Is Your Association the Titanic?

The object in the title was a ship, a transportation vehicle that ran afoul of some serious difficulties. When we use the name "Titanic" as I am using it in this post, we usually think of that voyage which was to be an extraordinary, pleasurable trip. But it encountered grave difficulties and has become the stuff of legend and also the object of several films, both romantic and documentary.

Using the term "Titanic" to describe one's condominium association is a metaphor that brings up an image worth thinking about. Is your association on a collision course with disaster?

Most of us will say "Of course not." Others may say "We're doomed!"  Yes, there are a lot of "horror stories" out there since 2008.  Not all are representative of reality. It's useful to remember that in 2012, about 85% of all the "homes" in the U.S. were not underwater. That includes townhomes and condominiums. If you think most of us are "underwater" then you can blame the politicians and the news media for misleading you with statistics that were not representative of the entire home market. The overwhelming majority are not underwater, and weren't in 2008, either! How can that be? A lot of people own their homes outright (32% in November 2012). A lot of people have paid off a substantial portion of their mortgages. A lot of people purchased homes with 20% or more down. Many apparently bought a home for that old fashioned reason "to have somewhere to live" and as an alternative to renting; they were not overextended in real estate.

Financial conditions have improved. Apparently, many of us have been paying down our mortgages for the last 5 years. However, individuals and associations face a lot of challenges in 2013 and beyond.

If you compare a home or condominium to a transportation vehicle and consider it to be a place to spend a significant part of our lives, then I suggest you also consider that travelling on a commercial airliner with professional crew is safer than flying on a small, private plane. In other words, there are advantages to condominium living with professional managers, a board to monitor and direct maintenance and finances, and a community to share the financial burden and the financial risks.

The naysayers will point to the Titanic, and to the headlines and say "But commercial crashes do occur on airplanes and on trains." Yes they do. These are the exceptions to the rule. It is a fact that in 2003 there were 22 people who died in commercial airline accidents in America. It is also true that in that same year 44,757 died in motor vehicle accidents, excluding motorcycles. (Note 1). In an average year, 82 die in commercial airline accidents. The number of automobile fatalities is pretty constant at about 40,000 per year. My point? Commercial travel is safer, Titanic or not. So operating our life out of specific events might not be the wisest way to go. Today, some people say that owning real estate such as a home or condominium is a big mistake. Really?

Residence or condominium, we also sometimes think of our "home" as somewhere to rest our hat during our journey of life and escape from the outside world with a nice warm hearth in the winter and other comforts. It is somewhere in which the problems of the larger world, the financial issues of our country and countrymen and women may seem far, far away. In other words, if we are attempting to find a means to achieve solace and comfort, including financial security, then there may be value in owning an abode. However, a private residence might not be the wonderful place that some have promoted it to be. Nor is it the automatic disaster that others now say it is. The fact is, we all have to live somewhere and a condominium can offer real financial advantages over renting. That includes an advantage called "strength in numbers."

However, real estate never was a sure thing, and with that signature you could be buying a ticket on the Titanic. That's what those who are deeply "underwater" in their mortgages may think. This applies to both single residences and town homes or condominiums. So if you are a home owner, you also might want to read this post and see if the concerns it raises should also be applied to you.

Rugged Individualists? 
Ah yes, this is supposedly a nation of free thinkers, of rugged individualists with a "can do" mentality.

That's a wonderful, romanticized version of America. What does that mean? Does the ability to sing like a canary guarantee a slot on "American's Got Talent" and a financially successful life? Well, that's not quite what I was thinking about.  I was raised by my parents to be self sufficient. My kindergarten teacher once told us "You are Americans" and she went on to point out that the word "American" ends in four letters "I CAN." In other words, it was in our national identity! The pioneers came to this country and saw a magnificent bounty. That manifested itself as near limitless opportunity. They lived that opportunity. We've all read the stories.

Where are we today? Has the opportunity evaporated? I think we forget about the reality of some of those romantic tales. The reality is life in this United States has been difficult from time to time, and there have never been guarantees. It was difficult before we were a nation. The Jamestown Colony perished. The Donner Party perished. People lived difficult lives, died on the prairie of starvation, in childbirth, in Indian wars, or in the influenza epidemic of 1918. If we compare the "Great Depression" to the "Great Recession" current times look like a cake walk. Furthermore, there have been not one, but four recessions since 1980!

Why do I say these things here? Because I think it's important to understand that we are probably living a life grounded in fiction. Contrary to some beliefs, we do need community. We need infrastructure. We need deep pockets. We need so much we take for granted, and yet many of us pretend we can do it on our own!

"A man's home is his castle" is the old expression. That may be, but it may also be a "money pit." Our personal reality probably lies somewhere between those extremes, but from time to time it may seem that we have moved closer to one or the other. If things go bad, would you rather be alone, or have professionals to support you and neighbors to share in the burden? Would you prefer to be a loner, or have the support of a larger group including professionals in your immediate community?

Unreasonable Expectations
Everyone who purchased a condominium did so with some expectations of what community living would be like. They also came with expectations of costs. Every association is unique, and so too are the expectations and built-in costs.

Here at BLMH, we have 15 acres of turf, hundreds of trees, two lakes, three ponds with meandering streams and waterfalls, and a mile or so of walking paths. Yet, we're not an arboretum, or a park, or a retirement community. Other associations may have a pool or pools, a sand volleyball court, cabana and a clubhouse. Yet, they aren't a "Club Med."

Owners may not understand this. Offsite owners may have little interest in maintaining some of these amenities, as their personal agenda might be simply extracting as much cash as possible from their personal business, which is renting their unit.

Condominium associations are communities. Ours is actually larger than some villages. Yet, we aren't a social club. Primarily, condominium associations are businesses in which each owner is a shareholder. Ours is a not-for-profit corporation. The primary duty of the board of directors is maintaining the property and operating the association as fiduciaries while upholding the declarations, the bylaws and the Rules & Regulations. That puts the board in the crosshairs of owners from time to time. It is not a popularity contest, and funds are spent to maintain the entire property. Not simply to maintain or improve the view of a group of owners, or on personal whims. Further, in a large association such as ours, it's impossible to do everything "at once." We paint the exteriors and halls on a 6-year cycle, for example. Large capital projects are also done in phases. We have 84 driveways which we are replacing. We're replacing 44 large roofs. Stream repairs which include large patio areas are also being done on a rotation basis. Yet, some owners will say "Why are you doing that patio over there, with my money!"

Some owners do not understand the purpose of the association in which they belong and some will promote a personal agenda and a political position. For example, we are not primarily a retirement community. Yes, they persist and in so doing, they are probably doing a disservice, and contributing to the tensions that will always be present in a diverse group.  They certainly make the job of the volunteer board more difficult.

It is a fact that most associations have "adequate" finances. That's true here at BLMH. We don't have excess funds for personal initiatives and any "new" initiatives will require reallocation of funds,  reducing spending in other areas, or increasing fees or levying a special assessment. It's untrue to say "We have enough money" to do whatever, unless it's already in the budget, in the maintenance and reserve studies, and also in the current fee structure.

Yet, owners from time to time will pretend they aren't aware of this, or make a fuss to get their way, or undermine the board. Owners will sometimes fall behind in their fees, and may feel that "There is enough money in the association" and so, being late or a month or two behind should be acceptable and tolerated.

If an association doesn't properly manage these expectations, it should expect difficulties.

The Current Reality?
Here are a few statistics to think about. I chose these because they are general in nature and are commonly quoted statistics and headlines. I suggest that the reader avoid drawing any specific conclusion from these and I'll explain why later in this post.

"Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute." This from a March 19th article in the Wall Street Journal.

"There have been approximately 3.9 million completed foreclosures in the U.S. since the economic crash squarely began in September 2008." This from CoreLogic’s National Foreclosure Report for October 2012.

Let's look at one more statistic.

The total number of foodstamp recipients as of November, 2012 was 47.7 million.  At that time the total number of U.S. households on foodstamps hit an all time record of 23,017,768! (Here's an aside statistic; the cost to the taxpayer to keep these 23 million households fed was $281.21 per month per household.)

What's My Point?
My point in the previous statistics is this. First, there are some real problems in society and the U.S. economy. These problems permeate all aspects and every segment of our society. However, generalities don't do justice to individual condominiums or personal plans. Yes, there is a lot of populist fiction out there and politicians who exploit it. We do get conflicting information. Which is it, are we a nation of underwater homeowners living in foreclosure with foodstamps, or are we the stuff of the pioneers?

I suggest that in each of us, there is both possibilities, and that we're a bit of both. That is also true for each household and each condominium association. For example, the statistic on savings provides a dismal picture. It implies that 57% of those workers approaching retirement have a bare minimum of savings, and that's untrue. A recent Employee Benefit Research Institute survey was the source of that statistic. That survey also stated that 51% of us are either "very confident" or "somewhat confident" that we will have enough money in retirement.

How can that be? Well, there are a lot of workers out there and most are in the age group 18 to 70. If we are younger we usually have fewer savings because of school debt, the costs of raising a family and we might be putting up to 41% of our income into a home. However, as the children age and the home is paid off, many of us divert that cash to retirement funds and savings. Yes, specifics vary all over the map. And so too for condominiums and homes.

Yet, if we read the headlines which focus on misfortune we may conclude that most of us are underwater and in foreclosure, that we subsist on food stamps and have no retirement savings. That is certainly true for some of us and for those who are that situation, we may have gotten there by accident, misfortune or bad luck.

This is not a personal finance post and so it will focus on condominiums and other forms of residential property ownership. Yes, as with individuals, an association may find it doesn't have the funds available to maintain the property and deal with necessary repairs and other normal costs. I suggest that poor planning and an inability to act in accordance with plans also contributed to the "hard times" some are experiencing.

Your Association is Somewhere between "bulletproof" and the "Titanic"
Just as it is with the individual households in this economy, condominium associations lie somewhere between well run and a disaster.

On the Titanic, we had a ship which was piloted in possibly treacherous seas. (Are there any seas that aren't possibly treacherous?) There were a number of mistakes made:

• It was considered to be "unsinkable." In other words, the plan couldn't fail.
• It had design flaws. In other word, there were incompletions. One was a rudder too small for a ship that size, and the absence of "bow thrusters."
• It didn't have a contingency plan. After all, who needs one in an "unsinkable ship"!
• It was running at a speed at night which meant it could not avoid an iceberg if one were visually spotted directly ahead. Oops, is that a symptom of poor judgement?
• It didn't have sufficient life saving contingencies, such as lifeboats.
• Passengers weren't briefed on life saving and other issues, and told "In the event this ship sinks, you may have to swim for it." In other words, inadequate communications. 

What does the above mean in general terms for your association? Here are a few questions to ask:

• Does your association have a 30 year, long term plan? One that can identify "icebergs" ahead?
• Does your association have supplemental 1-year, 5-year and 10-year plans?
• Are these plans updated every year, so that current conditions are taken into account?
• Does your association have professionals who take an objective look at the plan and its conclusions?
• Does it also use reserve professionals to provide an independent, unbiased review?
• Does your association use an accountant and are your finances independently audited?
• Does you board include a treasurer who scrutinizes every bill and signs every check?
• Does it view the plan as "unsinkable" or does it consider it to be only a possibility and "adequate?" In other words, is your board cautious or arrogant?
• Is your association outspending its finances? Are you pretending "icebergs" don't exist?
• Do you have a contingency plan to deal with any flaws in the plan?
• Does your association honestly communicate the issues to the owners?
• Have you, as an owner, attended numerous association meetings so you are aware and understand the issues facing your association?
• Have you studied in detail the documents that govern your association?

The Black Swan
This is a term which is taken from the title of the book "The Black Swan: The Impact of the Highly Improbable" by Nassim Nicholas Taleb. That book has become quite popular because it delves into the occurrence of improbable and unlikely events, both positive and negative, which result in massive consequences.

It has been used as a crutch to explain everything from the recession of 2007, the stock market panic that followed in 2008, and even the rash of home foreclosures since then. In fact, it has even been used as an excuse for these failures.  What rubbish!. I am of the opinion that if the book had existed back in 1912, it would have been used by some to explain the sinking of the Titanic.

Here's a fact. While hitting an iceberg is improbable, running at high speed in a ship which can't turn quickly in the dead of night in seas with icebergs and no radar is a risky venture. It would have been darn near impossible to hit that iceberg if the speed of the ship had been a correlate to its turning radius and the visible distance, with a margin of safety.

The real question to ask about Black Swans is this "What is a Black Swan?"  It is an event that is highly improbable. Most such events are avoidable. When people take the perspective that "it was unavoidable" or "it could never happen" and then, after it does, describe that so called impossible event "A Black Swan" I suggest that they be questioned in depth. Most of the time we will discover that they didn't plan and mistakes were made. The larger question is "What steps need to be taken to avoid this."

Everyone, from homeowners to condominium owners, should be able to have a responsible conversation about this.  I suggest many can't and many won't, preferring to quote some politician or other and saying "It can't happen because "so and so" said it can't."

A Personal Perspective
Most of us know what we have to do. We can read the papers and the internet and the various financial data provided by many accountable sources. But we may not take the necessary actions.

You want proof? Then answer these simple financial questions, and these are every day, household budget type questions

• Do you have a realistic household budget?
• Do you have a 5-month "emergency fund?"
• Do you have a savings plan? 
• Do you have a retirement plan? 
• Do you fully fund a Roth-IRA each year?
• If you have children and expect them to go to college, do you have a funded "529?"
• And, the biggest question of all is this. If you have such plans do you live your life in accordance with them? 
• I'll take it up a notch and ask "Are you debt free?" 

If you can answer "yes" to all of these, then "kudos" to you. If you have no idea or answer "no" to all of them, then you should be living with your parents. If you are somewhere in between you have some work to do, but that's okay because for most of us we do have time to put good plans into place and achieve them. If you don't understand the questions, then you probably lack the financial skills required to strike out on your own and succeed, or to live the life of a "rugged individualist."

If we have difficulty with a household budget, don't plan to accumulate the savings for a new furnace or roof, then we'd better have someone around to do the "heavy lifting" for us. I know, we will argue and complain, but in the end I assert it's better to be in a responsible community than to be a single, do-it-alone individual in current day America when it comes to housing. Unless, of course, we really are one of those "rugged individualists." However, I'm talking about accomplishments, not our personal thoughts or ideas on the subject.

Many  people think "I can go it alone, I'm capable and I'll make it work." There is a reality that indicates that a lot of us can't and many of us won't do the planning or the work or whatever it is that is necessary to succeed. That's one of the reasons that many businesses fail in the first year, and nearly 65% within the first four years. Thinking "I can do it" is no substitute for actually doing the things it takes to accomplish one's goals.

In the next post on this topic, which I'll call "Somewhere Between Bulletproof and a Disaster" I'll compare some lifestyle possibilities, and I'll also give everyone something to think about.

Final Thoughts
One of my philosophies about living is "Generalities are wonderful pipe-dreams, but specifics are reality." As applied to one's abode, there is a point of view that owning one's home gives one ultimate dominion and control. That's arguable. If you live in Wheaton, IL as I do, there are specific codes and ordinances to be upheld and adhered to. I can't let my abode fall into the state of being a dump. If I do, I can expect the local inspector to knock on my door.

That's the problem facing individual homeowners. Yes, we can make certain decisions, but then we discover that we are responsible to a "higher power" and we are solely responsible for making all of those financial decisions and performing the necessary maintenance. Those financial decisions include designing a life that allows saving to deal with the consequences of home ownership.

Oops! That means that when the driveway develops a hole, the roof leaks, or the exterior needs repairs or landscaping, that "Sally Homemaker" gets to pay the bills and/or do the work. Of course, "Joe Homemaker" has been planning and saving for this for the last 5, 10 or more years, hasn't he?

The fact is, we can live our lives to a certain extent as we wish. However, if we want to be a "home owner" there are specific obligations, and not a lot of help in satisfying those obligations, beyond our family unit. Perhaps "Mom and Dad" can help out, but more than likely they have their own issues.

In 2008 a lot of people discovered they were serfs. That was the year it became apparent that they lived in that home, paid the taxes, mandatory insurance and did the necessary maintenance. But in fact, as they had no "equity" they were in fact, serfs. With that realization and "no skin in the game" a lot of people decided to walk away and toss the keys at their lender. Today, there are ads on various radio stations and the gist is "Honey, we're okay financially, but that decisions we made to buy this home is really killing us. We're underwater and it will take years to pay off enough of this debt to get to where we expected to be. We made a mistake and we need a way to get rid of this financial responsibility." The solution in the ad? "Call XYZABC-Lawers and we'll get you out of that mortgage, so you can live a happy, carefree life!"

As so many have realized, with ownership comes financial and other responsibilities. That being the case, would you rather go it alone, or with other owners to share the risk, and with professional management?  Do you want to avoid being on a financial Titanic?

Continued in Part II "Somewhere Between Bulletproof and the Titanic"

Note 1. Statistics from Time Magazine article on risk dated December 4, 2006.

(C) 2013

What, Why, How?

I read an interesting article this morning. The article was written by a financial planner and was based on an earlier one in the New York Times. It asserted that most of us are absorbed asking "What" and avoid asking the really important "Why?"

For example, "What am I going to do today?" is a popular question. The unanswered one is "Why am I going to do that?"  I was struck by how true that is.

So many of us become absorbed by the result. We don't always think about the plan and "why" we take specific actions.

Plan + Process = Product

In any endeavor, we can spend a lot of time, energy and resources thinking about the results we want. Some call that result the "Product."  However, there are two preceding steps which are:

• Plan
• Process

The third step, which is the result or outcome of the previous steps, is what some call the

• Product

I know this might appear to be jargon, but if one wants to get a grip on the fundamentals of planning and project management, then getting familiar with the terms is a necessary step. 

Here at BLMH, our board is constantly operating in the question "Why?"  It's a fundamental for any maintenance and financial planning. Those are the primary tasks facing a HOA board. BLMH is not a social club and there are serious decisions to be made. Some of the consequences of these decisions may not show up for years. That includes both the physical, which is to say, the physical condition of the infrastructure of the association, and the financial, which is to say the amount in the reserves and other financial accounts.

This is obvious if anyone delves into the answer to the question "Why are my fees where they are?" Those fees are not the consequence of the actions of the board in 2012 or 2011. However, 5 years does make a big difference. 10 or more years can result in huge fee differences.  A substantial component of our fees is reserves, and as we all should know, 30 years is a long term planning issue. That is the standard duration used by professional reserve planners. 

Where to Begin?

In this planning process and in response to the question "Why?" the board begins with the Illinois Condominium Act (ICA), the Bylaws, Declarations and Rules. These things do provide the framework for the "why." Of course, if a board or board member is oblivious to these documents and what they contain, then one shouldn't be surprised if it gets a bit strange or murky in your association.

The board also has available what currently exists in the association. Those physical assets are what is to be maintained, and are "why" there is a financial plan. 

Why? Because its necessary to take certain steps in order to maintain a community. There are documents that stipulate why a board must take those steps. 

The "Why" is the First Step

Why are we going to build a financial and maintenance plan, particularly one looking 30 years into the future? After all, as individuals we probably won't be here in 30 years. Yes, that's absolutely true for a typical condominium owner. But we're not talking about our personal wants, needs and desires. This is a board issue, one for fiduciaries to consider. Of course, we have similar long term planning decisions to make in our personal lives. Those decisions include retirement planning, accumulating savings for that retirement, long term care issues and so on. Those are really important personal issues and could be the subject of numerous posts. But this post is from the perspective of a condominium association.

The board is a group of fiduciaries who are looking at the entire association. This association has been here for 35 year and it may well be here for another 100 years! We can quibble about the dates, but the board acts as fiduciaries and they must think long term and they must think of the association. For one thing, the ICA says we must maintain the property. We must maintain this community. We must plan for the future. We must put into action the necessary financial steps. In other words, we must set fees and save for reserves.

Owners can take a perspective that an association should be maintained “differently” or is well maintained or not. That’s a different issue. That’s a perspective about both the plan and the process to achieve that plan. As some cynics have said, if you don’t have a plan, any road will get you to where you are going.

It is a fact that some associations "roll the dice" and simply levy special assessments from time to time to handle significant financial issues. That might be acceptable to all of the owners in some associations. However, it certainly isn't acceptable to most of the owners here at BLMH. 

Boards have difficult decisions to make. First, anyone who ever says “We have plenty of money” in an HOA probably doesn’t know what they are talking about. Some may say that, as a means to justify a position they have about fees. For example "We have enough money" is sometimes promoted with a position "Our fees are too high." The fact is, any well run association will have a detailed reserve study and capital expenditure plans. It will have a maintenance plan and it will have the facts and details to back up those plans. If the financial plans are substantiated by the reserve, capital and maintenance budgets, then it is possible to say “We have adequate funding.” That’s as far as a responsible board member can go. Why? Because all of these plans are based on assumptions. They include the “Why” as well assumptions about the state of the association and also assumptions about the future.  This is one of the reasons BLMH has a "contingency fund" which is the equivalent of a homeowners "emergency fund." That association fund isn't excessive, and we can't say that it's adequate. However, it is there in recognition that unexpected and sometimes expensive things do happen, and they are an aid for a board to avoid a special assessment, or juggling funds in other areas; e.g. driveway and roofs. It is a fact that "reserves" cannot be used for day to day maintenance. At best, an association can borrow from reserves, but it must implement another plan to replace any  funds so borrowed.  

"What an inconvenience" some owners may say. Yes, that's true. It’s much easier if one only thinks of themselves because one only has to make plans for oneself. If we fail in those personal plans then we can always apply for Medicaid, food stamps and so on. In extreme cases, we can “walk” and let the bank take our unit. However, there is no government mandated "social umbrella" for associations. If your association fails, it will be entirely on its own. No government and no social organization will come to the aid of your association. If your association fails, then you can expect special assessments and much larger fees, as the hat is passed to the individual owners. Owners are shareholders. They aren't tenants!

If you read this you may wonder "Is this association failing?" Absolutely not. But I can't speak to the condition of other HOAs in the country. There is a checklist to review, and the board of BLMH does review it. Adequate reserves is simply one piece of the financial problem.

So the board is charged, as fiduciaries, to look at taking actions with the best interests of the association in mind for this year and for 30 years into the future.

That's a challenge. It might be impossible for any individual who doesn't think beyond the next paycheck, or next year to apply a mindset different than the one they use in their personal life. Here's a question. How would a board operate if they were each either delinquent or in foreclosure? That is not a rhetorical question but it is a serious one. It's also why there are conventions that restrict board members with personal issues or financial incentives from being involved in certain discussions and votes. I think it's also why it is best to have professional managers involved in the operations of HOAs. There is a need for checks and balances!

That's an extreme question but how many of us have a real, long term financial plan? A plan that predicts what our financial condition will be in 30 years, with inflation, financial setbacks and so on. Not a "rose tinted" plan that expects 10% on our savings accounts, 1% inflation, no recessions and 10% annual wage increases or 5% annual social security COLA increases "forever." I'm talking about a plan grounded in reality and reviewed by experts. A plan that adjusts spending and saving to accomplish that goal 30 years distant. That's what a board is expected to do, with the assistance of management and other professionals.

While doing this, the board comes to a conclusion about this year's finances, and plans in detail for the next 5 years and also come up with a really long term 30 year plan. When owners want to run an association as a popularity contest what do you think happens to those 5-year and 30 year plans? I suggest they get dumped and the emphasis becomes "What are you going to do for ME today!"  That is not to be a part of any serious or credible discussion about "Why." But then, owners are voters and we may vote for good things today with the expectation that "someday" someone else will deal with the problems, or "we'll worry about that in 5 years."

Individual owners can ask "Why did I buy here." They can ask "Why do I have to pay a monthly fee." They may also ask "Why are the fees what they are?" They should also ask "Why am I here and what kind of a difference will I make while I am here?"

The board takes a different perspective. That includes less of the "Me" and  "My unit" and more of the "How." Yes, an HOA board should ask "Why are we doing these things?" The board can look at the documents previously mentioned and discuss with management the "Why." It is in part due to precedent.

For example, "Why will we allocate funds this year to maintain the property?" It's not simply because the tress, shrubs and so on are there. It's because they have been there for 35 years. Every owner who purchased here drove on our streets, saw the trees, the landscaping, the streams, ponds and waterfalls.  They do so each and every day. They purchased with that as an expectation of what is "normal" here at BLMH. Some still talk about our "award winning" grounds. The board is not here to achieve awards, and that is not a consideration in the day to day operations or how we spend money month in and month out.

The board is here to maintain that "normalcy" that we've come to expect and that some demand.

That's an example of precedent. I think owners do expect the board to take reasonable steps to maintain that "normalcy." Using our landscaping and grounds as an example, that means collecting the necessary fees, saving some for unexpected issues (removal of a dying tree, storm damage, or a water main break, etc.) and then spending sufficiently to maintain the grounds. I can also say it means doing so in an orderly fashion to avoid decay or damage and sudden changes in funding (fees) and spending.  We all want "smooth and steady" and prefer to avoid fits and starts, sudden stops or changes in direction.

The Plan - A Combination of How and What
Once that we are clear about "Why" we are doing things, then the next step is to develop a plan. At BLMH this does not occur in a single step, or in one month. It begins with the annual election here at BLMH. Owners step forward and say "I'm willing to be of service to your association." The unit owners each vote, or not, and ultimately a handful of owners are selected for the board of directors. They are the "lucky" ones who get to deal with the problems.

The board term at BLMH begins with a budget workshop under the guidance of professional management. Consider that for a new board member, this is really a challenge. It doesn't matter how smart one is. There is a lot of information behind the worksheets. We can put the annual budget of this association on two pages. Behind those two pages are thousands of work orders, myriad projects, and the accumulated history and condition of this association of 35 years. And yet, we summarize it in on a couple of pages. I defy anyone to walk in and say "This is simple." But, some have!

The budget workshop builds upon previous budgets and plans. It sets in place a short term plan with a long term component. That plan includes "What" will be done, "How" it will be accomplished and "How" it will be paid for. A good board will also review the reserve study, update it with current information and compare the current reserve funding level to the plan. That should deal with longer term financial issues. With this plan, decisions are made about collecting and spending money for the coming year. It's a challenge, because it's also a goal to keep things steady and that means avoid large fee increases, both today and in the future. If this doesn't appear achievable, the board has the option of adjusting project time lines and running the numbers again to review the impact on fees. But it would be irresponsible to hold fees constant today and plan on large increases "in a few years." It would also be irresponsible not to do sufficient planning. Ignorance might be an acceptable excuse for individual owners (I don't think it is). However, a board is required to look at both the short and long term consequences of its actions. If there are serious financial problems on the horizon, should a board announce them? Why not?

Planning and budgeting has become more difficult and complicated. A few years ago, no one thought about delinquencies or foreclosures. Bankruptcies were few and far between. We didn't know what a "deed in lieu" was, or the legal details of "forcible entry and detainer judgments." We didn't think about such things as "bad debt" and the consequences to association finances. The recession of 2007 ended that. In 2008 some associations tightened up while others partied. Today the parties are but memories.

These annual plans are discussed openly during association meetings at BLMH, are published in the newsletters, and proposed annual budgets are subject to discussion and are mailed to owners. There is an opportunity for owner comment and for the board to reconsider. With the aftereffects of the economy of 2008 and current realities, there remain difficult decisions to be made. Your unit, the infrastructure and the HOAs are not getting younger. It doesn't really matter if one lives in a private residence or a condominium. The building, grounds, driveways, roofs and so on are all aging. Ditto for the furnace, air conditioner, hot water heater and other appliances in your residence. With that aging comes maintenance requirements and decisions about how to allocate funds.

Here at BLMH, we have also completed several reserve studies. These look at both short and  long term issues. A total of three were prepared; two professionally prepared studies looked at each year for the next 30 years. The professionals surveyed the grounds and infrastructure. They looked into details of the budget, interviewed management and the board, and made specific recommendations. Those recommendations included identifying those areas for which money should be collected, saved and spent in a gradual manner to maintain the "normalcy" here at BLMH.

A middle study was completed by a board member (me) and was the subject of a lengthy report to the board and to the management in 2010. That study was prepared after the first professional study and was included in a meeting several years ago. It propelled the board to seek that third professionally prepared study.

The reserve study is an integral and very important part of the "plan of action" for this association.

The board has also made a commitment to take steps to avoid special assessments. One year cannot achieve that. Any board that looks at the  bank balances and this year's bills as the basis of making budgeting and fee level decisions is making a serious mistake.  Boards must think at least 20 years into the future if the pitfalls of short term planning are to be avoided.

The How, or "The Process"
Once a plan is arrived at, the question then becomes "How to achieve that plan?"  That's what some call "the process." It's the many steps, both small and large, and the discussions that led to those decisions, over years.

Let me state that these are not "cast in stone." They are a work in progress, and they are made one at a time, with future goals and present reality all a part of the evaluation.

Any possible plan which is made with integrity is based upon the goal, but there are a lot of circumstances that can interfere with that plan. There are a lot of decisions to be made, each and every month. In a large HOA with reserves we do have options.

Each month, the manager provides the board with a packet. That packet is usually somewhere between 65 and 100 pages in length. That packet asks the question "How?" and each month the board makes decisions to decide "What" we will do to achieve the plan.

That plan includes maintaining goals with the fees we are collecting. That's another way of saying that stability is a goal. And yet, the board has to decide how to do so with things that occur outside the plan and with delinquencies, foreclosures while avoiding special assessments and unusual fee increases!

This happens one month at a time, and one step at a time and year after year.

For example, we do know that we want to complete the roofing and driveway projects in a timely manner. That means avoid the inconvenience of a failed roof for our owners. We do know we can anticipate about 18-20 years of leak free living. But in the past, some roofs have failed in 12 years, and others are apparently going strong at 20!

It could be concluded that generalities are fine for developing a general plan of action. But for specifics, and using this example, any roof that has an "active leak" or other serious problems and has been determined to be near the end of its useful life should be considered a candidate for replacement in the current year. That means that the current plan to replace 6 roofs each year is a tentative one. Yes, we might have to replace more than 6 roofs in any one year. On the other hand, to maintain steady fees, that might not be possible.

Somehow, the board has to navigate the conflicting demands of owners who want dry units and also want fees "to be as low as possible." And, just to make things interesting, let's throw in a few delinquencies and a few foreclosures for good measure!

The Product
Eventually, decisions about the future and current reality coalesce into the present situation. Some call this the "product." What you see when you walk outside your unit and even the roof over your head, is directly the consequence of the planning of the boards in your association. That current reality is "the product."

That product is a result of asking "why" and coming up with a plan which includes the "how" and "what."

In our association, that "product" is not only a result of current planning, but also a consequence of plans made 5, 10 and even 20 years ago.  We most certainly didn't get here because of the decisions of 2012. This association, the "product" is the culmination of the work by the builder and that includes the selection of materials as well as the actual construction techniques used. It is also a result of the age of the property, the maintenance accomplished over decades and the amount of money saved over that period and spent on the property. If you don't save for it, you certainly can't spend it as an association because BLMH for example, doesn't have a wallet full of credit cards. A very few owners have said "No problem, the association can get a mortgage or a loan." Yes it possibly could, and each owner will be responsible for the repayment of their share of that mortgage. That will be due in full at such time as they decide to sell their unit. Does the expression "Mortgaging one's future" sound desirable to you?

I've been told that a couple of decades ago, there were owners complaining "our fees are too high." I definitely know there were more than a few who said this in 2001 and as recently as 2008. It is also true that a couple of decades ago, we didn't have much of a reserve funding program. Are these two things related and was the status of reserves the consequence of owner position and board compliance? Today we do have the advantage of hindsight and the knowledge gained running this association for 35 years. That's also a part of the product.

The good news is this established association is pretty aware of the problems it faces, both internally and externally. The bad news is it took 35 years to get to this particular place in association history. As some would like to say "If I only knew then what I know now!"  But human beings being human beings, we probably would have ignored the sages among us and gone for the "rosy projections."

There was a time when there wasn't a lot of knowledge about the specifics of the reserves. Conveniently, most owners did not ask the difficult questions such as "How much money will it take to replace our roofs, when will that occur and are we saving enough each year to do that?" Likewise, most didn't ask the hard questions about driveways, streets and so on.

I suspect it was probably because they didn't want the "bad news." Some probably  thought "I'll sell in 5-10 years, so why should I care?"

So today, we are where we are.  Our boards do have the knowledge gained in the last 35 years, and they are required as fiduciaries to use it. We also have some additional things to deal with, such as delinquencies and foreclosures. 10 years ago, those were not a problem. Today they are a way of life and common everywhere.

Some owners would like to believe that guiding a large association is like driving an automobile. One simply has to respond to traffic and steer, brake and use the gas pedal. What they fail to understand is that while they are in their automobile, those decisions are made because of roads built by someone else, and an automobile built by someone else. The concern of the driver is only the condition of their automobile. "If I step on the brake pedal, will this automobile stop and if I step on the gas, is there fuel in the tank?"

In fact, in a large association such as ours, we are building the roads. We are, figuratively speaking, installing and maintaining the traffic lights. We deal with the snow plowing and even the condition of the streets.

Many owners don't even think about that.

From a Personal Perspective
I'd suggest most owners in an HOA consider "why" they live there. Why did they make that decision to purchase? If one truly hates where they live, then they should consider moving on. Of course, it is entirely possible that the "grass is not greener over the hill." My experience is that there are no easy answers to difficult questions. There are no quick solutions. There really is no better place "over there." I say that because in my profession I've traveled extensively and spent time in most parts of this country from California to Wyoming to New Mexico to Louisiana to New York and Florida and lots of points in between. I've lived in some places for weeks and others for a year. I'm of the opinion that there are compromises to be made everywhere.

I know exactly why I purchased at BLMH and I'm still here. As I told an owner recently "If I really didn't like it here I would move." There is nothing that forces any of us to live where we are. We may decide we're comfortable where we are, or we might move if someone offered me a specific price for my home or unit. That's my point. If I can say "I would move if I could get $xxx for my unit" then I am acknowledging that being where I am is my decision. I could just as easily decide to move on. I could also simply decide that "This is it" and stop complaining.

I also suggest that owners have a personal financial plan. That plan should be anchored in financial reality. Such reality includes "What is long term inflation?" "Can my budget support cost increases due to inflation, and that includes energy, other utilities, and fees?" "Do I have a realistic financial retirement plan?" "Do I have a plan to deal with unexpected financial expenses?" "Do I have an emergency fund?" "Is my budget sustainable?' and so on.

Of course, the final question is "Does my personal financial plan take into account probable long term financial consequences?"  From my experience, too many people fail to consider that they might be living on this planet for 95 years. If so, can I afford to retire at 62 or even 65? If I should be so lucky as to live for 30 or more years in retirement, will my financial plan deal with it? Can I also deal with financial setbacks and financial surprises?

(C) 2013

Quick Start Guide for Unit Owners

In September, 2011 I began work on a "Quick Start Guide" for use by residents in our community. This task  came out of a series of board meetings and discussions with various board members. It began of my own initiative. After board review, discussion and input this was originally published in December 2011.

Our Welcome Director and I recently updated this guide and it will be provided as part of the revised "Welcome Packet." It will also be updated on the official BLMH.org website.

The 14 page "Guide" came out of several years of observations at association meetings and discussions with board members and owners. Owners and other residents will approach management or the board and ask questions about day to day living here at BLMH. Many of the questions are similar.

I strive for consistency in all tasks in the organizations in which I participate, and this is also true for this association. The board is comprised of owners who have stepped up to the challenge. As a group we do read all of the formal documents for this association, and that includes the Rules & Regulations, Bylaws, Declarations, the Illinois Condominium Act, and several monthly periodicals geared toward board members in HOAs. Members of the board have received specialized training. As a group, the board has decades of experience in this association.

For these reasons, the board does have significant knowledge that is useful for owners. Management, as the professionals, has even more knowledge of HOA operation, etc.

It became apparent to me that a written "guide" could provide some of this information to all owners and other residents. It could be a tool for use by our residents in support of a harmonious community. It could achieve the desired consistency of information, providing every owner with the identical information, thereby supporting one class of ownership, and it would be an aid to both new owners and long time residents. Remote owners could provide a copy to their tenants. In fact, I am sure the board encourages owners and tenants to use the guide.

I won't print the entire guide here, but I will provide some information about it. I will also quote the "Purpose of the Guide." There is also a link at the end of this post which will permit viewing the version of the guide that is published at BLMH.org.

The guide does not replace the Rules, or the Bylaws, etc. It is a summary containing knowledge and information. That is made clear in the following paragraph from the guide, and I quote:

"This Quick Start is an overview and does not supersede the governing documents, nor does it provide all the information contained in them. It may not include the latest information, and the current governing documents will take precedence. In the event of differences, the ICA [Illinois Condominium Act] is the highest level, followed the association Bylaws, Declarations and the Rules and Regulations."

What is The Purpose of the Guide?
The guide contains this statement:

"This guide is intended to provide important information in brief, for new as well as long time owners. Numerous sources were used to prepare the guide. Some of this information is in the governing documents and has been published over the years in newsletters. Some of it is also in other sections of the Welcome packet. Some is from former board members and those who have been here since 1978. The goal is to get this “knowledge” on paper and to answer common questions. This “Quick Start” combines information from all of these sources and is intended as an aid for new owners as well as to established owners.

If you are a new owner, it is assumed you may never have been an “owner” of a condominium, townhouse or single residence.  If you are new to ownership, in particular a HOA, there are a number of things to be aware of. There is no “superintendent.” There is a management company, and management directs maintenance efforts of common elements at BLMH via a “work order” system. So be aware of their phone number and email; it’s in every newsletter. As an “owner,” some things are your responsibility, some are your neighbor’s in the building in which you reside, and yet other things are the association’s responsibility.

 This document will help you to sort it out."

List of the Contents of the Guide
I. About Briarcliffe Lakes Manor Homes
II. Management and Maintenance of the Association
III. Association Communications – Newsletter, US Mail, Email
IV. Census and Insurance Forms – An Association Rule
V. Rules, Regulations, Violations and Fines
VI. The Board of Directors
VII. Association Meetings
VIII. Things to Do After Your Closing
IX. Equal Ownership and Rules Apply to All, including Tenants
X. Governing Documents
XI. Utilities and Fees
XII. The Meaning of “Elements” at BLMH
XIII. Permitted Modifications and Remodeling by Owners
XIV. Current Restrictions (December 1, 2011)
XV. Garages
XVI. Utility (Laundry) Rooms, Electrical Power and Appliances.
XVII. Kitchen.
XVIII. Bathrooms
XIX. Windows
XX. Patios and Decks
XXI. Front Hall
XXII. Unit Entry and Storage Keys
XXIII. Exterior, Garage and Hallway Lighting
XXIV. Personal Maintenance Recommendations.

To provide further information here, this is Section I of the guide:

  I. About Briarcliffe Lakes Manor Homes.
"BLMH is a condominium home owners association (HOA); it is a Private Urban Development (PUD) and the association owns everything within the property, both above and under the ground, with the exception of buried natural gas lines, ComEd electrical power feeders, transformers and meters, and cable TV feeds or owner satellite dish antennas.

 BLMH is a not-for-profit corporation which is professionally managed, professionally maintained and has a volunteer Board of Directors.  There is an annual election held in September for the board.

You are a shareholder in the association.

The association is comprised of 42 buildings on approximately 40 acres. There are 336 units arranged four units per building entrance. Most buildings contain eight (8) units. Each owner is a shareholder in the HOA with an approximate 1/336th share in the association. You “own” your unit and are responsible for it. The actual percentage of ownership for each unit was established in the governing documents by the original developer. That percentage also determines your monthly fees.

So what do you get with your share in the association? You own a small share of every building on the property! You also own a small share of the lakes, streams, walks, streets, curbs, underground piping, about 800 trees, 15 acres of grass and 84 driveways! Your fees are combined with that provided by your fellow owners and those funds are used to maintain this entire association.

You “own” your unit. In addition to the interior of your unit, you have exclusive use of the storage units on the patio and one in the garage. You own doors, windows, patio door, garage door and garage door opener, water heater, furnace, fireplace and flue, HVAC compressor, water and waste plumbing and natural gas piping, and unit electrical wiring from the meter. You don’t own “your building” nor do you own “your grass, “your tree,” or driveway.

With only a few exceptions, everything outside your unit is owned by the association as a “common element,” the use of which is shared by all owners. Or it is a “limited common element.” These terms are described later in this Quick Start."

Link to the Published Guide:
Please note that this is the version on the official website. At the time of this post, it had not yet been updated with the revisions dated March, 2013:

Clicking will open a New Window> View Current Quickstart Guide

Preparing for Severe Weather

The City of Wheaton has added a video to inform residents how the County’s emergency management office operates during severe weather, and makes suggestions for resident preparation for spring weather.

PRESS RELEASE

3/1/2013

Video Includes Practical Tips to Prepare for Severe Weather

WHEATON, Ill. – Spring often brings with it some wild weather in the Midwest, including severe storms. Before this season’s severe weather arrives, the City of Wheaton encourages you to watch this video, “Preparing for Severe Weather,” with tips for how you can be prepared for thunderstorms, tornados or any natural disaster.

David Gervino with the DuPage County Office of Homeland Security and Emergency Management shares the three steps every Wheaton resident can take to be ready for spring weather. Gervino also addresses common misconceptions about weather sirens, and he explains the difference between severe weather watches and warnings.

In addition to learning about how the County’s emergency management office operates during severe weather, you can also learn about how the City of Wheaton works with the County in widespread events like the severe storm July 1, 2012 that left more than half of DuPage County without power in sweltering conditions.

This video is now available on the City’s website and on City of Wheaton Channel 10.

###

I've provided this link to the video and to the schedule for Channel 10:

Clicking will open a  New Window> Preparing for Severe Weather

Department of Energy Furnace Mandate is Suspended

If you have seen a flyer or advertisement warning of a federal government mandate that could lead to costly furnace replacement after May 1, 2013 you can relax; that mandate has been withdrawn by the DOE.

In 2011 the U. S. Department of Energy (DOE) passed a "Direct Final Rule" that was to have been effective May 1, 2013. That rule required any new furnace installation in the "Northern region" which includes Illinois to be 90% efficient (90% AFUE). However, in the Southeastern and Southwestern regions an efficiency of 80% was required. 

On January 11, it was reported that a settlement was filed in which the Department of Energy (DOE) agreed to withdraw the pending minimum energy conservation standards that included these new regional standards. This was a suit in the United States Court of Appeals for the District of Columbia. The suit was by the American Public Gas Association (APGA) and the Air Conditioning Contractors of America (ACCA).  

In the settlement the DOE agreed to initiate a new rulemaking for minimum energy conservation standards for residential furnaces. The DOE also agreed to allow stakeholders the opportunity to comment.

The portions of the Direct Final Rule which set new minimum energy efficiency standards for central air conditioners and heat pumps, including any regional standards, remain unchanged and the compliance date will be January 1, 2015.

The settlement requires ratification by the court, which was reported as being only  a formality. 

What does this mean for home and unit owners? Higher efficiency standards for furnaces are coming, but they won't be here for a while.  

Comments: 

• What was the problem, you might ask? 

For one thing, if the new standards had gone into effect on May 1, 2013 homeowners and condominium unit owners could have been faced with costly modifications to install new vent piping for the high-efficient furnaces. At BLMH, our existing furnace vents are unsuitable for use with 90% Annual Fuel Utilization Efficiency (AFUE) furnaces.  These new high efficiency furnaces are sometimes called "condensing furnaces" and they have special venting and condensate requirements. 

Some also voiced the concern that homeowners might choose to repair an older furnaces rather than replace. This was considered a safety issue.  There was also a concern that homeowners would choose such inefficient methods, rather than upgrade to a new federally mandated furnace. This could actually lower the efficiency of the furnaces!

• What's a condensing furnace? 

Furnaces with efficiencies of 90% or greater extract so much heat that water vapor will condense in the exhaust. In other words, the temperature of the exhaust is below the dew point of the gasses. That condensate is acidic and so the furnaces must be designed to avoid the corrosion which would occur if this condensate is in contact with metal parts. That condensate must go to the sewer via a drain line. In some cases, a pump may be required to remove this accumulated condensate.  

Condensing furnaces are more complex. A major difference is a dual heat exchanger. The basic ignition and gas firing systems are not that much different from a standard furnace. The big gains come from that second heat exchanger. Condensing furnaces include a draft inducing fan for combustion, a plastic condensate discharge line, and ABS or PVC plastic vent line. The furnace may also require a second vent line to bring fresh air for combustion into the furnace. 

Both the fresh air inlet vent and the combustion discharge vent are usually via plastic pipe through the sidewall of the home.  The higher efficiency results in lower vent temperature. That's why plastic pipe can be used. 

If a furnace can't be vented through a wall, then additional blowers and liners may be required. Of course, any additional blower for venting will use electrical energy. Such energy consumption reduces the effective efficiency and raises the installation cost and the annual energy cost for the homeowner. 

• How much will I save with a new furnace?

Here as an example are some rough numbers, which are based on a house situated in a colder climate. The operating costs include both electricity and natural gas:
60% furnace = $1,316 per year energy costs.
80% furnace = $1,014 per year energy costs.
91% furnace = $   913 per year energy costs.

So how much could I save if I replaced my 80% efficiency furnace with one that's 91 or 93% efficient? Answer: $1,014 - $913 = $101 annual energy savings per year. 

Of course, this doesn't include the cost of air conditioning. 

• Does this make sense? 

In the example above, if the furnace was 60% efficient, an 80% furnace could save about $300 in energy costs per year. That would probably pay for the furnace in 10 years. Modern furnaces with dual stage blowers have additional advantages. 

In the same example, if we compare an 80% efficiency furnace, then going through the expense to upgrade to a new 90% furnace could reduce energy costs by $101 per year.  

• Are there alternatives? 

Yes.
Older furnaces may not have a set back thermometer. These are available for $25 to $50 and allow setting difference heating and cooling temperatures based on the day of the week and time of day. To reduce energy consumption, comfortable temperatures are set when the home or unit is occupied. However, at night in the winter the temperature is lowered. 

A homeowner with an older furnace can install a new 81% efficiency furnace with two stage gas valve and a variable speed blower motor. These have been demonstrated to use less energy. On milder days, the furnace will come on at the lower gas setting and air will be circulated by the variable speed blower. This not only uses less energy, this type of system is quieter than the single speed alternatives.  Such a furnace can be matched with a more efficient air conditioning condenser.  Using this approach can add about 20% to the cost of a new furnace and air conditioner set.

• How long will my furnace and air conditioner last?

According to a study by Consumer Reports, home furnaces usually last between 13 and 20 years. Most will have a lifespan of 15 years. Their website currently lists 18 years for gas warm air furnaces and 15 years for central air conditioners.

The National Association of Home Builders (NAHB) has published a report that gas furnaces can be expected to have a lifespan of 18 years and in-place air conditioning equipment 15 years. InterNACHI, the International Association of Certified Home Inspectors says that a  furnace can last 15 to 25 years and a central air conditioner 7 to 15 years. 

Put all of these together and we get an average lifespan of:
Gas furnace = 15 to 21 years. 
Central air conditioner = 11 to 15 years.

Many manufacturers provide a 10 year warranty for their furnaces and central air conditioning compressors.  That would seem to indicate what the manufacturers expect this type of equipment to last without significant failure (blower, electronics and controls, compressor components).

• How often do we use our furnaces in Wheaton?

Here in Wheaton, IL our median monthly temperatures, which fall between the average low and average high are shown below. In brackets [xxx] the average high temperatures are also shown for warmer months, and the average lows for cooler months. Heating and cooling equipment will operate in these ranges:

January = 22.5 F [15 F]
February = 26.5 F [18 F]
March = 37 F [27 F]
April =  48.5F [37 F]
May = 58.5 F [46 F]
June = 68 F [80 F]
July = 72 F [83F]
August = 70.5 F [81 F]
September = 63 F [75F]
October = 51.5 F [40F]
November = 39 F [30F]
December = 26.5 F [19F]

• What is SEER?

The SEER or Seasonal Energy Efficiency Ratio is a number that describes how well air-conditioning equipment works. A higher SEER means better efficiency and lower energy costs. "SEER is calculated by dividing the amount of cooling supplied by the air conditioner or heat pump (Btu’s per hour) by the power (watts) used by the cooling equipment under a specific set of seasonal conditions." SEER ratings are determined under laboratory conditions using criteria of the Department of Energy. Each piece of cooling equipment is evaluated using the exact same conditions. 

For central air conditioning units, it's been reported that properly installed and sized equipment with a higher SEER number can lower energy costs about 60%, To achieve this all duct joints must be tight, there must be proper airflow, the refrigerant must be charged correctly and the equipment must be properly sized. 


Notes:
1. Individual owners will have to do their homework to determine their possible energy savings. My rough numbers assume certain gas and electricity costs, and will vary from location to location. Climate certainly will have a major impact on use of the furnace, and the more hours per year a furnace is operating, the greater the possible savings. 
2. Temperature data per the Weather Channel website. 

A&M Report for January - February Newsletter

The report was delayed by things beyond my control. So I've posted it here for anyone who has not yet received it, or wants to view it. . 

Here's a reflection on the vagaries of winter. Yes, it has been chilly outside, with snow. However, the begonia seems to be thriving with the morning sun. 

v    Architecture & Maintenance

Happy New Year! A Few Winter Reminders for Our Residents    As I write this, it is about 15F outside:

1.   Read the Winter Maintenance Tips which were included with the last newsletter.

2.   Cooperate with our snow removal and plowing service. If you want your patio cleared, etc. the information is contained in the Winter Maintenance Tips.

3.   A resident commented that the hall heaters were off. This is normal. The association turned these off several decades ago. Please don’t tamper with the heaters. The halls are sufficiently warm without the heaters.

4.  Use the snow melt stored in the large container in the garage. Use it on entrance walks and driveways, don’t use it on grass or walking paths . This is provided by the association for use by residents. 

5.   Use care when walking in the snow or on any paths, walks or the streets.  Don’t let your pets out in the cold weather and unattended. This is both a rules violation and is dangerous for them.

6. Observe the 20MPH posted speed limit and reduce speed under ice or snow conditions or if there are pedestrians present, or if our snow removal contractor is on the property and doing his job, for you.

7.  Never walk or play on frozen ponds, the streams or near the banks of the lakes or on the frozen lakes. This is dangerous. Children should never play in these areas. We request the cooperation of parents to keep the children safe!

Projects and Maintenance 2013   We’re currently planning the projects which will occur during warmer weather. There will be letters for certain projects, notices posted and additional newsletter articles. Please cooperate with any posted notices. If you plan to travel or be away, please advise management in writing or via email well in advance. We’ll do our best to advise you of projects and maintenance. In 2012 we had several vehicles towed to a location elsewhere on the property because residents didn’t respond to notices. We have your best interests in mind and want to provide a safe work space and avoid personal property damage. Unfortunately, the association sometimes needs to do work on short notice. Here are a few of the planned projects:

1.   Roofs.  We’ll be inspecting some attics when spring arrives, so we can do any necessary interior work in preparation for the roofer. It’s probable that 6 roofs will be done in 2013 and owners of the units will be notified by mail and the addresses will also be in future newsletters. Vehicles can’t be on driveways while roofing.

2. Driveways. We’ll be repairing and replacing additional driveways this year.  This will be based upon continuation of the annual surveys and selection of the worst driveways.

3. Exterior and Hallway Painting. This year, we’ll be switching to a 6-year program. The buildings to be painted will be listed in future newsletters and notices will be posted.

4. Drainage and Grading. We’ll be continuing drainage improvements at buildings which get new roofs.  We’ll also continue work behind buildings to improve areas which are in deep shade, or which have slope toward patios, etc.

5. Waterfall #2 Patio-Deck. This year, we’ll continue the work on the replacement of the patio in this area, which is between Thames and Lakecliffe.  See the May-June 2012 Newsletter for a project description.

Owner Architectural and Maintenance Variance Requests  Owners are reminded to notify management before any remodeling work, and provide a description in writing of their intentions.  There are rules and regulations governing certain modifications, and all City of Wheaton codes must be complied with. Any electrical in common elements is to meet association requirements. Only after obtaining written permission can owners proceed with certain types of projects. Here are a few examples:

1.  B-Unit Dormer Windows. Owners of B units which receive new roofs in 2013 will also receive a new dormer window, installed at cost and charged to the owner. All B-Unit owners are reminded please DO NOT replace your dormer window if you have an old roof. The new windows are flanged and as part of the installation we are replacing framing where necessary and providing new exterior components. This is intended to provide a leak free installation lasting decades.  This may not be achieved working around existing windows.

2.  Windows, Patios and Garage Doors. Before replacing any windows, sliding doors or garage overhead doors, contact management and fill out a form.  These must adhere to association rules.

3. Satellite Dish Antennas. Satellite dish antennas (SDA) are permitted but owners must obtain letter of approval from management and the installation must conform to the current rules.  As buildings are being roofed we are requesting that owners re-locate their antennas to the roofs, in accordance with the current rules and regulations (R&R) of the association. Our R&R govern the use of common elements, and our SDA requirements are in accordance with the “OTARD Rule” (27 CFR section 1.4000).     

================================================================     

 Notes:

1. The above was prepared and submitted on January 21, 2013. 
2. I've begun to work on the article for the April-May newsletter.