Annual Meeting of Homeowners
February 25, 2019
The Marymoor Trails Annual Meeting of Homeowners convened at 6:30PM at the offices of Morris Management in Bellevue. Board members in attendance: Michael Niksa, President; Van Chesnutt, Landscape; Linda O’Hara, Secretary; Josh Gibson, Treasurer; and Tim Hollingshead, Morris Management.
Welcome and Opening
Tim Hollingshead opened the meeting and reviewed the evening’s agenda. We only had 38.1% in attendance, including proxies; not a legal quorum, which is 51%. We have made a good faith effort to publicize this meeting in many ways. We will go ahead and have the meeting in case someone challenges conducting normal business. The minutes from the Annual Meeting of Homeowners from February 26, 2018 were read and it was moved and seconded to approve the minutes from 2018.
Michael Niksa introduced himself and will make his remarks further in the meeting. Michael also takes care of Buildings.
Painting: This year we did painting, and Michael walked around with a representative of the painting company. We are changing the way we paint buildings – now we look at painting the western and southern exposures more, as they get the most wind, water and weather. Paint the other faces as needed. In 2018 we did selected work on A, B, D, G, and H. We hope to take this approach again in 2019. The most exposed buildings are B and C and I and J. The painting company was more than willing to work with us on this cost-saving approach.
Major work on buildings: Work on buildings in 2018 included: siding replacement; work on the roof including removing moss, blowing leaves off gutter guards, patching around chimneys; most if not all of the chimneys have had the top caps replaced. Big ticket items in 2018 included replacing substantial sections of several wooden decks, and completely replacing two elastomeric decks above garages in Bldgs L-M -N.
Elastomeric decks: It seems that approximately 30 years is the lifetime of an elastomeric deck, and they appear to be coming due. We are trying to build that into the reserve study. Michael talked with Gene at AMG, and he recommended several steps that we could take to extend the lives of our elastomeric decks: inspect them annually and re-coat them more frequently. This is much cheaper than a $17,000 deck replacement. As Gene works on the decks, he finds that some previous work was done poorly, which we are addressing now. When the elastomeric decks were originally built, there were no corner posts to hold the corner of the building up – these have been installed and should extend the life of the building!
We ask that residents with elastomeric decks not let water pool on the deck – it is water resistant but not magic. Do not lay tile or carpet on the deck – it will permeate the coating and rot the wood much faster than normal – and then we have to replace the whole deck. In November-December Gene went up on the roofs and saw wet leaves on several decks. Rather than try to locate homeowners, we simply paid Gene $15 each to clear these. It got the job done, but we all cover these increased costs in our monthly dues. Residents asks why decks are not inclined so that water runs off – good question, this is the result of the original builder. BOD asks that if water pools in spots, please mark it — we will have Gene take a look at it.
Windows and Window Replacements: An owner is getting information on approved models for replacement windows, would like to put it up on the website for residents to refer to. It may be possible to get a discount if several units want to go in together. Resident is gathering information – will pass the information to Michael showing what we can get.
Michael clarifies to the room that we have not decided to do all of the windows for everybody. There are no plans to do this. The reserve study calls this out as an item, but numerous units have already footed the bill themselves. The cheapest inside units are approximately $10,000-20,000 to replace all windows in each unit, and the larger units are $20,000-$30,000 to replace all windows in each unit.
We as a Board have not elected to take this on, as we have no plans to replace all windows at Association expense, and have our hands full with critical projects. We have had a vacancy on the BOD for two years, so we are already down a person.
Notice to owners: When you replace your own windows you are asking for approval to do a modification of an Association asset. You assume responsibility for liability if something goes wrong. A typical replacement window warranty is a lifetime warranty for original owner – 20 year transferrable warranty to subsequent owners. We do continue to budget pane replacement for original windows. All the replacement windows in our complex are manufactured by Alpine, Milgard or Washington Energy Services. The installer of the windows also needs to be licensed, bonded and insured. If at any point down the road there is damage, and there is a leak that occurs, you are on the hook for all the damages that occur. That is part of the stipulation. If you decide to do it on your own, you are paying it out of your own pocket – if in 10 years the BOD replaces all the remaining windows, you do NOT get out of paying the special assessment for the remaining windows. Just to be clear, Tim emphasizes that you may wind up paying twice for windows. Just be aware of it. As the current board, we have no intention to replace windows and have not had plans over the past 30 years to do it. That does not preclude a future board from making that decision some time down the road. As long as a resident does not stray too far from existing examples, no problem.
Gutters and Gutter Guards: All the gutters and the gutter guards are good – in the spring small leaves will build up. Michael has ordered twice this year to have the leaves blown off. If residents have opinions on more optimal times to remove leaves, please give input.
Woodpeckers: Woodpeckers attacking the siding of the houses. Resident went on Amazon and ordered owls and shiny things. Michael offers to have “Brian’s Corner” on the website with tips. We are a volunteer board and accept/welcome help from all volunteers for projects.
Asphalt: When they did the asphalt in front of Bldg B, it had a low spot – they were going to repair it but it still forms a big lake. It will not be fixed for free – the question is, what is the most economical way to fix it. Drainage from down the hill comes down in front of Bldg B-105, both winter and summer. When they asphalted, they built it up higher, but the problem remains to some degree. Resident agreed it was probably not economical to try to fix at this time.
We have hired a high-quality project manager, Improcon, because this is a complex project beyond our expertise. In 2018, we had several engineering studies, injected foam under the slab and installed monitoring medallions. We had dirt drilling done to evaluate the dirt – it is of very poor quality. However, the foundation walls themselves are very deep, which is a good thing. The ground floor slab which sits on the foundation were sitting over open air, unsupported, as the dirt had settled. As a result, the slab is cracking. These open areas were supported by foam injection.
When we initially had the Bldg B engineering measurement, the southeast corner of the building is 3” below the center of the building. We are trying to determine if this is recent movement and, if so, how fast. Where was it in 1989? Was it just built poorly? We will measure periodically and see if it is sinking – not at all? A little bit? A lot?
The range of costs for remediation work on Bldg B is from $0 to millions as we do not know if it is moving or stable. If it is stable, we are looking only at the tens of thousands we have already spent. Worst case we remove the walls inside the basement, install pin piles, drill down to bedrock, put that underneath the foundation. Tim is dealing with another association that has two buildings that are sliding downhill. It is extremely intrusive drilling down inside a unit. That special assessment was $1.5MM for 4 units in two different buildings. The project manager said pin piling is the answer, no matter how big or small the problems – the question is how many. It may be 16 pin piles, it may be 100 pin piles, it may be 0 pin piles. It is important to be judicious about careful placement – every pin costs money; we must plan carefully to get the value from what is installed. At the recommendation of our project manager Improcon we are installing monitoring medallions first, to see what is actually happening.
Impact on owners and sellers: Two people were trying to sell, and we had this big problem outstanding. We had to update the Resale Certificate and estimate what it might potentially cost per unit if we were to have to make a special assessment to cover major Bldg B work. We could be lucky, and it could be $0 or it could be as much as $26,000 or $40,000 per unit based on how big a problem it is. For our Resale Certificate we used Tim’s other location to ballpark a worst case estimate. We emphasize, at this point we do not know. We are gathering information by monitoring and will know more.
Why we use a project manager: A Project Manager can get “captured” by a construction company, and not advocate as strongly for unit owners’ best interest. In this case Tim has past experience with Improcon – he is like a bulldog fighting for our benefit, NOT getting captured by the construction company. We feel like Improcon is working hard, doing what is in our best interest. We, as a Board, are doing the best we can, and trusting the best project management we have been able to get.
In February 2019 we experienced multiple snowstorms – a once in 10 years event. MMT has nothing in place to address snow and ice issues. Normally for snow removal, you have to have it contracted in advance and it can be very expensive, adding $10-$15 per month to the dues of a unit. Tim asked the room: “I have researched these costs. Do you want to do this?” Around the room there were immediate responses, “No!”
Tim arranged for someone come out and spread de-icer. Unfortunately, the amount of snow we had completely overwhelmed the de-icer. Following the snow, vendors’ crews were stuck. Two days later, the vendor himself was in a worse position because his only truck was in a wreck. A second crew came out and hand-shoveled the snow to clear pathways for our cars. It is advised that in situations where we have heavy snow residents should part at the top of the complex so they can avoid our hills.
Tim said he got one complaint from MMT. If someone would like to volunteer to organize a shed for snow shovels, placement on the property, please contact the Board.
Josh Gibson presented the Treasurer’s Report. The year ended with $36,941.20 cash on hand in checking and $148,839.82 in reserves. We have had a bit of a setback with Bldg B, as discussed above. It has not cost much, so far, but we do not know how this will resolve. We know there is much we do not know. In light of that unknown, we have worked hard to hold back many expenses this year, so that in case a large amount is needed, we can reduce or avoid a special assessment. As we get more information, we will know how much needs to be done.
Reserve Study – We have changed the company who does the reserve study. We do not want to have an HOA that is unprepared for upcoming maintenance. The former company treated the buildings differently that we do – we address it as a stitch in time saves nine; they were viewing as no maintenance and then complete failure with total replacement. The new company is providing us with good data and makes more of a compromise between the two philosophies. Excluding Bldg B, we are scheduled not to run out of money through 2037. In 2037, we are due to replace the roofs again, and we will have enough cash on hand without a special assessment. A reminder that Bldg B is excluded from long term planning and the reserve calculations because foundations do not fail on a regular, predictable schedule like roofs, siding, fencing, etc.
Van Chesnutt presented the Landscaping Report. We have done quite a bit of landscaping work this year, mostly in regard to drainage. A City of Redmond Stormwater drain inspection is planned for March 2019.
Drainage: In 2018 we took care of drainage issues on Bldgs M and N. Poor drainage was found to be caused by major root balls in building foundation drains preventing water getting to the Stormwater system.
We have discovered that poor drainage between Bldgs I and J in systems installed by the builder are also contributing to ongoing drainage problems at Bldg L. Those combined issues will be addressed this year by Bodine Construction in April or May. A second drainage issue on the side of Bldg I that faces the mailboxes will also be addressed, where a large pipe was crushed.
Trees: The new landscape company, Premiere Landscaping, is saving us a considerable amount of money and doing a better job. Trees were trimmed during the year. In 2019 hedges along walkways of several buildings will be trimmed. Several tree issues behind buildings A-F have also been resolved. Our landscape company also cleaned up many tree branches after the recent storm. We hope to replace some of the trees behind Bldgs L-M-N as we have had to take out several that exceeded their lifespan of 30-35 years.
Defoliant: A resident made a personal request – that the landscaping company not use defoliant. That is what keeps the ground from slipping. Defoliant appears to have been sprayed around the foundations. No one on the Board was aware that this was happening. Discussion ensued to attempt to determine exactly when this summer this occurred – was it the old landscaping company or the new company. It could be the City of Redmond. Lots of the blackberries on the hillside are gone, and along Old Redmond Road. Van appreciates the information and will look into it.
Sprinkler heads: The landscaping company we have now is going to replace several of the sprinkler heads – several on the lawns and some on the hillside near the mailboxes. Van plans to turn on the sprinklers the same time as last year – Memorial Day. Due to improvements in our watering process we hope to use less water and reduce costs. Since August and September, our water usage had dropped dramatically, by at least 1/3.
Hedges trimming: In trimming the bushes, a resident asks that they not be trimmed more than 30% or the roots will react. The height of the bushes that we have between the buildings is very inconsistent – width as well as height.
Owner-maintained areas: How do we let the landscapers know that plants planted by owners are not to be cut back? Resident had mature ferns cut back and they have not come back – flowers, ferns. Resident suggests sign “do not trim.” There was only one person who spoke English in the old company – and they would point to the supervisor.
We are gathering ballots on the Borrowing Amendment. Approval by homeowners would give the Association the option of offering homeowners either a time payment plan or a lump-sum special assessment in the event of a large capital expenditure. Without the Borrowing Amendment, the only option is a lump sum payment of the special assessment.
This does not have to be completed tonight. In our declaration, there is no borrowing amendment. This is no way influences the ability or the intent of the BOD to levy a special assessment. Discussing this does not mean you are going to have a special assessment. Even if Bldg B turns out to be totally fine, Tim recommends that every Association have a borrowing amendment. Condos under newer WA State laws automatically include Borrowing Amendments. It was not included in standard legal documents for condos established in 1989, like Marymoor Trails.
What is it? This enables the Board to borrow money from a bank, and spread your payments out. Without the borrowing amendment, you can either go to the bank yourself, or pay a lump sum. This puts a third option on the table – the Association acquires money on your behalf and spreads the payment out over a period like 10 years. If you do opt to pay the lump sum, you pay no interest, because they are not using the HOA loan. All the costs of the loan are paid by those using the loan – if you pay lump sum, you do not pay those loan costs. It is in your benefit to be able to pay it off in a lump sum.
This is a third option for a owner who cannot get a home equity line of credit and does not have a large lump sum sitting around. You can pay it off early. For example, pay it for two years and pay off the balance when you come into money. What you can’t do is pay $100 extra ahead each month like you can against your mortgage principal. If a unit with a loan is sold, it is paid off when they sell – the interest stops at that point. Tim had Owner Consent Forms for peoples who have not handed in theirs in.
Van volunteers to serve another term on the Board – we gratefully accept it. He has done an excellent job with Landscape.
Volunteering: Are you a self-motivated person who identifies a problem on our property and wants to do it? If you want to help, you don’t have to join the Board, just help with a project. You don’t have to be a Board member to contribute. If you have an idea, meet with the Board, and get buy-in. Examples of projects that came up tonight with great suggestions included: (1) learn timing of sprinklers; (2) website help; (3) signs pointing to buildings; (4) snow shovels , for example. We welcome any help.
Approval of IRS Form 70-604
Per the IRS, this form states that if you have a budget surplus for a given year, you are going to roll that over and not pay taxes on it. Tim reads the resolution – unanimously approved and passed. Any excess of membership income shall be applied against subsequent tax year assessments and expenses.
Next Meeting – The next regular Board meeting will be Monday, March 18, 2019 at 6:30PM at the residence of Linda O’Hara – Unit #133.