The Annual Meeting of The Fort Sumter House Association was called to order by the president, Dick Donohoe, at 6:30 on Monday, October 28, 2013.
Members of the Board of Directors in attendance were:
Dick Donohoe – President
Joy Jarvis – Vice President
Glenn DeBiasi – Treasurer
Beth Dixon – Secretary
Beau Clowney – Board Member
Also present at the meeting was:
Joe Yetsko – Manager of FSH
1. Calling of the Role and Certifying Proxies
Joe Yetsko confirmed that we satisfied the quorum requirement (>50%) for a valid meeting. The percentage of ownership is based on square footage owned, not headcount. Thank you to all who sent in proxies!
Present: 20 Owners (45.02% of ownership)
Proxy: 7 Owners (11.68% of ownership)
Not present / no proxy: 26 Owners (43.30% of ownership)
2. Proof of Notice of the Meeting
Proof of notice of the meeting was confirmed. The letter scheduling the meeting was dated and mailed on October 14, 2013, meeting the requirements of the Master Deed.
3. Approval of Last Meeting Minutes
A motion was made to approve the minutes from the 2012 Annual Meeting and it was seconded. The minutes were approved and are posted on Fort Sumter House web site (fortsumterhouse.org).
4. Welcome to New Owners
This year we welcome these new Owners to Fort Sumter House:
Granice Geyer Smith in Apt 401
Rad and Veronique Kessler in Apt 404
Gordon and Louise Strauss in Apt 610
Anne Bavier in Apt 706
Ralph Conte in Apt 710
5. President’s Report
Air Conditioning System Project
The signal project of this past year was the overhaul of the air conditioning system, which was begun and completed in the late spring and summer months. The project was paid for out of the Reserve Account, which was replenished by an assessment over a period of eight months. The new system has already reaped dividends in terms of reduced electrical usage by comparison with the previous year: 14% fewer kilowatt-hours used in July, 11% fewer in August and 5% fewer in September. At next year’s Annual Meeting, the Board will be able to report a full year’s worth of savings in electrical usage. Apartment Owners can see the reduction in their common electric costs by comparing current bills with bills for the same months last year.
Maintenance & Repair List
Other repairs, replacements and upgrades need to be addressed as time goes on. These include the hallway carpets, the ceilings on the second through the sixth floors, the front doors, the King Street awning, the laundry equipment, the roofing, the second and third floor terraces, and the elevators. The roofing and the elevators represent the costliest liabilities. The roof has outlived its expected life and is being kept from leaking by patching and coating. The elevators are periodically inspected and serviced, and they are working, but a time is likely to come when they won’t. As time goes on, more and more of the replacement parts for our antiquated elevators will no longer be available. The Board struggles with balancing the need for physical improvements with the importance of maintaining a substantial Reserve Account for unexpected contingencies.
Wi-Fi Investigation
A few months ago, the Board investigated the possibility of adding wireless Internet, or Wi-Fi, throughout the building. We found that it is not cost efficient because we would have to buy/lease the equipment, have it installed and then maintain it with a monthly contract. We found that this solution is better suited to a building with more apartments and a larger campus.
Insurance
A major annual expense is our insurance premium. This will not be quoted until November, so we don’t know, at this time, what that expense will be. The building was appraised recently for the first time in seven years and the value increased by about 19%, from $17,600,000 to $20,800,000. This will likely cause a significant increase in the premium, but we don’t yet know how much it will be. In the last few years, the Board has been obliged to finance the insurance over a 10-month period. We had hoped to pay it in full this year, but the Board will have to make that decision after the premium is known. Flood insurance is quoted separately and is only written by the Federal Flood Insurance Program. We have been quoted a premium which is 6% higher than it was last year, but we have learned that Congress has reduced funding for the Federal program as of October 1. So although the premium was quoted after October 1, we are not convinced there will be no further increase. The Board may have to consider an increase in the regime fee to cover additional expenses.
Proposed Insurance Amendment
When we met for the Annual Meeting in 2012, we discussed at length the failure of a water heater in an Apartment on the fourth floor which caused water damage to Apartments below and to the Common Elements. The responsibility was clouded by conflicting language within the Master Deed and Bylaws. The Board has spent a lot of time and energy consulting with our insurance carrier, adjuster, and an attorney trying to resolve these conflicts. This has led to an amendment to clarify the responsibilities of the Apartment Owner and the Association regarding insurance coverage. All Owners have received the proposed amendment in the recent mailing, along with the sections of the Master Deed and Bylaws to be amended. A mail-in ballot is due by the end of the year.
Proposed Limited Pet Policy
There was also a lot of discussion about the pet policy at last year’s meeting particularly about allowing dogs in ground floor Apartments with direct access to the outdoors and where residents are outside the 24-hour security that other residents enjoy. The pet policy is covered by the Rules and Regulations of the Fort Sumter House Association. The proposed policy was mailed to all Owners in the recent mailing and calls for significant fees for pets and significant penalties for infractions of the regulations. See New Business below for discussion details.
6. Financial Report
The 2013 Budget was provided to those Owners present along with a report on the Operating and Reserve Accounts. The Board expects revenue to exceed expenses for the 2013 operating budget. During the discussion about finances, some Owners expressed concern that the amount of money in the Reserve Account was insufficient to cover the maintenance requirements mentioned above, especially the cost of fixing the elevators or roof in case of failure. It was suggested that the Board needs to plan for these liabilities in advance, rather than wait for a disaster to happen and then have to react with a large assessment.
7. Unfinished Business
There was no unfinished business.
8. New Business
Insurance Amendment
The proposed insurance amendment clarifies the extent of the Association’s responsibility to insure the property for “Bare Walls OUT.” Owners need to purchase an H06 policy that covers “Bare Walls IN” (excluding the bare walls) for their Apartment. The Owner’s insurance agent should be provided with all the relevant FSHA documents to make sure their coverage is adequate. This amendment also enables the Association to make repairs in emergency situations. For example, if a window blows out during a storm (and this is covered by our insurance), then the Association has the authority to make the repairs to protect the shell of the building even though the Owner owns the window. The Board unanimously recommends APPROVAL of this amendment. The ballot for voting on this amendment is due on or before December 31, 2013.
Limited Pet Policy Amendment
The proposed Limited Pet Policy amendment is to change the current “no pet” policy to a policy that allows dogs in Apartments on the first floor (only) and to allow cats in Apartments on all floors. There was a lively discussion regarding this proposed amendment. Parts of the discussion and some Owner comments are listed below.
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Why weren’t there two separate ballots? One for dogs on the first floor and a separate one for cats in the building? Board Response: In hindsight, the Board agrees this would have been a better plan.
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Why are the fees and penalties so high? It seems very steep to pay $1000 to have a dog here. Board Response: The Board feels that the high fees and penalties ensure that the person with the pet is truly interested in following the rules and being considerate of their neighbors. This is meant to demonstrate a serious commitment to the building and the community.
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How will enforcement be handled? Currently Owners are breaking the rules by bringing their pets on the property now. What makes anyone think Owners will not continue to break the rules, even if we change the policy?
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One Owner emphasized that renters cannot have pets. It was noted that some renter(s) already have a cat here now and there is no enforcement.
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One Owner admitted that he is breaking the rules and keeps a cat in his Apartment. This owner was in favor of changing the policy.
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There have already been some complaints about barking dogs in the building, specifically from the first floor.
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Some Owners questioned the validity of linking security to having a dog on the first floor. Our staff patrols the entire FSH campus.
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One Owner said that it is unfair that only the first floor can have dogs. There are other ways to improve security and this is not a good reason to discriminate. The policy should be the same for all floors.
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Does a small dog really provide the same security as a large one? An Owner on the first floor responded said that whether it is a large or small dog, it is still a deterrence.
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One Owner expressed strong concern about allowing cats in the building because he is very allergic to cats.
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This Owner also commented that Owners who bought an Apartment in the building knew about the “no pet“ policy before they finalized their purchase.
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Do the air handlers in the building circulate cat dander? Board Response: The building air handlers do not circulate air in the Apartments, only in the Common areas.
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All 5 Owners on the first floor are in favor of this amendment not only for security but because it is also good for property values.
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Two first floor Owners sent a letter in favor of the amendment – Board member Beau Clowney read them to those present at the meeting. Another first floor Owner spoke at the meeting also in favor of the amendment.
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It was mentioned that ground floor residents have direct access to the street, and therefore would not be using the lobby, hallways or elevators with pets.
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Some Owners said they bought into the building because there was a “no pet” policy.
The ballot to vote for or against this amendment is due on or before December 31, 2013. The Board would like your feedback and requests that you include any comments about this proposal on your ballot.
The Seawall Repair Project
The first phase of this project will start on Monday, Nov. 4. Traffic will be redirected due to the closure of the section on East Bay St. next to White Point Garden. Information and a street map has been posted on the FSH web site here: https://fortsumterhouse.org/?p=915
Appreciation
Owners and Board members expressed appreciation to Dick Donohoe for his service on the Board for the last 4 years. They also thanked Joe Yetsko and his staff for everything they do for Fort Sumter House.
9. Election of Board Members
A notification letter about the Annual Meeting and election of officers was duly sent out on October 14, 2013, as required by the Master Deed. Beth Dixon, George Boniface, and Glenn DeBiasi were elected to the Board for two (2) year terms by majority vote.
10. Adjournment
A motion was made to adjourn the meeting and it was seconded.