President's Report and Treasurer's Report
By Windgate II Board President Geoffrey Hughes and Treasurer Jennifer Commander
At the Annual Meeting of the Windgate of Arlington, Village II, Unit Owners Association, October 20, 2016
Before I report to you on the year’s board activities, allow me to thank many of the people who have made contributions to the running of the Association this year.
Let me start with Dwayne Miller and Juywina McCray, whose daily service through heatwaves and blizzards have earned our genuine gratitude and admiration.
Next, our Property Manager, Gina Spellman, deserves a big round of applause. Having worked with Gina for my four years on the board, two of them as President, I can attest to you that Gina’s tireless work ethic knows no limits. She has been there 24 X 7 for us.
I want to recognize and thank our landscape committee, which was formed in the winter, and has been meeting regularly to study and plan for the landscaping needs of the community. Their work involves significant time commitments, budgetary drudgery, and complex decisions.
Our webmaster, Kirk Winters, deserves all of our thanks. A former board member, Kirk has continued his dedication to the community by maintaining the website he designed, and keeping it the best and most current place to go to follow community developments and link to community documents. Thank you, Kirk!
Lastly, I want to ask you to recognize our two outgoing board members, Mikhail Arthur and Stefan Semeniuk. In addition to their regular board service and all the work that entails, they both stepped up to head committees created by the board. Stefan helped the landscape committee get started, and Mikhail chairs the communications committee.
I need to acknowledge the work done by the Management Task Force, which was created at the beginning of 2016 to research property management companies in the DMV, reach out to other home owner’s associations, and secure references. They also developed the lengthy, detailed request for proposals, which resulted in our receiving bids from five management companies. The Task force was chaired by our former Windgate II Board President, Jason Hickox. Many thanks to Jason and the members of the Task Force, who were ten owners from both Windgate II and III.
I’d also like to make sure you all know our two incumbent board members, Jennifer Commander, our Treasurer, from whom you’ll be hearing shortly, and Jonathan Watson, our member-at-large. The business of the Association could not have advanced as far as it has this year without any of these folks, but I want to acknowledge and thank Jennifer in particular, as I personally might not have survived this board year without her dedication. Jennifer is both a CPA and a tireless analytical thinker who has brought her drive and mind to successful projects such as the By-Law revisions, the revision of our employee handbook (I’ll bet you didn’t even know we had one), and the management company contract review and selection process. Thank you so much, Jennifer.
It has been an eventful board year. The biggest of our tasks has been the review of our management company contract. Your board and the Task Force we created have literally devoted hundreds of hours and more than a dozen meetings to this undertaking. We started this review because it has been more than a decade since the Windgate II Board actually looked at the terms of the contract and studied the Management company marketplace. We felt it was our fiduciary duty to you to do this. There are many related documents regarding this endeavor
on windgate2 website. I urge you to read them if you have questions about the process. At last night’s regular monthly meeting the Board voted unanimously to change management companies. Beginning on January 1st, 2017 we will be managed by First Service Residential. We have a two month transition period, more than sufficient for the process, one which both management companies at expert at handling.
Some of you have asked how this decision would be made. I refer you to the Request for Proposals (RFP), which was developed by the Task Force, and laid out all of our requirements and expectations. It was those criteria, our past experience, many meetings with both management companies, and a generous helping of optimism that resulted in this choice.
The Board of Windgate III made a different choice. They have chosen to stay with KPA, but have signed a lengthy memorandum of understanding, laying out in detail the changes they want to see. Their Board President, Brenda Stanley and I have had many conversations about the pros and cons of these two paths, and also about how we continue to work cooperatively going forward with two different management companies. We both believe we can accomplish this with minimal disruption. We will be closely watching the outcome of their strategy, and they will be watching ours.
Obviously, there will be changes in many aspects of the operation of the property and some of the practices to which you’ve become accustomed. The board hopes to make most of this seamless and minimize the convenience to owners. You should expect changes in routine matters such as the parking permits and recreational passes. You will receive a welcome package from FSR, which will give you all the information you need. At the suggestion of our At-Large board member, Jonathan Watson, we are creating the position of Ombudsman. FSR has a 24X7 help line for owners, which logs all calls and promises a response within 24 hours. And that should be your first recourse, but if you have a recurring problem, Jonathan will be your point person with the board. We’ll get you his contact information in a broadcast e-mail, and post it to the WG2 website
Another huge project was the revision of our by-laws. In consultation with our legal counsel, and with your participation, we managed to bring our governing documents into conformance with current VA law. We passed all the proposed revisions except the proposed lease cap and the standardized lease for owners renting their property. Everyone owes a huge debt of thanks to the board members and volunteers who went door-to-door in the teeth on winter gales to collect the ballots and the mortgage information forms. Without the persistence and gentle persuasiveness of Ms. Pat Walter we would still be waiting for ballots. Thank you, Pat.
Among other capital projects this year have been the parking lot re-surfacing, curb repairs, and striping, which I seem to recall was around $140K. We completed the initial, high priority, removal of sidewalk tripping hazards, as required by our liability insurer. There remain secondary hazards that will need addressing. With your cooperation we were able to further evaluate and hydro-jet the community’s sewer piping system from its source at your unit lateral out through the building laterals and the main lines. We are hopeful that this effort will minimize the likelihood of any future unpleasant surprises for you or the community at large.
The other major property improvement is currently ongoing, namely the replacement of deteriorated exterior woodwork and the painting of all exterior woodwork, doors, and metal railings. This project will cost the Association almost a quarter of a million dollars, but will rejuvenate the appearance of the community and help preserve our collective investment. The last time painting and woodwork was done, the Association was not financially prepared, resulting in a special assessment of over $800 per unit. I am proud to note that this time, through gradual increases in monthly fees, we have been able to avoid that kind of shock.
Some of you may be aware that capital projects, that is, investments in our physical common elements, are on a timetable projected by a reserve study conducted by a professional engineering firm, as required by the Virginia Condominium Act. The reserve study analyzes every physical element of the community and projects its useful life and the cost and timing of replacement. This is an important element in our budget planning process.
Based on the reserve study and our on-site experience, next year we are planning to begin replacing the Association’s roofs. This is another expensive undertaking, and one that will be extended over two years in order to keep our reserves at a responsible level. We don’t yet have a plan for which buildings will be addressed first, but rest assured that the initial attention will go where it is most needed.
In a previous letter to the community I appealed to you to volunteer in whatever way you can to contribute the the betterment of Windgate II. During my years on the board I have observed in some owners an unfortunate belief that there is a distinction between the board’s interests and those of individual owners - an “us vs them” attitude. My difficulty with this viewpoint is that it is the essential nature both legally and operationally that when you buy a condominium unit you willingly sign a document agreeing to be governed by the Association covenants and by-laws. When the interests of an individual owner conflict with those of the larger community it is the duty of the board to try to find common ground, but ultimately the board must govern in the interests of the “greater good.” When an individual owner contemplates a lawsuit against the Association, they are essentially suing their neighbors. The expense of any lawsuit will be born by all and reflected in everyone’s monthly assessments.
I’m taking your time to interject this little reflection on lawsuits not because we are facing any situation of that type currently, but because it bears on the communal nature of condominium living and how it differs from owning a single family residence. And that brings us back to volunteerism.
I wonder why we have such a challenge getting folks involved. At our typical board meeting we might see only one or two owners who don’t actually have business before the board that night. I reflect on the make-up of our community compared to a longer established one like Fairlington where the culture of volunteerism seems to thrive. Maybe it just takes decades to build. Maybe one day we’ll get there. Or is it that you keep hearing what thankless, exhausting work it is to serve on your Board? I guess that is true, but service to your community is not only personally satisfying work, it assures that you know what’s going on and have a voice in decisions that directly impact your home and your investment.
If you think the management company runs things, and that all you have to do to assure the functioning of the Association is to write that monthly check, you are misinformed. The management company is indispensable, and directly oversees the daily operation of the property, the financial management of our payables and receivables, and is our connection to all manner of third parties from contractors to insurance agents. However, the property manager’s spending limit without board authorization is currently less than $2,000, and will be $1,000 with FSR, at least initially. If you think about what can be done for less than that amount of money, it gives you an idea of the level at which the Board is involved in the daily decision making. Also, the policies and long-term direction of the Association are guided by the board. You could, and in my opinion, all should, in some way be involved, whether it is attendance at a couple of board meetings a year, or getting involved with the work of a committee, or serving as a board member. If you have an idea for the betterment of the community, or want to get involved, please reach out to me or another one of the board members here tonight or in weeks to come.
The final budget for 2017 will be posted to the website. You will recall that last year’s monthly fee increase was $26.00, which took the fee to $412. This year we have been able to hold the increase to $10.00. The fee for 2017 will be $422.
Jennifer is prepared to give you the Treasurer’s report. We are very fortunate to have her professional expertise applied to the oversight of our finances. The Association is in good shape financially, and Jennifer will give you some details.
Jennifer Commander, treasurer for Windgate II, reported that the Association’s 2015 audit and tax returns were completed without issue. She said that the 2017 budget will be made available at windgate2.com.
The largest expense line items in 2017, she said, include:
- the contributions to reserves
- payroll for the maintenance staff
- water and sewer expenses
- insurance premiums
- landscape maintenance (not including the cost of landscape enhancements or tree work)
- the management company fee
- trash removal services.
The landscape maintenance fee was increased for 2017 to cover the hiring of a new service provider. Roof replacements will be a major replacement reserve expense in 2017 along with potentially new exterior signage and mailboxes, which are being evaluated by the Communications Committee.