Draft of Minutes
San Francisco Suites
General Meeting of the Board of Directors
August 10, 2024
President Geoffrey Bellah called the meeting to order at 11:03 AM on Saturday, August 10, 2024. The Board of Directors members present were:
Geoffrey Bellah, President
Fred Munroe, Vice President
Dwight Walker, Treasurer
Nancy Hudson, Secretary
Jo Ann Trembath, Director-at-Large
Others Present: Cynthia Reid, General Manager
owners Forum: No owners were present.
- President’s Report: President Bellah thanked Cynthia Reid and Dwight Walker for their excellent work in rolling out the Airbnb initiative and for developing a proposed budget for the 2025 year.
- Approval of Minutes: A motion was made to approve the minutes of the June 5, 2024, Emergency Zoom Board Meeting by Jo Ann Trembeth. It was seconded by Dwight Walker and approved unanimously. A motion was made to approve the minutes of the May 4, 2024, Board Meeting by Dwight Walker. It was seconded by Fred Munroe and approved unanimously.
- Treasurers Report: This has been a particularly challenging year for Cynthia with some owners not paying assessments, deed backs, and foreclosures. The Board should be very grateful for Cynthia’s dedication to this issue. Not only is her workload excessive as a result of dealing with 50 uncollected assessments (as of 6/30), but she initiated the new Airbnb program that has taken a tremendous amount of effort, not only setting up the program but taking excellent care of the Airbnb guests. That care is translating into 16 5-star reviews that will lead to even more guests and rental income for the Suites. Cynthia is making it happen.
Here are some highlights of the Financial Dashboard and statements:
- The operating cash account balance is $648k, and there are 25 days of operating expenses in uncollected assessments.
- Replacement Reserve cash balance is $634k, and there are no projects planned for the remainder of the year. But there could be emergencies that will require the use of some of that cash.
- Accounts Receivable total is $86k of which $41k is due to non-performing shares owned by the Suites. This is a very unusual situation and puts the cash position of the Suites in jeopardy as we move to the end of the year. Cynthia has pulled out all of the stops to offset this shortfall, but that pressure will continue for the rest of the year and into 2025 as foreclosures are finalized.
- Shifting gears to July, there are 43 nonperforming shares, which translates into 301 unused dates. Cynthia’s Airbnb initiative has begun to yield benefits with $1k in rental income in June and $2k in July. If we are able to rent out 15 days/week at $172 for August through December that would generate $52k in rental income. The remaining shortfall could be offset by sales of shares and adoptions of Parlors. In addition, if operating expenses continue to be under budget, that will also offset some of the shortfall.
- Adding to the stress on cash is the projected property insurance renewal due on September 1 requiring an estimated $154k in cash. It may be necessary for the Board to authorize a temporary loan from Reserves in order to meet this cash need.
- Good news on the revenue front with interest income in excess of budget by $4.2k and sale of foreclosed units in excess of budget by $16k.
- Operating expenses are $15k below budget through June largely due to payroll-related savings of $14k.
- General Manager’s Report: Cynthia Reid reported that there are now 37 shares in the SFS Inventory. Another 10 shares have been sold (five Masters and five Parlors) and 11 shares have been adopted (four Masters and seven Parlors). There are 26 non-performing shares ($44902.00 owed) and four deed backs ($6908.00 owed). There are five deed-backs with paid assessments. In addition, four shares’ assessments are being paid in installments ($4352.40 owed), and one share is in foreclosure.
In the area of maintenance, Lawson Roofing inspected the roof and determined that no repairs were necessary. Similarly, Brady Air found that no repairs were needed on the boiler. Brady Air recently repaired a radiator leak in #45, and Jason repaired the Jacuzzi in #10.
- Ongoing Business:
- Dwight Walker reported that there does not seem to be a need to engage a collection agency at this time.
- The Board revisited the issue of bodywash/shampoo/conditioner dispensers. Dwight Walker moved that the Suites purchase and install these dispensers (already in use in #10). Fred Munroe seconded the motion, which passed with a majority of four with one opposed.
- As noted above, 11 shares have been adopted and 10 shares have been sold.
- Cynthia Reid reported that drapery lining repairs would be initiated soon.
- President Bellah noted that the Board Retreat held on August 9,, 2024, was successful. Ideas generated during that meeting included growing the Airbnb program, improving the appeal of the #4 Parlors, and continuing with the program to sell and adopt out shares in the SFS inventory. Also, there will be an exploration of developing a new marketing brochure, including rebranding the Suites, and upgrading the SFS website.
- New Business:
- Dwight Walker and Cynthia Reid presented a Draft Budget for 2025. Items under consideration include:
- Airbnb rental income is a big unknown at this point. We will want to gauge success through October before we finalize a revenue number. The Draft Budget includes $87k which translates into 500 nights rented out at an average of $175/night. That depends on occupancy, nonperforming shares, etc.
- Another revenue item that is soft at this point is Sale of Foreclosed Units, which is listed at $30k in the Draft Budget. Obviously this depends on future activity. But based on the first 6 months of 2024 it appears reasonable. In conjunction with this item the Board may want to reconsider the sales price of Association-owned shares.
- A smaller item to consider is Food and Beverage expenses — are we charging enough to cover costs?
- Property taxes, ownership resolution foreclosure and bad debt expenses totaling $32k in the Draft Budget are directly tied to anticipated foreclosure activity and will require a fresh look before finalizing.
- Payroll related expenses are based on current estimates and will be refined when health insurance premiums are renewed and the Board approves wage increases.
- The Reserve Study calls for a contributions to Replacement Reserves in 2025 of $250/share or $204k. Those contributions have been reflected in the Draft Budget.
The Draft Budget currently shows the 2025 assessment flat at $1,727, but that may change before approval in November. The 2 biggest factors are the projected number of nonperforming shares and Airbnb rental income. Both of those items are best estimates at this point, and the months before November will shed more light on what could be a more accurate estimate.
- Cynthia Reid reported that Hartford through ISU with handle Worker’s Comp Insurance.
- Dwight Walker noted that insurance renewal discussions were in still in progress for the 2024-2025 year.
- Cynthia Reid reported that the Airbnb rollout has been successful and that SFS has already achieved a “Top 5% Guest Favorite” ranking. We have also received 16 5-star reviews and are on our way to becoming a “Super Host” by October. The Airbnb company has been very easy to work with.
- Cynthia Reid also presented the Reserve Study report, with an explanation of the document as developed by RF for the Suites. She emphasized that the Study’s recommendations are only guidelines for review and consideration, not requirements for replacements.
As the business was completed, Jo Ann Trembath made a motion to adjourn. Dwight Walker seconded the motion, which was approved unanimously. The meeting was adjourned at 12:56 PM.
Please note the next BOD meeting is Saturday, Nov 2,2024
Respectfully submitted,
Nancy R. Hudson, Secretary
San Francisco Suites