Date:
August 15, 2012
To:
From:
Topic:
GHI Board of Directors
Addition Maintenance Program Task Force
Recommendations of Task Force
Background
Members of the Addition Maintenance Program (AMP) Task Force (TF) are Henry
Haslinger, Daniel Obester, Irma Tetzloff, Ruth Wilson, and Kate Phelan. Staff Liaison is
Matt Berres, Board Liaison is Diana McFadden.
The AMP TF has met almost monthly beginning April 18, 2011. The first meeting was
opened with Eldon Ralph and Matt Berres providing background information and
outlining the charge to the TF as outlined in the eight questions below:
1.
2.
3.
4.
5.
6.
7.
8.
Should the AMP be abolished with members responsible for all maintenance on
their additions as Reserves Advisors recommended?
What are the ramifications of making changes to the AMP based on Addenda to
MOC’s for additions?
Should the AMP be eliminated and participating members pay GHI a monthly
maintenance fee that is based on the total square footage of their homes including
additions?
If GHI remains responsible for maintenance on addition components, how should
the division of maintenance responsibilities between members and GHI be
clarified?
How should sub-standard (in terms of construction) additions on the program be
treated during the community-wide upgrade program? How should additions not
on the AMP be treated?
If GHI remains responsible for maintenance of addition components, should the
coop require all additions to be maintained by GHI before the community wide
upgrade begins?
If GHI continues to maintain additions, what resources, methodologies and
practices should GHI employ to effectively manage a replacement reserve
program and replacement programs for major components, considering that the
additions are of variable ages, construction types and conditions?
Should the Coop require new additions to be built according to specific prototypes
for standardization purposes?
In July 2011, the AMP TF recommended, and the Board accepted, a professional
replacement reserve study. GHI staff invited bids, interviewed bidding companies, and
presented the results to the AMP TF. The TF recommended that the Board award the
contract to Kipcon Inc. The study was completed and the final report was submitted to
GHI by Kipcon Inc. on July 5, 2012. The report was reviewed by the AMP TF at
meetings on July 16 and 23, and August 6, 2012.
Our recommendations are presented in this document.
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AMP TF Recommendations
1. Should the AMP be abolished with members responsible for all maintenance
on their additions as Reserves Advisors recommended?
The AMP Task Force recommends that the Addition Maintenance Program
should NOT be abolished. The rationale includes two points:
 The main purpose of the AMP is to provide timely and ongoing maintenance
of additions consistent with GHI policy and programs governing all GHI
homes; and
 Member-signed MOC addenda provide a contractual obligation for ongoing
maintenance support of additions unless exceptions are noted.
2. What are the ramifications of making changes to the AMP based on Addenda
to MOC’s for additions?
The TF recommends that the GHI Board seek legal consultation to determine
whether TF recommendations would have any legal consequences relevant to
members MOC additions addendums.
3. Should the AMP be eliminated and participating members pay GHI a monthly
maintenance fee that is based on the total square footage of their homes
including additions?
The TF recommends that the AMP continue much as it is structured today with
different charges for different addition types and features. Although simplifying
the AMP would theoretically reduce work for staff and, thus, costs to GHI, the TF
believes that a well-structured and fully populated spreadsheet would eliminate
much of the time burden. See question 7 for complete recommendations.
4. If GHI remains responsible for maintenance on addition components, how
should the division of maintenance responsibilities between members and GHI
be clarified?
 Member Responsibility Documents should clearly delineate covered and
non-covered components. The TF recommends that GHI remind members
periodically of GHI maintenance versus member responsibilities. Some
possible way to do this are communications, such as News in Review
articles, and discussions at future town hall meetings to help engage
members. The TF recommends that GHI occasionally remind members that
GHI is collectively-owned property and keeping it well maintained increases
its value to all members. When additions are in disrepair, visitors and
prospective buyers will not understand that some parts of GHI are not
maintained by GHI. They may think such conditions reflect the level of
maintenance provided by GHI staff, which would make membership less
appealing.
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5. How should sub-standard (in terms of construction) additions on the program
be treated during the community-wide upgrade program?
Substandard additions on the AMP need to be brought up to current GHI
standards soon as feasible. Costs incurred should be shared by the member and
by GHI in keeping with current policy. That is, the member and GHI should be
required to improve the components for which each is responsible. If the poor
condition of the addition resulted from neglect or abuse of the property, the
member should be held responsible for all costs, in keeping with GHI policy.
How should additions not on the AMP be treated?
The TF agreed that, ideally, all additions should be enrolled in the AMP by the time
of the community-wide upgrade to help ensure they conform to GHI standards and
policy. However, the TF recognizes that requiring enrollment in the AMP could be
contentious and the process of inspecting and accepting additions into the program
will be time consuming for GHI staff.
The TF discussed ways to add incentives to encourage those not enrolled and
recommends:
 Informing members that improving their additions to meet standards may be
easier and less expensive if completed during the upgrade process. It may
be advantageous to do the required addition upgrade work simultaneously
with the GHI reserve upgrades because GHI staff will be coordinating and
overseeing the work of the upgrade. This may help members by making the
transition to the AMP less expensive. Whenever a planned replacement
reserve update is scheduled, such as door, window, or siding replacement,
any member on the affected court whose addition is not on the AMP should
be approached with this offer.
 Additional triggers to require additions to be enrolled in the AMP. The new
triggers include observed instances of visible damage, obvious neglect, or
visible degradation of the structure; and violation of any city or county
health or building code. These situations demonstrate an unwillingness or
inability of the member to care for the property in a way that protects our
collective investment.
 As was done in the previous community-wide upgrade, members who
cannot afford the upgrade or needed improvements to their additions may
apply to GHI for a loan. The loan would create a lien to be paid when the
member sells their membership.
6. If GHI remains responsible for maintenance of addition components, should
the coop require all additions to be maintained by GHI before the community
wide upgrade begins?
See response to question 5, above.
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7. If GHI continues to maintain additions, what resources, methodologies and
practices should GHI employ to effectively manage a replacement reserve
program and replacement programs for major components, considering that
the additions are of variable ages, construction types and conditions?
The Kipcon report provides a professional recommendation for the management
of the AMP. The TF concurs with several of Kipcon’s recommendations.
The current GHI AMP determines monthly fees using the following groups. The
costs shown are from 2012.
Group
Monthly Contribution per Cost Measure
Open porch with roof
$ 0.033 per square foot
Unheated addition
$ 0.036 per square foot
Heated one-story
$0.076 per square foot
Heated two-story
$0.067 per square foot
Plumbing fixtures
$1.63 each
The Kipcon report used component data supplied by GHI and supplemented by
field inspections to develop projected replacement costs for individual
components such as windows, doors, roof, siding, heating systems, plumbing
systems, and electrical systems. Kipcon recommended several possible
modifications to the current GHI AMP structure. The TF will comment on these
recommendations below.
First, Kipcon said they could maintain our addition component spreadsheets for
$1,000 per year. We do not support hiring Kipcon to maintain our spreadsheets.
The ownership and maintenance of the spreadsheets should remain with GHI.
Second, Kipcon recommended that addition groups be consolidated from the four
current categories of 1-story heated, 2-story heated, enclosed unheated, and open
unheated to two categories – heated and unheated. We recommend this change
because the difference in the fee per square foot between 1- and 2-storied
additions is $0.009 and the difference per square foot between open and enclosed
unheated additions is $0.003. The TF considers these differences small enough to
allow the simplification. We further recommend that the fee applied to the two
categories be the higher of the fees of the categories that are combined.
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The chart below details the contribution charge difference to members of this
recommendation.
Group
Monthly
Contribution
per Cost
Measure
(2012)
Open porch
with roof
Unheated
addition
Heated onestory
$ 0.033 per
square foot
$ 0.036 per
square foot
$0.076 per
square foot
Option 1:
Monthly
Contribution
per Cost
Measure (2013
with 4%
increase)
$ 0.034 per
square foot
$ 0.037 per
square foot
$0.079 per
square foot
Heated twostory
$0.067 per
square foot
$0.070 per
square foot
Plumbing
fixture
$1.63 each
$1.70 each
Option 2: Monthly
Contribution per Cost
Measure (2013 with 4%
increase and group
consolidation)
Monthly
Contribution
Cost Increase
for Option 2
assuming 100
SF addition
$0.30 for open
Unheated
$ 0.037
porches
per square
foot
Heated
$0.079
per square $0.90 for two
foot
story heated
additions
Plumbing
fixture
$1.70
each
Third, Kipcon recommended apply a flat fee for all additions regardless of the
number of plumbing fixtures. We disagree with this recommendation as it would
lead to a significant increase for members with fewer fixtures. We recommend
that plumbing fees continue to be calculated by number of fixtures. Even if
piping replacement is similar regardless of the number of fixtures attached,
maintenance requirements will vary by fixture type and number. Also, the
difference in fees for a member with one fixture ($1.53) versus a member with
four fixtures ($6.12) is substantial.
Fourth, we support Kipcon’s recommendation that AMP fees increase by 4% per
year so that the reserve funds are better funded. When the next reserve study is
performed, this will be reassessed.
Fifth, we strongly agree with the recommendation that a similar replacement
reserve study be performed by a contracted professional on a periodic basis. We
recommend that the study be repeated in 5 years.
Regarding Kipcon’s recommendation that the same additions be studied in the
next replacement reserve study, the TF recognizes that following the same
additions will provide real and useful component depreciation data. The TF
originally thought using different samples would eventually result in complete
data on all additions. If GHI implements a program of regular inspection of units,
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including additions, complete data could be gathered through those inspections.
The decision can be made closer to the next replacement reserves study.
8. Should the Coop require new additions to be built according to specific
prototypes for standardization purposes?
No. The AMP TF finds that variety provides interest in GHI and the ability to
personalize one’s home adds to the desirability of GHI membership. We do
recommend that current rules remain in place to ensure the architectural integrity
and structural soundness of historic GHI. We recommend that the review and
pre-approval of changes to GHI units remain in place. We endorse periodic
inspection of all units and additions by GHI staff so that quality is maintained.
This is another area in which education would be helpful. Members must be
aware that they do not own their unit or their addition but that the real estate of
GHI is owned collectively by the cooperative and members have the right to
perpetual use per their MOC.
The TF would be happy to meet with the Board for further discussion of the issues raised.
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