Marymoor Trails
Board of Directors Meeting
September 19, 2022

The Marymoor Trails Board of Directors convened on Monday, September 19, 2022 at 6:00PM via Zoom. Attending: Michael Niksa, President; Josh Gibson, Treasurer; Van Chesnutt, Landscape; Linda O’Hara, Secretary; Tim Hollingshead-Morris Management.

Homeowners’ Forum

We begin all meetings with Homeowners’ Forum. Any interested owners may bring items to the attention of the Board, or simply call in to listen to the meeting.

• Two homeowners called in to listen to the meeting.
• Homeowner from Bldg. A reports his lower deck was replaced with Trex, just saying thank you, very appreciated. Another homeowner reported a tree growing between unit A102 and A103 that he thought could use a trim as it is beginning to touch the units in a couple of places.  Van said he would take a look. Subsequent to the meeting, Van asked our landscape people if they could trim the tree. Van usually goes around annually with an arborist to inspect the trees but has not done so this year.

Treasurer’s Report

Josh led off, noting that there are some additional bookkeeping irregularities due to some line items not having their available annual budget pulled down into their monthly budget. One item last month – this month is five items. This will resolve itself quickly as the new budget is rolled out.

August month-end balances are as follows: Reserve Account (savings) $345,830.18; Operating Account (checking) $22,505.00

Further financial discussions took place as the Board prepared the new 2023 Budget.

Buildings Update

Tim provided several updates from Jehan Bharucha, our Project Manager:

• The bill for the electrical work impacting Unit I-131 has not yet been received from Prime Electrical, our contractor. The problem with electricity abruptly going out for spells in a couple of units has been fixed. Jehan has said he expects the bill to be $15,000-$20,000. While this is still a substantial amount of money, this is a fraction of what was originally anticipated – originally estimated at $120,000. Jehan’s oversight and management allowed us to address exactly the problem and not more. The problem was some oxidation (rust) around some of the connection points, which caused it to fail.
• Asphalt patching to fill the excavation from the electrical work in front of Bldg. I Units 132 and 133 remains to be done and is still awaiting a firm date. Jehan reminded the asphalting company, Benjamin Asphalt, to keep us on their radar. We are saving money by waiting for a quality company to group this work with other small jobs. Hot mix asphalt becomes very expensive when done in small jobs.
• Re-roofing of Unit E-120 is 80% done. The roofers found substantial rust under the roof, indicating water was getting in through defective shingles, causing nails to rust. Soffit work will also need to be done. This will be done by other vendors.
• A small patch of asphalt was repaired by Bodine Construction today near Bldg. M.
• Gene the Handyman has done and completed most of his summer projects list. We spent a lot of money this year but it all needed to be done.
• On Sunday September 18, 2022, the fire alarm for Bldg. M went off, and the Redmond Fire Department had to come out. This may have been caused by a power surge. Resident in Bldg. N reports that their power was lost at the same time but the fire alarm was not triggered.
• Fire system inspection of all units is underway this week, by Johnson Controls and Tyco. It is in progress now, nothing to report back yet.
• Bldg. B work is on hold, awaiting permits from the City of Redmond. Jehan estimates the city will not allow us to work until spring because we’re about to enter the rainy season and they will disallow soil work when it is wet.
• Repair work on the fire-damaged unit in Bldg. J is also on hold pending permits. Jehan estimates it will be at least three months before we get a permit.

Special Assessment Budget

• Tim has prepared budget spreadsheets – an annual budget for 2023, and a special assessment budget to assist us in figuring out sources and distributions of funds going forward.

• Tim combined budget figures from Jehan Bharucha’s high and low estimates for multiple items of work on Bldg. B. This includes foundation issues, interior repairs for Unit B-108, pin piling around the perimeter of the building, deck repairs, and landscape restoration. The estimates range from $619,000 – $715,000.
• To these numbers, Tim has added other items which need to be addressed. This includes unbudgeted reserve expenditures for the electrical issues in Bldg. I and the re-roofing of Unit E-120. Also, we need to include a .75% Morris Mgmt. fee for managing all elements of the special assessment.
• In addition to the above, we are expecting a substantially higher fire insurance rate as a result of the J-135 earlier this year.
  
  

The total of all these immediately known items, plus the higher insurance expense is $1,042,194.  This would be the approximate amount of our special assessment.

• Tim requested a motion to pass the special assessment budget as written. Van asked – if we get new information, can we change this? Answer: No.
• Once we pass it and it is ratified, it is locked in. If it is more, we will have to do another special assessment. That said, if we have extra unspent money left over, it will go into our reserves and we might be able adjust budgets downward next year. Both budgets need to be ratified at special ratification meetings. We will meet by Zoom with all Marymoor Trails Homeowners on October 24 to review and approve both budgets, the 2023 Budget and the Special Assessment Budget. Passed unanimously by the Board.

Operating Budget 2023

• The next thing Tim presented was the Marymoor Trails budget for 2023.
• The regular operating budget is separate from the special assessment budget.
• In Tim’s draft budget, dues are expected to have a 10% increase, considerably higher than recent years. Tim’s budget had many items increasing 8-10% due to inflation. Some line items included:
  • Insurance up 5-6%
  • Landscapers up 10%
  • General repairs and maintenance all based on last year’s numbers
  • Fire monitoring estimated 10% jump
  • Pressure washing same as last year, as is glass replacement.
  • Gutter and roof cleaning $4000, accidentally not included, will add in.  
  • Pest control increased 8%. We will cut expenses by reducing on-call.
  • Backflow testing and irrigation repairs, same.
  • Operational contingency $20,000
  • Morris Management fee increase of 8% due to higher labor costs they are incurring.
  • In addition, our reserve study says we should put in for 100% funding of known major expenses.
  • Fire Insurance – This is a big unknown. It could range anywhere from $50,000-$180,000. One of the reasons for this is that we don’t know when Building J insurance claim will close.  If the claim remains open past May 2023, it could make our insurance next year stay at $180,000 – $190,000 like this year instead of our usual $55,000. By law we have to pay insurance, we cannot simply not pay it. We think that if we do have this big insurance cost jump it will not be a forever thing and that once all the costs of the fire are known and paid, our insurance cost will come back down to something reasonable, perhaps in 2024.
• The whole problem is here is that we are working with unknowns. We may get lucky but we just don’t know. Van proposed several good budget compromise options.
• Michael said that it is incumbent on us to do the most palatable thing we can and put forward as reasonable a budget as possible. We will present our best recommendation.
• Tim requested a motion to approve the proposed 2023 Budget. Approved unanimously by the Board.

Budget Approval Meetings – October 24, 2022

• 2023 Operating Budget discussion and ratification vote at 6:00pm.
• Special Assessment discussion and vote immediately following.
• Convene for regular October Board meeting.
  
  

A special Memorandum of Understanding being sent by Morris Management to Michael and Josh, clarifying the 0.75% special assessment management fee charges and what is being covered.

Tim will update Resale Certificate for Marymoor Trails, saying Board has approved a special assessment but the general populace has not yet ratified. Leaves it on unless the unit in question has already paid the special assessment.

Next Meeting

Our next meeting is Monday, October 24, 2022 via Zoom

• 6:00pm – Budget Ratification meeting
• Immediately followed by Special Assessment Ratification meeting
• Immediately followed by October General Board meeting.