Call for Guest Authors

A reader or readers (Anonymous on October 26, 8:03 and 8:05PM) made a suggestion for guest authors. (Reference 1).

That's an excellent idea, and if anyone is interested, send me an email with your name and phone number, and a brief summary of your proposed post, or posts. After discussion, your posting will be under an "alter ego" of your choice. Send the email to me by clicking on the link below:

Send an email to Norm

Now before I get comments about possible censorship, etc. I want to clarify something. This is not an association blog; that is, it is not owned by the association. Unlike our newsletter, and other "official" association communications, which are the collective statement of our board,  this blog has been a personal endeavor. Therefore I have no responsibility or "fiduciary duty" to represent the unit owners in this blog. The fact that I do is a matter of choice, and of commitment.

It didn't have to be that way. Earlier this year, I offered in writing, to transfer this blog to the association. That offer was declined. Nor was there a counter offer from any member of the board, such as "we would prefer that you work on our website". So as someone has said "it is what it is".

This reminds me of a course on "Accomplishment" that I took some years ago. The question was asked "What are you committed to, Results or Reasons?" In that spirit, I am willing to open this blog up. However, I do have an objective for this blog and it is stated in the column to the right, entitled "WHAT THIS IS ABOUT AND HOW TO NAVIGATe."

Consider your purpose and if you want to participate and are interested in making a contribution to your fellow unit owners and to this association, then send me an email. However, unit ownership is NOT a requirement. 

Thank You!

Reference 1:  Comments to Post of October 26

The Newsletter Has Arrived!

Got my copy of the October/November newsletter today. Here are my initial observations.

The newsletter was further expanded and uses the same "upgraded" glossy paper. Photos are dark and I assume that this is because the original documents are being sent to the printer in color. Hint: conversion to "gray scale" and tweaking for contrast prior to submission would significantly improve the quality of the photos. Now that the "old" board has been removed, there are no longer any excuses about the newsletter, website, etc.

Did you notice that our CD is now our "Secretary, Recording Secretary and Communications Director?" I'll use the title "Communications Director" so as to provide continuity in this blog. For those who are interested, the "Secretary" is the named representative on legal documents for the association. According to the Society of Corporate Secretaries and Governance Professionals, the "Secretary" of a corporation has a "key responsibility to ensure the the board has the proper advice and resources for discharging its fiduciary duty under state law, and to ensure that the records of the Board's actions reflect that the Board has done so." Reference 5.

The newsletter stated that for the present we don't have a treasurer. However, as stated the board is planning to fill a vacant position, unless unit owners create a petition as specified in the newsletter.

The newsletter confirmed that our former Architectural Director "declined to fill the one-year term." Reference 1.

The new president made a statement encouraging unit owners to attend association meetings. The president stated that "the more engaged each homeowner is in the association's affairs, the better the board will be able to understand and address our community's needs." I underscore this. In a statement pertaining to the 2010 budget, the president stated that the board expects "there to be no increase to your 2010 assessment." That underscores the information and statements made by management at previous association meetings. So the new board concurs. That should make people happy, or not? There was no mention of the "reserve study". I am very interested in seeing the details of the study and the budget. But the study has been one of those "secrets" I guess.

The association website is coming "soon".  One of our unit owners has volunteered to do this. I am not certain if that is the same gentleman who was acknowledged during the annual meeting.

In the "Director Reports" our outgoing Architecture Director stated that driveway replacements were approved during the September association meeting for 1600T, 1601T, 1604T, 1706L, 1725L, 1733H and 1774G. I had written to management in the first week of October pertaining to the apparent delays to this work as well as to the roofing project at 1730-1732H.  My letter stated,  in part "...the board has authorized the driveway work and the roof...The Communications Director was the only board member who voted "NO" regarding the driveway repairs. However, it would be an inadequate excuse for the board to forego [sic] its responsibilities, and it would seem necessary for the board to act in compliance with the wishes of the vote." etc. I closed with the comment "I am very concerned about the current state of affairs at BLMH."

In the "Management Report" section of the newsletter, the statement was made that "There are several projects underway and scheduled for completion yet this year."  The newsletter went on to state that "The asphalt replacements and drainage improvements will be an ongoing project for the next several years until all of the driveways are completed." One aspect stood out. That was the statement that several projects are "scheduled" for completion this year. A careful observer will note that the languaging was "scheduled" and not "will". So perhaps we should keep our fingers crossed, and hope the work is completed. As a unit owner who gets a bill each and every month for the payment of my fees, I don't think our board and management would accept my statement that "I am "scheduled" to send you a payment each month." What is expected each and every month is that I "will" send my payment. For those who are about to quibble, the difference is significant and is one of "commitment".

I found it interesting that the new "Rules and Regulations" Director made the statement that "I suggest that instead of regarding our R&Rs as annoying restrictions, we think of them more as responsibilities that we share with our neighbors." Gee, I thought that is what the "old" board kept telling us. Now it was not only stated, but it was actually PRINTED in the newsletter. How did that get past the censor?

Pertaining to the "resetting of storm drains" you can see photos at Reference 2.

It was stated that the maintenance company will be "coming around in the next few weeks to break up the garage salt buckets and fill them for the beginning of the winter season." I thought that was performed by our snow removal contractor. But then, I am a relative "newbie", so perhaps I am mistaken. My building has a 50 gallon plastic container. Perhaps I am lucky and the rest of the unit owners have "buckets" in their garages. There is an explanation, of course. I have a large container because this is "another perk for the favored few." Oops, sorry for blowing it for the other three unit owners who share the garage. Perhaps we'll be demoted or whatever to a "bucket" this winter.

The newsletter stated that "Monthly assessments can be paid automatically". That's attractive, but would filling out a debit form also provide for "automatic" collection of fines, etc.? No explanation was given in the newsletter. I'd be unwilling to have fines automatically debited from my bank account. I'll explore this further with a letter to management.

The newsletter contained a reprint of the "Rights and Responsibilities for Better Communities" as made by the CAI, which is online at caionline.org. These are "Principles for Homeowners and Community Leaders."  There was no statement accompanying this document. On its website, the CAI states that "By encouraging community associations to adopt Rights and Responsibilities for Better Communities, CAI strives to promote harmony, community, responsible citizenship and effective leadership.

The CAI website makes the following recommendations for adopting the "Rights and Responsibilities":

"Adopting Rights and Responsibilities for Better Communities is easy!

• Download the Rights and Responsibilities document.
• Distribute the document throughout your community, announcing and publicizing where and when adoption will be considered.
• Explain why this is important to your community and the benefits it can create.
• Review and discuss the merits of the principles at an open meeting of your board.
• Solicit input from homeowners.
• Have your board vote to adopt a resolution endorsing Rights and Responsibilities for Better Communities. The principles will be more meaningful to homeowners and community leaders if they are formally adopted."

The newsletter does not indicate this is to be a process, with unit owner input. There are several possible explanations:

1. There is no intention for formal adoption at BLMH on the part of the board. The "R&R for BC" is merely a suggestion.
2. Our board intends to adopt the "R&R for BC" by decree.
3. Input is being solicited, but only from specific unit owners.
4. This will be posted as part of the agenda for the next association meeting, thereby continuing a bias in favor of unit owners living on the property.

I'll be providing more on the CAI "R&RforBC" in a later post. You are encouraged to go to the CAI website and review their statements about the use of this document and recommendations for boards, unit owners and professional managers. Reference 3.

The newsletter did not provide a statement about the oaths for our Board of Managers. It is unclear if the newly elected members of the board signed the oath. Reference 4.

The Communications Director provided a "Meet Your Neighbor" page and the following statement at the bottom of the page: "NOMINATIONS: If you'd like to nominate someone you know for the "Meet Your Neighbor" column, send the name and address of your nominee to: [our Communications Director] or email __________. Nominees will be contacted and asked if they wish to be interviewed." From this, am I to conclude that my earlier request to the "Communications Director" regarding the interview of current and former board members did not occur because they declined the interview? Or perhaps my request was simply ignored??? Nah, that wouldn't happen here, would it? I'll resubmit my nominations with addresses, but I won't be holding my breath.

In the "Meet Your Neighbor" interview for the month, the selected nominee stated that her personal motto is "What doesn't kill you makes you stronger".  Choosing to paraphrase Friedrich Wilhelm Nietzsche was interesting and I can only say, "you have come to the right association, lady."

The "red stuff on my shoes" article does "officially" answer the question brought up by a unit owner at an earlier association meeting.

No mention of the "vandalism" or recent theft brought up by a unit owner was made in the newsletter. If you want to be informed of some of these items, you will have to attend association meetings, or be fortunate to spot a piece in the local paper. Of course, you may also use one of the rumor mills in operation at BLMH, including the "official" and board member sponsored and "unofficial". However, in so doing you will possibly not get accurate information and you may also be spreading gossip. I appreciate that in the absence of published statements, unit owners have few choices.

Did you notice the statistics for unit owners who cast their votes? The statement is on page 1 in the second paragraph.   I'll state this "positively": 57.14% of the unit owners at BLMH aren't apathetical about their association, and did vote. The remaining 42.86% just don't give a hoot. Gee, and it was only a year ago that "a majority of us" were up in arms, according to the Communications Director. Amazing what a difference a year can make. Now nearly 40% are simply going about their daily business. I guess things aren't that bad here, are they? I state that because in my limited experience, most people go about their day to day business unless something personally significant intervenes in their lives.

The newsletter does not provide a current list of contractors. At several association meetings, unit owners have asked about "Ron's TV" which has left the downtown area. Their replacement is used for work on TV and coaxial cabling in units, maintaining the rooftop and in-attic antennas, etc. The new information for contacting "Ron's TV" was promised to be included in the newsletter. I suggest that unit owners contact the professional management for this information.

Sorry, but I've got to go. Despite what my critics say, I do have a full time job and I have spent the last 40+ years improving American industry, "committed to the elimination of all preventable industrial accidents in my lifetime", etc. Besides, I've got a  "quick banana bread" to remove from the oven. I prefer the recipes in a January 1967 version of the Rombauer-Becker "Joy of Cooking", you know, the version prior to the time they took butter out of the recipies and became "politically correct". So this bread was made with honest to goodness real "shortening". As we are approaching winter, I'll soon be making home-made cinnamon rolls. However, as I am currently working on a project about 650 miles distant, that may interfere with my baking schedule. Blogging however, can be accomplished from anywhere. From personal experience, I have been able to "carry on" from 7,000 miles away "as the crow flies."

Reference 1:   http://briarcliffelakes.blogspot.com/2009/09/post-election-2009.html
Reference 2:   http://briarcliffelakes.blogspot.com/2009/10/somebody-is-on-job.html
Reference 3:   http://www.caionline.org/info/help/Pages/RightsandResponsibilities.aspx
Reference 4:   http://briarcliffelakes.blogspot.com/2009/05/board-of-managers-part-2.html
Reference 5:   http://tinyurl.com/ygodh6n

Roofing Project Status - from Dawn 'til Dark

Here are a few photos of the project at 1730-1732H, but work was suspended this morning dew to rainfall.

The technique for removing existing roofing is to use a pitchfork or a square headed shovel. I prefer a sharpened shovel, myself, based upon personal experience. I once owned a home here in town, on which I upgraded the roof and I did remove the existing shingles. It was difficult work!

Stripping begins:

Down to the plywood:

Note the plywood panels being replaced:

Work suspended this morning due to rain:

More on Inflation

There has been an ongoing discussion among some unit owners about "inflation" and the effects on our association, and some interesting comments posted on this blog.

Here are several charts from the St. Louis Federal Reserve. These show the effects of inflation in the recent past, and how it increased the cost of goods and services. This information is from data provided by the U.S.Bureau of Labor Statistics, or BLS. Each month, the BLS surveys prices for certain products and then publishes the cost of those products as a number, called an "index".

What general information can I determine from the charts? If we use the "All" data, which includes food and energy, then since September of 1978 to September 2009, the CPI increased from 67.1 to 215.791. This is an average increase of 4.97% per year. However, the government ignores food and energy in making its "core" CPI calculations because of an argument that goes this way. "If food increases in price, then people will substitute hamburger for steak". In other words, if prices increase, I'll adjust the thermostat in my unit to expend less energy, drive my car less and eat cheaper alternatives, such as beans and rice. 

So what is the "CPI"?

According to the government, "The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services."

This "index" is defined as a "number used to measure change". The Consumer Price Index was 100 in 1984. Today it is 215.791.

This means that if the prices of goods in the basket was $1.00 in 1984, those same goods in the same basket would today cost $2.16. In the 15 years since 1984 the price of those goods has more than doubled. That is inflation. 

It is possible for prices to decrease. The chart shows that in mid 2006 the CPI fell. It did so again in late 2008. During those periods, the prices of certain goods decreased. That is deflation. 

This chart shows the change in price for the most recent five years for "all items" which included food and energy. We all know that gasoline increased dramatically in 2007, and has since moderated in price. The chart indicates this (Hint: click on the image to enlarge it, and then use the "back" or "return" button to return to this blog):

NOTE: In the above chart and also with the following charts, the "gray" areas are an "economic recession".

Here is a similar chart, but this one uses the BLS data excluding food and energy. If we ignore these, prices for most consumers didn't "spike":

Finally, here is a chart showing "All items less food and energy" since the 1950's. Note all of the "gray" areas, which are "economic recessions". No matter what the politicians tell us, they occur frequently:

And here is a similar chart showing "All Items" since the 1950's:

What can we learn from these? They can provide some guidance for future planning. I might not be able to determine how much a refrigerator will cost in the year 2015, but I can get some idea of the average price increases. I can then use those for determining how much I should be saving today to afford living in the future.


Of course, I could simply make the assumption that my income will increase by an amount sufficient to pay for the increases in goods and services due to inflation, but that might be dangerous. Or I can simply assume I'll spend less in the future. But that means that I'll have to sacrifice in the future. Question: Why should I assume that I'll be able to make financial sacrifices in the future, if I am unwilling or unable to make them today? 


For an association, the argument goes something like this. I want and expect manicured lawns, a secure roof over my head, paved streets and driveways "today". However, I may not be willing to save to provide for these things in the future. So unit owners may elect individuals to the board of managers in an attempt to forgo saving for the future. The plan is that "We'll do with less tomorrow". Of course, eventually "tomorrow" becomes "today". 


Does that sound familiar to anyone?


On October 21 I added Reference 4, which is a site which can be used to quickly determine the current inflation rate, the current CPI and also compare how inflation has changed our buying power. "The US Inflation Calculator measures the buying power of the dollar over time. To begin, just enter any two dates between 1913 and 2009, an amount, and click 'Calculate'."


Reference:
 1) St. Louis Federal Reserve CPI for Urban Consumers:  http://tinyurl.com/yf2fgzl
 2) Bureau of Labor Statistics: http://www.bls.gov/CPI/
 3) Shadow Government Statistics: http://www.shadowstats.com/
 4) US Inflation Calculator: http://www.usinflationcalculator.com/

For those who are interested, there are some strange methods in the CPI calculations, including geometric weighting and even something called "hedonics". It is my understanding that "Hedonics adjusts the prices of goods for the increased pleasure the consumer derives from them. That new washing machine you bought did not cost you 20% more than it would have cost you last year, because you got an offsetting 20% increase in the pleasure you derive from pushing its new electronic control buttons instead of turning that old noisy dial, according to the BLS. " (Reference 3)

Roofing Project at 1730-1732H is Underway

The roofing project approved at the most recent "open" board meeting began this morning. Seems somebody is on the job!

Hopefully, the weather will permit the seven driveways also approved for replacement this year and there will be no further delays to that project in 2009.

Where Does our Money Go?

The information is from the Consumer Expenditures Survey of the U.S. Department of Labor April 2009. It applies to the average consumer, who is 48.8 years old, is part of a family comprised of 2.5 people, has 1.3 wage earners and owns 1.9 motor vehicles. 67% of the consumers are homeowners.

You can use this to compare to your own expenditures:

Housing 34.1% = $16,920, split as

• 20.2% or $10,023 for shelter,
• 7.0% or $3,477 for utilities, fuels and public services,
• 2.0% or $984 for household operations,
• 1.3% for housekeeping supplies,
• 3.6% or $1,797 for household furnishings and equipment.

Transportation $8,758, split as

• 6.5% or $3,244 for vehicle purchase,
• 4.8% or $2,384 for gasoline and motor oil,
• 6.3% or $3,130 for other transportation expenses.

Food = $6,133, split as:

• 7.0% for Food at home $3,465 and
• 5.4% for Food away from home $2,668.

Pensions and social security tax = 10.1% or $5,027.
Healthcare = 5.7% or $2,853.
Entertainment 5.4% = $2,698.
Clothing apparel and services = 3.8% or $1,881.
Cash Contributions 3.7% = $1,821.
Education = 1.9% or $945.
Miscellaneous = 1.6% or $808.
Personal Care = 1.2% or $588.
Alcoholic beverages = 0.9% or $457.
Tobacco 0.7% or $323.
Life Insurance and other personal insurance = 0.6% or $309.
Reading 0.2% = $118.

Total spent = $49,638.


References:
1) U. S Dept. of Labor Consumer Expenditure Survey = http://www.bls.gov/cex/
2) Visual Economics "How the average U.S. consumer spends their paycheck?" http://tinyurl.com/nrsvvl

Somebody is On the Job

On Sunday, October 4, our maintenance company was driving through the complex and they spotted a problem with one of our sewers. After checking further, cracks were also determined to be in the pavement of a second storm drain.

After notifying the management company, our maintenance company was given permission to begin repairs.

“Official” Election Results - Oct 10, 2009

The results of the September 24 annual meeting and election were posted in my building on Saturday. The announcement stated that “four individuals were elected to two-year terms”. It also stated that “the candidate who was elected for the remaining one-year term has declined that Board position; therefore the Board of Directors will be appointing someone to fill that position at the November 12, 2009 meeting.”

These are summarized statements made by the elected candidates and included in the election packet mailed to all unit owners on August 31, 2009:

1. A former homeowner who was an administrator in a non-profit for 23 years (public relations and fund raising). Married with children and grandchildren, travelled overseas extensively, teaching English, promoting projects, etc. Inner-city pastor for 17 years. Policies/objectives are 1) Being responsive to residents, board, management and 2) Developing a stronger sense of community. Time Conflicts: Retired.

2. For 35 years, served in various capacities in a non-profit corporation, including managing properties and programs for camps, building a thriving publishing house. Have worked under a board and been a founding member of several boards, internationally. “In retirement, I am offering to help BLMH become a vibrant community which will be attractive to prospective buyers and increase the value of our homes.” Policies/objectives: BLMH “needs a board that is willing to listen to owners and residents and that is transparent about all aspects of its deliberation through careful and complete minutes of board discussions for any owner who wishes to read them.” Our monthly fees are “twice as much as some other associations.” Using the Community Association Institute will be able to effectively review all aspects of our association to improve efficiency and eliminate wasteful overpayments. BLMH needs to change from an administrative association to an aspirational community. “The board is to serve all owners, not just themselves.” Time conflicts: Retired.

3. Volunteer experience as a leader for Boy/Girl Scouts of America, past president of PTO at middle school level, worked on numerous fund raising committees. Policies/objectives are 1) Help maintain and improve a safe environment for all residents of BLMH to live. 2) Be open to all suggestions but only come to conclusions after much thought and deliberations. Time Conflicts: Working.

4. Senior administrator at a nearby college. Manages a budget of $3 million, develops and leads 26 employees as a productive team, and negotiates large contracts with outside vendors. Has served on the boards of other organizations. Policies/objectives: to enhance the value and beauty of our community’s assets, and encourage neighborliness, through competent, transparent, and fair-minded stewardship. Time conflicts: none.

Reference: Community Association Institute  http://www.caionline.org/Pages/Default.aspx

Resolving Reader Problems Reaching and Printing This Blog

It has come to my attention that some are having difficulty accessing or reaching the blog, and do not always arrive at the "home" page. The following instructions work in recent versions of Microsoft's Internet Explorer browser.

Printing Only This Post
If you are reading this, you might want to print this post before proceeding. You are currently viewing the five most recent posts. So if hit your "print" button now, you will print all five of them.   To avoid that, click (that is, use the left clicker on your mouse) on the beige text "Resolving Reader Problems Reaching This Blog" at the top of this post. That will eliminate the four posts following this one.

Then you can choose one off the two following methods to print:

1. Press the "right click" on your mouse or touch-pad. This will open a menu, and you may select Print.... from among the items on the list. Your Print window will appear.  Press the Print button.

2. Instead of using the right mouse button, you may use the keyboard. Press and hold the "Ctrl" key (there is one in the lower left hand corner of your keyboard. While holding it down, press the "P" key. Then release both the "Ctrl" and the "P" keys. Your Print window will appear.  Press the Print button.

Note that the photo at the top of the post will not print. You will have an open, white rectangle with nothing inside. On the bright side, this saves ink!

Going to the Home Page of this Blog

To get to the "home" page, click on the following link, which will insert the link into your browser:

http://briarcliffelakes.blogspot.com/

After you are taken to the site, add it to your "Favorites". One way to do this in Internet Explorer is to press and hold the "Alt" key (usually near the space bar of your keyboard). While holding it down, press the "Z" key. Then release both the "Alt" and the "Z" keys. You can then select "Add to Favorites" from the menu.

In the future you can go to your list of "Favorites"  by pressing the star on the left side of your Browser, and select this blog from the list. Here is what the button looks like:

That way, you avoid the need to type the complete address, called a URL. Note that "URL" stands for "Uniform Resource Locator" and previously "Universal Resource Relocator" which is internet speak for the unique address for a page on the world wide web. Each page on my blog has a different "URL" but the one above takes you to the most recent, which is the "home" page.

Opening a New Tab

The best way to go to this or any other website is to open a new tab. In that way, you won't replace an open browser window and possibly lose your place on the web.

What I describe will work with Microsoft Vista, or XP with later versions of Internet Explorer.

1. Press and hold the "Ctrl" key (there is one in the lower left hand corner of your keyboard. While holding it down, press the "T" key. Then release both the "Ctrl" and the "T" keys.  This will open a new tab in Internet Explorer.

2. You should see a new tab open with this message displayed "You've opened a new tab" and some additional info. Or, you may see this message "What do you want to do next?"

3. At the very top of the new tab, there is a white space and in it a symbold and the text "about:Tabs" which may be highlighted in blue or not.  Go to your "Favorites" and select this blog from the list. Or, type this link in the white space http://www.briarcliffelakes.blogspot.com  and then press the "Enter" key.

You should be taken immediately to the home page for the blog.


If you have any questions or comments, email me.

letmethinkaboutthisblog@gmail.com

Everything Can Be Resolved In Communications – It’s Not Rocket Science

That was the message delivered in a course I took a few years ago. It’s not “news” either. The founding fathers of this country knew this and went to great lengths to protect freedom of speech in this country. For the same reason the Illinois General Assembly included, in the Illinois Condominium Act, a mandate for “open” HOA meetings in which all board business with only specific exceptions, are to be discussed in view of unit owners.

However, it takes a lot more than simply “free” and open speech for an HOA to work. It requires, among other things, a commitment to “workability”. For unit owners, such a commitment is optional. They vote, but they have no fiduciary responsibilities and duties. In other words, there are no requirements for unit owners, beyond those contained in the bylaws and rules & regulations of the association.

For the members of the board of managers, such a commitment is a requirement.

But what exactly is a “commitment to workability”? Workability is defined as “capable of being done with means at hand and circumstances as they are.” (Reference 1)

So exactly what are the “circumstances as they are?” Currently, this association has been accumulating reserves for ten years. Currently, this association has a prepared list of driveways which are in “serious” need of replacement. Currently, this association has a defined program which includes specifications and a roof waiting for completion this year. Currently, this association has professional managers, a professional maintenance company, and a professional landscaping company.

True, this association is a bit more complex than a 12 flat with gravel parking lot. So we have professional, licensed, bonded and insured contractors to perform the necessary work. We are not reliant upon a couple of handymen and a gardener or janitor.

All of the pieces seem to be in place. As that popular commercial states “this isn’t rocket science.” (Reference 2). So what’s the problem?

The experts tell us that we need a board which has “sound business judgment and a healthy dose of common sense” and will consistently “act as a fiduciary on behalf of ….. fellow owners.” (Reference 3).

I also think that the board needs a “commitment to workability” which transcends the perspectives which sometimes occupy the volunteer workplace. It’s necessary to overcome self defeating positions which can include “it’s not in my job description”, “I’m just a volunteer”, “I don’t have enough time”, and so on. All it takes is a team committed to performing its fiduciary duties. In the words of the experts, put the interest of the association's homeowners collectively first. Protect the fiscal and structural security of the building and the association and the well-being of its inhabitants. Uniformly uphold the rules and regulations, and look out for the interests of the unit owners as a group.

As the guy in the commercial says “it’s not rocket science”.

Reference 1:
http://www.thefreedictionary.com/workability

Reference 2:
http://www.youtube.com/watch?v=fM8puyJxL1U&feature=player_embedded

Reference 3:
http://www.hoaleader.com/public/206.cfm

Don’t Shoot the Messenger - Vote NO for Driveways!

This is the first of several posts pertaining to the recent comments by readers.

On September 29, Anonymous said... “Again, your comments are full of negativity and inaccuracies. Can you at least get the facts correct before you publish them. How do you know, without being on the board, that certain individuals were to blame for the delay in the roofing and the asphalt project. Get a life.”

My response is this: I have attended most board meetings for the past 12 months. I'm one of the 4 or 5% of unit owners (excluding the board) who do so. During the meetings I keep thorough notes. For example go to:

http://briarcliffelakes.blogspot.com/2009/08/august-13-2009-association-meeting.html

The above post is edited. It includes only a portion of the notes that I took at that meeting. That’s why I titled the post “August 13, 2009 Association Meeting Highlights”; I emphasize the word “Highlights”. Editing is for three purposes; 1) to keep posts brief ,  2) I sometimes remove aspects which could compromise the privacy of an individual, 3) I sometimes edit aspects of the meeting which could put our association in a very bad light.

For example, and to address your statement, there have been discussions during quite a few meetings regarding the state of driveways. Here is a summary, but not necessarily in the order of the actual events. The discussions included aspects of the how and why of performing these repairs. Unit owners attending the meetings brought some of the problems they were having to the attention of the board. They stated issues they faced last winter. There were a number of discussions over several meetings about ice, heaving driveways, heaving garage floors, standing water, water entering garages, methods and options for controlling run off and the flow of water from roofs, etc. The state of driveways and water was described as a "serious" problem by several members of the board. The board authorized the management company to complete a thorough survey of all driveways and rate them. At a subsequent meeting the manager reported on the driveways most in need and those had been ranked. Discussion at various meetings was interrupted by events I have reported in earlier posts. Eventally discussion at meetings resumed. Details of asphalt installation and concerns were stated regarding the unique nature of many of the driveways and even the uneven traffic patterns. Concern over weather interference, specifically the closing of asphalts plants in the fall and the need for urgency was pointed out. Finally, at a meeting the board discussed the results of inspections by our Architectural Director and our Landscaping Director.

The Architectural Director made a final presentation and stated there were sufficient funds to do some, but not all of the driveways. He requested that seven (7) driveways be approved for repair and replacement in 2009. He made further statements regarding the criteria for selection.

The board voted and the motion was passed. There was a single NO vote cast. That vote was cast by our Communications Director.

Wouldn't you consider that a NO vote is an attempt to delay or thwart driveway replacement at the association? I don't know why she voted no, and I don't have any idea how voting against a fundamental repair to our association, is consistent with her ongoing calls for a “kinder, gentler” board of directors. Perhaps you can tell me how this all goes together.

By attending meetings, I know a lot about what is going on in our association. According to law, as per the Illinois Property Condominium Act, associations are required to hold open meetings. Board members are prohibited from holding closed meetings, except for special circumstances. So unless our board is in violation of the law, then attending meetings and keeping good notes, should give me a very good insight into what is going on.

If you want to read the Act, it is available at the Illinois Assembly Website at:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2200&ChapAct=765%26nbsp%3BILCS%26nbsp%3B605%2F&ChapterID=62&ChapterName=PROPERTY&ActName=Condominium+Property+Act%2E

As an example, I provide two quotes from the Act:

The Act, as part of (765 ILCS 605/18.4) (from Ch. 30, par. 318.4) Sec. 18.4. states:

“In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.”

The Act, (765 ILCS 605/18) (from Ch. 30, par. 318)  Sec. 18 states:

"(9) that meetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner's unpaid share of common expenses; that any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner; that any unit owner may record the proceedings at meetings or portions thereof required to be open by this Act by tape, film or other means; that the board may prescribe reasonable rules and regulations to govern the right to make such recordings, that notice of such meetings shall be mailed or delivered at least 48 hours prior thereto, unless a written waiver of such notice is signed by the person or persons entitled to such notice pursuant to the declaration, bylaws, other condominium instrument, or provision of law other than this subsection before the meeting is convened, and that copies of notices of meetings of the board of managers shall be posted in entranceways, elevators, or other conspicuous places in the condominium at least 48 hours prior to the meeting of the board of managers except where there is no common entranceway for 7 or more units, the board of managers may designate one or more locations in the proximity of these units where the notices of meetings shall be posted;"

From the above, the board is required to hold open meetings, and all but a few items are to be discussed during those meetings and when unit owners are in attendance. It also states that any unit owner is within their rights to take notes, and even record the meetings if they choose to do so.

I also suggest that you consider that “shooting the messenger”, which is me or anyone else who disagrees with you, is not going to resolve this. "Shooting the messenger" is a metaphoric phrase used to describe the act of lashing out at the blameless bearer of bad news. If you have a problem or an issue, then I suggest you come to an association meeting and bring it to the attention of the board, and observe the meetings and keep your own notes.

Should Unit Owners Be Concerned?

That’s a good question, and one that seems to be on the minds of some of the owners here at BLMH. Upon reading the candidates’ forms, it’s difficult to determine in which direction the board will go. From the perspective of a lack of knowledge about their business agenda, we’ll have to wait and see. Here are a couple of thoughts.

Some unit owners ask “how quickly can our association disintegrate” and others ask “just how bad can it get?”

Our newly elected board members now have fiduciary duties. It is immaterial if they are even aware of that. They are legally accountable for their actions. To Quote Sima L. Kirsch of the Law office of Sima L. Kirsch P.C. in Chicago “"Being a fiduciary means that you have an obligation to take off your hat as a homeowner and put on your hat as an officer of a corporate board and use your best business judgment." About using business judgment he goes on to state "That's the judgment that best applies to the facts you're dealing with and protects the fiscal and structural security of the building and the association and the well-being of its inhabitants." (Reference 1).

Michael S. Hunter, an attorney and partner at Horack Talley, which represents “more than 500 community associations” adds "When you're acting as a fiduciary, you're serving in a representative capacity, and you must put the interest of the association's homeowners collectively first….You must also exercise sound business judgment and a healthy dose of common sense." (Reference 1). For more information and examples of breach of fiduciary duties, go to the link for Reference 1, at the end of this post.

As for the finances of the association, we have historical information for this association, which provides a possible glimpse into the future. Using that information may answer the question: "Can the board wreak havoc with the finances of our association?" The simplest answer is "not easily". First, our current professional managers would have to be fired and replaced with someone less capable. That would create the possibility of a sudden "step" change. Alternately, the board could repeatedly vote for much lower fee increases for a period of years. In that case, it is possible for our finances to degrade.

I suggest we use the historical data for this association to see how board actions, over long periods of time, have affected our finances.  You may then draw your own conclusions regarding the future.

Financially, for a period of about 15 years our reserves were underfunded because fees were too low to support the association. At the time, this may not have been readily apparent; I wasn't present during association meetings at that time and so I can't comment on what pressure unit owners brought to bear on the board. However, we do have the data and an analysis to substantiate my statement was posted earlier this year.

To further substantiate this, I’ve attended several association meetings in which our professional managers have stated several times, in response to unit owner questions about why the fees have been increasing at the rate they have been and why (in the opinion of the unit owner asking the question) our fees are higher than some “comparable” associations in the area.

In each case, the manager stated that this association is “playing catch up” and that our fees are about 5 to 7% higher than associations offering comparable amenities. It was also stated that when making fee comparisons, unit owners need to remember that this association is a PUD and that we own 40 acres and all streets, buildings and grounds.

It would seem that some unit owners refuse to believe that. Our official communications, which is our newsletter, also avoids this subject. From this and what does appear in our newsletter, it seems some on the board also refuse to accept this.  I suggest this is an example of allowing personal viewpoint to overrule fiduciary duties. Unit owners can take any perspective they wish, but Board members may not.

During the November, 2008 association meeting, our professional manager stated that our "assessments are stabilizing and reaching equilibrium". I assume by “equilibrium” it was meant that the funding of reserves had reached a point that expenditures would be satisfied by receipts and the funds in the reserves.

Using this information and additional historical data, I draw a few conclusions, which may help up in discerning the future and answer the question "How bad can it get" and also determine how quickly things might change.

The chart above shows the erosion of our finances which occurred during the period 1983 to 1998. It shows a gradual and continuous accumulation of a shortfall, which reached $1,472,168 in 1998 and peaked at about $1,600,000. This is derived from the data in my post of March 26, 2009. How did this association accomplish this? The simple answer is that unit owner fees from 1983 to 1998 were, on average, about $25 per month too low. It doesn’t take very much over long periods to create serious financial problems! What does $25 per month buy a unit owner? Well, it’s just about enough for a new roof every 20 years. If you need one in 15 years, well, too bad! That would require a special assessment!

In a post dated September 7, 2008, I noted that I had been “alarmed” when I reviewed the finances of this association while considering a purchase in 2001. As I stated in the post “We were alarmed by the state of the cash reserves, which were only $297 per unit!” Unit owners who were present when garage doors were replaced in 1997 or so, may recall that the price of each door, which was levied in the only special assessment I am aware of here at BLMH, was $300 per unit. So if unit owners don’t want to fund reserves, the implication is that they want special assessments.

Of course, you could retort that "fees can't be so high as to place an unusual burden" on unit owners, and that is true. However, it is important to remember those definitions of "fiduciary duties" as posted above and in other posts on this website. I'm not making any of this up. Our board has a legal responsibility to protect the finances of this association, and that includes our investment here. They must maintain buildings and driveways. If they don't there are legal remedies for unit owners. Being a board member of an HOA "carries legal consequences if you—even unknowingly—breach that [fiduciary] duty" (Reference 1).

Should we be “alarmed” today? I don’t know. The information I have indicates that it would take time to again erode our finances, if there are no unforeseen or unusual expenditures. That does not mean that we should sit back and assume it will all turn out. Nor should we lie awake at night in our beds, worrying about the roofs over our heads. Here is another chart, from the same data used for my post of March 26, 2009:

As you can see, this indicates that in 2000 the shortfall stopped increasing, and for the next nine years, it steadily decreased. This corresponds to the change from "low" assessment increases, for example, 3% each in 1997 and 1998, to "high" assessment increases of 11% each in 1999 and 2000, which have steadily decreased in the years since. By 2009 the shortfall was eliminated. The fees collected have been spent on projects to date and saved in our “reserves” for funding roofs, driveways and so on. To provide some perspective to the chart above, in 1999 we were in arrears about $1,600,000. How could that be? Well, for example, if there is no item in our “reserves” for roofs, that is money that is not being collected and saved for the day that our roofs will need replacement.

That’s a lot of money, but how much is it really? $1,600,000 distributed among 336 unit owners is about $4,762 per unit owner. How much “extra” have we paid each month to accumulate that? Over 10 years, we each paid on the average $39.68 per month additional, to accumulate this amount. Comment: So it would seem that all of this complaining has been about $40 per month!

Of course, it may come to pass that we will be paying slightly higher fees AND special assessments. That possibility would occur if our board of managers is not prudent in managing this association. However, I see no possible excuse for this. We are well funded at present and there is absolutely no valid reason or excuse for our projects not to be completed in a timely and effective manner and with the funds and fees available. Based upon statements made by our professional managers in November 2008 and during several association meetings thereafter, the rate of fee increases should abate and we should still have the financial resources to accomplish all that is required at BLMH. My independent analysis substantiates this.

A recent, posted comment stated "Unfortunately, many people in this complex want everything under the sun, and don't want to pay for it." That may be true. However, it would seem that in fulfilling their fiduciary duties, our board is required to maintain our property.

In conclusion, I suggest that concerned unit owners compare financial reports from month to month. If projects are not underway then reserves should be accumulating and increasing. Also attend association meetings and observe the operation of the board. Finally, read this blog and post your comments.

References:

Posts about reserves:

http://briarcliffelakes.blogspot.com/search/label/Financial%20Reserves

Post about Comparing our Fees and Reserves 1983 – 2008:

http://briarcliffelakes.blogspot.com/2009/03/method-for-arriving-at-assessment.html

Reference 1: Living Up to Your Fiduciary Duty as an HOA Board Member: http://www.hoaleader.com/public/206.cfm

Note: Some clarifications added Oct 6, per comment.

Etiquette for Comments

On reviewing the comments, I have a few observations and requests. Here are a few rules about blog etiquette:

1. It is okay to disagree with me, other bloggers or the comments of others. It is not okay to use vulgarity, swears, acronyms for vulgarity, or say or imply or take a position that could be particularly offensive. For example, that others are on drugs or alcoholics, etc.
2. Unless you have permission, it is not okay to post someone else’s words in your comments. You may quote with attribution, but don’t reprint someone else’s post. The copyrights of others will be protected on this blog.
3. If you can’t offer a decent comment or rebuttal to a comment, then keep your thoughts to yourself.
4. Don’t spam.

I appreciate that you have taken the time to participate in a dialogue or read this blog. However, as the owner, I have the right to remove comments that are vulgar, particularly offensive, or violate copyrights. Effective immediately, I will use that right. So if you want your comments to remain on this blog, I suggest that you think twice about the comments you are posting before you hit the "Publish Your Comment" button.

Thank You!