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June 30, 2013


This annual report was prepared and is submitted by the President of the Delta Delta Property Association of Sigma Nu Fraternity (“the Association”) as required by Article VI of the Association’s Bylaws. The period of this report is from July 1, 2012, through June 30, 2013, unless otherwise stated.


Meetings with the Collegiate Chapter

Representatives of the Association, Alumni Chapter, and Alumni Advisory Board (AAB) met with the leadership of the Collegiate Chapter at a “kick-off” meeting on September 2, 2012. The fall budget was reviewed and plans for the fall semester were finalized.

The annual meeting of the Chapter’s alumni organizations was held on October 6, 2012. In addition to normal discussion topics and alumni officer elections, the meeting included a status report on the capital campaign donations and capital improvement plans.

Officers and Directors of the Association and Alumni Chapter held a budgeting and planning meeting with the Collegiate Chapter on January 27, 2013, at which time the Association’s draft budget for the next fiscal year was presented and discussed and the Collegiate Chapter’s budget for the following academic year was developed

Capital Campaign

Our “Building a New Legacy” campaign concluded on January 31, 2008. We received a total of 170 pledges with a total amount pledged of $297,673, well short of our goal of $600,000.

As of the date of this annual report, a total of $238,758 had been donated, leaving an uncollected balance of $58,915. Of this balance, the Classes of 2006 – 2012 owe $33,475. Of this group of 39 brothers, six are paid in full and 27 have made no payments.

Previous annual reports discussed delinquent pledge commitments. Because collections have dropped off substantially, I will now report on all pledges with a non-zero pledge balance.

Number of Pledges with Non-Zero Balance: 60 (35.3%)
Number of Pledges with No Payments: 33 (19.4%)
Minimum Non-Zero Balance: $50
Maximum: $5000
Average: $982

Because the collection campaign in 2011 – 2012 was expensive compared to the amount collected ($16,195 donated at a cost of $5,184 or an expense ratio of 32%), I directed a streamlined approach. We eliminated quarterly pledge reminders, made more extensive use of e-mail and relied less on snail mail. Unfortunately, total payments dropped to $7,750. Affinity Connection has been retained to process pledge reminders, collect donations, and prepare monthly reports. The Affinity costs for this fiscal year totaled $628 (an expense ratio of 8%).

Clearly, a new collection strategy is needed. I plan to prepare such a strategy and submit my recommendations to the Board of Directors early in the academic year.

Capital Improvements

In May of 2012, the Board approved replacement of the tile floor in the basement from the door to the north party room and continuing south through the south party room. This project was completed in July 2012 at a cost of $8,110 that included asbestos abatement.

A capital improvement projects proposal was sent to the Board of Directors by e-mail dated July 15, 2012. Later in July, the Board of Directors approved the replacement of the 44 windows on the second and third floors at a total cost of $29,167 and the replacement of the kitchen stove at a cost of $4,616. The new stove, consisting of six burners, a griddle and dual ovens was installed in August. The new windows were installed during the fall semester.

Using surplus funds that had accumulated from its operating budget, the Collegiate Chapter voted to replace the tile floor in the north party room. This project was completed in May 2012 at a total cost of $5850.

Early in the spring semester, the Collegiate Chapter voted to return to an in-house cook for the 13 – 14 academic year. To support this decision, the Board of Directors approved the replacement of the dishwashing machine; the purchase of dinnerware, flatware, glassware, pots, pans, and cooking utensils; and purchase of a bin-type icemaker and deep fat fryer at a total estimated cost of $11,500. The dishwashing machine and kitchenware have been ordered but not received. We will not purchase the icemaker and deep fat fryer until we have our cook in place and confirm the need for these items.

[Post-Period Note: The dishwashing machine was installed in mid-July.]

Capital improvements from the operating budget included purchase of a used commercial style double door refrigerator; removal and replacement of the tile in the front stairwell from the first floor to the basement; and a donated used faux-leather sofa for the foyer.

Interactions with the University, Town and Other Fraternities

Brother Sidwell continues to serve as our principal point of contact with the Office of Fraternity and Sorority Life (OFSL). He also covers the Advisor Meetings when our advisors have conflicts.

For the 15th year, Brother Sidwell served on the Board of Directors of the Nittany Cooperative, formerly the Fraternity Purchasing Association.

Brother Sidwell also serves as Vice President of the Lion Fraternity Alumni Association. This group has been very active this year in responding to a proposed change to the Borough’s Property Management Ordinance. Brother Jim Shincovich, a Board member and local resident, has also been very active in these discussions. Among other changes proposed by Borough staff is a significant change to the “nuisance” provisions of this ordinance. Under the current ordinance, rental property owners are assessed points for confirmed nuisance violations such as excessive noise, underage drinking, serving minors and some felony and misdemeanor convictions. After a rental property has amassed 10 points, the Borough can suspend the owner’s residency permit at the close of the current lease period. Under the current ordinance, noise violations are assessed one point and drinking violations three points. The Borough staff has proposed to reduce the limit from 10 points to nine, increase the noise violation points to three/violation, and suspend the residency permit immediately upon reaching nine points. In addition, under the proposed changes, the landlord would be responsible for finding housing for the displaced residents. Unlike apartment buildings that are issued one permit per dwelling unit, fraternities have one permit for the entire house. Under the proposed change, three noise violations would shut down a fraternity house. Ed & I met with other fraternity advisors early in the year to discuss the changes with the Borough Manager and his planning staff. The meeting was sponsored by the OFSL. Later in the year, Ed, Jim and I attended a roundtable luncheon with members of the Borough Council to discuss the impacts of the changes and alternatives. The LFAA later wrote a letter to council and I wrote a letter of behalf of the Association to the council member who sat at my table. In preparation for these meetings, Ed organized several meetings with the LFAA to discuss strategy.

On a positive note, the same Borough residents who have been pushing the Borough for these changes have become heavily involved in opposing the placement of a natural gas transmission pipeline through their neighborhoods, and this resistance has apparently derailed or delayed Borough Council consideration of the proposed points system changes. This has bought the LFAA more time to prepare to resist these changes.

Other Activities

I attended the Sigma Nu Institute held at Penn State in February. Jim Wyland and I conducted unannounced monitoring of several social events held at the Chapter House. No significant deviations from our Risk Reduction Policy and Guidelines Implementation Plan were identified. I led two Phase I LEAD Seminars for the spring candidate class – Project Management and Leadership. I cooked two brothers’ meals, one in the fall semester and the second for the summer residents and local alumni. I cooked and served two “date night dinners” for a total of four brothers and their dates during the spring semester. The Alumni Advisory Board provided significant input to the Chapter’s mandatory Pursuit of Excellence submission for 2013 and provided a similar level of assistance in responding to the General Fraternity’s review of the Chapter’s 2012 submission. I provided a separate advisor’s assessment for this year’s submission that is available upon request.

Maintenance and Repairs

Association funds were used for the following activities related to the Chapter House:

Code inspection-related repairs;
Removal of a diseased elm and stump from our parking lot and backfill with stone;
Interference (i.e., baseboards, bars, DJ stand, and benches) removal for installation of new basement vinyl floor;
Installation of new baseboards in basement;
Sealing new basement floor after installation;
Installation of new vent fans in the main bathrooms;
Repair of the dishwasher area exhaust ducting;
Cleaning and resealing of the wood floors (after spring semester);
Stripping and waxing all the linoleum tile in the common areas (after spring semester);
Cleaning and repairing of the grout in the shower rooms;
Cleaning of the Chapter/Living Room carpet;
Down-payment for masonry repair of the north chimney;
Security and fire protection system repairs;
Installation of new gas line and regulator for new stove;
Delivery and installation of double-door refrigerator;
Supplies used during the Active – Alumni Work Day on April 13;
Weekly walk-through inspections;
Variety of door and door jamb repairs; and
Numerous miscellaneous repairs including a variety of electrical, heating, drywall, structural, and plumbing repairs.

In addition to the above repairs, security deposits were debited in the amount of $3,153 for repairs due to damages and cleanliness issues caused by the Collegiate Chapter this fiscal year. This amount contrasts to $1,356 debited in the previous fiscal year.

Based on visible deterioration as seen from the ground, we had two masons inspect our three chimneys. Both agreed that the north chimneys (serves the Chapter Room fireplace) need repair to the mortar. We signed a contract to repair this chimney ($3960). A down payment was made in June and the work should be performed in August. The remaining two chimneys will receive close-up inspections during repair of the north chimney.

[Post-Period Notes: In July 2013, the university’s arborist reported that one of our elms on our kitchen side of the property is infected with Dutch elm disease and must be removed. This project will cost approximately $3,800. My son, who is a certified consulting arborist, is also concerned about the elm tree next to the one with Dutch elm disease. The branches are “flagging” (severe bowing) indicating a potential weakness. He advised that storm damage to this tree is likely once the diseased elm, which provides some wind protection, is removed.]

In-House Cook

As mentioned above, the Collegiate Chapter has decided to return to an in-house cook. The Chapter selected CollegeFresh (www.collegefresh.net) to supply the cook and food. The meal plan will include a self-serve cold breakfast, lunches Monday through Friday and dinners Monday through Thursday. The chapter has elected to use disposable dinnerware for breakfast and lunch and china/glassware for dinner.

Summer Residents and Summer Parking

We have six brothers living in the house this summer (compared to 11 last summer). Rental income has been split between the Collegiate Chapter and the Property Association. We’re also renting parking spaces to the general public with all parking revenue going to the Association.

[Post-Period Note: Although the Chapter House was closed for the summer, except to the summer residents and their invited guests, several alumni gained access to the house during the weekend of July 19. Significant damage occurred to the basement ceilings, sprinkler pipe hangers, and an exit sign. The cost to repair these damages is unknown as of the date of this report. Two alums gained access to the locked Chapter Room and left trash, spilled beer and vomit on the carpet.]

Bursar Billing

We’ve had very few problems with bursar billing this year. However, the university does not bill for the summer semester so this burden falls on me. Advance payment is required so collection is not an issue.

Completing the required paperwork for bursar billing remains a challenge. The university establishes strict deadlines, and if not met, bursar billing is not possible. Both Ed Sidwell and I work very closely with the Collegiate Chapter treasurer to ensure that the needed forms and spreadsheet are complete, accurate, and submitted on-time.

Accounts Receivable

Unlike past years, there were no accounts receivable at the close of the spring semester.

Chapter House Cleanliness

As discussed in previous annual reports, the alumni have expressed continued concerns over the cleanliness of the Chapter House. Last year’s report stated that cleanliness had significantly improved. Cleanliness has been maintained at the previous year’s level but continued improvement and monitoring is needed. Weekly walk-throughs by me and separately by our contractor are providing a good level of oversight.

Risk Reduction/Management

There were no risk management issues this academic year. We plan to continue unannounced monitoring of social events to help ensure continued compliance.

Plans for 2012 – 2013

Meetings & Events

For the upcoming academic year, the Association’s planned activities include: a kick-off meeting with the Collegiate Chapter on Sunday, September 1 (Labor Day weekend); the annual Homecoming meeting on October 12 (beginning at 11:00 AM); and a budgeting and planning meeting in late January. Additional meetings and/or telephone conferences will be scheduled as needed.

The Association will host a buffet-style dinner following the Blue/White game on April 12, 2014.

Brother Sidwell will continue to serve as our interface with the Centre Region Code Administration and serve on the LFAA.

Maintenance & Repairs

Planned non-routine repair and maintenance activities include:

Removal of a diseased elm from the south side of our property
Completion of kitchen upgrades;
Completion of the assessment of the brick and mortar of the exterior walls of the House Mother’s Suite along with options and recommendations for consideration by the Board of Directors;
Completion of north chimney repairs; and
Treatment and painting of the second floor bathroom ceiling because of mold growth

[Post-Period Note: The diseased elm and small elm next to it were removed on August 6, 2013, and the chimney repair was completed on August 7.]


Budget Execution

Attachment 1 includes budget execution results for 2012 – 2013 and the budget for the 2013– 2014 fiscal year, which was approved by the Board of Directors in early June 2013. This new budget is an increase because some expenses have increased.

  1. Rent charged to the Collegiate Chapter was increased because of the unexpected large fall pledge class (which significantly increased our spring liability insurance payment) and summer occupancy. A summer operation was not planned when the budget was prepared.
  2. Capital improvements for this fiscal year are discussed above. The new dishwashing machine and other kitchen improvements were approved this fiscal year but won’t be billed until 13 – 14, probably in July or August. No other capital improvements are pending.
  3. Affinity costs are associated with processing pledge reminders and donations.
  4. At the close of the fiscal year, our mortgage loan, executed in 2002 for a term of 15 years, had a balance of $18,263 (APR = 8.0%). Our other loan, refinanced in June of 2008 for a term of 15 years, had a balance of $55,346 (APR = 6.5%). Debt service on these loans totals $1,140 per month.
  5. Real estate taxes were less than budgeted because rate increases were not as high as I had anticipated. The 13 – 14 budget is based on the current assessment and known tax rates.
  6. Casualty insurance costs for 12 – 13 increased because of the increased replacement value determined by our insurance carrier and the addition of bed bug insurance. Unfortunately, we were recently informed that the bed bug insurance underwriter will cancel this coverage August 17, 2013. Our hazard insurance carrier is looking for a replacement carrier to underwrite this program.
  7. Liability insurance costs were higher than budgeted because of the unexpectedly large fall pledge class. Rates for 13 – 14 are based on the mid-tier rates (Tier 2) charged by the General Fraternity in 12 – 13. The Chapter will drop a tier (Tier 3 to Tier 2) because the Collegiate Chapter had no risk violations this year. We won’t know the 13 – 14 rates until the fall semester begins.

Costs for Maintenance/Repairs/Furnishing expenses far exceeded our budget, largely because of significant emergent repairs that included the removal of a diseased elm and stump from the parking lot ($2,213); a down payment on the repair to the north chimney ($1320); installation of the new refrigerator; gas line installation for the new stove; finish coats for the new basement floor; and replacement of the vent fans in the main bathrooms. As a result of these expenditures, I sought approval from the Board of Directors in June to exceed the limit of $15,000 established in the Association’s Bylaws. By Board vote (with no dissents), the limit was raised for this fiscal year to $21,000. (I had anticipated that the entire cost of the north chimney repair would be paid in June but only a one-third down payment was required).

Miscellaneous expenses included Blue/White dinner, copies and related expenses for meetings, conference calls, and postage.

The positive net cash flow is the cumulative result of the variances discussed above.

Balance Sheet

The year-end balance sheet is provided as Attachment 2.

Our “Current Assets” (less Security Deposits) have decreased since last year ($89,495 on 6/30/13 v. $120,613 on 6/30/12) as a result the capital improvements discussed above. This decrease would have been greater had we not had a positive cash flow from the operating budget.

The Association has loaned funds to the Alumni Chapter to cover shortfalls in donations to the Annual Fund. The first loan occurred in 2006 for $1000. Loans for 10 - 11 totaled $4,700 with a total debt of $5,700 at the end of that year. A loan of $1,350 was required in December 2012 raising the total loan amount to $7,050. No loan payments have been made.

Under Liabilities & Equity, the “Deferred House Mothers Suite” (HMS) account represents the funds that had been raised by Brother Leyburn, ΔΔ 597, and ear-marked for the HMS renovation.

The “Nittany Bank Loan” is the combined remaining principal of the two loans discussed above with a total principal reduction of $8,217 this fiscal year.

Beginning in the 2007 – 2008 fiscal year, the Association transferred the management of security deposits from the Collegiate Chapter. Thus, the Association’s balance sheet includes asset and liability entries that should offset. They don’t & I’m still trying to resolve this inconsistency.


Brother Ed Sidwell has consistently supported all aspects of our operation, only some of which are described above. Brother Doug Kosydar, ΔΔ1249, has been the Alumni Chapter’s Worthy Commander, a member of the Association’s Board of Directors, and a member of the AAB. Director Jim Wyland, ΔΔ1273, has served as Chairman of the AAB and Brother John O’Donnell, ΔΔ869, is the Chapter’s faculty advisor. Brother Jim Shincovich, ΔΔ860, a member of the Association’s Board of Directors, provided significant support to the Chapter and the LFAA in discussions and meeting concerning the Borough staff’s proposed changes to the Property Management ordinance. He also helped prepare the two brothers’ dinners.

A special thank-you is extended to Brother Mike Sweeney, ΔΔ1220, and his wife Karen who made a significant donation towards the kitchen improvement expenses.

Finally, I thank all the officers, directors, and advisors for their support throughout the year.

As always, I would appreciate any feedback on how we can improve the Association’s operations.

Respectfully Submitted,

Robert A. Nelson

Robert A. (Nellie) Nelson, 916
Captain, US Navy (Retired)
Delta Delta Property Association of Sigma Nu Fraternity