Fairlington Arbor
Board of Directors' Meeting

Board Members Present: Judith Greig, Tom McQuillan, Desiree DiMauro, Jincy Boerner, and Gus Wescott

Management Present: Mike Maloney, CFM Management Services, and David Pollard, Facilities Manager

Also Present: Peter Philbin, Esq., Rees, Broome & Diaz

Ms. Greig opened the floor for Homeowner Forum by explaining the rules to address the Board. A homeowner when recognized by the Chair may speak one time and will be limited to two minutes. Ms. Greig explained that one co-owner, Ms. Bierman, had asked to be put on the agenda and she would be the first to speak.

Ms. Bierman requested that her option to speak be moved to Unfinished Business. A motion duly made by Ms. Bierman, seconded, and voted in the affirmative, Ms. Bierman's option to speak was moved to Unfinished Business.

Mr. Jenkins of 4442 S. 36^th Street
Mr. Jenkins questioned if the Board was planning on discussing the purchase during the course of business tonight. Ms. Greig responded that it was not.

Mr. Craig Olson of 3450 S. Utah Street
Mr. Olson commented that he had been a resident since 1987 and felt that the Board and Mr. Pollard have been doing a good job. He noted that in 1988-89 Fairlington Arbor left full service management; this resulted in significant annual savings. He asked, given that over the last ten years everything has been going well, what changes necessitated the purchase of the unit. Ms. Greig explained that the association owns more equipment and now carries out considerably more administrative work in-house than before, and consequently needs more office space to be able to conduct business. She further explained the imperative to provide the employees with up-to-standard workplace facilities.

Ms. Patti Costello of 3473 S. Wakefield Street
Ms. Costello commented that she worked for PEPCO, where a vice president is given 300 square feet for an office while the Arbor is purchasing 1500 square feet. Will moving the administrative functions from the poolhouse yield sufficient additional space to do repairs in the shop, or is the Association over purchasing office space and under purchasing maintenance space? Ms. Greig responded that Board felt the unit to be of appropriate size to meet current needs while allowing room for growth and that the room gained in the poolhouse shop will be sufficient to meet needs.

Mr. McKenzie commented that the Board's answers were very vague. He requested that the Board explain in detail what equipment the association owned. He also questioned the fact that there was no line item in the budget for $150,000.00. Mr. McQuillan responded that the purchase of the unit was an exchange of assets. Mr. McQuillan further stated that the Finance Committee confirmed that it is entirely proper to record the unit in this manner. Mr. McKenzie questioned (1) if this was a good investment of association funds; (2) if the Board could legally make this purchase; and (3) whether it is legal to use the unit for an office. Ms. Hodapp, Finance Committee chair, responded to the first question by saying that this was a good investment as confirmed by Singleton & Bardowski, the Association's independent auditor. She pointed out that the Association pays Federal and State taxes on the interest earned on the Reserve Funds. The unit would be a depreciable asset and this would lower the Association's taxable income. Mr. Philbin, legal counsel to the Association, responded to the legality issues saying that under the provisions of the Virginia Condominium Act, a condominium unit maybe used as a management office unless expressly prohibited in explicit language by the Condominium documents, and that under the provisions of the Association's Bylaws, the Board could legally make this purchase.

Ms. Patty Costello of 3473 S. Wakefield Street
Ms. Costello requested that the Board define what a management office is. Mr. Philbin responded.

Ms. Kate Langbein of 4421 S. 36^th Street (address corrected 2/1/00)
Ms. Langbein commended the Chair and said it was clear that the Board had looked into the pros and cons of the purchase. She further felt that this was a logical purchase. She said that in her opinion the Board had not been secretive and that the Board was elected by the co-owners to take care of these matters on behalf of the community.

Mr. Chuck Soderlund of 3487 Wakefield Street (spelling of name corrected 2/1/00)
Mr. Soderland commented that anyone questioning the need to purchase the unit should go by the poolhouse and look at the current office space and amenities.

Mr. Robert Annand of 4444 S. 36^th Street
Mr. Annand asked whether legal counsel had reviewed the Association's documents in order to be able to state that the purchase was permitted. Mr. Philbin responded that yes, the governing documents and Virginia Condominium Act empower the Board to make this purchase. He also pointed out that the Bylaws give broad powers for day-to-day control of the community to the elected Board of Directors.

Ms. Ann. R. Rogers of 4427 S. 36^th Street
Ms. Rogers asked whether there would be an increase to the condominium fees. Ms. Greig responded that there would not. The co-owner further noted that she is new to the neighborhood and that she has not seen the current office. She commented that there should be more concern with the health considerations of the office/work space. There are laws requiring that the employees be provided with proper work environment. She feels that the purchase is a good idea. Ms. Greig responded that the need to provide up-to-standard facilities for the Association's employees had been an important part of the Board's considerations. Mr. McQuillan then asked Ms. Rogers to state her occupation and she responded that she is an attorney with the US Congress and specializes in employment law and OSHA issues.

Ms. Diann McCormick of 3434 S. Wakefield Street
Ms. McCormick commented that she would have liked to see the Board make this purchase "correctly." She questioned what exactly would be in the office. Ms. Greig replied that the unit would be used to house everything to do with the administrative functions, including office equipment and supplies and the Association's records and files. There would also be storage of other appropriate items such as cleaning supplies, appropriate power tools, vacuum cleaners, and carpet cleaners. There would also be a small lunchroom. The Board again confirmed that they looked into other options before determining that this purchase was the most cost-effective solution.

The following comments were made by co-owners. Not all names were recorded but among the speakers was Ms. Jocelyn Kerrigan of 3407 S. Wakefield Street:

• Question as to whether the Board had considered the possibility that the property values of the surrounding units might drop and had the Board set aside money to compensate the owners who might be affected?

• Question on the public appearance and access, including the view that the unit will be perceived as a maintenance shop. Mr. McQuillan reiterated that the unit would be used for management and administrative office space, committee meetings, and appropriate storage, not maintenance activities and repairs. He noted that the unit has back door access so that its function as an office will be invisible from the front of the building.
• Comment that the Board should be clear on what the unit will be used for.
• Question on how the unit was selected. The response was that it is ideally located a short distance from the maintenance shop on the emergency access road to the pool.

Ms. Anne Moppett of 4510 S. 34^th Street
Ms. Moppett questioned the Board's thinking when they made the decision to make this purchase. Ms. Greig responded that the current Board as well as past boards realized that there was a problem to solve but that until this time there had not been a good answer. She reiterated that in such a transaction, time was of the essence and the Board notified the owners as soon as there was concrete information to impart. Ms. Moppett commented that she had no problem with relocating Mr. Pollard's office, just with the way the Board went about making the decision to make the purchase. Ms. Moppett and Mr. Moppett became disruptive and had to be called to order by the Chair.

Ms. Patricia Schoen of 4512 S. 34^th Street
Ms Schoen commented that she was a former board member and had been on committees where much larger sums of money had been spent without confirming votes of the co-owners. She pointed out that the Board does not need to have the co-owners vote nor, indeed, to notify the community before making expenditures such as that for the purchase of the unit. The community is notified as a courtesy.

Ms. Jacqueline Johnson of 3493 S. Wakefield Street
Ms. Johnson asked whether the unit had gone to settlement, and what options does the community have to stop settlement. Mr. Philbin responded that the unit would be settling on Thursday, and that the community's options were limited by the broad powers given the Board by the Bylaws. Mr. Philbin further commented that what he had heard was general displeasure with the Board for not informing the homeowners of the purchase rather than objection to the purchase itself.

Ms. Patti Lease of 3520 S. Utah Street
Ms. Lease expressed concern because her backyard is adjacent to the unit in question. She asked whether the piles of debris currently outside the poolhouse maintenance shop will be transferred to the patio of the unit. She also questioned whether owners of the immediately neighboring units were notified of the decision to purchase. Ms. Greig acknowledged the problem with the accumulated debris and said the Board would address the problem. She assured Ms. Lease that there would be no patio storage at the unit. She also said that it was the Board's understanding that the seller had communicated her intention to the neighbors.

Mr. Geoff Thomas of 4441 S. 36^th Street
Mr. Thomas felt that the Board had acted in the best interest of the community. He said he was confident that the appearance and condition of the unit will not change and that it will be very well maintained by Mr. Pollard. He further commended the Board on doing a great job.

Ms. Kathy Wilmath of 3488 S. Utah
Ms. Wilmath said she owns a unit in the same court and cannot find a reason to oppose this purchase. Furthermore, she has complete faith in the Board.

Ms. Fletcher owns the unit across the hall from the unit being purchased and has full confidence in the Board and in Mr. Pollard, all of whom, she said, are doing a great job. She further commented that she felt it would be good to have an onsite office in this building.

Ms. Anna Gilda of 4424 S. 34^th Street
Ms. Gilda asked whether using this unit for business purposes would set a precedent. Mr. Philbin responded that no, it would not.

Mr. Kenneth Larson of 3527 S. Wakefield Street
Mr. Larson asked whether rules would be established for the opening and closing of the office and to limit its use for late meetings. The Board said yes, but cautioned that on occasion, it might be necessary to open the office after regular hours to deal with emergencies.

Ms. Kathleen Zimmerman-Bonham of 3474A-A S. Utah Street
Ms. Zimmerman-Bonham stated that she owns the unit next door to the unit being purchased. She said she was not notified of the intended purchase and requested she be provided with the following information: a list of the equipment that will be stored in the unit; information on the intended use of the unit and hours of operation; the specific questions asked of the zoning board, and their answers. Miss Zimmerman-Bonham pointed out that she is a realtor, very well informed on property values, and she questioned the purchase price of $135,000.00, which she claimed to be at the high end of the average of the Barcroft units being sold in the Arbor.

Mr. Philbin responded that there could certainly be rules established as to the use of the unit. He pointed out that Arlington County had given its approval and that anyone with concerns can speak with officials at Arlington County. Ms. Greig responded to Ms. Zimmerman-Bonham's other questions by saying that the Board would get back to her with answers.

Mr. Larry Lilly of 4437 S. 36^th Street
Mr. Lilly corrected Ms. Zimmerman's judgment on the price paid for the unit by quoting from a printed real estate listing which verified that the price most recently paid for this type of unit was $139,900.

Mr. Les Bergen of 3504 S. Utah Street
Mr. Bergen commented on the community's history, detailing the past needs for special assessments, and higher condominium fees. He feels the community is in very stable condition and is not facing an increase or special assessment.

Ms. Greig closed the Homeowner Forum, at 8:07 PM, noting that the Board had extended the Homeowner Forum from 30 minutes to one hour to accommodate the number of people wishing to speak. On a final note, Ms. Greig offered the following information to the homeowners present with reference to the communications received by the Board to date on the purchase of the unit. She pointed out that the figures were expressed as percentages of the number of units and did not represent actual voting share in the Association.

Ms. Greig said that the total of self-expressed supporters and the silent majority amount to 84% of the unit count of the community and that the Board takes this as an indication that the majority of co-owners have no objection to the purchase of the unit.

Ms. Greig called a brief recess.

The meeting was called back to order at 8:15 PM to conduct the business portion of the Board meeting.

A motion was duly made by Ms. DiMauro and seconded by Ms. Boerner to approve the minutes from the September 20^th, 1999 meeting with the following additions:

The minutes were approved: 5-0-0 (for-against-abstain).

VP Grounds: Mr. Pollard has informed Ruppert Landscaping their contract will not be renewed. Living Color has been selected as the landscaping contractor for next year. The Grounds Committee held a meeting and voted to recommend that the tree trimmers come out and trim two Arlington County trees.

VP Buildings: Mr. Wescott reported that the roof replacement would begin in Court 11 (3622-3632 S. Taylor Street) during the second week of November and would last for five weeks. The total cost is $70,560.00.

Treasurer's Report

1. Mr. McQuillan reported that the Board took a confirming vote by phone to sell a T-Strip valued at $94,000.00, and deposit the funds in the Merrill Lynch checking account in order to finance the unit purchase. (In favor: 5; opposed 0)
2. Mr. McQuillan commented that the financial statements looked good. He noted that the Water was over budget $4,000.00 for the month, and $13,000.00 for the year. Mr. McQuillan asked Mr. Maloney if the estimated taxes had been paid for October 1999 and Mr. Maloney confirmed that they had.
3. Mr. McQuillan reported he had received the CFM contract for renewal and recommended that the Board postpone voting until November.
4. Mr. McQuillan presented the engagement letter from Singleton & Bardowski for the FY99. There is an increase of $300.00 and an option to sign a two-year contract with no increase for the second year.

Mr. Maloney recommended that in the future the record not show names or balances of the homeowners who are delinquent. He recommended that the Board go into executive session if it is necessary to use the names of any delinquent owners.

Mr. Maloney addressed the Water & Sewer variance and said that the invoice reflects the end of the summer months when there was heavy watering but that usage and costs will level out.

The second check has been received from the IRS. (amended 2/1/00)

Mr. Maloney said that the Singleton & Bardowski proposal is advantageous to the Association.

He noted some very good information on confidentiality was received from Rees, Broome & Diaz and is enclosed in the Management Report.

Reimbursement to an owner of a unit in Court III: The owner requested reimbursement of his insurance deductible to a total of $250.00 for damage when a branch fell on his car during a recent severe storm.

Ms. DiMauro moved to reimburse owner for insurance deductible in the amount of $250.00 for damage done to automobile by fallen tree limb. Ms. Boerner seconded the motion. Ms. Boerner reported that he limb was green and not a dead branch. She felt this should be considered an "act of God," since it did not result from poor maintenance. The maintenance crew has done a good job of trimming the dead limbs. Ms. Boerner said that reimbursing this owner when the Association had no liability would set a precedent. Ms. DiMauro questioned whether this type of reimbursement had been made in the past to other co-owners and was told no. Motion defeated: 0-5-0.
The Board asked Mr. Maloney to send the owner a letter stating that the Board sympathizes but cannot provide reimbursements for acts of God.

Singleton & Bardowski Engagement Letter: Engagement letter, with a $300.00 increase, includes a two year option with no increase for the second year if accepted.
Mr. McQuillan moved to accept the Singleton & Bardowski Engagement Letter for the two-year period. The motion was seconded by Mr. Wescott. Motion carried: 5-0-0.

CFM Management Services Contract Renewal: Tabled.

Unfinished Business

Ms. Bierman said that she had sent a letter asking on what basis the Board feels it is given the right to make the purchase of the unit without the consenting vote of the co-owners. Ms. Greig pointed out that Counsel had answered this question earlier, during the Homeowner Forum. Upon Ms. Bierman's insistence that she had not been answered adequately, Ms. Greig referred her to the Bylaws, Article III, Section I. Ms. Bierman further questioned whether this is an extraordinary budget item, and is it the normal practice of the Board to make such purchases? She also asked what assurance is there that the Board will not make any other purchases. Are there spending limits set upon the Board? She asked whom disgruntled co-owners should serve process on? Ms. Greig responded that unhappy co-owners should talk to an attorney.

Adjournment

Ms. Boerner moved to close the meeting and Mr. Wescott seconded the motion. The meeting was adjourned at 8:40 p.m.