PostHeaderIcon Meeting Minutes January 15, 2017

 

Minutes of the Open Meeting of the San Francisco Suites Board of Directors

Sunday, January 15, 2017
San Francisco Suites Board Room

 Call to order: The Open Meeting of the Board of Directors started at 11:27 AM, with Board President Chuck Meibeyer welcoming all in attendance and calling the assembled group to order.

Roll Call and Introductions: The following Directors were present: 

  • Chuck Meibeyer, President
  • Cynthia White, Vice-President
  • Jeff Reichel, Treasurer
  • Geoffrey Bellah, Secretary
  • JoAnne Trembath, Director-at-large
  • Also present were Cynthia Reid, General Manager, and Pamela Murphy, Interior Designer.

The following owners were in attendance: Jim White, Max and Susan Josselyn, Medsie Bolan, and Ramona Martinez.

Establishment of Quorum: With all Board members present, President Meibeyer determined that a quorum was reached and that the Board could conduct its business at the meeting.

Owners Forum: White then announced the Owners Forum as an opportunity for owners to address the Board regarding general issues and concerns but limiting their comments to three minutes. Medsie Bolan thanked the Board for its hard work and said that the Suites “looks great!”

Approval of the Minutes: Meibeyer called for the approval of the minutes of the November 16, 2016, meeting. Director Trembath so moved, Treasurer Reichel seconded the motion, and it carried unanimously.

Treasurer’s Report: Treasurer Reichel said that the 2016 budget summation was not yet available, but he believes there will be a $20,000 to $30,000 end-of-year surplus which, by owner agreement, will be deposited into the general reserve fund. He reminded the Board of the major capital improvements made during the past two years, with one project – the remodeling of the “4” suites – in progress, but doesn’t anticipate anything new coming up involving large expenditures.

General Manager’s Report 

Financials: Manager Reid reported that the inventory of 28 Parlors owned by the Suites have all been adopted. Also, all of the 2016 annual assessments have been paid. A foreclosed Parlor was auctioned at City Hall in December, selling for $3000, with its overdue annual assessments paid. The invoices for the 2017 assessments have been sent out, via email and regular mail, and payments are coming in quickly, well ahead of last year. Some costs have risen recently: the Kaiser Permanente insurance program for employees has been renewed with a 2.4% increase in the premium. The mandated minimum wage increase to $14 per hour will take effect in July. And InPark (formerly City Park) has raised their rates by one dollar for both self parking and valet parking. Reichel moved then to raise our parking rates accordingly by one dollar, to $31 for self parking and $36 for valet parking; Bellah seconded the motion; and it passed unanimously

Maintenance: The annual roof inspection is scheduled for the end of January. Several window locks have been inadvertently broken during periodic cleaning, and replacements and spares have been ordered at no cost to the Suites. Kitchen sink faucets will need to be replaced, and Reichel suggested that newer stop valves be installed wherever they are not currently in place. Our television cable carrier Astound, which now called “Wave,” will be doing a wire inspection next week and hopes to convert our cable boxes to state-of-the-art digital. The annual carpet and upholstery cleaning has just been completed, and the long-anticipated remodeling of the “4” suites will commence next week.

Personnel: Houseman David Bairan is still on a medical leave. In his absence weekend houseman Luis Martinez has stepped up to do Bairan’s duties, even changing his scheduled vacation to work at the Suites.  For his outstanding performance while substituting for Bairan, Martinez is being awarded the “Employee of the Quarter.” Concierge Caroline Johnson will be also honored today as “Employee of the Year” although she will not be at today’s meeting to receive the award. (When Johnson arrives later for her afternoon and evening shift, the Board will present her with it.) Since the “Employee of the Year” award is new to the Suites, Reid asked the Board to approve the purchase of a plaque to be engraved with the award recipients and placed somewhere in the lobby. The Board agreed to this purchase. Meibeyer then asked that Martinez be brought into the Board Room for the presentation. He praised Martinez for his positive attitude and helpfulness and presented him with a small monetary award.

Old Business: Meibeyer introduced Pamela Murphy, the interior decorator who has been overseeing the remodeling of the “4” suites, scheduled to begin this week. She has returned to the Board to request additional funding for the project, namely, for the darker stone elevator floor which was preferred by the Board ($130); for replacing the elevator’s lighting fixture (cost to be determined); for assembling the three new islands ($291); for custom pillows and table-top accessories ($2418); and for applying fire-retardant to the sofa fabric ($480). Meibeyer argued against the purchase of the accessory items, given the high expenses the remodeling project had already incurred, but Trembath felt that these items would add to the finish of the “4” suites and, if not approved now, would probably never be purchased. Reichel and Bellah wondered about the safety and security of the proposed accessories – Might they be stolen? Easily broken? – and Murphy explained that they would be of durable quality and might be secured with earthquake putty. Murphy added that the “4” parlors are the “step-children” of the Suites and lack the fine art of the other suites, and that the accessories would make them more “posh.”  Owner Bolan, who often stays in the “4s,” provided a history of these suites’ inconsistent and insensitive  re-decorating over the years and urged the Board to follow the recommendations of the interior decorator and purchase the accessories. After considerable discussion, the Board agreed to fund the darker elevator floor, the island assembly, the required fire-retardant, and the custom pillows but deferred on the other accessories and the elevator lighting fixture.

Reid asked the Board to decide on the disposition of the furniture in the “4” suites which will be replaced. The Board felt that the small sofas might be made available to the staff, if they agree to remove them at their own expense. As for the three leather recliners, the Board thought that Reid might place them for sale to the owners to the highest bidders. White subsequently moved that the leather recliners be offered for sale to owners for thirty days and sold to the highest three bidders. Trembath seconded that motion. And it passed unanimously.

Murphy and the Board briefly discussed painting the remodeled kitchens, and Meibeyer reminded everyone that a comprehensive interior painting is coming due according to the Reserve Study and that the “4” suites’ kitchens might be painted then along with the other suites, hallways, and other common areas.

The Board then moved on to consider the proposed revision of the Rules and Regulations. Meibeyer pointed out a few textual errors as well as some other minor problems in phrasing and consistency, especially regarding lower Bonus Time rates for designated three friends and family versus the higher rates for others, occupancy limits for master and parlor suites, and exchange agencies with whom the Suites has contractual agreements. Bellah, who had developed the draft, agreed to make the changes.

Reid requested that the Rules and Regulations include a credit card requirement when owners make a reservation, and that the card numbers be kept on file. Although the Board agreed that a credit card number might be helpful in case of unpaid costs or damage after check-out, several Board Directors believed that keeping this information on file might pose a security risk for owners and exposure risks and liability for the Suites. Even so, Meibeyer suggested an addition to the Rules and Regulations that would give the Suites the right to require a credit card number from owners to be kept on file or presented upon check-in to cover any expenses incurred while staying at the Suites or  any discovered after checking out. After much discussion over the security issue, Reichel made a motion which would give the general manager the right to require from owners a credit card whose number would be kept on file or for the duration of their stay. White seconded that motion, emphasizing that this only empowers the manager to act if necessary but that the manager may wait until better security is available. The motion passed unanimously.

Meibeyer spoke about a special elevator fund, now totaling approximately $170,000, which was established about ten years ago and whose purpose was to prepare for the eventual replacement of the Suites’ historic elevator. The Suites’ elevator maintenance company then had forecast the need for such replacement, but more recent information has determined that the elevator, if properly maintained, will last indefinitely.  This special assessment, voted on by the owners at the time, has been segregated from the reserve fund and is currently not available for other uses, only for the elevator’s replacement. The owners must approve the move of the elevator fund to the reserve fund and, if they refuse to do so, there is a possibility of a new special assessment to increase the reserve fund by $170,000. (The total reserve fund is approximately $500,000; but $170,000 of that is locked into the elevator fund.) Owner Sue Jocelyn asked, “What if the elevator does need to be replaced?” And Meibeyer explained that the funding for that would still be there from the replenished reserve fund. Trembath moved that the question of moving the elevator fund to the reserve fund be placed on the upcoming ballot. Reichel seconded that motion, and it passed unanimously.

Meibeyer next discussed a recent development which has raised the concern of several owners, the Manager, and the Board. It has come to the Board’s attention that there may be new owners buying up shares just to rent them on the open market and using the property as a commercial business. Of course, the Suites does allow for exchanges through one of the Board-approved exchange agencies, but turning ownership into a business scheme, with renters having no personal connection or loyalty to the Suites potentially changes its character and contravenes the very purpose for which San Francisco Suites was established. Also, as Reid has pointed out, these renters often do more damage to the facility than do owners and their guests, and create more problems due to their unfamiliarity with the Suites’ rules and customs. There is legal precedent for putting restrictions on renting in other home owner associations, i.e., limiting the number of rentals, putting in minimum-stay requirements, and so on; but when the Suites was established in 1982, there was no way to foresee this problem arising in 2017, with the original CC & Rs not addressing it. Therefore, the Board is proposing to amend the CC & Rs to prohibit or limit owners from renting their shares. To do so will require a majority vote from the ownership, with 409 owned shares or more approving. Meibeyer assured everyone that the proposed restrictions will not affect the ability of owners to “gift” their share nights to friends, family, and guests or to exchange them; however, it will stop the commercial renting of such shares to people who have no relationship or affiliation to the Suites. He believes that the Association needs to take immediate action, soon after the general meeting in March, with a newly elected Board deciding on the nature of the changes in the CC & Rs, as suggested by the Suites’ attorney, and a time frame for the vote. Bellah added that the purpose of the proposed changes ultimately is to protect the Suites, its atmosphere and founding mission, and to prevent it from being converted into a hotel occupied by strangers.

Meibeyer reminded the Board of the need to put on the upcoming ballot the request to transfer any surplus from the 2016 budget into the reserve fund. Reichel moved that this request be included; White seconded; and the motion passed unanimously. Moreover, the March elections will require an Inspector of Elections, voted upon or designated by the Board. Sue Josselyn volunteered to serve in this capacity. Bellah nominated Josselyn as the Inspector for the March elections; Reichel seconded the motion for her nomination; and it passed unanimously.

Reichel talked about the possibility of putting the operating and reserve funds into interest-bearing money  market accounts, now that the interest rates have risen to make such a move profitable. Although such accounts protect up to $250,000, these institutions are all FDIC banks and therefore secure. He has spoken with representatives from two institutions, Capital One and B of I, who will offer rates from .6% up to 1% with no restrictions, meaning that the Suites might realize about $7000 from this reinvestment. Bellah wanted to know if reinvestment by HOAs into interest-generating accounts is common, and Reichel said that the B of I representative claimed to have “millions of dollars” invested by associations. White then moved that the Board open three accounts: to put $250,000 from the reserve fund into a Capital One interest-bearing account, and to put the operating account and the balance of the reserve fund, about $250,000, into B of I. Trembath seconded the motion, and it passed unanimously.

Finally, Reid brought up the continuing problem with the Suites’ door locks, which are failing due to age and overuse. She investigated installing a key card system, similar to what hotels use, but found that our doors are too shallow for their installation. In other words, to put in a key card system would require purchasing new doors at great expense. To replace the locks and keys in all the suites with a traditional system would be far less. Meibeyer mentioned the advantages of the key card system’s ability to track comings and goings, but given the small size of the Suites compared to a large hotel, front desk personnel are usually able to know who is in house and who is out. Reichel said that the reserve study indicated that door replacement is imminent, but the doors themselves remain in good condition. White moved that the locks be replaced in all the doors that haven’t been recently serviced; Trembath seconded that motion; and the motion passed unanimously.

New Business:  The Board discussed purchasing and installing new “black-out” shades for the kitchen windows in the remodeled “4” suites in order to keep these parlors dark in the morning hours. Reichel thought that this matter should be handled by Reid rather than the Board, and the other Board Directors agreed.

Adjournment: With the Board’s business concluded, Trembath moved that the meeting be adjourned; White seconded, and the Board passed the motion unanimously, ending the meeting at  1: 30 PM.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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