HOA Shareholders Meeting

This week will be the annual meeting for our HOA. This shareholders meeting is an important annual event. Our HOA is a not-for-profit corporation with 336 owner-shareholders. Board members are owners who step up and are elected by the other shareholders for terms of one or two years.

During the meeting the owners who attend will be given a "State of the HOA" assessment by the current board members, and after the election tallies are in, they will meet the new board members.

Will we have new board members, members who have never previously been on the board? Or will we have the same old, same old? The youngest member of the board, by age, is not running for reelection. After several terms that is appropriate. It's time to pass the hat to owners who have not done this before. It's appropriate to create the opportunity and nature abhors a vacuum. Working on the board should be an enlightening, educational experience. Something each and every owner should do, and be willing to do. "With knowledge comes wisdom."

Is there anything significant to report to the owners on Thursday? Yes, there is. I am a member of the budget committee. It has been working on the reserve plan. Simply one of a thousand tasks that must be done here by a volunteer body of six or seven. If not, then we drift and there will be consequences. If not, then we'll simply pull out a dart board. Will it be the "feel good" dart board, the "same old focus on O&M" dart board? Or the "just wing it" dart board? HOA boards can pick and choose their approach, and boards do. 

If this annual meeting is true to form, we'll have somewhere between one-third and one-half of the owners in attendance. Most will listen and ask questions. A few will opine about what the board should be doing, or what the board is doing wrongly. In other words, what "someone else" should be doing. Sometimes the opinion expressed is about "What the board should be doing for me." 

What's Important?

In fact, this HOA faces some serious challenges. These are not insurmountable. Nevertheless they are real and there will be consequences for owners.

What kinds of consequences? Owner Fees, for example. The budget for 2016 will be determined in October, less than 30 days after new board members are in place. I would suggest this. In a HOA where very few owners attend monthly meetings, just how prepared do you think the new board members will be to discuss a budget in excess of $1 million?

After the annual meeting, the board, whoever they are, will make the decisions necessary to keep this place running. Maintenance, projects and budgeting/fees will be determined by the board. Will the next five years proceed smoothly? Not necessarily. Boards are comprised of ordinary owners whose only mandate is to 1) Act as a fiduciary, 2) Leave any personal agendas behind, 3) Exercise sound business judgement, 4) Use common sense and 5) Avail themselves to the guidance of competent professionals.

However, it will be entirely up to the board to use their common sense and business judgement when steering this behemoth of a HOA through the annual mine fields. Is it easy? Absolutely not. Previous boards have stumbled to build reserves, have stumbled to maintain the HOA, have stumbled to act as fiduciaries and have stumbled to uphold the Bylaws and Rules & Regulations. 

Yes, it is a minefield and far more treacherous than the potholes we had on Lakecliffe. Those were preventable. But boards made a series of decisions commencing about 2000 and there were consequences 10 years later.

My point is this. Every board is significant and important to the well being of the HOA. Each board makes short- and long- term decisions. There will be consequences to each decision. If boards make poor decisions there will be financial consequences. Streets may disintegrate. A few years ago we had a small group of owners who argued this place could be well maintained with an army of handymen with lawnmowers. Really? Really! So to owners I say, choose wisely.  Some HOA owners appear to be willing to let others make the decisions and the mistakes, and then complain about it.

It is true that we can do everything right and things may go wrong. That is the exception to the rule in my opinion. Good decisions and good choices have good results. Reserve studies are tools to be studied and discussed. But boards are reluctant to do that. As with all tools, they can be used, misused or abused. Have you ever seen anyone using a screwdriver as a hammer? I have. So too with finances and planning. Sometimes board members will take the position "we don't have enough"and then boards will raise fees. Sometimes the position will be "we have enough" and boards may spend frivolously or unwisely. It takes study and some financial wisdom to figure this out. It also takes consistency. We live in a dynamic, changing world. Simply because we made a decision last year has little bearing upon current reality and current outcomes. That is why frequent and recurring surveys of all things HOA are a necessity.

It is necessary to have stamina and consistency. Being a board member is not something for the hip shooter. But we can all learn from the experience, if we are willing to learn.

What Must We Do?

The greatest single impediment to success is the owners. What do I mean by this? I'm addressing a lack of involvement. When only a handful attends monthly meetings, when less than 50% attends annual meetings or votes, that is a serious problem, IMHO. This is my single greatest concern for this HOA. In such a vacuum any group with a personal agenda can take control of the HOA. It happened before and it will happen again. What I can't predict is precisely when this will occur.

I do think that a few will answer the call of duty and will perform as fiduciaries.  In fact, I am of the opinion that more than a few will show up at some point in the future. When will that be? Most likely the trigger will include the completion of the roofing project, the completion of Lakecliffe Blvd and the HOA has achieved oh, $2 million in the bank in reserves. At that point, the call of that money will be overwhelming to a few. "Save it and they will come to spend it."

It is a fact that politicians love to spend. Every HOA has its politicians and BLMH is no exception. We also have a few who covet the savings of this HOA.

Who are they? They will come out of the woodwork at some point in the future. They did before. Human beings come in all shapes and sizes. There are those who do good and then there are those who are up to no good. Welcome to reality.

What Will I Do? 

There are limits to what I can or will do for this HOA. Board members are owners who volunteer. We're supposedly no different than any other owners. So where are the other 329?

It is a fact that none of us have to live here. That includes me. Among other things, I am a long term planner.  I have a plan in progress. I won't live here until I die. After my death, my unit won't foreclose. My past due fees won't be inflicted upon the other owners, as another "bad debt" that they will have to pay via their monthly fees.

Living in a HOA, even one as well managed and as lovely as BLMH is voluntary. If an owner can't tolerate rules, boundaries or fees, then they really should live somewhere else. Renting is cheap. No responsibility and no benefits either. Just pay each month and when things go bad, complain to the landlord. No one has to worry about the hot water heater, the fireplace or the furnace. Hot water and heat comes with the rent. For some, that is the best option in living.

HOAs aren't apartments and they don't have landlords. Owners have the responsibility to maintain their units, pay their fees and plan their independent futures. If they are unwilling to do this, then they should leave and live elsewhere.

Boards aren't comprised of politicians. We can't make owners happy; there simply isn't enough money to do that.

In a well run HOA, every dollar collected from owners via fees has been earmarked for a specific task which is consistent with the structure and purpose of the HOA. So it is at BLMH. There is no money to flush or throw around indiscriminately to make a few owners "happy." If there was, then I assert that the fees are too high. HOAs are not supposed to have a "slush fund" taken from the pockets of owners and squirreled away to deal with special interests. Yes, owners who want to be coddled are "special interests." This isn't COD, or the State of Illinois, or Chicago, for that matter. Each and every professional this HOA retains is a contractor (yes, they are contractors via legitimate businesses. They aren't "employees" of BLMH). Owners won't be paying their retirement; any such funding is the sole responsibility of the firms which have these employees.

Why Don't We Have 100 Percent Attendance?

We have a few offsite owners. For anyone living in Florida or Thailand, it would be an imposition for them to attend. It would also reduce their profit as airline tickets, motel, etc. would be a business deduction but would also lower the bottom line. 

For any of the others, I really can't say why they don't attend. It is true that some of our owners think they live in an apartment complex, or a retirement community. Some of these truly believe that the management company owns this complex. Some also believe the board is a group of paid professionals. 

It is easier for some owners to make believe than to determine what is real and act responsibly and accordingly. 

Why I May Not Be a Good Fit For BLMH

I've concluded that the problem might be that I'm not a good fit for the mores at BLMH. In other words, it really is my problem and I may not belong here. The definition of "mores" is "the essential or characteristic customs and conventions of a community."  Some of us really don't belong and I may be one of those.

Here's an excerpt from a recent post elsewhere which may provide a glimpse into my perspective, and why I have a concern that I really am living in the wrong community; one which is not a good fit for that community or for me. Somewhat like attempting to mix "oil and water."

Posted elsewhere on June 1, 2014
"On Friday, May 30 I received a call from a client. It seems their production facility had experienced a massive breakdown. They requested that I come to the facility on the following Monday, Memorial Day. Apparently they could not ship any product and needed to resolve the issue before shipments resumed on Tuesday morning. A team would be available as of 3am to begin remedial action. 

Okay I said. So on Monday (Memorial Day) I arrived at the facility at 7:15am as agreed. I began looking into the problem, but after a number of tests and trials I concluded that a critical part had failed, a spare was not available and I could not fix this. However, [it was determined that] shipments could and would resume in the morning using an alternative means of material transfer. 

After concluding this, and after discussing with remote (400 mile distant) management what was essential to get this problem resolved I was given their blessings and I prepared to leave for the day. (There is always a way).

While wrapping it up, a worker at the facility (a 20 something; aka a "Millennial") asked me a few questions about my life and in particular, why I had bothered to respond and was there on a holiday Monday. I replied that this was, in fact, my 51st year of employment, but I had somewhat serious and unusual skills and so I felt it was appropriate to provide these when asked. In this case, there was no alternative. He then asked about my spouse. I said that she was on year off of employment, while she dealt with some health issues. However, she really, really wanted to get back to work. 

At that point, I was told "You people are weird." 

I laughed and explained that it had taken 50 years of constant effort for me to get to this point in my life, which included having the particular skills I possess. I don't think he understood at all, but he will learn. 

On Tuesday I was on site at 7:15am, UPS Red overnight early morning arrived on site at 7:30am with the necessary part. A technician installed it and voila, shipments resumed at 8:30am. 

Yes, there is a strata in society and there is a difference, which some now declare to be an "inequality." As I like to explain to people, I have worked continuously and diligently for 50 years to hone my skills. Where I am today was not an accident. It took some luck, a lot of very hard work and many, many good decisions and some sacrifices.

That may be weird. "

My Reply To Comments To the Above in a Thread Posted on June 3, 2014     
"I would take it a step further and suggest that we be "true to ourselves." To do so requires discovering who we are and what our purposes might be. In my experience it takes a lifetime to do this. It also requires some courage of conviction to act in accordance with what we discover. One could say we are operating consistent with our integrity. To do otherwise we are disloyal to ourselves and untrue. 

I've striven to be true to myself and it is taking a lifetime to work the kinks out. I've used work as the playing field because like it or not, I concluded I would spend at least 40 years working. So why not put that time to good use? I began "working" in 1963, but I started my first real business in 1978, after one aborted attempt in 1966. I have worked in companies of my own creation ever since. However, no matter if I was the President, I always considered what I was doing to be work, and I always describe it as so. I always wore two hats, and I seldom used the business card that had my corporate title on it. I used the other one, the one that described my role in systems and process control. I never hesitated to get into the production plants and did spend time literally in the trenches (actually, they were ditches). It is true that some thought I was a bit odd, but there are many paths to empowerment. 

.....it is also true that I've got thousands of hours of learning and training under my belt. Some was formal, some was via focus coursework, some was book learning and a lot was by doing. Getting an education while working was one way to pack more into the day, although some of those days were really long. 

I've worked at three companies other than the ones in which I was a major stakeholder. But by 1978 I decided that my third employer would be the last in which I was merely an employee and that I was ready to move on, and so I embarked into creating my first true business. That was 36 years ago. It was a post recession dole-drum. It was very difficult. The economy sucked, but that was why I ventured forth in the first place. Banks were useless and so I had to be very creative and was internally funded until 1984, at which time we finally moved out of the 1980's recessions.

We were an industrial automation firm and so we purchased and used all sorts of high tech gear in systems we programmed and assembled, providing sensors, computers, controllers, software, actuators, commissioning, training, etc. etc. To minimize risk I made it a point to test everything in the real world and so we built entire systems in the shop and ran them. "Smoke and mirrors" was rampant. Nevertheless, even after testing and so on the firm found itself on the "bleeding edge" from time to time as things didn't always go as planned. Our designs included various margins for error or unknowns in the event the impossible happened. Determining what the weak links might be and then providing for that gave great insight. Everything that was learned was applied. I was and continue to be a continuous, incremental improvement buff, and people do make the difference. 

Some of those systems continued to perform reliably for 20 years, and were performing leading edge, state of the art at the time they were retired. Some continue today, after 30 years. 

It was all very challenging and there were real financial risks. Invention is not a precise science, and the things that we use don't always work reliably. It was challenging to select and build on technologies that would be maintainable and reliable for 20+ years while performing sophisticated tasks. There are unknowns and that means cost overruns, time overruns, breakdowns and so on. My annual pay was less than that of my administrative assistant during difficult times. Fortunately for me, it was never, ever about the money. Money was simply another tool and it is the long term averages that count, or to say it differently, the area under the curve. I established a reputation for integrity. What is that? We did what we said we would do for what we said it would cost and we delivered on time. In other words, those production plants went into operation as planned. If there were issues we made it right. That hurt but there is no lesson learned like the one that stings. It goes deep, deeper than short-term memory. I gets into the sinews and to one's core. 

So why did I do it? To be true to myself and to achieve my real potential. I also wanted to see the results of my labors. I provided a real opportunity to some talented people who become even more talented as time passed. We all grew and got better. We made a difference and we saw with our very eyes that difference. It was tangible and real. Our clients businesses improved, the conditions for their workers improved. Safety improved. There really is something to be said about conceiving, designing, installing and then training others to use a sophisticated product which leverages their talents. 

Why do I continue to work today? So I can continue to grow, develop and make a difference. True, there are financial benefits, but my fees are reasonable. 

Yes, there are other things to do and there are benefits to volunteering and so I do that also. But in my experience, too many volunteers view their tasks as a hobby. There is sometimes no need for urgency. Nevertheless, there can be a sense of fulfillment and accomplishment. 

Looking back, do I have regrets? Yes I do, and they have been very useful. They and various failures possibly made a greater impact than the successes. They did show the way to some transformative decisions. The regrets don't run me, I think I'll probably die worn out and that's something I can live with.

For my younger worker, I think what made him think of me as "weird" was the realization that I was there and working on that holiday as pure choice. I suspect, based on his comments that he had difficulty understanding why I was there as I had no real need. In time I think he'll figure it out. Eventually we all do. Hopefully we do so earlier than later. "