that need to be resolved with the attorney before a decision can be made. First, if we foreclose do we lose our right to 1% or 12 months in maintenance fees when the lender completes the foreclosure. Second, if the mortgage is small enough there may be an incentive for the lender to go faster because the property can be sold for a profit or breakeven. Third, the laws have recently changed. Do these changes have any implications on our decision to foreclose in county court? He also suggested an alternative to foreclosure. He proposed that we contact the lender and negotiate to get the right to rent the property without taking it into foreclosure. He volunteered to investigate and advise the Board. Kahanu will get the attorney to give further clarifications of the questions Richardson raised. The Board voted unanimously to investigate the options to foreclose in county court, or to negotiate with the lender to rent the unit.

c. Writing off delinquencies: The delinquencies should be written off only when the following process is complete: Once the foreclosure is completed, the lender will then pay ITC either 1%, or 12 months of maintenance fee. Once this is done we’ll know exactly how much money is still owed to us by the delinquent ex-owner. We then refer the matter to a collection agency to see if we can collect anything. If this fails, we write off the final amount of delinquency.

d. 2009 Audited Financial Report: We are waiting on the final report. The auditor had questions regarding outstanding delinquencies, and whether they should be written off in 2009. Based on guidance from our attorney, the auditor was told, on Jun 18, 10, not to write off the delinquencies in 2009. The debt shouldn’t be written off until the foreclosure process is completed and the lender has made the final payment to us (1% or 12 months of maintenance fees). At that point we’ll have an accurate final number to write off.

5. Property Management's Report.

a. Maintenance: Maintenance Issues: 9 New maintenance requests, completed 4, outstanding 7. Warranty issue outstanding =6. Most of them are painting issues. They’ll probably have Jose 2 do the work on their time.

b. Project Updates:

1. West tower fire pump controller was complete.
2. Wheel chair ramp, & damaged curb was repaired. We didn’t pay for the damaged curb.
3. 30 door closures were installed.
4. Legislative changes effective Jul 10, 10: Carpenter gave the Board copies of the key changes that effect Florida condominium associations. Some changes to 718 make it easier for associations to collect maintenance fees.
5. Should we write off the current delinquencies now?: The legal answer is no. We should wait until the foreclosure process is complete and the lender pays the association off.
6. Letter to accountant: The accountant had raised questions on writing off delinquencies in 2009. We notified him on Jun 18, 10, not to write the delinquencies off. Kahanu stated that based on guidance from the attorney we should wait to write off the debt until the foreclosure process is finalized, we’ve been paid by the lender, and we’ve attempted to collect the final delinquencies.
7. New towing contract: We had an occasion last week to tow a vehicle and discovered that our current towing company, Bradford Towing, is no longer in business. We then signed a new contract with Caladesi Mobile, Inc. They tow 24/7 and have in house towing capacity to handle a 35 foot RV. They can subcontract for anything bigger and respond on short notice.
8. Carpenter on vacation first week of July.
9. Landscaping: Beck updated the Board on landscaping issues. He talks with Summit on a weekly basis. They are considering crepe myrtles along the southern border of the parking lot between the hedge and the street. Summit will move some crepe myrtles to perform better. Summit noticed that some there were some irregularities in the irrigation process. The East building area was not getting the proper amount of irrigation. They corrected the problem. Klamo asked about the status of hedges for wind brake by the parking lots. Beck said nothing has been finalized yet, but it’ll probably be the next thing done.

6. Unfinished Business:

a. Heating the spa/pool. Because of the time required to review and discuss this issue the Board has decided to separate the spa/pool issue into its own monthly special meeting. This monthly special meeting will be held the third Tuesday of each month until further notice otherwise. This will give the Board two opportunities per month, to review, resolve and vote on any questions. Kahanu summarized the important points of the first Special Board Meeting held the prior Tuesday, Jun 15, 10.
1. ITC has never had a heated pool: All documents have been reviewed, and it is clear that ITC has never had a heated pool, only a heated spa.
2. The spa heater is obsolete/inoperable: The committee has advised the Board that the heating equipment is no longer functional and even if repaired no one will guarantee if or how long it will work. It is obsolete.
3. Effective Jul 1, 10, the spa’s water circulation system will be shut down indefinitely: On Jul 1, 10, new safety code requires that the all spas use a top gravity drained circulation system. Our system uses bottom suction to circulate the water. Consequently, we’ll have to turn off the water circulation system to the spa until it can be made code compliant.
4. The Board is required to restore the heated spa and make it code compliant: The estimated basic cost of items #2 & 3 is $20,000-25,000, but Kahanu believes that it is more like $30,000-35,000. Whatever the cost, the Board is required by law to restore the spa, and make is code compliant. The Board does NOT need permission of the membership to accomplish these tasks.
5. The Board should consider other viable options before making its decision on restoring the spa: Before making a decision to restore the spa, the Board wants to review all viable options. Once the Board has reviewed all the viable options it can make a completely informed decision to restore the spa, or ask the membership to consider an alternative plan. Some of the other alternatives are heating the pool as well as the spa, and a complete remodeling of the pool/spa area.
6. Hiring a project manager for the spa/pool heating project: The committee will find three viable candidates for the job of pool project manager. This person will be tasked with: securing three quotes for the restoring the spa, making recommendations on heating the pool as well as the spa, making recommendations on a complete remolding of the pool/spa area, and managing the project to completion.

b. Pool fence: This project was approved by the Board two months ago. However, the city won’t approve the design that we specified to the contractor. The City won’t allow us to have a fence higher than 4’; we specified a 5’ fence. Also, the City won’t allow us to have wing walls (the extensions that go out beyond the sea wall). Without the wing wall someone can just walk around the fence at the seawall. The Fire Marshall wants the fence changed, but the City won’t let us do it. The two departments seem in direct conflict. Kahanu will schedule a meeting with Rick Johnson to discuss waiver possibilities. Gandolfo asked about fencing around the property as an alternative. Kahanu stated that a fence around the property will be discussed later under owners’ concerns. Kahanu stated that regardless of whether we have a perimeter fence, we are still required to have a fence around the pool.

c. Building drainage. Kahanu had put the project on hold two meetings ago because of concerns about drainage problems resulting from the side walk project (the other project Nichols had done for us). Kahanu had asked that this project be put on hold until Nichols addressed the problems created by the side walk installation. Kahanu’s contention was that Nichols should have recognized the potential for drainage problems and raised them during the design specification process. Kahanu expressed the concern that if Nichols couldn’t recognize potential drainage risk on the side walk, how could Nichols be trusted to handle a much bigger drainage issue like the south side of the West Tower. Last week, Nichols, Kahanu, and Carpenter met and Nichols reviewed/explained the problems and the solutions regarding the side walk installation. Both Kahanu and Carpenter were satisfied with his explanation. The conclusions of the meeting were: first, the side walk drainage problems weren’t that obvious and were compounded by the raised grass that was subsequently installed; and second, Nichols was very knowledgeable on drainage. The owner is a practicing civil engineer and most of Nichols’ business comes from solving customer’s drainage problems. Based on these conclusions, Kahanu withdrew his HOLD request on this project. Nichols quoted $12,400 on this project to drain rain and runoff water from the south side of the West Tower. Steve isn’t sure that the Board previously approved this project. Kahanu & Beck thought the project was approved three meetings ago. Steve will review the minutes of the previous meetings before proceeding further. Nichols also recommended that we change the mulch in that area to an aggregate that isn’t susceptible to floatation. The floating mulch would clog any drains installed. Bixler asked if we could get a guarantee. Kahanu said that would be unlikely. Richardson questioned why Nichols didn’t raise concerns about drainage during discussions on the side walk. Kahanu stated that the drainage risk wasn’t as obvious as previously thought and was compounded by other factors not under Nichols’ control. Kahanu reiterated that Nichols had addressed all concerns at the meeting held last week.

d. Kitchen renovations Nothing new report. Carpenter is trying to come up with a way to reinstall the stove and met the Fire Marshall’s requirements without having to install a commercial hooded stove exhaust system and venting it through the roof. Steve is talking to a kitchen company that may have a solution that meets all code requirements, is much less expensive, and eliminates the need to vent through the roof. It would require moving the stove and venting it out through the north outside wall. Carpenter is waiting on the final quote for these modifications. Klamo asked why we can’t get rid of the stove and install a convection oven or something similar. Kahanu stated that replacing the stove with a convection oven had been the original plan. However, the Board had not considered the fact that the stove was a common element and therefore must be maintained by the Board. The Board does NOT have the authority to eliminate the stove. The stove can only be eliminated by a 75% approval vote of the membership. Before the issue presented to the membership, the Board must examine all possible options and then present the issue and options to the membership for a vote. Bixler asked why we have to restore the stove if the bylaws state that there is no cooking allowed on a stove. Kahanu stated that parts of law are often in conflict and this is one of them. However, even if the bylaws say no cooking is allowed, it still doesn’t give the Board the authority to eliminate a common element. Only a 75% vote of the membership can do that. In order to present the question to the membership, the Board has to research all the options and make a considered and well thought out recommendation to the membership. Kahanu stated that this may be a perfect example of where the Board should recommend the elimination of a common element. There appears to be three very good reasons for eliminating the stove as a common element: first, the cost of $10,000-15,000 to bring it to code; second, superior reheating technology exits in the form of microwaves and convection ovens that are cheap and modular; and third, to vent the stove, we’d have to punch a hole through the roof and jeopardize our roof warranty. If anything goes wrong now or later, it’ll cost over $250,000 to replace the roof. Kahanu reiterated that this looks like a perfect example of where it makes sense to eliminate a common element.

7. New Business:

a. Auditor firm change to be considered. The current auditor has become non-responsive. He doesn’t return phone calls or emails. Steve has been directed to find three candidates for the Board to review and vote on as a replacement. The current aditor will finish the 2009 audit. Kahanu stated that we are late on the audit and ultimately it is his fault for not getting the auditor to stay on schedule.

b. Unit owner delinquency. Covered under the financial report.

c. Building waterproofing. North side of the west building. Two water collection/intrusion problems were discovered outside 102W & 105W (Note: the two long walls). Nichols installed a drain in front of 105W that drains to the seawall, and it seems to be working. Last week, Nichols, Kahanu & Carpenter met to formulate a more encompassing solution. The following corrective action formulated: first, install a trench drain in front of both units that connects into deck drains (cut through the side walk) and drains to the top of the seawall (not through it). Secondly, while the trench is open, in front of 105W & 102W, Nichols will waterproof the base of the outer wall of each unit, by applying a waterproof seal to the joint between the wall and the floor. This should prevent further water intrusion. Nichols quoted $3,600 (included in the BOD Pkg). Carpenter was unable to get any other quotes before this meeting. The Board voted unanimously to award Nichols the contract.

d. Fire stand pipe water leaks. When Piper repaired the system, they discovered a loss in pressure that implied a leak in the pipe system. Carpenter was asked to check if we are being charged for the loss water. There is a meter but it doesn’t seem to be turning much implying a minimal loss. Piper can’t identify the exact location of the leak. Carpenter will have to find a leak detection company to locate the leak.

e. Seawall Inspection: Richardson stated we got the inspection report. Mr. Clarson, who conducted the inspection, thought that overall the seawall was in pretty good shape. However, there are some minor maintenance issues that need to be addressed. There are some spider vain cracks that have occurred as a result of settling. These need to be sealed. There are also some light spalding areas that need to be ground out and epoxied. Richardson would like some time to review the report and make a complete presentation at the next meeting. Richardson volunteered to handle this project and the Board accepted his offer.

8. Unit owner letters and concerns.

a. Gandolfo (701E)-Unauthorized vehicles parked at IT & new towing contract: Unauthorized vehicle parked in the entry way to IT. While calling to have the RV towed we discovered that our current towing company, Bradford Towing, was no longer in business. We quickly signed a new towing contract with Caladesi Mobile Inc. Only three people will be authorized to call for a tow: Steve Carpenter-Property Manager, Drago Kahanu-President, and Bob Beck-Secretary. There are very specific rules governing tow that the three designated individuals will have to learn. One of those unique rules governs limited common elements known as reserve parking spaces. The Association can NOT tow an unauthorized vehicle from a reserved parking spot without the written consent of the owner of the space. Normally it is recommended that the owner of space call the towing company and the Association NOT be involved.

b. Lind (505E)- Trespassers: A group of people who don’t live at IT had a boat pick them up at our seawall. They were told that this was private property but hopped the boat anyway. Kahanu stated complaints about trespassers were up over last year. From Jan-May, he received about 2-3/month; however, there have been 5 complaints in June so far. Kahanu believes that the increase is partly due to the side walk that allows for a scenic stroll along the St Joseph Sound. Kahanu predicted that the number of trespassers will increase as more people learn about our scenic promenade. These trespasser ignore signs, so a fence around the property is the only solution. Kahanu stated that we have a quote of $17,900, to fence the property north of the parking lots. This proposal is for a 6’ aluminum fence similar to the one we want to install around the pool, and would include using the buildings as part of the fence. Additionally, even though adding this fence would be an alteration, it does NOT require membership vote, because it’s a security issue. In matters pertaining to code complaints and security, the Board has the right to make alterations on its own and does NOT have obtain the permission of the Membership. Kahanu stated that this is a project that the Board will definitely vote on once some key points are cleared up. These points are financing and code requirements.

c. Gandolfo (701E) – Dog on the grounds: A women was seen walking a small dog on the grounds one night and the following day. Kahanu located the women while she was walking her dog, and told her that the dog wasn’t allowed on the grounds. She was leaving today. Kahanu asked what unit she was visiting she stated 804W. However, it turned out that she was lied about who she was visiting. Supposedly, she got off on the 6th floor and turned left, implying that she was visiting someone 603W, 604W or 605W. When Kahanu knock on each of the doors, no one answered. A description of the women is top of the shoulder length blond hair, medium to light built, about 5’6” tall, walking a small long bodied short legged dog with long brown (with black shaded spots) haired.

d. Kendler (803W)-Security Code: Raised concerns about who should get the security access code. Based on those concerns, the Board voted unanimously to eliminate use of access codes, go back to restricting access to key holder only. The Board also voted unanimously to forbid leaving the security door open during the day for contractors. The Board also voted unanimously to allow the following individual to have security keys to : Steve Carpenter/CA (he controls all security keys, maintains the key log, and orders new keys), the Fire Marshal, the Postman, Jose-2, the St Petersburg Times distributor, the UPS driver, the Fed-Ex driver, and the Fed-Ex Overnight driver. (NOTE: We missed including Jose 1.) The access code will be eliminated immediately tomorrow. Joan will notify each representative to contact Steve, and sign for a key.

e. Walsh (705W) – missing window screens: Kahanu summarized the situation as follows: PGT maintained that properly cut & installed screens were more than adequate for this wind environment; however, Kahanu maintained that the screen design was NOT adequate for this environment. Both parties had agreed on the following plan. Two units were identified, 501W (Kahanu) & 701E (Metelski), to be test units. PGT would check all screens and make sure that they were cut to the proper size. Any screen found to be improperly cut would be replaced. Both parties would evaluate how the properly cut and installed windows performed during the upcoming rainy season. If everything worked properly, PGT would set up a program to check for, and replace, all improper cut screen in all the buildings.


9. Adjournment. The Board voted unanimously to adjourn.