The Sept. 22^nd Kontiki Board of Directors meeting began at 9:10am. All board members were present. Owners Ann Killingsworth, Chris Crowley, and myself were in attendance. Rob Mabe and Justin Schmidt were also present. My overall impression of the meeting is that we are in for a number of big expenditures. It was noted that Phase II has gone to $400 per month to catch up on their expenses. The board worked very well together and Chris was also actively engaged in the deliberations.

There was no treasurer’s report and little discussion of the budget other than Karra noting that we are out of money again and that she will issue another $50,000 loan on Monday, Sept. 24. Barbara Schultz is no longer handling our account at Johnson and Cate. I’m not sure that she is still with the company.

The board discussed the hiring of Justin as property manager. Justin was recently made onsite rental operations manager. There was some interest in calling an executive session for personnel issues, but no action was taken. It appeared difficult for the board to discuss the hiring and salary for Justin with him in attendance. Pack suggested that perhaps as had been done at least once in the past, the rental manager would manage the Phase I property at a reduced rate because of the revenue received as rental manager. Chris said, “That’s not going to happen.” At that point Richy suggested $750 per month, but the decision was made to pay $800 per month as John Knostman had been receiving. As the meeting proceeded and the jobs were heaped upon Justin to complete or look into, the pay seemed to be well justified, if not too little. The issue of conflict of interest was raised by Scott as to Justin assigning work on the complex to himself. He said that would not be a problem, as he would contract out the larger jobs.

The board then assigned Justin the task of hiring a full time employee for Phase I to do everyday tasks. While I don’t disagree on the need, it raises the question of budgetary constraints. As Dave Schultz noted at last year’s owners meeting, out declaration prohibits the board from going more than $1000 over budget unless it is for repair. Other than property manager there is no money in the budget for employee salaries.

The parking lot has been repaired in house with asphalt and is in much better condition. Discussion centered on what to do now. An approximate cost of $2 to $3 per square foot was proposed as feasible to redo with asphalt. I would estimate that would put us in the $150,000 to $200,000 range. The board felt that concrete was not that much more and would be longer lasting. Justin was asked to bring quotes for the owner’s meeting for asphalt, concrete, or just seal coating as has been done in the past. Chris said that owners should not have a less expensive option and so Justin was redirected to bring only quotes for asphalt and concrete. I feel that the entrance road is in such a bad condition that the only option is asphalt or concrete. However the parking areas around the buildings are not that bad, in my opinion. A seal coat there may be quite adequate. This issue probably points out quite well the divergence of interest in those who see Kontiki as an investment property and those that see it as a pleasure property. We all want to see it well maintained, but investors, quite normally, are in a hurry to do all the repair work ASAP and get a quick return on investment while others may be more willing to pace the repairs.

Another expensive item discussed was roofing. This year to date we have spent $1,702 for roof repairs and with all the rain we have experienced, roof replacement may not be that urgent. My opinion is that the concrete tiles are fine, but near the edges there is some rotten wood and nails used in the edge areas were really too short. The nails are not rusted and maybe some fascia board replacements and longer nails would do the trick. Chris feels that a new composition roof is needed now. One was placed on Phase II this spring. The cost would be less than half of a new tile roof that was quoted at just less than $500,000, but roofing companies have warned that a composition roof will show unevenness that exists in the roof supporting structure. That could possibly be built up. Justin suggested that we could do everything possible to improve the roofline from the curbside and not spend so much on the bay side since it couldn’t be seen unless viewed from a boat in the bay. Bids will be reviewed at the next board meeting.

The Bug Free pest control contract was discussed. Karra noted that she had requested a copy of the contract and it was lacking in details. Costs have been much more than she had proposed in last year’s owner’s meeting. The board will ask for a better description of services and costs.

Pier and Breakwater repairs were discussed. Mark Dominquez from Kinsel Construction will have bids for Justin on Sept. 24^th. Richy reported that Moose Johnson does not return his phone calls concerning the breakwater. Chris suggested that legal intervention might be required. It was decided that a letter would be sent to Moose to give him 30 days to complete the needed work on the breakwater. If that is not done, the retainage will be used to pay someone else to complete the work, if it can be done with the remaining money. Pier repair will consist of extensive remodeling of the newest pier extension. It will be elevated and increased in size at the end and moved away from the breakwater. More lighting will be installed.

Shrubs have been removed from in front of the 100 building. Cut ants had devastated the shrubs and plants will replaced. Justin will resolve the cut ant issue before proceeding with the replanting. River rock was spread as an example for the board to choose between the white rock in front of the 700 building and river rock. The board voted 3-2 to go with the river rock for all the buildings.

The issue of pressure washing the buildings was presented. Justin said the cost would be about $1,500 per building. The board decided to try to use the pressure washer we already own and use JoMax to remove the mildew and mold to see what condition the remaining paint is in.

The tennis court is in need of resurfacing. No one could recall who did the job last time. Justin will get bids to have the work done and the board will review the bids.

Pack presented what he had found about the cost of security lights that we are being charged for. There seems to be a discrepancy between the number of lights on the property and the number we are being charged for. Chris said that Justin said we are paying only about $100 per month, but Pack produced bills that show we are paying over $400 per month for what may be as many as eleven lights when only four are present on Phase I property. When the CPL serviceman was here on May 22, he was under the impression that this was one property, not two phases and separate HOAs. Their records may date back to the time that the original owners, LJB Enterprises owned the whole thing, because he did say that he counted seven security lights on the Phase II property. All the security lights have been out since last Thursday. They are not metered so we are charged whether they are working or not. Pack gave Justin his contacts and findings and Justin will pursue the issue.

Our contract for commercial electrical service has expired. Justin will seek bids for a new contract.

Karra will email the board a copy of the loan agreement. Richy said that he had not yet seen it. The $50,000 that Karra will deposit will complete the $150,000 that was agreed to be loaned.

Phase II will share security costs for Paul Walton to patrol the area. Richy said that he had asked Paul, earlier in the summer, to patrol Phase II as part of his rounds and perhaps he had overstepped his authority, but it did make sense. I believe Phase II will pay 25%, although I didn’t hear a motion. At one point Richy said that Paul spends 90% of his time at Phase I and Chris suggested that maybe 25% share was too generous.

A discussion of security issues revealed that the recent loss by theft was for about $20,000 and seemed to entirely consist of property owned by the Crowleys. Even the big screen TV in the recreation room was taken. Locks and combinations were accessed without force which indicated that possibly a previous employee may be involved. Chris has posted a $2,500 reward in the Rockport Pilot for information leading to an arrest. Security cameras were quickly installed at Phase II within six days time. Chris very much wants similar cameras for Phase I. Bids were about $10,000 for four cameras including one night vision capable. The board discussed the need for cameras around the complex since we have a single ingress and egress route surveillance of this area would cover all vehicular traffic and capture license plates numbers. Chris felt that this alone would not be sufficient evidence for prosecution. The issue will be decided at the annual owner’s meeting.

The problem that I see is that despite our attempts to renew this property, the buildings are still old and when one repair is accomplished another major maintenance issue pops up. The exposure, especially on the bay side, is just so great that when one rotten board is removed for replacement, another is discovered. The outside stucco can be seen separating from the walls in places and the foundation has always been suspect. I think the efforts are well intended and much needed, but it may be a losing battle until the next hurricane does us a favor and allows us to rebuild completely. Until then it is just going to be very costly just to try to stay even.

After the meeting Karra called me over to discuss the email that I sent her regarding financial issues. She asked if most of my questions had been answered and I said that “yes, they have for the most part.” On the issue of vending machine money in our account, she said that Phase II did have a Coke machine, and perhaps that should be Phase II money, but she was not sure.

The large cost for grounds maintenance was a result of an accumulation of bills that had not previously been submitted. Placing the HOA accounts in interest bearing bank accounts caused the bank charges she said. I’m not sure I understand this totally.

The board asked Justin to look into the security light billing that I questioned and I had learned earlier that the pier repair costs in May were a mistake and had been billed to us by accident. Security costs that I had inquired about will now be shared. Karra brings a lot of experience and organizational skill to our board. I really appreciate her efforts. I told her that owners had, in years past, received information about our property by intermittent disclosures and information included with the monthly assessment bills. With all the activity going, maybe that could be restarted. She agreed that would be a good idea.

I did learn during the weekend that Christie Aguirre is no longer employed in the onsite rental office. She will be missed. Her sister Sarah will be having her first child soon. Richard, who spent many years as our primary inside maintenance man before he left for employment with Sandollar Security, has returned for part time repair work here. It was good to see him again.

When I first started this blog in early 2006, it was to keep friends up to date on fishing and such. I had no idea of the wider readership that it would receive. It never occurred to me that Google and Yahoo searches would have people all over the country viewing and reading my musings. I try to accurately report news that comes to me, but I don’t hesitate to include my own opinions and ideas concerning issues affecting Kontiki. I received a call last week from a prospective condo buyer who said they had read every post I have made in order to be fully aware of the issues before making an offer on a unit. I advised the caller that to get a wider view of the property, board members and other owners may need to be contacted. The ideas and opinions expressed here are entirely my own and may differ, and probably will, from those of other interested parties.