Update - Board Meeting of April 9, 2009

These are my notes pertaining to the board meeting on April 9.

I'm not certain precisely where to begin. I drafted a letter to the management and the board regarding the shenanigans at the meeting. It was originally 6 pages in length and required editing prior to mailing. The following is based on that letter.

1. Our “Communications Director” read a statement in support of a personal agenda and advocating the use of association money to fund that agenda. That action was a catalyst and fed dissentious elements in the gallery. Comment: I conclude this little drama was staged, at which point the constructive elements of the meeting ended. Frankly, I cannot understand why that board member did what she did. Why is a board member taking up these unit owner causes and disrupting the meeting? No matter how “noble” or well intentioned, I must ask, is it appropriate for a board member to do what she did? It is my opinion that her action was an undermining one. It was a major disruption of the meeting. It was inconsistent with the stated goals and strengths of the ROC board members; most notably “conflict resolution”! The word “antithetical” comes to mind. What is going on here? Fomenting conflict or supporting fractious groups at BLMH is at the very least divisive and not appropriate for a board member. What this board member did is not for the good of the association. Or, to put it another way, promoting causes or promoting a private agenda is not consistent with the code required of a board member. Each of the board members signed an agreement to abstain from this type of activity.

This is not the first time this individual has staged this type of event. Last year, as a unit owner, she prepared and posted a document in each foyer, in advance of a board meeting exhorting unit owners to attend the meeting and thereby prevent a ruling on the banning of pets at BLMH. There was no such ruling.

2. Certain aspects of the meeting were, as one attendee stated to the board “terrible” or words to that effect. There were unit owners shouting down the manager, board members and each other! This led to repeated shouting between two groups of unit owners! The board was unable to manage the meeting. I realize this is difficult particularly when things occur such as the personal statement read by our “Communications Director”. Comment: The “Leadership by Example” must come from the board. The unit owners should not be manipulated by members of the board and vice-versa. Our board has a lot of work to do and theatrics and disruptions cannot and should not be tolerated.

3. A vendor (contractor) attended the meeting. That is one of the results of advertizing the meeting on the web, I suppose. Comment: Instructions should be posted on the website and the blog, advising who is permitted to attend the meetings. Announcing meetings is fine, but they may be interpreted as an invitation by readers who are not unit owners.

4. During the meeting I observed unit owners complaining about snow removal “bobcats” parked on one of the courts and then in the next few minutes the “Communications Director” swung the meeting to support the parking of a tractor of a semi-trailer on the property. Comment: What is going on here? I must say, this was incredulous, and if not duplicitous, then inconsistent. Bobcats are an eyesore, but tractors are OK? What are we devolving to, mob rule led by our “Communications Director”?

Why is a tractor parked on the property apparently OK to our Communications Director in defiance of the rules and regulations? Why is that same board member championing causes which are totally against the rules? I have a little story about this; I once had a pickup truck and some of my neighbors were unhappy. I resolved this by parking the pickup off site for a period of time and ultimately capitulated and sold it. I guess my “circumstances” would be construed as being without merit. Besides, I was simply keeping the rules and operating as one would, in a ”community”. But talk about “community” is apparently easy and without meaningful action. A board member can champion personal causes to spend association money, but can’t seriously discuss deferring the painting of the exterior of certain units for a year at a savings of about $15,000.

Regarding the tractor (which is the motorized portion of a “semi-trailer”), why did the vehicle owner not attempt to park the vehicle on the boulevard outside BLMH? Alternately, why not in the driveway of the building and with a notice in the window stating visitor with unit owner's name, address and cell phone? Why this board member statement about the personal feelings and concerns, which is essentially a private matter, and a subjective one at that? Why didn’t the board member who seems to have great concern about this, not handle it simply with a request for a collection from “concerned” unit owners, instead of attempting to manipulate the board and spend association money for her “cause”?

5. I asked a question about budgeting, which was lost during the meeting. That’s what happens when personal agendas reign and disrupt. We have some significant expenditures, including driveway repairs. During the meeting, our Treasurer and Architectural Director, and our professional manager stated that we have eight or more driveways which, under the criteria (81%) qualify for immediate repairs. It was also stated that to maintain reserves at a certain threshold, not all of these repairs can commence OR other expenditures must be curtailed. Our Treasurer has pointed out several areas where this might be possible (reference: my March 19 blog). Most notable was delaying painting of the exterior of certain buildings for a year (or more?). I asked if this has been further explored, and the Treasurer stated “no”.

This was lost because of discussions about personal causes, bobcats, demands for "service", etc.

Comment: If there is an assertion that driveway repairs are not now possible due to finances, I ask the board to consider just how long it will then take to make repairs. Consider that driveways will continue to deteriorate and at an accelerating rate, which is not unusual as bituminous concrete (asphalt) ages and loses its binding agents to the bacteria in the soil. I fear that the board may be creating another catch-up game here. The result will be disrepaired driveways pushed off until next year, joining the group which does not survive the winter of 2009-2010, and so on. That is a game with nature that our association cannot win.

Consider the uproar from the unit owners who have terrible driveways and have to wait a year or longer. That will certainly feed the negative elements at BLMH and will foment another shouting match later this or next year.

A multi-faceted financial solution may exist, but the board is distracted by personal causes and agendas which dominate the meetings. A financial solution could include the temporary lowering the threshold for our reserves and delaying painting. But that would require an inspection and discussion. As I understand it, our reserves are growing by about $27,000 per month. If so, then they will increase in the 5-month period April 1 to August 31 by about $137,000. Is that included in our cash-flow projections?

I appreciate that these are difficult choices, and in many respects the current and recent boards are attempting to make up for lost time and lost revenue. Believe me, as a “B” unit owner, I will gladly pay for a new window if that is what it takes to free up funds. On the other hand, I will not pay for a window so that the board can take the association money thusly saved and flush it on the private causes championed by a board member.

I am also disturbed that our “Communications Director” apparently has little or no interest in these matters, but would prefer to discuss block parties, garage sales and personal causes. I do understand that this may be consistent with her focus on her interpretation of “community”. However, that is not within the duties and scope of a board member of a million dollar business. Perhaps I am naïve but I don’t think that block parties can overcome the pressures on unit owners of increasing assessments, increasing numbers of vacancies, increasing rentals, increasing absentee owners and so on. However, I would like to hear a statement by our “Communications Director” about how her proposed events will satisfy her constituents, some of whom are committed to an increased level of “service”.

6. I was heartened to hear our professional manager address a unit owner and state that the assessment increases are due to underfunded reserves as the result of previous board action. That is the first time I have been present at a board meeting and heard a direct statement on the matter. In all previous discussions that I have been present to, there has never been a direct statement of this type.

Comment: There are unit owners attending meetings and pressing that more funds be spent on “services”. It seems there are different positions about funding repairs and funding services. Since 2001 our assessments have increased about 50%. This has been for two reasons; to fund reserves and to pay ongoing operating expenses. At the present rate, our assessments could increase another 50% in less than 8-1/2 years. I do not expect that. However, I do not know what the future inflation rate will be, nor do I know what the “reserve studies” will reveal. However, I do know our association faces an aging infrastructure and with it increasing repairs. Too bad the boards in 1983 to 1999 made the decisions they did. But “it is what it is”.

I know that the term “perfect storm” has been much overused after the publishing of the book and the movie. I apologize for using it here. We are in the midst of just such an event. A serious economic decline, new unit owners who purchased at the height of the boom and possibly at inflated prices with "resetting" mortgages, rising assessments and aging infrastructure requiring increased expenditures and one or more new board member with private agendas and causes!

We have many older unit owners who are very used to the lower assessments. The data on BLMH reveals an incredibly low 2.36% average annual increase from 1983 though 1995. That is what unit owners came to expect. However, since 1999 what they have gotten is an average 6.96 percent annual increase. When I purchased in 2001 after conducting my own studies and interviews of management and unit owners, I fully expected that there would be “trouble in River City”! Nor did I believe the ROC candidates when they replied to my letter, in writing, that “assessments were not an issue”. If that was true, then the new board members are as oblivious, ineffective, or subject to unit owner pressures as the boards we had in the period 1983 to 1999.

I always find it humorous when someone talks about how "low" the assessments are “somewhere else”. They were incredibly low here for years and look at what that got us! I guess some unit owners want to go back to those “good old days” and hang future owners. Talk about “community” is so easy, but action is what counts!

There is a purpose in my stating this here. It is simply this: I think some really straight talk about finances, budgeting, and forecasting is preferable to the alternatives. Again I say “kudos” to our professional manager. To that end a reserve study may be helpful, no matter the consequences. I have been opposed to such a study and it is simply because I fear the possibly bad news and diverting funds to the study. But overall, I don’t think this board has a choice. We need some really straight talk. We are now definitely in a crisis, aggravated by certain new board members.

I suggest that the board and my fellow unit owners consider the implications of the financial demographics at BLMH. There is no formal census, but I think I can state that we have some unit owners who purchased in the period 2000-2007 and are struggling with the unanticipated (on their part) increases in assessments and balloon payments on mortgages, or mortgage rate resets. Consider our aging demographics. (Our census form does provide age info on unit owners, so that can be determined). The social security administration awarded a 5.8% benefit increase for 2009. However, with core 2009 inflation below 2.0%, it is to be assumed that the increase for 2010 will be far lower. I am advocating as per my recent letters and blog, that the board consider the SS benefit increases when discussing and evaluating assessment increases. If inflation remains low and if we can maintain reserves at a certain threshold, then perhaps future assessment increases will moderate as our management has predicted. However, we do need new roofs, the driveways are deteriorating and so on, all of which need to be paid for. But funding personal causes is not a problem!

I would hope that the entire board and community realizes that the problems here at BMH are due in large measure to our low assessments for an extended period of time. That drew in owners who expected such assessments would remain low “forever”. It built false and unsustainable expectations among the existing unit owners. It undermined our finances and it underfunded our reserves. It is the reason that the board today is struggling to agree upon expenditures and to do such simple tasks as replace driveways in serious need of repair. It is also why we have unit owners complaining about a “lack of service”. And we apparently have board members willing to seize upon this and use it for personal advantage.

Recent history of boards here at BLMH has shown that those who do make the hard choices will be fired. I am of the opinion that is due in part to the avoidance of straight talk by the boards. There was bad news, and perhaps everyone hoped it would get better, that assessment increases could be curtailed. Well, our aging infrastructure, the economy and the housing bubble conspired against that hope. What we need in new unit owners, are owners that are fully informed of the future here at BLMH, to the capacity of board and management. There may be fewer sales, but we will not be contributing to future problems.

There are about 10 million home and condominium owners in the U.S. that are “underwater” and in dwellings they cannot afford, according to data by the housing industry and the U.S. government. Some of those are here at BLMH. We have experienced foreclosures as evidence. There is, to my knowledge, nothing we can do about that. We can emote, we can be concerned, but what definitive, corrective action is possible?

7. At the meeting I again listened to a unit owner declare that “I’m a unit owner” as compared to something else. Comment: I see this as an opening for a serious conversation about the duties and responsibilities of a unit owner. There seems to be a lot of conversation centered on the “rights and privileges”, and the expectations for “service”. Well, with those “rights and privileges” also come “duties and responsibilities” and the need to “be of service” to our community.

Perhaps it is time for a dialogue regarding the duties and responsibilities of a unit owner. It may no longer be appropriate for the majority of us unit owners to be sitting idly by. For example, it may take one unit owner per building to take responsibility for the condition of the halls, another the garage interior and yet another the grounds in the immediate vicinity of each building. The fourth unit owner per building could actively support our landscape director. To get involvement may require the stipulation by the board of who is to do what. Absentee owners may be required to have a surrogate owner perform their duties. If that is not workable, this opens the path to an additional assessment fee to offset their inability to perform their duties. However, leadership in this and all other endeavors at BLMH will come only from the board, which is being driven in the direction of private causes and block parties.

8. I am disturbed by unit owners who have complaints about our management or the board, when statements are made about alleged insults, etc. Why would this disturb me? It isn’t the statement. We all have opinions. It is the reaction of some of the board and the grand stand. This frequently becomes the basis of “proof” that someone is incompetent or unjust. Why should I ever believe a unit owner just because they said something was so? Ditto for any of us. But some members of the board seem to relish this and I have seen a board member state that this must be proof as “there were complaints”. For example: A unit owner who is trying to sell their unit (or so they stated at the meeting) is unhappy that bobcats are parked on their cul-de-sac, snow accumulation and so on. This is inhibiting their opportunity to sell, or so they stated. Then they say the management company is rude and unresponsive to their requests to remove the bobcats. Should I believe this? If so, why? But apparently the word of a disgruntled unit owner who is attempting to exit BLMH should always be trusted over that of the management company!

To be frank, if I were attempting to sell, I might do the same to move my unit. But why should my position be believed? I certainly would have a reason to distort the facts, and as a unit owner, I might not agree with management's unwillingness to move the bobcats so I can improve the appearance of "my" cul-de-sac and facilitate a sale. I have been known to lose my temper in such situations. If I were desperate or intent upon a specific outcome, I might be inclined to get argumentative, or to stretch the truth. That's the way it is with human beings.

9. During the meeting a gentleman in the homeowner’s section stood up and addressed the board. He stated that he was in the business of maintenance and implied his business serviced associations such as ours. He then went on to talk about his business and how he would love to get the contract here at BLMH. Did anyone get his name and phone number? Was he a vendor attending the meeting or a unit owner? Was he a plant or was he invited by someone on the board?

He went on to dangle a few “plums” at the board. He actually backed off from some of his more powerful statements, as he continued to talk. I was concerned when he stated that his revenues are down about 35% this year. This could be construed to be due to price decreases, but the gentleman did not state that. More likely, his revenue falloff is attributable to several causes, including a loss of business. Why is his business down by that amount? Is it due to poor workmanship and quality or poor business skills? Just the kind of people we need attending unit owner meetings: hungry vendors of dubious ability looking for a choice plum of a contract.

I am not encouraged by a business owner who comes into a board meeting, addresses the board, states he wants their business and then tells me his business is down 35%. He is certainly looking for business to fill that void. But the larger question is why was he here and at whose invitation?

10. I sat quietly at the meeting for the most part. Thank God I had some gum to chew on. But believe me, it was difficult. Sitting quietly can be construed to mean that I support one position or another. However, discretion won out and I simply refused to join the fracas. I will continue to attend meetings, but if this is the way it is going to be, I may bring a camera and I will need a lot of chewing gum.

Let me say in closing that I do appreciate the efforts of our management and the board. Let me also say that my concerns have increased in the past 6 months and that this is not related to the economy but is strictly the result of observing the new board in action. I have discussed certain aspects of this letter with other unit owners who are not on the board and who have never been on the board. They share my concerns, which are due entirely to the current board situation; the character, integrity and makeup of the new board, and the apparent direction that certain members of the board seem to want to take BLMH. What will happen when the board is comprised entirely of members all supporting personal causes and private agendas?