How "Fairness" is Applied in a Condominium Association

There has been, from time to time, public discussion by the board or assertions made by board members about fairness or a lack of fairness at BLMH. This has migrated to unit owners, some of whom mirror this conversation. Or, do I have it backwards and it is the board that is mirroring, or parroting the conversation?

When I hear statements by board members or unit owners on this subject, I have concluded that there are several definitions in use here, which go beyond conformity and equality. I also suspect the source of this conversation is an expectation from society at large, and that included BLMH, to conform to and provide, certain services to owners. For example, some unit owners seem to believe that it's unfair if some of us have better fortune than others. But what can and should our association do to promote "fairness?"

I am of the opinion that the source of much of this conversation is about "scarcity" or a condition of scarcity. I'll return to this later in this post. This issue of "fairness" also contributes to some of the problems an association may have with budgeting!

Our attorney made an excellent example of the point of fairness in our association, during an association meeting earlier this year. There is a real difference between "fairness" as it is to be applied in our condo association with various unit owners, and as it is to be applied in social systems. For example, people sometimes say it is "unfair" when illness strikes someone, or death occurs to an individual early in life. However, that type of societal fairness is not appropriate when determining who is to get a new roof, or how fees are levied, etc. in a condominium association.

There are a number of definitions that can be applied here:

According to Princeton Universities Wordnet, fairness is:

• Conformity with rules or standards; "the judge recognized the fairness of my claim".
• Ability to make judgments free from discrimination or dishonesty.

Other definitions include:

• The attitude of being just to all.
• The property of being fair.
• Achieving the right balance of interests without regard to one's own feelings and without showing favor to any side in a conflict.
• Fairness concerns the equality of opportunity for members of different groups.

The Illinois Condominium Act addresses the issue of fairness in associations, specifically equality and prohibits  the creation of sub-groups. That means, no differences for unit owners based on need, merit, contribution, and effort.

The good news is, as a board member, I have read the Illinois condo act, and I also understand the definitions above. The bad news is, some of our board are clueless in this area.

However, returning to "fairness" and how it should be applied, and might be practiced in our or any other condominium association,  I'm going to address specific concerns and provide examples.

Levying and collecting fees:
All association members are given the same due dates, and in the event of tardiness in payment, each are given the same consideration and privilege for late payment. Any deviation from this, violates the fairness rules. Our attorney presented a discussion on this topic, when he was asked during an association meeting earlier this year. He stated it is unfair for some unit owners to pay fees and assessments while others are given any leniency or special treatment. The unfairness in this example is simply this: those unit owners who pay their fees in a timely manner are supporting the operation of this association. Tardiness or delay or failure to pay, puts a financial burden on the fees paying citizens of the association. It puts a burden on the rest of the fees paying members.

Implementation of projects:
It is obvious that to achieve a "conformity" requires standards and specifications for projects. Our recent boards through deed and intent have assured unit owners that such standards exist. All fee paying citizens (unit owners) are paying equally for the necessary improvements and day to day operation of the association. That equality is determined by the share of ownership, as determined in the governing documents. Fairness dictates that all projects be applied and distributed equally. In other words, projects such as our roofing project, must be properly evaluated so as to assure that all unit owners are given the same treatment. Why? Because each unit owner pays "equally" based on their ownership percentage. The value of the owner's unit and their investment here, and their future ability to sell their unit in competition with other units for sale at BLMH, is determined by association factors including the quality of their roof, and the other repairs and improvements to the property and specifically to their building and it's immediate environs.

Projects ranging from the installation of carpeting, driveways and larger projects including architectural roofs, or other necessities, must equally improve the value of the properties or buildings. If not, then some unit owners will have improved benefits which they can enjoy. When the time comes to sell a unit, will a building with a new architectural roof and insulation be perceived as a "better" or more desirable building than one without? Of course it will. So there is an obligation on the board, and this association to assure that projects which have begun can be completed in like manner throughout the association without special assessments on future unit owners or significant adjustments to the scope of these projects. Continuing the example, last year the board accelerated the driveway and roofing projects.

That board, and I, now that I am a member, is accountable to assure that funds are in place and sufficient fees  collected, at essentially the same rate for the duration of the project, to assure that all roofs and driveways will be completed in a timely manner. Failure to do so, creates sub-groups in the association.

The Schedule and Board Assurances:
In 2009 and 2010, the board assured us that this will occur, and that there is an impartial method for selecting the buildings to be re-roofed. So too for driveways. In 2010 the board accelerated the roofing and driveway projects, and spent a substantial portion of our reserves in the process. To complete these projects, will require additional funds. We can do this two ways. We can increase fees modestly, to assure that each of "us" gets a roof and a driveway. Or, we can delay and charge a special assessment. Delaying affords a few the opportunity to sell their unit(s) and leave the new owners "holding the bag" when the special assessments are levied. Some would say that is "fair." The next time you see a board member, I suggest you ask them about "fairness" as they use it. You might be surprised by the answer!

Scarcity:
Scarcity is a condition of insufficiency. If you observe some of the board, and unit owners, you will come to the conclusion that their motivation is about a lack of abundance. They believe, or intend to create, a situation in which there will be insufficient funds to do the necessary projects here at BLMH. Most notably, the roofs and driveways. If owners press to keep fees low, they will succeed in creating an insufficiency.

Now, that's a game I am not interested in playing. However, I am in a silent majority here at BLMH. I have concluded, after watching and listening, that there are some owners who truly believe there are insufficient funds and/or will press the board to keep fees sufficiently low to assure that. In such a situation, what should an owner who is "playing the game" do to assure that his property is upgraded before the funds run out? Well, you make friends with the board, complain incessantly, tell them how it is that you really need that roof, etc. and then let their mores do the work.

I have a different perspective. Do the math, and determine how much money is needed to do all of the driveways and roofs, and then structure the budget to see that the necessary funds are available when needed. In such a situation, there is no scarcity, and each and every owner is a winner. So that is what I intend to do. However, I'll need your help.

Comments, Corrections, Omissions, References
Note 1. Principles of Fairness and Justice
The most fundamental principle of justice, accepted for more than two thousand years, is the principle "equals should be treated equally and unequals unequally." This has been interpreted in contemporary society this way: "Individuals should be treated the same, unless they differ in ways that are relevant to the situation in which they are involved." In the work place, that means that if two workers perform the same work, and there are no relevant differences between them and the work they are doing, then justice demands that they be paid identically. This is not about circumstance; it is about equality with no circumstance. However in society we expand the notion of "justice" and "fairness." It is considered "just" if government gives benefits to needy citizens which are not available to the wealthy or affluent. It is considered "fair" for parents to give their children more attention and care than they would to other children. It is considered "fair" that the first in line be admitted to a movie or event ahead of other equals. These are examples of special criteria called "need, merit, contribution, and effort." These justify different treatment in society. However, in our association these notions do not apply. All unit owners are to be treated equally in accordance with the Illinois Condominium Act. 


You might find this link interesting:
http://www.scu.edu/ethics/practicing/decision/justice.html

Note 2:  I find it somewhat ironic, that after all this talk about "fairness" that we have a board majority that literally gets "tied in knots" when attempting to manage the rules. If you read the definitions in this post, it would seem that rules enforcement is a very straightforward matter. For example, fairness as a "Conformity with rules or standards." So what definition of fairness is some of our board using? It might be useful if unit owners were told this. I have asked simple questions such as "Are you, or are you not, in favor of special assessments." I know where our treasurer stands, because he has put his position in writing, Not a single board member, in response to a written request from me, has volunteered to tell me what their position is in this matter. Isn't that odd?

Note 3: Continuing the question of "Who is, or is not" in favor of special assessments. I had the opportunity to have a private conversation with our Architectural Director, and I took the opportunity to ask his position about "special assessments." He told me that he is opposed to them. So that's four remaining, who have not volunteered this information. I will ask them again.

When is a Bench, More than a Bench?

A bench appeared in the common area adjacent to 1700. Here's a photo taken on October 10:

I'm not sure precisely how this bench got to where it is, but I suspect an owner put it there. I'm going to make that assumption for this purpose of this post. We have had an owner make "requests" of the board for a bench for a year or so. This was observed during the homeowner's forum of several association meetings. That owner also approached other residents and stated his and her case; I was approached.

On first glance, one might be inclined to say "well, if they want a bench, why not allow one?"

To answer that question requires an inquiry into the "ownership" of BLMH, and some of the definitions, and responsibilities of that ownership, and the role of the board in these matters.

The bench is in the "common area" of the association. The "common area" is one of three areas, which denotes ownership and responsibility. These are:

• Unit
• Common Element
• Limited Common Element

The "Unit" is owned and under the control of each owner. It's my property and it's everything contained within the walls of my dwelling space. Each owner is fully responsible for everything in his or her unit. However, "my responsibility" extends beyond the wall of my unit. The windows, interior of the walls including finish painting, electrical, plumbing, garage door, etc. If something in my "unit" fails, it is my personal responsibility to repair it. Further, if there is damage to the building or to our neighbor's unit, caused by any failure of something which is a part of my "unit" or by the utilities solely serving my unit, such as water, waste plumbing, electrical, etc., such repair is entirely my responsibility. That means, it is my responsibility to make such a failure right, and I will be obligated to pay any sum to do so. I will be required to pay for any and all repairs to my neighbor's unit and the building or "common elements," if failure of my "property" is the cause. It's not a choice; it's an obligation.

The "Common Elements" are anything which does not serve or service my unit exclusively. It's generally the grounds and everything outside of the interior of my unit. However, structural elements of the building, even if within my unit, are part of the common elements. (Note 1). Common elements are owned and maintained by the association. They are not "my" property. They are association property and the use of these commons elements is available to and shared by all unit owners. Maintenance, which is to say the cost of maintaining anything and everything in the common elements is paid by your fees, and is shared by the unit owners. The bench in the photo is in the common elements.

The "Limited Common Element" is the "grey area" which isn't in my "unit" and also isn't part of the "common elements." It's anything that isn't within the walls of my unit, but which may be there for the purpose of serving my unit. This includes my patio, the air conditioning compressor outside my unit (which I own, but is situated in the common elements) and all the plumbing and the electrical service that serves my unit. For example, once the water main leaves the "T" in the water closet in the garage, and through "my" water meter, that plumbing is my responsibility, because it serves my unit exclusively. It's of no matter or consequence if that plumbing is outside the walls of my unit. It is "my" plumbing because is serves my unit, and mine exclusively.

So, what is the significance of the bench?

The bench is in that area called the "common elements". It doesn't serve a specific unit, nor is it in any way connected to a unit. That means the bench in the photo is now a "common element." It is now a part of the property of the association. 

If a unit owner placed it there, have they, in fact, donated it to the association? It could be argued that in doing so, the unit owner has given up all rights to it. But have they? A bench in the common elements is now the responsibility of the association, as the association is responsible for all of the common elements. That means that your fees will be used to clean it, maintain it in good order, and, if someone should trip over it or fall off of it, our association would be expected to cover any medical claims.

I have heard owners complain to the board at association meetings that wood chips were left on sidewalks. They requested that maintenance "get out there with a broom" and sweep. What would make me think that the same owners will be out there maintaining this bench? The sidewalks adjacent to our units are as much our property as anything else in the common elements. 

If this bench is now association property, that means it can be used by anyone in the association at any time. Who has first claim to sit here? Another resident, or friends of the person who placed the bench here? Perhaps another owner will decide this is not the best location for a bench. Perhaps landscaping or maintenance will also decide that. Or management. Does the association have the right to move it to a better, or more advantageous location? Perhaps another owner would conclude it would provide more benefit if it was outside their unit. Why shouldn't or wouldn't they petition the association to move it, or simply get a few friends to move it? After all, if one person can decide to put a bench in a location, why can't or shouldn't another decide to move it? Why shouldn't we all have benches, or planters, or lawn furniture and decorations? After all, we are all equals here, and if the association doesn't manage these things, then it's entirely up to individual owners to make the decisions. 

You can see the problem, can't you? If the directors of the association decide to look the other way and allow the owners to make the decisions, that will ultimately lead to conflict. It will result in anarchy. 

Sometimes a bench isn't simply a bench. It's a symbol. It's a declaration. It's taking a stand.  I wonder if those who placed that bench along the walk, truly realized what they were doing?

If there are to be games at BLMH, wouldn't you, as an owner, like to know what the ground rules are, so you too can "play the game" and win?

Comments, Corrections, Omissions, References, Miscellaneous News

Oops. I had posted the wrong address; it was a typo and has been corrected.

Note 1. If an owner should modify the walls or other aspects of the structural elements, then responsibility for subsequent failures may pass to the owner. So, if I want to modify a wall, it might be a good idea to hire a competent carpenter and not simply "Joe the Handyman" to do the work. A few years ago, a unit owner decided to add a "built-in" bookcase to his or her unit. It was a nice idea. However, whoever they hired to do the job cut the structural supports. This was discovered by one of our observant maintenance crew before irreparable damage occurred to the building. The cost of repairs was the responsibility of the owner who authorized the original work. If a previous owner had done this, then the responsibility passed to the current owner.

Note 2. Our "rules and regulations" state that an owner may report a rules violation, and specifies the proper methods of doing so. I suspect the previous board has used this as the opportunity to avoid rules enforcement. It seems that if an owner doesn't report a violation, then the rules and regulations director, and the others on the previous board, made a decision to "look the other way." This is conjecture on my part, based upon the content of a rules violation letter I received, and observations. This policy change wasn't discussed in public during association meetings, nor were the discussions of policy changes and enforcement by the rules and regulation "focus group" revealed to the unit owners.

Note 3. There have been some interesting consequences because of the new rules enforcement policies. I've noticed a few satellite dishes mounted in such a manner as to be in violation. The reason for strict guidelines is to minimize potential damage to the buildings and the roofs, and that means, to keep our maintenance costs as low as possible.

Note 4. I sent a copy of the photo to the R&R director yesterday, with copy to the president of the association. I accompanied it with a few questions about the origin and legitimacy of the bench. My thanks to the owner who took the photo on October 10.

Questions include:

1. Has the owner been determined, and has this been discussed with the owner? If not, I would suggest a discussion be made with the residents of the building to determine ownership.
2. If no one claims ownership, should it be removed by the association? If an owner claims it, then I’d like to know the specific position of the rules and regulations director, in this matter.
3. I pointed out a potential issue. All property in the common areas is the property of the association. We are responsible for it as soon as it is placed there. Should a unit owner have the right to determine the responsibilty of his or her neighbors, and their liability for his or her actions? 
4. If it is the decision of the board that the placement of personal property in the common areas is to be permitted, I requested advice on this. I suggested that the board determine what features and types of items are to be permitted, and if benches are to be permitted, where are they to be installed, etc. Who is to maintain them? What is the criteria for removal by the association? For example, if the bench falls into decay or disuse and becomes a danger or hazard to residents, who is to determine when and if it poses such a danger? Who is to negotiate with the owner if such ‘danger’ exists. Who is to pay for such removal? In other words, what are the ground rules?
5. If benches on the property are desireable, and the R&R director has decided to “look the other way”, then I suggest that the R&R director approach the board and initiate a discussion to determine the appropriateness of such benches, and determine how to specify the type of benches, where they are to be installed, who is to approve such installation, and then initiate a change to the rules.
6. Finally, whose insurance will be cited if someone trips over this, or falls from it and is injured? The association’s or the owner’s? Perhaps what is needed is a “waiver of subrogation” from the owner, naming BLMH. Of course, such waiver must be renewed annually. Who is to assure that this is done? Who is to monitor this? If an owner refuses, then what?

Note 5. The approach I am advocating would permit all owners to have the same benefits. It could also shift rules enforcement in the direction of being a creation, rather than a reaction. If this makes sense to you, I suggest you contact the board. Writing is best, if for no other reason than it is easy to ignore or lose verbal requests. Email with copies to all board members are an easy method of accomplishing this. Our email addresses are contained in each "Manor Briefs" newsletter, which is also posted on the official BLMH.org website. 

Note 6. It's also my observation that the rules and enforcement of the rules at BLMH has shifted into gamesmanship. Owners and even board members, sometimes cajole other owners and play politics to get others to agree with their positions. One of the statements used in conversation to solicit such agreement is "Isn't this wonderful!" That's one of the reasons I have stated publicly that "silence in all matters is consent." That's exactly the conclusion of people who interpret such silence as being complete agreement. Of course, most owners would prefer to avoid confrontation and that means, avoid an argument or disagreement. Some months ago I didn't "roll over" during such a press by an owner about their position on a matter here at BLMH and at the end of that conversation I was told "You are a hard, hard man!" That's the way the game is to be played by some of our politically astute owners. Cajole, manipulate and if that fails, then dominate? Or simply attempt to make others "bad and wrong?"

Is This Sign Difficult to Understand?

At a recent association meeting, a board member stated that "some residents were confused by the entrance signs."

It's unclear who these unnamed persons are, but it was suggested that because of the confusion, the board should consider changing the signs. There was no specific recommendation made of how to help the confused resident(s). The board did not discuss this further in the presence of owners.

This post includes a photo of one of two signs which are at each entrance. I assume this is the sign that is the source of the problem. I have posted a revised sign which would be more consistent with the association's current approach to rules and regulations.

To explain the problem, each entrance has two large signs. The first is shown on this post, The second sign is a standard, bright blue on white,  "WARNING" sign stating that vehicles will be towed, who will do the towing and how to retrieve your vehicle if it has been towed. I didn't reproduce that sign here.

These signs, combined, make it clear that there is "no public parking" at BLMH, and what the consequences of violation will be. (Note 1).

Perhaps the problem, as with many rules here at BLMH, is really about "why do we need these inconvenient rules?" Of course, these rules are part of the social structure that makes this a community. So is the problem really about a few inconvenienced owners who complain to the board? Is it also about board members who are committed to satisfying these owners? (Note 3).

The signs we see on entering our community and which I photographed and posted here, clearly state "Parking Subject to the Regulations of Briarcliffe Lakes Manor Homes." Those regulations prohibit boats, campers, trucks of certain sizes and commercial vehicles. They also prohibit garage and estate sales.  (Note 2).

However, is that so difficult to understand? To be honest, the rules do at times inconvenience me, and I suppose they do others. For example, I have an old sail boat and I'd love to store it in one of the parking lots. So what if it takes up two parking spaces and inconveniences a few neighbors? If I parked it here, that would work for me, and that, it sometimes seems, is what ultimately counts at BLMH.  As an owner once shouted at an association meeting "What do we get for our money?" I guess his point was that we should each take as much as we possibly can. So, why not push the rules to the limits?


Perhaps, what is being suggested would be a change in signage to something like this:

If rules don't work for a few, then why should the board enforce them? Why not disregard them instead of inconveniencing an owner or two? If no one complains, everyone is happy, is the logic.

If too many owners complain, then perhaps the board will enforce a rule. It's to be a tug of war between opposing positions. The problem for the board might be "how to keep everyone happy?" The answer is, "we can't." Nor are we supposed to. I see nothing in our charter, bylaws, rules & regulations, or the Illinois Condominium Act, which state that it is the duty and responsibility of board members to keep the owners happy. Common sense and experience also tell me that it is not possible for people "to be completely satisfied." So why would we or board members even attempt this?(Note 3).

I can only wonder what the next step will be? Will it be to remove these signs?  (Note 4).

Perhaps someone can enlighten me?

Here's a photo of one of our "confusing" signs:
This is the sign currently posted at our entrances. It is un-retouched. 

Comments, Corrections, Omissions, References, Miscellaneous News

Note 1.  The sign above is one of those hints that BLMH is an unusual community. It's a PUD. Click on this link, to go to a post for more information: 

 Benefits of Owning a PUD - October 12, 2010

Note 2. A former board member related a story to me about an estate sale that was held on the property a few years ago, in violation of the rules. There were complaints, and it was reported that there were cars parked on lawns, blocking owner's driveways and garages, etc. But, the argument is and has been "it couldn't happen here." It might be useful to quote George Santayana: "Those who cannot remember the past are condemned to repeat it."

Note 3. In the area of rules, I too am somewhat confused. Why is it that one or more board members are willing to take up the complaints or viewpoint of those who are opposed to enforcement of rules, or break them? Yet, these same board members, ignore owners who state that they want the rules enforced? At the annual meeting, one owner stood up and said she didn't want to "live in a ghetto." She admitted that was an exaggeration, but her point was that rules need to be enforced, including the trashing of sofas, mattresses, and other discards while tenants move out, or in advance of garbage pickup day. 

I find it confusing that people complain to the board about the difficulties they have in selling their units in this terrible real estate market, and then the board looks the other way for other inconvenienced residents. 

This somewhat capricious approach to rules enforcement was culminated by the posting of a political endorsement of a board candidate by the R&R Director, in violation of the rules. That led me to conclude that rules enforcement is going to continue to be arbitrary and inconsistent here at BLMH, to the detriment of owners. It seems that rules are only to be kept if they are convenient. I inconvenient, they are to be ignored. 

Perhaps with more pressure from residents, the board will shift to a more consistent and pro-active stance. However, I now see a bench in the common areas, which I understand was placed by an owner. I'm sure another 335 unit owners probably have things they would like to place on the lawns, or modifications to the exterior of the buildings. How about a portable gazebo or two, a shady rest, a portable garage, custom painted doors, decorations all over the exterior, special awnings to keep the sun out, etc. These would each benefit various owners, so why shouldn't we be allowed to do whatever it is that benefits each of us?  Why not any and all modifications to the limited common areas? I'm somewhat tired of the color of my lobby, the color of the door, my drab garage door, etc. How about something lively and less "retro?"

Note 4. Continuing this line of thought, if paying the association fees are also an inconvenience, then why should we? These are difficult economic times. Perhaps anyone with frozen wages should get a freeze on the fees. Someone working reduced hours should get a reduction in fees. Those unemployed should get a suspension of fees until they are again employed. Finally, if you are unemployed and your "unemployment compensation" runs out, perhaps the association should start paying you to live here. Let those of us who can afford it, pay the fees. The rest of us won't. Of course, we all expect to get a new roof, a new driveway and we expect the association to respond to any complaints and write a work-order for each and every repair. However, I suppose if this situation were to occur, that someone else, like me or you, should pay the bills. Is that a reasonable definition of community at BLMH? I realize that such a thing would be an extreme example of a well-meaning but misguided owner or board member.  I work with clients in industries in which the unemployment reached an "official" 18.2%. I understand the extreme difficulties which some are facing today. However, I also understand that for an association to operate, it must have funding. Funding to pay for maintenance, our newsletter, and all manner of services and replacement projects, such as our roofs. These times will pass. We had a nasty recession (two actually) in the 1980s. We will again experience growth, more normal employment and better times. BLMH needs to continue to prepare for the future and take care of business. That business includes doing sufficient things to maintain the property. 

After watching the rules enforcement for the past two years, I must say that I am glad that in general, fee collection isn't in the hands of the board. In some respects it is; the board is involved with owners who are delinquent or tardy. The board has the power to set fees and could, I suppose, waive collection. It's important to remember that the board makes all decisions at BLMH. Our managers, maintenance company, cleaning and landscapers are all "employees" who follow the direction of the board in all things, and are hired and fired by the board. 

Budgeting - Part IV - Roofs

This is a continuation of a series on budgeting and financial planning.

I've been monitoring the finances of our association since 2001, before I purchased here.

Over that time, I've constructed quite a few spreadsheets and charts, using the publicly available data. I began monitoring several ongoing projects in 2008. These include our roofing and driveway projects. This diligence on my part resulted in a letter to my fellow owners in September 2010.

This post explains how I went about determining the possible costs of our roofing project over a possible schedule. Since October 1 I have updated this information and provided it, with a number of other charts, for our board's use in the budgeting process and workshops for planning 2011, and the near future (5 years or so). I did so, because I am now a member of the board of managers and it is both my duty and responsibility to prepare such information, and to provide it to the board, so that we may make the necessary decisions. (Note 1).

This chart, for our roofing project, is a "scenario" which is an approximation, an illustration. It is realistic, and uses possible numbers and dates, but it is not "our" chart, because this chart assumes certain budgeting and spending may occur. It may not. That is entirely the choice of the board, of which I am but one. (Note 2).

However, this chart is useful to you, because it does provide useful information.

I have recently prepared new charts and spreadsheets on funding, costs and scheduling, using "real" and "projected" budgeting information, including association data provided by management to the entire board. These charts, which are similar to the ones posted here, and some additional spreadsheet data, have been issued to the entire board. Those charts include:

• Paving - Driveways, 2010-2017
• Roofs, 2010-2017
• Garage Floors, 2011-2019 and beyond.
• Summary - Roofs, Driveways, Garage floors and Masonry, 2010-2019

Those charts were assembled using information, including but not limited to:

• Reserve Balance, by category, 12/31/2010.
• Reserve Fees collected, by category, 2010-2020 and beyond (Note 3).
• Estimated cost per unit (e.g. per roof, per square foot of driveway, etc.).
• Estimated annual cost increases, due to inflation in materials and labor.
• Estimated return on reserve savings (CD rates, etc,).
• Estimated progress dates (e.g. driveways to be completed in 2011, 2012, 2013, 2014, etc.)

With the above information, and knowledge of the condition of our infrastructure, it's possible to create a timetable which is an approximation, or best, informed guess, of when these projects will occur, and of how many years they will require. That is the "duration" of each project. For example, experts have provided opinions about our roofs. Using that information, it is possible for our board to design, with management's assistance, a timetable for replacement of the roofs. This project began in earnest in 2009. However one roof was completed in 2005. Of course, roofs will not all be replaced in one year. Consider the mess, possible inconvenience to owners, and problems attempting to coordinate the roofing of 42 buildings in one summer and fall season. That's about 24 weeks, which would require completion of about 2 roofs each week, from May through October! Consider also the tremendous cost over such a short time! As our previous Architectural Director emphasized during association meetings I attended, there is a real cost to the association if roofs are done too early. If done too late, and there are leaks, there is also a real cost of unnecessary repairs, and damage to the units and owner's property. (Note 4).

Here's a first chart. It indicates a reasonable schedule, by year, for the replacement of roofs at BLMH. It includes the number of roofs completed per year, and the number of roofs remaining to be completed. This is just an estimate, and an illustration. It shows that the final roofs will be completed in 2016. The actual schedule will be determined by the board with the recommendations of management:

The next chart, shows a possible funding of the roofing project, accomplished at the schedule in the chart above. All roofs would be completed by 2017. The chart begins with a hypothetical balance in the "roofing reserve" account in 2010.

Each year has three columns. The front most is the amount added from our fees and accumulated interest on savings, to the "roofing reserve" account each year. The middle column is the amount spent each year, to accomplish roofing on the schedule. The rear column shows the amount remaining in the "roofing reserve" account on December 31 of each year, after paying for the roofs completed in that year.

At the end of the project, in 2017, the reserves are about $300,000. Why is that? Well, that roof installed in 2005 may need to be replaced 15 years after installation; experts have stated that shingles on roofs in our area may require re-shingling in as little as 12 years. We also know, from experience, that they may last quite a few years longer (Note 4). So, that roof completed in 2005 may require re-roofing in 2017. Roofs completed in 2009 may require re-roofing in 2021, etc. So, the board, in fulfilling it's duty to provide reasonable funds for the operation and maintenance of the association, must begin funding for those roofing projects with a possible beginning in 6-7 years. In 2017 a new roof with gutters may cost $55,000 each! (Note 5).

Comments, Corrections, Omissions, References, Miscellaneous News
Note 1.  At present, my reasons for preparing these various spread sheets is as dictated by my fiduciary duty, and that of my fellow board members. That duty, among other things, "relates to a director’s responsibility to perform his duties in good faith, in a manner each director believes to be in the best interest of the association, and with such care, including reasonable inquiry, as a prudent person in a like position would ordinarily use under similar circumstances."

Note 2.  I have adjusted the data slightly for this "illustration." The original charts were prepared with association information and information provided by management to the entire board. The originals also had accompanying numbers for starting reserves amount, fees collected per year, actual roofing costs and funds spent on roofs per year, etc.

Note 3. The necessity of project timelines was determined by the possible duration of the project. For roofs, it was easy, because the condition of our roofs is well known; our boards have been accumulating funds for about 6-10 years for this purpose. Some projects are longer in duration. For example, several garage slabs need to be replaced. Experts have stated to the association that concrete will last 50 years. Of course, that doesn't mean that all of our garages will "vaporize" and crumble to dust in 2028 when most are 50 years of age. What it does mean, is we can expect, as an association, to repair or replace many of them over the next 17 years. That includes several which should be replaced immediately, in 2010 or 2011. There will be more.

Note 4. Of course, it's not possible to time these projects perfectly. Delaying a project and then attempting to do any roof in the year prior to failure is not possible. It would be foolhardy to attempt such guesswork. On the other hand, as I posted here, earlier, if this association habitually does the roofs one year early, over a projected life of 100 years, we'll spend an estimated additional $420,000!

Note 5. Because of inflation, roofs are expected to cost more in 2015 than they did in 2010. For this illustration, I used a starting price for roofs in 2010. That was adjusted annually, by an amount based on likely increases in the cost of shingles, etc. Our roofs are approaching the end of useful life. That's why we have a re-shingling project! About 40% of our roofs have shingles that are 15 years of age. In 2009 and 2010, roofs were re-shingled which had the following ages. The average age of the shingles on the replaced roofs was 14 years:

• Installed 1992, re-shingled 2010 = age 18 years.
• Installed 1993, re-shingled 2010 = age 17 years.
• Installed 1996, re-shingled 2010 = age 14 years.
• Installed 1996, re-shingled 2010 = age 14 years.
• Installed 1998, re-shingled 2009 = age 11 years.
• Installed 2000, re-shingled 2010 = age 10 years.

The Tragedy of the Commons

There's a theory that explains how it is that a society, and that includes larger ones such as a nation, and smaller ones, such as a condominium association, sometimes decay and fall into ruin. It's called the "tragedy of the commons." This theory was first put forth by Garrett Hardin in 1968. Here is an explanation by game theorist Ken Binmore:

Critics ask how can it possibly be rational for a society to engineer its own ruin. Can't we see that everybody would be better off if everybody were to grab less of the common resource? The error in such reasoning is elementary. A player in the human game of life isn't some abstract entity called "everybody." We are all separate individuals, each with our own aims and purposes. Even when our capacity for love moves us to make sacrifices for others, we each do so in our own way and for our own reasons. If we pretend otherwise, we have no hope of ever getting to grips with the Tragedy of the Commons.

So that is an explanation of how the actions of individuals can be at cross-purposes to that of the group, and the result can be disaster for the group, and ultimately the individual.

Fall 2010

After the water main break and an "alleged" fire at 1731, things are returning to normal. The wildlife at BLMH hardly noticed the excitement. They have a more congenial view of the activities, I guess. Here are a few photos taken on recent walk-throughs.

As usual, you can enlarge these photos by clicking on them (with your mouse pointer over the photo, double-click with the left select of your mouse or trackball).

We have various "watchdogs" here at BLMH. These include a Mallard Drake, who is one of several "watchducks" who like to perch on the roof and overlook the property. Occasionally, the morning doves also participate.

At the nearby wildlife center (How nearby? About 5-10 minutes due east). the herons are looking for lunch:

Comments, Corrections, Omissions, References, Miscellaneous News
Note 1.  I've never seen a heron at BLMH. Probably because our streams are devoid of fish.

Water Main Break - An Affected Owner's Request - Photos

Here is an update. I added some photos the evening of October 16

I received an email from an owner, and in it she asked if I could provide additional information on the water main break on Gloucester. She stated that "Do you know when the work will be completed or when we can drink the water safely if we have it? Yesterday I called FUPM, and [I was told] there was another break, and there could possibly be more troubles.

On Sunday I went to the site several times and never saw anyone monitoring it. I asked the workers Sunday evening when they were going down into the large and deep hole if they were going to shore it first or use a trench box, and they said they did not have time; so, I am happy to hear they are now in accordance with OSHA rules.

Anyway, Norm, if you can shed more light on the situation, please do. I would appreciate knowing when the problem will be officially fixed."

Here was my emailed response, slightly edited for posting:

I am sorry for the delay in responding. This is my personal response to you, as a resident. Yes, I am a board member, but I am speaking for myself here and I have not been given a formal statement by the board and its position in this matter. So this is not an official statement of the board. 

I believe a notice has been posted on the quality of the water. The board is attempting to provide frequent information to the affected owners.

It's my understanding that notices have been posted in the foyers, providing affected residents with updates. I also understand that emails have been issued to affected residents, who have provided their email addresses to the association. I believe all of this is being coordinated by our president. Several board members have assisted in distributing these notices. 

I am not provided with this information in a timely manner. I'm not sure why, but most likely it is because this blog is not considered a source of "news"  in the association. For my part, I have not asked for frequent updates. So "up to the minute" information is not available on my site. It is not the part of any BLMH emergency notification system. Our official BLMH.org web site is apparently not structured for use as part of a "current events" news system. It is currently under the direction of our Communications Director and the board.

I understand this repair is almost complete at this time. Officially, it was not possible to provide you,  I or anyone with details about exact "fix date" because no one could, with any certainty, predict when the pipe would stop rupturing. Here is some info, which I can't yet verify. Multiple breaks, or ruptures occurred on several dates and in different locations on the same water main. I have been told there were a total of 5 breaks! This is unusual, but is no one's fault.  I am sure that is little consolation to you or any other owner living on Gloucester or Dover and affected by the failure.

It was the decision of the contractor to bring in an OSHA required [or mandated] box, and subsequent failures required a larger box, actually two. These boxes are costly to use and to transport, and require time to construct and position. However, the ultimate goal is to do repairs of this type as quickly as possible and at the most reasonable cost, to the association and the owners, and with a minimum of disruption to you and anyone else. While the association values the fees we so carefully collect and save, I see no attempt to penny pinch in this matter, and I believe the ultimate cost will reflect that.

As to the nature of the delays, it takes, for example, digging to determine what the problem is, beyond the obvious "it's a broken water main." Exactly where was it broken, what is the depth, the condition of the line, etc. is not obvious until the ground is broken and a hole is made. At the time of the break, the contractor estimated the type of equipment required on site and then got it here. The contractor is very experienced and is, I understand, one of the more proficient at this type of work and has much experience on our property with these types of problems. 

I'm sure the board will be looking closely at what failed, at the response of the contractor and also of FUPM, and of the communications issues raised by this water main failure. I would hope the purpose will be not to spread blame or point fingers, but to better understand how the association can better respond to this type of failure, so that communications system can improve. Believe me, your president takes all of the quite seriously, and so do I and the other members of the board. She has directed that you and others in the immediate area of the break get frequent notices posted. I believe the architectural director posted the notices you saw this morning (October 15) and that was after a late night budget workshop!

I wish I could tell you more, but that is what I know at this time (Friday morning, was my last communications with anyone and that was one of your affected neighbors). 

I have suggested a phone tree or similar for the future. That does not currently exist and would require the cooperation of owners, who would have to release their phone numbers for this use. Certainly other techniques will be considered. One of the issues with this type of problem is the infrequency. That makes emergency preparedness more difficult, but certainly possible. What would be the best method of communication? I suggest [you] make specific recommendations because you were one of the owners affected. You could direct that information to our Communications Director. 

Looking at this piping failure, I have been told that the last time a failure of this type occurred on Gloucester was 2002. Most of the other breaks on the property have been a single break, which was very easily repaired. My personal concern at this time is the question "is this indicative of the types of water line failures we can expect, in the future, as the infrastructure ages?" That is a serious question. I have been told by relay of information attributed to the contractor, that a part of the problem is that the soil composition as they moved east was that of a "peat bog." I assume that this is not typical on our property. But we'll have get more information on that. 

Norm

Some Additional Photos

Here are a few photos of the "dig". The hole is not quite filled, but the multiple breaks have apparently been fixed. I understand this stage of completion was reached on Friday. However, I first want to show this photo, taken on October 14. This shows a stack of two OSHA safety boxes. They are two high. Each box is about 8 ft. tall, so the stack shown in this photo is 16 feet in height! That gives some idea of the depth of the hole. However, I should point out that the initial hole was shallow. As the break, or breaks "progressed" the hole became both longer and deeper. This photo depicts what might have been the maximum depth.

The OSHA boxes were removed and these photos were taken Saturday afternoon:

Equipment waiting for transport and a partially filled hole.

A partially filled, barricaded and safety-taped hole:

Budgeting Part III - Budgeting and the Reserve Study 2011

This post was prepared several days ago, but publishing it was delayed because of current events and other obligations. Note added 11:30am 10/15/10, this post may have obliterated the brief one about yesterday's fire. That post is here:

Click Here for Post About Yesterday's Fire (October 14)

By my rough estimate, I've put about 60 hours into evaluating the reserve study. That time has been spent in reading the study, researching the statements and conclusions made in it, preparing my notes and spreadsheets and other analysis, and applying the conclusions and data of that study to those spreadsheets, for the purpose of developing projections.

I became concerned by some of the statements and conclusions of the study, and by the sums spent on a small portion of our driveways this year. So much so, that after I completed my initial analysis of the reserve study, and our driveway program, that I prepared a 3,000 word document, a "Rough Draft - Review and Highlights of the Reserve Study - October 8, 2010" to provide to my fellow board members at a brief workshop on Saturday, October 9. Our president agreed to attend, but two members declined due to schedule conflicts. The remaining four members did not respond to me, nor did they attend. (Note 2)

So, where to go from there? I decided to create a letter to the management and to my fellow board members. This was issued the morning of Sunday, October 10 as an email. It is a nearly 4,000 word summary of the current situation, with data and my concerns and considerations.

About fees, I see the issue as somewhat straightforward, but there are complications. First, we can’t spend money we don’t collect. That’s why, when the board voted a 0% fee last year, I was of the opinion that it needed a companion austerity program. I do understand that voting "0%" is much easier than creating an austerity program. Many of our costs are “built in” and include essentials such as snow removal. Others might be elective, but who wants to clean their own halls? I see no owners clamoring to take over services, and recent boards I have been present to did not discuss this in front of unit owners, or caved when there were complaints about dirty halls. Finally, when there is a repair required, owners will call this in to management, who issues a work order. Some owners are more persistent than others, so they call and complain when things aren't done in a timely manner. So, it seems the majority of complaints and requests are acted upon. That means a steady stream of work orders, and a steady flow of dollars out the door. This is what I call an "open ended" contract, which is one in which there is no cap on spending.  In the end, while an “austerity program” might sound like a good idea, what are we to give up to achieve that? What do we give up to lower fees? How do we set a cap? In other words, where and how to we say "NO"? We can't simply say "well, we spent $5,000 this month, so there are no more work orders until next month except for emergencies." So, are there any non-essential services we are willing to forgo? Is anyone willing to say "no" to a single unit owner? In 2008 and 2009, there were unit owners attending meetings who shouted “what do we get for our fees” and also complained about dirty hallways.

Some recent board members implied that the problem was waste and inefficiency. We were spending money needlessly. This was grounded by the opinion that our “fees are too high,” and could only be explained by waste, mismanagement or fraud. Certainly it could not be based on necessity. Well, the big push in 2008 to “scrutinize every bill” seems to have gone nowhere. Because of the complete silence in this matter, I am unsure if it is because after the “scrutinizing” there was nothing to report, or if it was simply a convenient campaign slogan that went nowhere.

I'll be monitoring finances, and I have made a suggestion to management that has the potential to save a significant amount of money. But I won’t be scrutinizing every bill. That was someone else’s campaign slogan, not mine. I’ve put my time in on this reserve study. I am now willing to take some responsibility for it, commencing with my actions effective October 1, when I picked up a copy. Everything prior to that is someone else’s doing.

So, the question might be “how low do we go” in funding this association. We tried 0% last year. An earlier board actually had a negative assessment. That means they gave money back to unit owners at the end of the year, I guess. A similar question about “how low is practical” might be what prompted a unit owner to stand up during the annual meeting and state “I didn’t buy here to live in a ghetto.” She then went on to state that was an exaggeration, but that because of some of the things she has experienced at BLMH in recent years, she is now concerned.

When it comes to money, passions do run deep. It’s useful to remember that the investment we each have at BLMH may be the one of our largest, and was approaching $200,000 at one time, not so long ago. Should we nurture and protect that investment? Or simply allow it to decay? Some want to sell at top dollar, which implies they want the property maintained. Some want special plantings at additional cost. Some want to spend no more than 1% in fee increases each year. There seem to be a range of owner opinions.Even in today's very low inflation, keeping expenses below a 1% increase could only be achieved by forgoing some maintenance. That low number would also assume that our roofing, driveway and other projects such as streets, are fully funded. They aren't, and at least one, the driveway project is severely underfunded, if we are to replace all in a short period of time.

It will be a board decision about when and if there is any austerity program at BLMH. That will require a serious discussion of what we are willing to give up, and what we should give up, and how to give it up.

Returning to the reserve study, I have reviewed and studied most of it. As I stated earlier in this post, I did produce a 3,000 word document for the use of the board.

At this point, the responsible thing to do is to use the study constructively to reach as many conclusions as possible, including the impact, if any, on funding and fees here at BLMH. It will take additional time to research some of the conclusions, and those may be deferred from current planning. We’ll see. When management stated to the ownership that the 7% recommended fee increase is based on the study, with a decision to disagree with one or more study conclusions, such editing would seem the approach. Some items have apparently been removed from consideration at this time for technical reasons.

It would have been helpful to distribute the work of the reserve study among the board members, so that we would each be fully prepared for the budgeting workshop, and so we would have some “ownership” or a stake in what it says. I’ve spent the equivalent of between one and two “work weeks” with it. That was my personal choice; there was no request made.

There are portions of the study that are "obtuse" and difficult to decipher. There are omissions. The study makes some statements and conclusions about reserve areas, about which the text and supporting data varies and sometimes there are contradictions. That creates some difficulties, and the report must be very carefully read and notes taken.

The study provides funding and budgeting projections, based on the various descriptions, photos and tables. There are options given, and so it is necessary to decide which option to choose. In the end, I found it helpful to generate spread sheets for:
1. Notes
2. General Financial Data and Summary
3. Reserve Study Conclusions and Data
4. Reserve Budgeting Tables and Data
5. Roofs
6. Driveways
7. Garage Floors

I could add others, but am waiting for the conclusions of the budgeting workshop and specific recommendations of management to questions that have been asked.

There are other issues in the report, and it omits our garage floors. So there is a lot of data and some discrepancies to sort out. Some is this is simply due to the subgroups of infrastructure in the report, which is different than the current grouping at BLMH. So it is necessary to come to various conclusions for each area of our infrastructure. Some of the areas included as major in our current reserves and also in the report or worthy of specific analysis and budget review include:
1. Roofs
2. Paving - Driveways
3. Sealcoating - Driveways
4. Paving - Streets
5. Repair - Crack Filling - Streets
6. Concrete - Garage Floors
7. Concrete - Curbs
8. Concrete - Sidewalks
9. Concrete - Streams
10. Building Exterior Masonite Panels
11. Building Masonry
12. Hallway Carpeting
13. Lake Restoration
14. Exterior Doors and Entrances
15. Hallways
16. Contingency

My letter of October 10 to the board expressed fully my concerns including the statements of the Reserve Study and the issues it raises, and the budgeting process which will culminate in the workshop meeting of October 14. The board authorized the reserve study and it has an obligation, as I stated in my letter "The association spent [a large sum] for this study and we have an obligation to find in it what we can and use it to the best advantage of the association and for its intended purpose. I may disagree with some of the findings, but I can’t simply throw it out the window and disregard it."

So, how is a board to respond to this reserve study? Here is a quote from my letter:

“As fiduciaries, the board has some extraordinary responsibilities. I am going to summarize one aspect here because it is the heart of this matter.........

There are two aspects of fiduciary duty. The first relates to a director’s responsibility to perform his duties in good faith, in a manner each director believes to be in the best interest of the association, and with such care, including reasonable inquiry, as a prudent person in a like position would ordinarily use under similar circumstances. This standard of care has been adopted in most jurisdictions and is often cited as the “prudent person standard” or the “business judgment rule.” Directors will not be liable for mere mistakes in judgment so long as they act in good faith and have a rational and informed basis for their decision.”

The “reasonable inquiry” above would seem to mean that for the current budgeting process and reserve study, the board must come to an informed consensus about the specific recommendations. The definition of fiduciary duty would mandate that every director of BLMH review this study, become familiar with it and be willing and able to discuss some of the key points and conclusions of the study. Why? Because the study is a critical component of the budgeting meetings this board is preparing for. The board has an obligation to be prepared, and because each member votes, each member must be in a position to “act in good faith and have a rational and informed basis for their decision.”"

In reviewing all of the data, and of course, the general issue of fees and funding, I asked this question of my fellow board members: "How is the board to raise the necessary funds? I think that your personal philosophy and position on this should be stated. I most certainly want to know what it is. Is it to be through annual fee increases, or special assessments or both? What does prudence dictate? Do we ignore recommendations and/or defer fees and assure special assessments at some time in the future? Is that a responsible course of action? Can our owners afford a special assessment or assessments? If they can’t afford such today, what makes any of us believe they can tomorrow?.......[As] for myself, and as I have repeatedly stated, IN WRITING, I am opposed to special assessments. That means that I am committed to finding financial solutions that result in the smallest possible incremental fee increases and satisfy our association’s funding requirements at a minimum cost to owners over the entire life of the various programs."

I take my responsibilities as a director and as a fiduciary very seriously. That's why I have spent an extraordinary amount of time with this reserve study. I intend to "squeeze as much juice" out of it as I possibly can and derive full measure from the money this association spent to get it. Should you, as an owner, expect anything less from any board member?

Comments, Corrections, Omissions, References, Miscellaneous News
Note 1. This budget meeting will be "act one" of a multi-part action on the part of the board. There are some aspects of the reserve study that will require additional research, and some of the longer term implications won't be resolved this week. However, given a few months of time to proceed and a willing board, we could have a good plan in hand to present to the owners.

Note 2. Our Treasurer and CD responded and declined to attend the pre-workshop "workshop" because of previous commitments.

Note 3. Independent of the study, there was a “step change” in asphalt prices in 2009. I’ve read reports attributing this to the government “low sulphur diesel fuel” mandate. Whatever, the reasons, asphalt prices tripled and have not “returned to earth.” This was evident in the driveway bids for 2009. It appears prices may not return for some time and they may never. That has a profound and significant impact on our street and driveway programs. That’s why, as a unit owner, I stood up at the annual meeting and asked some questions about the percentage completion versus percentage expenditures for the driveways.

Note 4. In a letter to the board, I stated in very straightforward language, that I will not be a scapegoat. To put it bluntly, I was not involved in the evaluation and selection of the vendor, I did not vote, and I did not interview the author or review the rough draft or drafts. Nor did I exert any influence on the board. Getting to where we are today was a board decision. It will take the entire board to find a funding solution. Management stated to owners and the board at several meetings over the past three years, that there might be unwelcome consequences to a reserve study. The board decided to go for it. The board now gets to decide how to deal with it and the matter of the fee increase recommendation of management. As I am now a member of the team, I will be a part of that decision making process. We'll sort it out and we will, collectively and as individuals figure it out. In the end, I hope that each member of the board can own the result completely and speak of it as owners, and as creators of whatever plan it is that we design.

A fire at 1731!

Updated October 18, by request.

It's my understanding this event is being called an "alleged fire." I'm unclear precisely why, but possibly because the fire department has not issued a formal statement. Perhaps it's simply because it will not warrant an official investigation. That's fine with me; I'd prefer a minor, non-event. There was smoke and charred wood, and the use of fire extinguishers would imply it was a "fire." The fire department has not issued a press release on the event..

Here's a photo after temporary exterior repairs. I have several interior photos of the immediate area of the "alleged fire" taken shortly after the departure of the fire department. These do indicate the extent of the damage, which was minor. I'm holding them for insurance and other purposes, should they be needed.

Original Post. October 14, 2010
A fire occurred this afternoon at the 1731 building. Damage was apparently contained to the water meter room in the garage. Thanks to the residents for their alertness and prompt call to the Wheaton Fire Department, who responded very quickly.

Here is a photo of the exterior of the building. This damage was the result of action of the responders who, I am told, opened the wall to assure there was no fire within.

I may post another photo or two, tomorrow.

A Hole Grows In Wheaton

And what an expensive hole it is! The water main break on Gloucester is growing. Temporary patches have been installed, but on October 12/13 another break or multiple breaks occurred. The hole is getting longer, an OSHA mandated protective box has been installed, and even larger mechanized equipment is now on the site.

Tomorrow with be day number 5. This will be quite an expensive repair. Possibly equivalent of $125 per owner. Of course, some may quibble about my numbers. Some always do. However, I'm including my estimates of the repair, crushed stone fill, driveway and landscaping, and a tree or two that have been removed. Why include all of that? From a cost accounting perspective, none of these costs would have occurred at this time if it were not for this break. So in my book, these are the contributors to the full cost of this repair. Another way to look at it is this; if this break had never occurred, this money never would have been spent. Some of this may be common sense, or, to paraphrase another board member, who has used this term during association meetings, "that's only logical", isn't it?

There are two sides to this. These types of problems are inevitable; they will occur. The only thing we don't know is precisely when they will occur. So it's only responsible to financially prepare for the inevitable, isn't it? This association does plan and prepare, and it raises fees in an orderly way, to assure that it has sufficient reserves and funds for operations. Well, OK, most of the time it does. And it does so because some of those "hard" people are alway pressing to adequately fund our association. People like me.

The alternative is, the board can vote for very low fees, and it will be entirely up to the owners to plan and prepare. That means, leave it entirely up to the owners to manage their finances in such a way as to save a few dollars each month, to be available for problems and special assessments. Then, when we have a problem, such as this, the association can simply "pass the hat" to the owners. Those owners will then willingly and cheerfully dig into the cookie jar and pull out a wad of bills they have saved explicitly for this moment!

Dream on, Norm! What planet am I on?

Last year, our board voted a 0% fee increase. They did so with management's input. Did they jump at the opportunity of a 0% fee increase because that is what they wanted to hear? Or did they do a little bit of independent analysis so they could come to an informed decision? I don't know what they did, because they didn't tell us, the unit owners. But in the end we did get a 0% fee increase. (Note 5).

I had done my research, which included some simple things like the ultimate cost of our roofs and driveway projects. You will recall, the board had voted to proceed with those and if it weren't for delays by supposedly external forces, we would have had 7 driveways repaved last year, in addition to two roofs.

My arithmetic indicated some funding problems with these programs and I did discuss this with some board members. To others, I was and probably still am "persona non grata." (Note 2).

So I began a public campaign to encourage all owners to save the difference between that 0% fee and a small fee, in a cookie jar each month, because I knew we would need it. I "knew" that it would be inevitable for a fee increase at some point in the near future. I was advocating that a prudent owner prepare for it. So, anyone who heeded my words has been doing this and will, I hope, continue to save a bit each month in preparation.

The real point of stating that here and now is I want to use it as an example of my position about unit owner preparedness. I suspect many and perhaps most owners didn't hear my words, or if they did, they simply didn't heed them. I wouldn't  be surprised if some of the board at that time reassured owners and told them to ignore me.  That's conjecture on my part, but I suspect we are dealing with individual belief systems here. (Note 3).

To return to reality, the question is, which is better? Having the owners each use their own best judgement and save and be prepared, or have the association manage these financial affairs. Some here are arguing that the association is doing a poor job, and the owners would do a better job. A few, I suppose would. But would all? I say they wouldn't and for that reason I disagree with the naysayers. To support my position, I suggest we check the number of owners who are late paying their fees each month. And by how much? Who or whom is late is considered "personal information." However, the amounts are in the monthly accounting records and are available to all owners.

Returning to the immediate issue, there will always be problems of this type. Breaking pipes, falling trees, the occasional unit fire, or roof leak; it's all a normal part of ownership. Rational board members have been arguing for years that we need to adequately fund for these types of breakdowns. Management, for its part added a "contingency" reserve category. That's to allow the board to have somewhere to fund for these  problems.

Will there be other failures? Of course there will, and probably more frequently. Why? Because our infrastructure is aging. That's not a big deal, unless our board decides to stick its head in the sand and pretend that we don't need to adequately fund for driveway replacement, garage floor replacement, new trees, roofs and of course, the occasional breakdown. Believe me, it's easy to fall into the trap. All one has to do is listen to their neighbors. The ones who complain about our "high fees." That's "diversion speak" for "we don't need to save or fund our reserves," or "I'd rather spend my money elsewhere and I don't want to put it into this association."

The next time someone tells me that they think they can do it better than the association does, I'll should ask them a few questions:

1. Do you currently have $5,000 set aside for a new furnace to replace that 30 old one in your unit?
2. Do you have $400 for a new hot water heater to replace that 15 year old one in your unit?
3. Do you have at least one month's cash saved up in advance to cover next month's bills, including your association fees?
4. Do you have a 6-month "emergency fund" which financial planners recommend, should you suddenly experience a loss of income?
5. Are you funding your Roth IRA 100% each year?
6. Is your 401K or retirement plan fully funded?

If you can answer "yes" to each of these, then you and I can have a conversation about how you probably are financially prepared, and you are capable of independent financial planning. However, I suggest that most of us are not as prepared as you, and we need a responsible financial plan for this association, and we also need a reliable means of collecting the fees required by that plan.

That plan includes realistic data on the condition of infrastructure, including its age and condition, and a companion document to fiscally and responsibly fund the association in accordance with these plans. Earlier this year the board authorized and paid for a "Reserve Study." It was expensive, but it was decided to be necessary by the previous board. Some of us are now analyzing it and determining the relevance of its merits and conclusions. (Note 1).

Here are a few more photos take at dusk on October 13. 

Comments, Corrections, Omissions, References, Miscellaneous News
Note 1.  I was elected to the board and since approximately October 1 I have been doing a serious analysis and review of the "Reserve Study." I have provided two documents to the board, including one of about 3,000 words and another of about 4,000 words, and several spread sheets. I'll be posting more here tomorrow.

Note 2. As the newest and most junior member of the board, I am bound to keep some things in confidence. However, I am also bound to act in accordance with my fiduciary duty. I'll do my best to earn the trust of the board, but some will probably never trust me. I suspect some are simply counting each and every one of my missteps, because this will support any such position regarding my un-trustworthiness, my lack of accuracy, etc. In politics, if you can't discredit a person's position, and the information they present , then one does their best to discredit the person. This is Illinois, after all and most of us have had the opportunity to observe political corruption and incompetence. We'll see what develops here at BLMH.

Note 3. I will be doing my own analysis and I will continue to publish my views here. As a board member, I have some constraints. I don't want to publish all information and in particular, financial information here. It would be inappropriate and won't serve the association on the manner in which I do intend to serve it. I have observed and scrutinized  boards here for the better part of three years, I have made some conclusions about individuals because of their arguments and also because of what is not stated to unit owners. I have concluded that in recent years, some board members truly believed our fees were too high and unnecessary. They also believed our professionals were not to be trusted and were doing a poor job. They then began to act out of those personal beliefs, and some board members may continue to do so.

From the perspective of information, a case in point is our association newsletter. It is greatly expanded, but does it really provide more information? Does it prepare owners at BLMH for some of the responsibilities of ownership, for our finances, for the realities of some of this association? I think it could do better. Owners have called for more transparency on the board. The news letter is the perfect vehicle for that. I think some owners would like much more information about the decision making process. I will provide that here, in a responsible way, but I can only go so far and I can't reveal all. I will discuss various sides of the arguments, such as financial planning, project decisions, and so on. However, I can't quote individual board members unless they permit it.

Note 4. Because of the realities of being a member of the board, I will be restrained slightly. So I'll use my best judgement about what is printed here and what is not. I pressed forward with my independent analysis of the reserve study, and produced two letters to the board. That wealth of information was prepared by me and I claim the right to use it in any, prudent manner to the benefit of the association. Some of it will be printed here. I would hope the board also uses it to good purpose.

Note 5. When the time came for a vote, the Treasurer voted "no" for a 0% fee increase. As I recall he was the only "nay" vote. As I also recall, the minutes did not accurately reflect that. The minutes recorded the quantity of votes but did not indicate who, by name, had registered that "nay" vote. This came to my attention later, as I was not present at that particular meeting when the minutes were read and approved.  This is a serious oversight. Why? because when the time comes, there will be no accurate historical record of who specifically voted "ay" and who voted "nay." It is possible one or more board members will one day claim that they were the caster of that "nay" vote.