Summary of the Second Wednesday June Conversation

There are 25 residents association members of ORANJ. Thirty-three residents from 21 associations participated in the May 8 Zoom conversation: Applewood, Atrium, Cedar Crest, Crestwood Manor, Evergreens, Fellowship Village, Friends Village, Harrogate, House of the Good Shepherd, Lantern Hill, Laurel Circle, Lions Gate, Masonic Village, Meadow Lakes, Medford Leas, Monroe Village, Oaks at Denville, Pines Village, Seabrook, Stonebridge, Winchester Gardens.

Maggie Heineman here, I’ve decided this month to let Artificial Intelligence write the summary.  It’s probably at least as accurate as my 88-year-old mind can produce. Let me know what you think of this:

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AI – generated: Meeting Summary for ORANJ 2nd Wednesday

Jun 12, 2024 09:25 AM Eastern Time (US and Canada) ID: 841 9232 7399

Quick recap

The meeting discussed increasing tax deductions for veterans, addressing insurance coverage gaps for residential associations, and exploring new phone system options. The team also covered the healthcare provider change, concerns over transparency with management companies, and the complexities of managing retirement communities.

Next steps

Rick to summarize the discussion on liability insurance for the blog.

Resident Trustees to review the non-disclosure agreements they are required to sign and understand the implications.

Resident Associations to discuss with their management companies about the role and responsibilities of Resident Trustees on the governing boards.

Jan at Harrogate to follow up with Julia at Lantern Hill regarding their phone system provider and features.

George Ruben to attend the hearing in Trenton and testify in favor of increasing the tax deduction for veterans, if transportation can be arranged.

Summary
Veterans Bill and Residence Association Insurance

Richard Ober, the Chair of the Legislative Committee, informed the group about a bill, SCR81, to increase the tax credit for veterans living in CCRCs from $250 to $2500 the upcoming hearing where he and Gary Baldwin would testify in support. There was also a discussion about the lack of liability insurance coverage for residence associations, particularly for life plan communities, and the challenges of procuring insurance for unincorporated entities. 

Rick Ober asked whether or not Residents Associations [RA] and their officers,
directors/trustees and volunteers are covered by Directors & Officers Insurance [D&O] and Comprehensive General Liability Insurance [CGL] at their life plan communities, either under the umbrella of the provider or by separate policies purchased by the RA. Alhough lawsuits may occur infrequently and liability even less often, the legal expenses of defending a lawsuit,
even successfully, can be substantial.
D&O policies protect against mismanagement, sexual harassment, discrimination and the like but not personal injury. Personal injury, including libel and slander is covered by the CGL policy. Various policies may include persons acting as volunteers but exclude them if they are directors or officers. Many policies have a cross-liability exclusion, which denies coverage if one volunteer/director/officer is suing another volunteer/director/officer of the same organization/corporation. It is important to have this cross-liability exclusion removed by endorsement to the policy, as a lawsuit against one RA member is most likely to be brought by
another RA member.

One provider officer suggested that ORANJ consult its insurance brokers [ORANJ has none and no ORANJ insurance] or every RA member get an endorsement to their own renters’ liability policy. I tried the latter without success. Another indicated that such policies could probably be written by their broker for $1000 or so per year, which would be a burden for those RAs that
have little or no funds. It is my experience with other nonprofits that subsidiary organizations like RAs are often included in the controlling organization’s policy at little or no expense. At least one RA indicated that their provider covers them.

Frank shared that the Evergreens had obtained Directors and Officers Liability Insurance despite initial objections, and Julia inquired about the funding sourde. Lois expressed concern about the associations lack of authority in these matters.

Exploring Phone System Alternatives and Insurance

The team discussed the inadequacies of their current 10-year-old Cisco phone system and explored potential alternatives. They shared their experiences with various phone systems, including Verizon and Comcast, and considered their reliability and cost-effectiveness. The team also discussed the upcoming vacation of Maggie and the need for someone to summarize the meeting, particularly the discussion on liability insurance. Lastly, the issue of veterans’ insurance was mentioned as a potential future topic.

Company’s Shift to Optum Network and Transparency Concerns

The team discussed the company’s shift of skilled nursing care to the United Healthcare Optum managed care network. Richard brought up the change, but no one had prior knowledge or experience with the organization. The team also discussed concerns about resident trustees in management companies having to sign NDAs, preventing them from sharing information with residents. There was a general consensus that this was not a common practice and that the residents should have more transparency. Julia, from the Lantern Hill community shared her experience, stating that they had been pushing for change, including having dinner meetings with the board president without management present. The team acknowledged the need for more transparency and hoped for positive changes.

Board Roles and Retirement Community Management

Wayne clarified the role of the board, emphasizing that it’s separate from Ericsson and its members can’t be employees of the company. He also highlighted the board’s primary duty: to ensure the management company is performing satisfactorily. Barbara Trought led a discussion on the complexities of owning and managing retirement communities, highlighting the need for training and non-disclosure agreements (NDAs) to manage financial transactions and insider information. Don concurred, stating that training is crucial for board members handling large financial resources. Lura, however, voiced concerns about being asked to be a “yes woman” and agree to unlimited funds without knowledge of the budget setup. She also raised issues about the NDA, questioning its broad nature and its implications for residents. No one from the Spring Point community responded to her comments in the provided transcript.

Annual Budgeting Process and Challenges

The group discussed the annual budgeting process and the role of the board in presenting and negotiating the budget. They agreed to meet again in September to continue their discussions. They also discussed potential issues with the state law and the high costs of some facilities. The group appreciated each other’s efforts and recognized the need to continue working through these challenges.

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