Lakecliffe - The Quiet Before the Storm

Work continues while preparations are underway for the main event. That is scheduled to begin on Monday, August 4. Now before any of our residents get bent out of shape, let me say that neither I, the board of BLMH or the management is making a promise that the street stripping will begin promptly at 7:00am on Monday.

Nevertheless, I will get my vehicle off of the property at about 6:30am on Monday.

it will be interesting to see if everyone on Harrow Ct. and the north section of Lakecliffe gets out of the way prior to 7:00am on Monday. Some won't.

Weather
The schedule will be influenced by the weather. Currently there is a "chance of thunderstorms" on Monday and Tuesday. On Wednesday there are "thunderstorms" and again on Thursday there is a "chance of thunderstorms."

Impact on other projects
There has been a flurry of activity elsewhere on the property. The landscaper is moving stone which is to be distributed around buildings in place of the mulch which prior boards spread with great abandon and at great cost. It's all a part of drainage improvements and steps to reduce overall maintenance costs.

Some projects, including the roofing of eight large buildings will commence after the street reconstruction has been completed. Meanwhile preparation work on those buildings is underway.

Work continues in preparation for painting of the exterior of 1/6 of the buildings on the property.

The 80/20 Rule
Recently a comment was made that "most businesses, statistics, etc.....have an 80/20 rule....where 80% of the resources, time, etc. go to.... 20% of the people." I have no problem with that perspective and agree completely. However in practice and using simple math, 20% of 56 units in the construction zone implies that 11 units will have some sort of problem and require unusual interaction or hand holding. Now, in a HOA where we have one manager and six board members with one fully engaged A&M  director, that would indicate a potential problem, wouldn't it? Ah, no problem. The board can take off from their day jobs and take care of this. As for management, there is nothing else going on this week, is there? Duh!

Let's amplify this and look at the statistics for a HOA with 336 owners. Using the 80/20 rule, that would imply that 67 owners will absorb an unusual amount of time and resources. If so, that small group outnumbers the board by almost 11:1. At BLMH the owner body to board ratio is currently 56:1.

The comment went on. "80% of the resources come from 20%".  Not true. If this were so, our HOA income would be severely reduced. If I look at this from the perspective of the number on the board, then we have 6 serving the needs and requirements of 336. BLMH has board comprised of fewer than 2% of the owners dealing with the real problems and dealing with the 20% who supposedly absorb most of the resources of this HOA. Furthermore, at any time the owners in that pool of the 80% can migrate to the 20% and become a resource hog.

Is that a problem for this HOA? I assert the 20% are a drag and the 80% are dead weight. Furthermore, in an economic environment in which rentals are rising while home ownership is stagnant, I suggest that board members are actually unpaid workers for profit seeking remote owners.  More on this in a future post.

Lakecliffe - "Looks expensive"

It's day 3 and I got up early to make scones and again moved my automobile off of the property. Today some identification of underground stuff is underway. The next step in construction will be stripping of forms and backfilling. I don't know the precise timetable for that.

I received a couple of comments that are both interesting and printable. This post will respond to one of them. Another post will respond to the "time to move on" comment.

The replacement of Lakecliffe "Looks expensive." Yes it is. All of the infrastructure in this HOA is expensive. From water mains to streets, streams and waterfalls, walks and other common areas and so on. Expensive to install and expensive to maintain. Maintaining a 36-37 year old village of "Manor homes" is expensive. Lakecliffe is actually the tip of the iceberg.

For example, every time this HOA experiences a water main problem, the direct cost to deal with it begins at about $7,000. That's about $21 for each owner. A really serious break at an inopportune moment can cost much more, about $300 for each owner or one entire month's fees. We get one or more water main breaks each year; it's my understanding we've had 15 or more in recent years. I suspect some are the consequence of City of Wheaton changes to their water main system. It's called "water hammer" and dead ended mains can cause that. In conversations the city has denied this. I haven't given up on that, but there are so many problems and issues at BLMH and no one to deal with them. So this will wait and probably never be addressed. The treasurer frets about the money, the board struggles to comprehend the problems while I look for causes and solutions. The owners look on and some complain.

A few years ago this HOA, even with annual water main breaks, had no specific budget item for this. It's useful to ask why not? One answer: it provided a fiction of lower annual budgets, and therefore lower monthly fees. Nevertheless, infrastructure failures must be paid for. BLMH has never has a special assessment. So where in the budget did the money come from for these water main failures?

At this point the reader is probably wondering "What do water main breaks have to do with an expensive street?" In a HOA in which boards struggle to come up with dollars for various infrastructure failures or cover lost income as the result of delinquencies and bad debt, it has everything to do with it. It's a tale of boards since 1999 that have struggled, with fits and starts, to accumulate sufficient reserves so each building gets a new roof while dealing with a variety of infrastructure problems. Lakecliffe is another infrastructure failure and a budget problem.

I will get back to that street, but a few paragraphs are necessary to get to why street repair is so expensive.

If you think budgets are scary now, you should explore the budgets for the decade of the 1990s. Budgets today may be stable. On the other hand, some initiatives are stalled and we don't have a solid grip on some infrastructure costs and timelines. Some things are being pushed down the road. That's the BLMH way.

Is maintenance of infrastructure desirable?
That's the fundamental question. If we don't maintain the property, then we can reduce the expenditure of money. We then don't have to collect those fees. It's all so simple, isn't it? But it isn't that simple. Some of the same owners who complain about their fees also chase any board member, manager or maintenance worker who comes within 150 feet. They want that piece of conduit painted, that slab of concrete replaced, new grass and so on. Why? Because "What do we get for our money?"

So even the most judgmental owners want the property in their immediate vicinity to be maintained. Not simply maintained, but manicured. They want money to be spent and a lot of it. But it has to be to their personal benefit and specification.

Boards are required to look a bit farther ahead than that. Boards are also squeezed by financial reality and owner demands. One would think that maintaining infrastructure to achieve full life would be something boards and owners would want to do, or at the very least compare cost to long term benefit. Investigate the cost of alternatives, and decide "maintain or not?" However, the operative phrase is "long term." For owners who plan on selling in one, two or five years, "long term planning and saving" is irrelevant and unnecessary. It is viewed as a waste. I suggest that is what's behind the statement of some boards and owners who promote the phrase "We have enough money." The financial problems won't occur next year or the year thereafter; any HOA with even minimum accepted financial controls can deal with those problems. It's the future beyond five years when roads and driveways will fail, roofs leak and so on.  So crass owners say "Let the future owners deal with that; I'll be long gone." If the board in place doesn't play ball, then the politically savvy can always contrive to put in place a more compliant board.

If the budget is at risk the knee-jerk decision is often "do not maintain" because on face value, that's the lowest immediate cost. There was no preventative maintenance of Lakecliffe, until it failed. Then the patching began. Maintenance was discussed repeatedly and for a time I was rebuffed repeatedly. I put forth my best arguments but it would have taken maintenance dollars. Dollars that didn't exist in the budget, or were being spent on water main failures. Or money that wasn't received because of foreclosures and delinquencies. No one wanted to spend the money and the group in 2008-9 was also too busy looking for scarecrows such as alleged management fraud, waste, and so on.

I can state with absolute certainty that more board time was spent in recent years yakking about the fireplace issue than dealing with the street problem. That's not a real surprise. We could still drive on that street so it can be dealt with later. It couldn't be failing could it? It was only 6-7 years old. Some owners took the fireplace issue a bit farther and harangued management and the board. Their fireplace was the overwhelming concern of a block of owners because it is an "in our face" problem. Some owners want the entire cost paid by the HOA. They wrongly assume their fees will remain constant. Some apparently can't do simple arithmetic. But they were assured by that earlier board that "we have enough money." Some owners trust only in those who tell them what they want to hear. The damage to this HOA is permanent.

An expensive street
Yes it is. Recent repairs and replacement have probably cost each owner about $450. Some of that was only necessary because of the failure of the street. Normally it would be strip and replace. Over a period of years I urged a closer look by an engineering professional and the current board agreed. Thank god. The problems had gotten out of control and the cores revealed that the base was so moisture laden it was on the lower edge of a slurry.

Alternatively, we could have simply thrown $100,000 at it. However, it was prudent to determine just how bad that street condition really it was and what to do to avoid digging it out in another 10 years. But not everyone agrees. After all, some of us won't be here in 10 years. So why waste "my" precious dollars today? That in a nutshell is why fees are today higher than they should be. I would also argue that this is why the street is in the present condition. Even well meaning board members are inclined to "duck and cover." After all, why be the bearer of really bad tidings in a HOA where the few can't wait to shoot the messenger?

Of course, the street problem is really a larger financial problem than might be readily apparent. The area being replaced is about 1/5 of the entire surface area of all streets. In other words, the premature failure of the other streets is also a real possibility. If so, the cost of early failure to each owner will be about  $1,125. That's about $10 each month for a decade in higher fees. Simultaneously, this HOA has to begin accumulating fees for the next street replacement in 15-20 years. It does all add up, doesn't it? Most owners are oblivious because these amounts will be embedded in those monthly fees. For BLMH, this "kick the can" down the road approach has assured higher fees in recent decades. It has also assured that any board that attempts to deal with these problems will be attacked, and so we are.

A worker yesterday commented that the street looked to be 30 years old. It isn't. It's 12 years old and has had 5 years of serious patching.

Protecting our investments
So what will this HOA do now to protect this very expensive investment? At BLMH, boards struggle with the finances. So some things just don't get done. For example, this HOA does not have a formal maintenance program for the streets. Boards discuss this from time to time, but with the exception of spot patching, there is no maintenance done.

Why is that? It's all about money. Money and poor decisions promoted by owners. What am I talking about? While it is true that a well designed and properly installed street may last up to 25 years, here are the underlying facts. “With a good maintenance program consisting of regularly scheduled inspections, spot repairs to damaged areas, and periodic application of a sealer, asphalt roads will have an expected service life of 20 to 25 years. If maintenance is ignored, the service life of an asphalt road can be as short as 10 years.”

Here at BLMH, maintenance of streets has been generally ignored. I took the initiative to assure it was discussed, but street maintenance will increase the annual maintenance budget. Several years ago a manager sided with the "do nothing" board and argued against crack filling. However, there was no interest or willingness on the part of anyone to get the opinion of a registered professional civil engineer. It was made clear to me that any opinions, if they were to be sought, were to be from paving companies. Why? Because such opinions are free. They may also provide bad advice. Something went very, very wrong on Lakecliffe. How else can a street experience early signs of catastrophic failure in only 8 years?

The hidden costs
The failure of Lakecliffe had hidden costs. The residents of about 96 units have had to deal with the consequences. I am one of them. I've also spent untold hours, probably two hundred or more, researching this problem, looking for causes and solutions, preparing sometimes elaborate reports for boards or emails and arguing until I was blue in the face about the merits and necessity of action. All for naught. 

Why do I say that? It's simply because all of my time and efforts were a complete waste. Boards did next to nothing for a critical 4 years and the street failed. Then we slid into damage control. My goal was to prevent failure. I didn't achieve that. It was impossible to achieve with the structure at BLMH. What is necessary is an organizational structure called a "structure for fulfillment." What BLMH has is a "structure for failure." Today, the same people who argued against spending money now come to meetings and wail about how inconvenienced they are. It's all the board's fault, they say. So it may be, but they are the ones who elected the "do nothing" boards and they are the ones who have done everything possible to disrupt this HOA.

To be honest, the personal costs to me were enormous.

Our fees are "too high"
That's the underlying problem to be dealt with by the current board, and all recent boards. Owners chant this en masse. Chants are easy. Doing the real work, that is not easy.

"Our fees are too high" was a comment most recently made to me by a board member while the street work was progressing. I do understand that some of our residents probably can't afford to live here and I have stated so. I have also spent more time, personal money and energy attempting to figure this out than any other person in this HOA. I have also spent more time in recent years attempting to come up with solutions than anyone else at BLMH.

Some of the contributing factors to our fees were made several decades ago. In rough numbers the current monthly cost to each owner to live in this PUD carries a premium of at least  $70 per month.

• Monthly catch-up fees for reserves not collected 1990-1999 = $50.
• Monthly cost of premature failure of Lakecliffe = $10
• Monthly cost of water main failures = $10

I sent a personal letter to each and every owner about the real problem of budget shortfalls in what, 2009? A few board members pitched in to cover the mailing costs. The "change" group and some ever ungrateful owners had run some of the earlier board off. The fundamental idea was "we have enough money" and so that group was elected.

That $70 per month is going into the HOA coffers to cover the current and necessary costs of dealing with the numerous infrastructure problems and of course, previous failures of boards to collect and accrue sufficient fees for streets, roofs, garages, streams, etc. It is today being spent on "Damage Control."

Lakecliffe - Construction Day 2

It's Day 2. I got up and moved my car off of the property at about 7:00am just as the paving company was moving on site for the day.

The forms for the curbs went up quickly and continues as workers move sequentially from west to east. The crews have worked on storm sewer inlets, forms for curbs and the engineer was on site. Of course, maintenance was here from time to time as was our manager and I added another layer of complexity.

While this was going on, a variety of vehicles ranging from automobiles to tow trucks to Fedex and the mail carrier all converged in the construction zone. Pedestrians in the street added to the mix. Of course, there were numerous construction vehicles, a bobcat and a small army of workers placing forms, fixing basins, smoothing CA6, spreading concrete and so on.

It got a bit weird when the concrete mixers began queuing up and the curbs were being poured. Not because of the construction workers, but because of the vehicular traffic attempting to enter and exit all at the same time.

I did a bit of traffic direction to avoid an accident. However, doing this is asking for trouble. If a driver doesn't follow my directions, then there might be an accident. Of course, I would then be responsible. That's why I'm here instead of "out there" directing traffic. People must use common sense in these situations. That "Road Closed" sign is there for a reason.

Here's a series of photos which reveals the stages of curb construction.

There are other, numerous details including storm sewer basins. However, it's time for some levity.  There is a "Road Closed" sign out there, and this photo indicates how tight it is.

One resident gave up on attempting to enter with the tucks in the way. I guess he realized that the "Road Closed" sign was there for a purpose. He walked his bags to his vehicle parked on the street. Probably a wise move.

Lakecliffe - Construction Day 1

The trucks arrived early this morning and work began promptly at 7:00am.  Residents cooperated and all vehicles were moved away from curbs to be cut and the Lakecliffe parking area. The last passenger vehicle in the way was moved at about 7:10am. Several residents, myself included, have put our vehicles on Briarcliffe. I moved mine early this morning.

There were "road closed" signs posted and with good reason. While construction vehicles are moving to and fro, driving could be hazardous.

This is "day one" of several days of curb replacement, which is "phase 1" of two steps in this project.

Management has been on site, maintenance is on site and of course I, because I have absolutely nothing else to do with my life, I am here too! Just kidding; I recently passed an anniversary. I have been working and paying taxes, including SS taxes each and every year since 1963. I have started several businesses, and paid another block of taxes each year as a "corporation." As of a month ago I began my 52nd year in the work force. I love it when millennials complain to me about their hard life. Ditto for anyone who never worked a day in their life. The very idea of someone working for 52 years is difficult for some to comprehend. After all, this is (or was) the "retire early" era. The reality? Save 15% of your income for 40 years and you may be able to retire.

Returning to the Street
Not to say the morning was entirely "blip free." Owners have been told to avoid workers. I do the same because any interruption can increase costs or interfere with worker safety. But not all owners will follow this directive. This morning I admonished a former board member to stop quarterbacking. He was interrupting some workers. I also cautioned him to keep off the streets in the construction zone as this was "extremely dangerous." He said he would comply. As a former board member he fully understands the instructions to owners to avoid interrupting contractors. However, I expect he had to make a report to the group, he has status to uphold in the group as well as an obligation to that special group which transcends all other loyalties and obligations. So it was in 2008-2009 and so it remains today.

Why Were Some Curbs Removed?
Observant residents may notice the differences in some of the curb cuts. Here are a couple of photos to demonstrate:

Why were some removed, and why are larger portions of driveways removed in some cases than in others? There are two explanations:

1. When the engineer submitted the first draft of the construction drawings to management and the board, I was surprised to see portions of the curb flagged for removal and replacement. These curbs were in good condition. Removal implied drainage problems. The explanation that was provided was straightforward: drainage was, in fact, a problem.
2. Removing curbs and installing new at a different elevation means some driveways or parking areas will be raised or lowered. However, the drawings did not indicate exactly how much driveway to remove. I expressed several concerns: a) A step change in elevation might be created and that would pose a problem for vehicles entering or leaving the driveway or parking area.  b) The paving contractor should be provided specific instructions as to how far back to saw cut the existing driveways. c) The driveways needed to be cut back far enough to provide a reasonable slope for vehicles. d) We certainly wanted to avoid the possibility of water flowing in the wrong direction; some driveways in our HOA are nearly level and do have a slope of less than 2%.

I discussed this with the engineer and management. The engineer's explanations were provided to the board with my concerns and recommendations. As a consequence the engineer was directed to shoot the elevations of the impacted driveways, determine the actual elevation and slope changes, determine reasonable height changes and come up with a solution of where precisely each driveway or parking area was to be cut. This information was to be then incorporated into the plans. And it was. So larger portions of some drives will be replaced than other.

The costs? Some are apparent. However, because the board in 2010 ignored my warnings and because this project was further delayed there was additional inconvenience. It took additional time for replacement boards to get up to speed, come to a consensus about the problem, award an engineering evaluation and then award the contracts for replacement. Well, the fact is, there are trade-offs. It may cost our owners more today. Why? Because we are tearing up some driveways replaced since 2008,9,10. That's why. On the other hand, delaying this project by a year or two may have saved owners some money.  If the value of this portion of street is $150,000, then delaying a year and thereby delaying expenditures might have saved owners about $7,500 to $10,000 dollars, or about $30 each. Was all of the aggravation worth this amount? But that's what we get when the primary driving force is "to keep fees as low as possible." Could this situation have been avoided? What do you think? I faced this problem "head on" in 2010, but I was alone. As I say time and time again, HOAs get the board they deserve, which is to say, the board the owners elect. . 

Why Were Curb Changes Required?

One of the primary destructive forces for asphalt is standing water.  The asphalt is placed to match the edge line of the curbs. It was discovered during surveys of the street that the existing street did not provide sufficient slope and that means improper drainage toward basins. 

To alleviate this, the elevation of some sections of the curb needed to be changed. The street elevation can then also be changed and a minimum 2 percent grade to the storm sewers becomes possible. The asphalt is poured to match the curbs. 

Owners at BLMH, or anyone who reads the newsletter is aware of some of the drainage issues which have been addressed by several boards in the last 5 years. Owners who attend HOA meetings regularly have heard my monthly reports of 4 to 12 pages in length and have been provided more information. 

Many drainage problems can be traced back to the original construction. The City of Wheaton approved all construction and drawings. So what went wrong? I'd hazard a guess that some aspects of this HOA were not built to the drawings and specifications. The inspectors for the city failed to do their job. The builder took short cuts or failed to follow the plans. 

The City is responsible for some of this, but they are not alone

The City of Wheaton created a situation which reverberates to this very day. This street is an example. We have buildings at such an elevation that some driveways are nearly level. So how is a HOA to replace a street and curbs and yet get a minimum slope for proper drainage? The answer is, it can't. 

If a driveway has a 1% slope, any error by the paver can exacerbate the problem. That's what happened in 2002. Lowering streets to fix this problem may require more storm water entries and basins. But then the HOA has to meet the elevation of the city street at Briarcliffe. The costs go up, and up, and up. 

The fundamental problem? The street elevations are determined by Briarcliffe Blvd and the elevation of the buildings; most notably the garage floors. If this isn't rocket science, then what is it? It's Damage Control. The angst faced by our owners about the failure of their fireplaces has one possible benefit. It brings home to nearly all owners, on a personal level, the problems faced and addressed by many boards in this HOA since day one. Some owners have been aware of these issues. Some owners have done everything in their power to ignore these issues. Many of these problems were caused by the City of Wheaton which failed in inspections and reviews and allowed these problems to be "cast in concrete."

Meanwhile that small group, which is completely oblivious to reality, demands "fees as low as possible" because "we all know our fees are too high." There is absolutely no doubt in my mind that the board of 2008-2010 made the callous decision to kick the can down the road to future owners and to future boards. 

I tell people I'm like that guy during the parades. He walks at the very end of the parade, when most of the revelers have already begun to pack, the politicians are picnicking with their supporters, and he carries a broom and a wheeled cart so he can do the cleanup. 

Here are a few more photos take at about 10:00am:

Lakecliffe - We Really Aren't Kidding!

This post is an update

The current weather predictions are "Clear Skies" for Monday, Tuesday and Wednesday. [Sunday update: Now the weather is possible "Showers" on Tuesday and Wednesday]. The paver has set up signage and is getting ready for that Monday, 7:00am target.

Will some of us be inconvenienced? Yes we will be. Should we be surprised if we are? No. The association has posted notices and mailed a notice with targeted language to each and every owner and every tenant. This includes all on site and offsite owners. If you really believe you should not experience construction then I have to ask "Why are you living in a 40 year old Condominium Association which is a PUD and maintains streets, driveways and water mains?" The answer I am frequently provided in this circular argument is "Because it would be so inconvenient to move elsewhere."

Do I have any advice? Yes I do. Avoid the north half of Lakecliffe while this is going on. There will be periods when the street is closed to traffic. That will cut off Harrow Ct. If you really need access to your automobile at all times, then park it somewhere else. Park it elsewhere commencing at 6:45am while construction is underway or while the streets are closed. Once the construction begins, moving vehicles may be difficult or impossible.

Are we prepared? This is actually two questions. Is the association prepared and Am I, as an individual, prepared? I can speak only for myself and I aware of the efforts taken by the association to prepare for this. Association logistics has included the clearing of some parking areas which were occupied by construction materials. The next photo shows one of those cleared areas. 

As individuals, we should have a plan to moving our automobiles to other areas, arranging for rides if we need one, getting groceries over the weekend, etc. so we can avoid using our automobiles and so on. There will be periods when Lakecliffe is closed or impassable and Harrow Court will be cut off. In an emergency vehicles will be able to get through. However, shopping is not an emergency.

What are my personal preparations? I will say this. As of 6:45am on Monday the vehicle I need to use will be moved to Briarcliffe Blvd. It will be off the property while construction work is underway. If I am elsewhere for business or whatever, then I won't be here. My unit is within the construction zone.

Lakecliffe - Why Perform an Engineering Study?

Anyone in our HOA who reads the newsletter or regularly attends HOA meetings is aware of the fact that an engineering study was made of Lakecliffe before proceeding with the replacement project. The goal was to determine the condition of the street so a proper remedy could be designed. That study indicated problems more serious than was apparent. That's one of the reasons some sections of seemingly good curb are being replaced.

The handful of owners who come to HOA meetings are aware of the board's determination to head off additional problems on the other streets of BLMH. The owner body has been informed of the award of an engineering study for this purpose.

Was it an easy decision for the board to do this? No, it wasn't. Spending money is never easy. Spending other people's money is darned difficult. It is for me, that is, and I think the other members of the current board are as cautious about this as I am. Each and every very dollar in the HOA accounts has been allocated for a purpose.  I for one do not operate from "We have enough money." I operate from "We have sufficient funds in our budget" or "This is included in the reserves" and I only state that to the board after checking our actual funding levels. How much we have in the bank is irrelevant. Using the bank balance as a justification to spend money would be deceitful.

Project management including cost accounting, etc. would make for another very long post.

However, infrastructure maintenance decisions are a task of the board. Water main breaks, for example must be addressed if there is or is not a sufficient budget amount in any calendar year. 

So why spend money on a study of the remaining streets?  Each owner has an investment of about $2,000 in our streets. Is it worth spending about $27 to protect that investment? Do we want to minimize the disruption to residents caused by street failures? Do we want to achieve full life of the streets and do we want to know what that full remaining life is to be? Do we want to design our reserve fund accumulation program using the best information possible? 

As I recall, I first made the suggestion for a complete study to the current board in 2012. I'd been promoting the taking of core samples since 2008-2009. I  made a formal recommendation to the board in 2013 after a discussion with a registered professional engineer and after completion of the study of Lakecliffe.  With board approval an engineering firm was asked to provide a proposal. This was again discussed early in 2014 and this is what I asked of the engineering firm:

In order for me to ask the board to approve the funds for this overall study, I needed to be assured by the engineer that the following would be provided in that study:

1. The purpose of this work is to ascertain the condition of the remaining streets, the possible remaining life and the possible (reasonable) steps this HOA can take to extend the remaining life of these streets. 
2. I advised the engineering firm that these streets were not expected to be replaced until 2020, 2021 and 2022. In other words, the installation dates imply there are at least 7 years of remaining useful life. The condition of the streets indicates otherwise unless remedial action is taken. 
3. One of the things I expect from any report provided by the engineering firm as part of the scope of work is a candid appraisal of these streets. That includes a statement pertaining to the probable life remaining if no preventative measures are taken. This statement is to be in straightforward layman's terms. e.g. "The association should plan on replacement of Harrow Ct. in 20xx.". 
4. An estimate of the costs to achieve full life of the streets per the report is not a scope of the work of the study. 

That study will be underway with the taking of core samples in the next few weeks. The engineering findings will be used as part of the 2014 update to the reserve study.

Are all owners aware of this effort? No they aren't I can say that because of recent comments and questions by several owners.  Some of our owners either don't read the newsletters or can't remember what they read. Some don't attend HOA meetings and that includes the annual meetings. In fact, less than half attend the annual meetings. At the last annual meeting I gave a very fast 15 minute update to all owners. That update ranged from streets to driveways to roofs to water mains to drainage improvement to flooding in south Wheaton and also included budgeting from the perspective of Architecture and Maintenance.  I said it was "fast" because I was time limited. However, I think a summary to owners is necessary.

Do all owners agree to the board action? No they don't. I can say that because of numerous owner conversations and emails over the last 7 years.  Who are these owners? Some see any money spent on any endeavor in which they will not directly benefit as an entire waste of money. Some live elsewhere on the property where the streets have not yet degraded. Some see planning as a complete waste of time and money, Some plan on selling. Some don't think they'll live for another 10 years.  But they all get a ballot and can vote in each election. 

Lakecliffe - "The HOA Board should pay for this!"

This post is an update

The comment in the title of this post was made by an owner who doesn't appreciate the inconvenience imposed by the street project, which is published to occur during the next two weeks.

Yes, and I suppose he/she is also of the opinion the HOA board should don our "Sherpa Uniforms" and carry them to their door and up the stairs, too!

I've come to describe the members of this group the "Entitlement Brigade." Does anyone think these people really have any capacity or awareness beyond themselves? These are the same people who have been complaining "When will you fix Lakecliffe?" Now that the date has arrived, the primary concern is "How will you take care of me?"

Here's a current "Before" Photo of the offending street, taken yesterday:

Signs have been posted and three, THREE different notices have been posted AND MAILED so everyone is informed. Why three different notices? There are three groups affected: 1) Those on the street to be rebuilt, 2) The adjacent street which will also be access limited and 3) Residents elsewhere.

Yesterday another notice was posted in the entrances of the affected addresses on Lakecliffe. This notice, on a different color paper, was also put on parked vehicles. It provided emphasis about parking restrictions and advised that problem vehicles "WILL BE TOWED."

Here's one of two signs posted on July 23:

Some historical Information
Here's two photos from my April 7, 2010 post. These were taken on March 18, 2010. That's a yardstick in the photos. These photos were published only after the board ignored my concerns. By 2010 I'd been advising various board members for about two years that this street was in serious trouble and prone to deterioration. I finally and very reluctantly pressed to get on the board because of this and other serious financial problems. In 2009 the owners decided I wasn't qualified. In 2010, in part by accident (voter apathy) I achieved a seat on the board; lucky me! I'm not on the board of BLMH because of any overwhelming owner consensus. To the contrary, it's because the Entitlement Brigade and their entourage were unable to prevent this from happening. I'm on the board of BLMH primarily as an accident.

The potholes in the photos were eventually patched, as were more and more holes each year. But the underlying problems were ignored. My formal, written advice in January 2010 that this street would require $100,000 within 5 years (no later than 2014) was ignored. At the time I wasn't a member of the "yes board." This expensive solution was left to others, because it was really about looking good. That group walked and left this and many other messes for others to clean up. But then, it never was about solving problems or maintaining BLMH, or making it a better place to live, was it? It was about "keeping fees as low as possible" until the voters could bail. At best, I would describe that board as "misguided." For the supporters who drank the kool-aid and remained here, the economy and the real estate market did not cooperate. You were left stranded. Too bad for you! For the group that remains here, they are the few who couldn't escape via the "window of opportunity" that was created. But the "wise sages" left. The followers? They feel they are trapped, or betrayed and are unhappy. So blame others and join the Entitlement Brigade.

The reality? We are not the center of the universe; we don't control the laws of physics, we can't escape death, or the consequences of our financial ineptitude and there are consequences to our actions or inactions. I would also add that it is blatant stupidity to expect others to clean up our messes for us.The argument seems to be "I am entitled and I paid my fees!"  I'm being generous. With owner fee delinquencies, it is quite possible some of the complainers have not paid their fees.

Let's all sing the refrain together "What do we get for our money?"

Lakecliffe Rebuilding Update

Hold on to your hat, Mable, the construction crews are en route!

I'm not kidding. This post will provide details of the now imminent construction. Anyone who reads this blog is aware of the issues on the north section of Lakecliffe Blvd.  The problems were identified in 2008-9. The board was told in black and white in January 2010 about the seriousness of the situation and was given a timetable of failure "within 5 years." That was exactly 4-1/2 years ago. But that didn't fit the popular agenda.

So what did I mean when I said we faced "failure" of this street?  At the time, no one on the board asked me. They didn't want to know.

Some people wonder why I am frustrated. I'm using north Lakecliffe as my poster child. For 6 years I've observed various owners and boards argue "we don't need to do this." I've observed owners and boards argue "we don't need a reserve study." I've observed owners and board members argue "we can do this with an army of handy men." Need I go on? The problem I have is when things go wrong, then the same people run, or turn to others and say "how could this happen" and worse still, they will turn to me, or our manager, or a current board and say "it's your fault. You shouldn't have allowed this to happen" or "fix it NOW." One owner complained "I'm embarrassed by this street." It's interesting to note that some of the very people who argued against this type of action are now in the audience playing dumb and saying "how could this happen?" I'm willing to take responsibility for my actions, but I will not take responsibility for the actions of others.

Some problems can only be delayed for so long and then it becomes obvious to everyone.  In fact, some owners now come to HOA meetings and express dismay at the signs of early decay of other streets. Even a member of that former board noticed this. Of course, the question that has been posed to the current board is "What are you going to do about this?" The pieces have been put into place incrementally and the capstone is ready . Furthermore the board will know a lot more about the condition of all of the streets after the results of the engineering study have been completed. The board will also have a very good idea of the cost to deal with the other street problems. 

The problem of north Lakecliffe is finally to be decisively dealt with. No more bandaids, no more procrastinating and no more "pass the problem to future boards and the hat to future owners." After several years of warranty repairs, a board willing to take this on and forge a board agreement to get an engineering survey, take core samples and analysis, after many board conversations about how not only how to deal with this but how to pay for it, selection of a course of action, selection of an engineer and formal agreement about his role,  and the preparation of drawings and specifications. This has taken lots of board and management time to get to the point where this the street will finally be replaced.

Replaced, I will add, 6-8 years earlier than planned as of 2014. In 2009 when I flagged this as a significant problem, that was 12 years earlier than planned. (How serious was this? Streets are supposed to last 15-20 years with little maintenance.) That's what boards are supposed to budget for. We don't budget for street replacement (base and asphalt) every 10 years.

Owners who regularly attend HOA meeting know the details because all of this is discussed during open HOA meetings. Most don't attend. Some don't read the newsletters. [Sigh!]. Nevertheless that time has arrived and the time is NOW! 

Additional weather delays may yet occur. However it's "full steam ahead."

How Large a Project is This?
One half of the length of the major street in this HOA will be closed for part of the construction. This will inconvenience each and every resident. 56 units will be directly affected. Another 40 on Harrow Court will find there are times they cannot get into or out of the cul-de-sac via automobile. How will the various residents deal with this? We'll find out. We'll see just what the mettle is for this HOA.  

The Timetable

Weather - Any timetable will be determined by the weather. Nevertheless, I expect some of our owners to say "But you promised!"

Immediate - Signs will be posted and notices will be posted and letters mailed to each owner and tenant so all are informed. Several versions because depending upon where one lives in BLMH there will be different consequences. Material stored in parking areas will be moved to free up parking. Where will some of this material go? To the area the board recently agreed to build additional onsite storage. (Was this an accident, or is this part of the plan? Here's a hint; my life is not about living an accident.) Notices will be posted at each entrance in the construction area. Additional notices will be posted for the remaining residents. 

Next Week - Some driveways and one parking area will be closed while curbs are removed. New curbs will be poured and allowed to cure. Concrete samples will be taken for testing. While all this is going on parking and access to some driveways will be restricted. Driveways with new curbing will be closed. Sorry for the inconvenience. Storm drains (basins) will be cut away for inspection so any repairs can be made before the street is replaced. Better to do this now than to rip up a new street in a year or two or three, yes?

The Week Thereafter - A large section of Lakecliffe will be closed. That means no traffic in that portion and Harrow Court will be cut off. Asphalt will be removed and so will the base. "Proof Roll" witnessed by the engineer will determine how much base and sub-base is to be removed. After new stone is placed and rolled asphalting will begin. 

How Long Will I Be Inconvenienced?

The total time of the project once it begins and with no weather or other delays will be 7-10 working days (weekdays). 

Behind the Scenes

In addition to the visible work there has been a lot of "behind the scenes" work and preparation. JULIE was notified. Water mains will be marked by the association (not by JULIE; we own the mains because we are a PUD). Numerous meetings of the board, of the contractor, engineer, management and maintenance occurred. Courses of action were discussed. Plans were made and remade. Logistical issues were discussed not once, but many times. These discussions included the engineer, management, maintenance, myself and the entire board. Communications was discussed; who is to communicate what and to whom and when? The police department of the City of Wheaton has been advised that owners may park on Briarcliffe Blvd overnight if Lakecliffe is closed; however, it's up to each resident to notify the police department if they do so.  The post office has been notified. Etc., etc, etc.

How Will This Turn Out?

I expect some upset residents. I expect some won't read the notices or if they do, they will act contrary to them. I expect some automobiles may be towed. Some residents will be unhappy. 

I am supposed to be in San Antonio, TX for business while some of this is going on. However, I am inclined to delay that trip so I can be here to "do my duty as a fiduciary." However, taking a week of two of one's life to do this doesn't really make a lot of sense. Nevertheless, if I can make it work, I will. 

As the project proceeds I'll post the gory details to all here on my blog. Enjoy!

About HOA Delinquencies

This is another is a series of "reality check" posts. I include several charts to substantiate my position.

Delinquencies continue to be a problem for many HOAs. A delinquent owner is one who doesn't pay HOA fees in a timely manner.  The consequences of delinquencies include:

1. Higher fees for other owners, who make up for the lost fees.
2. Higher operating costs for HOAs as management time is spent dealing with this problem and lawyers are retained to work these problems through the court system. Owner fees, of course, pay for management time and legal fees. Some, but not all, legal fees are eventually collected.
3. Interference with HOA operations as boards are diverted to deal with the issues caused by delinquent owners. 

Dealing with these problems can cause serious financial difficulty for the HOA, higher fees,  and can also result in serious disputes between owners, owners and board and among board members. Here at BLMH it is entirely up to the board to make most of the decisions with management support. This includes dealing with this problem, the financial consequences and upset owners who have been pressed, and who are having difficulty to honor their financial obligation to the HOA. Only after the board reaches a consensus can directives be given to management.

Has it gotten bitter? Does anyone think that pressing an owner to make good on their financial obligation won't lead to bitterness? What the HOA is asking delinquent owners to do is to make the necessary sacrifices to pay their fees. That is not always greeted well. Owners who fall behind and don't take positive action will be turned over to the attorney for collection. Some will argue they shouldn't pay the attorney's fees that were reluctantly required to get positive action. Some delinquent owners assert "The HOA should pay these legal fees." In other words, "Let the other owners pay these fees."

Sometimes an owner who has fallen behind in his or her payments makes it personal. What board member would want to deal with that? Who wants to be branded as "mean" or "uncaring"? Who wants to be threatened? In some HOAs from time to time it is the board that is treated as the outcasts and the pariahs. The delinquent owners are sometimes put on a pedestal as either victims or heroic. That says quite a lot about the mindset of some HOAs. It is absolutely no surprise to me that BLMH has had great difficulty finding people to serve on the board, do the work, who were willing to make the difficult decisions and be a target of the rotten tomatoes. That's why for most of the time the board is understaffed. Shame!

Some boards may avoid the problem. One board decided that it was easier to avoid the issue rather than make difficult decisions, upset a few owners and deal with the consequences. A kick the can down the road approach leaves the problem for future boards to deal with. All the while the lost fees accumulate and the financial hole gets bigger. Nevertheless, all boards have had to divert resources, adjust fees and delay some projects or maintenance as a consequence of the financial burden placed upon the HOA. At the end of the year it is a requirement of the board to create a budget. That is when the board may become grounded. Ultimately, no one has benefited from these delinquencies with the possible exception being the attorneys. Monthly fees are higher than they would otherwise be if there had been no delinquencies. Some delinquencies become foreclosures and the HOA loses the opportunity to collect past due amounts and those legal fees. The HOA pays attorney fees in the hope that this will be eventually recaptured. That is not always the case.

Is the situation better today? Here is what was done to manage this problem.

1. Identify it as an important problem and worthy of much board effort. Determine the magnitude of the problem so priorities can be established. Boards are volunteer organizations. Ours is understaffed. There are more tasks than hands. 
2. Build a board coalition to do the necessary work and take the necessary, but unpopular steps. I call this "The power of two." Then three, then four and so on. 
3. Get the support of management in dealing with the problem. Managers provide professional advice, but it is easy for boards to avoid following the professional advice.   The boards provide the directives to management. With no directive there can be no action. The boards "hire and fire" and that includes the managers.  Any manager who doesn't play ball with the board can be put on notice. That may make it difficult for the manager to function properly. 
4. Go back in time and assemble information that the board could grasp and present it in such a manner that the full magnitude of the problem becomes impossible to avoid. 
5. Provide this information to the board during open HOA meetings, with frequent updates. This will make it difficult for board members to avoid the issue or to avoid taking a public stand on the issue and making prudent decisions. 
6. Improve communications with the owners. Responsibly communicate the problem to all owners. Repeat that communications. 
7. Do the work necessary to enable the difficult decisions required to take the next step. This included meetings with the HOA attorney and management discussions, including doing the work to enforce the Illinois condominium act provision about "Forcible Entry and Detainer."
8. Do everything reasonable to keep all owners within their units and paying their fees. This requires board diligence about delinquencies. If any owner is allowed to fall further and further behind in their fees, at some point it will become impossible for them to catch up in a reasonable time.  Some will foreclose. Without proper communications and information it is impossible for the board to determine this breaking point. If is best for the board to be rigorous and forceful and not allow the situation to get out of control. If a delinquency makes it to the point to which it goes to the attorney for collection, those legal fees become a greater burden for the delinquent owner to deal with. 
9. Do everything possible to enroll the entire board in taking the necessary and very difficult steps. However, some will resist, kicking and screaming at every step of the way. Some will say taking those difficult steps is "bad" and a "wrong" course of action. 
10. Take steps to assure that all owners are treated equally. In other words, all are required to pay their fees and any "payment program" is structured in accordance with board set guidelines and monitored by management and the HOA attorney.  
11. Determine and interview service organizations who could and would rent any unit taken over under the "Forcible entry and Detainer" provisions of the Illinois Condominium Act.  The purpose of renting an owner's unit is to collect back fees. Thereafter the unit is again turned over to the rightful owner. 
12. Expand the newsletter information provided to owners to include information about the steps owners must or should take to avoid legal action in the event of delinquency. In other words, pay your HOA fees! If you don't there will be unpleasant consequences. Delaying will bring in the attorney and it will be more costly. No Kidding!
13. Recognize that even with the best efforts of the board and management, some owners will default and seek bankruptcy and/or foreclosure. 
14. Recognize that some fees and legal costs will never be collected. Create a "Bad Debt" account in the HOA Chart of Accounts for this. Failure to do this results in a write-off in the annual report, but does not provide the HOA board with a monthly number to view, discuss and track. Why is this important? HOAs formulate budgets a year in advance, and with reserve studies, that budget includes a 30 year financial collection plan. "Bad Debt" is simply money that won't be collected. If only pennies, it is of no consequence. However, it is not unheard of for bad debt to reach 1% to 3% of an annual budget. Here at BLMH, the board strives to control spending to maintain annual fee increases of 3% or less. Bad debt can wreak havoc with these financial plans. 
15. Create a spreadsheet which provides detailed monthly information on total delinquencies, delinquencies of significant dollar amounts (greater than $100) and the quantity and percentage of owners in these categories who are delinquent. Chart this month to month and discuss each month. 
16. It's useful to remember that "The road to hell is paved with good intentions." Remain cautious, but also realize that your "partners" on the board may be operating in ways that are contrary to the greater good. 
17. It's useful for the board member to realize that they are here to do the tasks that many will not, cannot or refuse to do. At BLMH, currently 6 do the tasks of 336. It is truly a job that will, at best, be one "of service" and at worst will be one "of a servant." 

Of course, none of the above was popular and it was merely another in a long list of chores for a few (two) members of the board to take on. Some on the board simply did what they usually do, and that is to either avoid the matter, avoid dealing with the consequences, or pass the problem and the work on to others. Planning and preparation can be difficult. Some owners do little of this in their personal lives and on achieving board status, attempt to run the HOA exactly as they do their personal lives and personal finances.

In this situation as in so many others, I think it is prudent to ask who in the HOA benefits from this type of board inaction? There is an unpleasant answer to this question. 

Dealing with the Unavoidable
In the fall of 2010 I successfully enrolled another board member in moving forward to deal more forcefully with the delinquency problem. We two board members decided the situation really, really needed to be dealt with. How did we achieve this? I followed the steps in the program above, management was empowered and the board agreed one by one. Taking the necessary but difficult steps was not acceptable to all on the board. It took time to change direction, get everything into place and change the direction. It took more time for the situation to change. Of course, this was merely one of a number of concurrent problems to deal with.

However, the question to ask is "Why hadn't it been dealt with prior?"  It is a fact that prior to 2008 many HOAs had few or no delinquencies. In January 2008, BLMH did have some delinquencies. That all changed in 2007 with the "Great Recession." Boards and HOAs were slow to react and many did not have the management systems in place to deal with this. BLMH was no different.

Here's the problem. First, the award of a position on the HOA board is the consequence of an election which is a "Popularity Contest" and at BLMH  is frequently avoided by many of  the shareholders.  Second, the actual work required is not commensurate to that expected of a figure head group. Third, allowing things to simply continue "as in the past" will not necessarily draw a straight line and get us to the predicted result. Fourth, being on the BLMH board is really a lot of work. Fifth, being on the  BLMH board will require making sometimes unpopular decisions. I assert that any "populist" board will be unable to fulfill it's fiduciary duties. Doing real work may also be unpalatable for some board members. After all, we're volunteers. Finally, in 2008 our owners elected a "kindler, gentler" board which was committed to "change." It seems some of that board viewed BLMH as a social and philanthropic organization.

At BLMH, the board is given a "management packet" which is typically 90 to 150 pages in length. It arrives after the closing of the books for the previous month and before the monthly meeting. Our meetings are on the second Thursday of the month. It is not uncommon to receive this packet somewhere between Saturday and Monday immediately preceding the Thursday meeting. For anyone who works for a living this can provide little time to read, absorb, generate comments on the contents of the packet and formulate a plan of action, much less a solution to the problems in the packet. I am not only employed, I travel for business.

It is no surprise that boards can become blindsided by the data and numbers in the packet. Nevertheless, I focus on identifying and dealing with serious problems. So, to deal with delinquencies in the fall of 2010 with the newly appointed treasurer I created a spreadsheet which provided great detail about the delinquency information and also added a "bad debt" number. It provided charts going back to January 2008 to provide trend data.  When presented to the board during an open HOA meeting it was not greeted with enthusiasm by all on the board. In fact. there was great resistance to this among some of the board. However, it is impossible to refute the facts when accompanied by charts tracking the issue since January 2008.

Some of this goes back to the extreme financial problems of 2007-2008 and the manner in which boards deal with acute financial problems. For delinquencies, some board members may operate from the position "We are all owners and neighbors." Yes we, are, but my position is "We all have responsibilities and agreements to keep with the HOA, and each and every owner benefits from the fees and so we must each pay our fair share." For a time commencing in 2008, it seems that "being neighborly" won the debate.

For any board, there is also the option of running out the clock. Simply delay dealing with certain problems until the current term is over and we can move on with cheers and accolades. Someone else will have to deal with these problems which remain unconcealed. When that future board acts, some will say "How could this happen?" How indeed.

The Wake-Up Call
In situations that go from "bad to worse" there will always be a point in which it becomes impossible to avoid the obvious. There will be a few who are unwilling to bury their head in the sand. In 2008 with fear gripping the nation our skilled board was replaced. The slogan of the new team was "Change."  It's my opinion that the replacements had great difficulty in dealing with the new reality, what some business people described as the "new normal". After attending HOA meetings I was more than concerned.  That's why I ran for the board. I admit I was reluctant. I knew exactly what I was in for and I don't like open ended agreements. I have been in accountable positions in a volunteer organization. It was very difficult.

As I said, I did know what was unfolding. Our annual reports are available to all owners and I did understand some of the financial issues. I am a specialist who is retained to solve problems which are "difficult to impossible." I did recognize the problems at BLMH. I knew it would be an uphill battle. Financial disasters create a wide net which many cannot escape. Since 2007 some owners faced financial difficulties. Board members are owners and pay the same fees and are not immune from personal financial difficulties.

As a board member I simply don't read the management packet. I do my independent analysis. On assuming a board position in the fall of 2010 I became immediately concerned by some of the financial data. Over a period of months I reviewed financial information and compared previous months to the then current situation; I then became extremely concerned. The data confirmed some ominous delinquency trends. The board in place was not capable of dealing with the problem, but one could be built.

On February 28, 2011 with the hard work of the newly appointed treasurer I prepared a summary spreadsheet about delinquencies. This was for the use by the board to empower us in making the difficult and uncomfortable decisions.

Here is what the spreadsheet displayed. I am using percent increase as compared to January 2008 in the charts below. I show 0% change as of January 2008, but in fact the HOA did have delinquent amounts. The charts presented to the board indicated actual dollars, not percentages. Graphing the rise in dollars delinquent month by month and year by year does effectively present the problem to the board. Each $10,000 represents 1% of the annual budget. After the 2008 election the board announced a 0% fee increase. How would a responsible, but reticent to act board react if it became very, very clear that delinquencies of $10,000, $30,000 or $50,000 represented possible fee increases of 1% to 5%? One approach is to implement an austerity program. Another is to tighten up collections. However, boards are not required to do these things. Another approach is to start a "witch hunt" and blame management and the contractors. Yet another is to create a red herring about "transparency." The charts provide real transparency, are readable and understandable. .

If any board does not recognize the impact of delinquencies a board will be spending money it isn't collecting. That is not a good thing.  In my monthly spreadsheet I provide to the board additional supporting data including a chart of the number of owners delinquent, a chart of the number of owners delinquent by more than $100 and a chart of the amounts owed by owners who are delinquent by more than $100. I chose $100 as a separation because it is not uncommon for any owner who has electronic financial transfer from their bank and the HOA accounting system to take a month or so to record the payment of fines; it is also well below the monthly fee amount. I wanted to separate the minor problems from the significant ones. After all, the board is to act for the significant problems. Why get tied into knots about a $0.06 delinquency?

The charts and data provided to the board have been updated each and every month by me. I also include the change, year over year, in the cost to each owner in actual dollar amounts to deal with this. "Bad debt" has been added. So armed, and with two board members who were willing to do the hard work, the HOA did all of the things I outlined above. So how did this turn out?

Here's a current chart, again in percentages. The board is provided this same chart in absolute dollars. Today our delinquencies remain higher than they were in January 2008. Is the problem under control? Perhaps. Was this difficult to achieve? Yes, it was, and it wasn't universally popular either. In society there are those who are vocal and visible and are more than willing to spend the money of others. Some board members have view a HOA as a "philanthropic, or social organization." The problem for the average HOA owner is simply this: "Don't automatically expect the few to responsibly spend the dollars of the many!"

In 2011 the BLMH took many steps to deal positively with the problem of delinquencies. This is not a war that has been won. It is a contagion that has been contained. Future boards may again stumble. The economy may get worse. There are never any guarantees.

Background Information

Let me also say that that delinquencies are one of the many, many problems that the board at a HOA must deal with. Some problems can be quickly created but take years to correct. In 2007 with the onset of the "Great Recession" many HOAs hunkered down and listened to the rosy pronouncements of politicians. Doing so provided another excuse to avoid making difficult choices. Much has happened since 2007.  Today in Illinois our state income taxes are 66.67% higher. Unemployment remains high, and the employment that is created is primarily low wage or part time. I am using U.S. Department of Labor statistics. Illinois continues to financially struggle. Anyone who thinks this problem will go away is delusional. Here at BLMH the owners "voted for Change" in 2008. That did not work.

In 2007 with the onset of the "Great Recession" delinquencies began to rise at HOAs. Over the next few years delinquencies rose to higher dollar amounts. A confluence of factors created the situation.

1. HOA owners found their income reduced. Something had to give as paychecks were stretched.
2. Retirees were hit with a huge loss in interest income. 
3. The stock market value dropped precipitously and portfolios shrunk.
4. HOA boards were unprepared for the situation. In some HOAs delinquencies had been few or none. 
5. Some HOA boards were slow to respond to the situation. 
6. Courts, overwhelmed by foreclosures allowed proceeding to continue for a year or more. All the while HOAs had no fee income from these foreclosed owners. HOAs were further damaged as they paid large legal fees to wind these delinquencies through the legal system.
7. Debt counselors routinely advocated dealing first with high interest, high penalty credit cards, mortgages and real estate taxes. The coaching was to allow the low interest debt including HOA fees slide. And that is exactly what some financially stressed owners did. Postponing bill payments will only delay the day of reckoning. It cannot avoid it. 
8. Boards cannot reveal the names of delinquent owners. That provides an opportunity for mischief and misunderstanding among the owners and in the boards.  

In August 2007 the global financial crisis manifested itself. With the "Panic of 2008" and the pop of the real estate bubble a lot of people lived in fear. With a $700 billion government bailout and lending at a stand still the economy was on the brink of collapse. On October 6, 2008 noted financial entertainer Jim Cramer appeared on the Today Show and told people to "sell any investments you won't need for 5 years." There was a serious and real threat of total collapse of large financial institutions.

By 2008-2009 some HOAs had a serious problem to deal with. Delinquencies were higher than in recent years, the management and the boards were dealing more and more with delinquencies and lawyers, to the detriment of other issues. Boards found that pressing delinquent owners made them the enemy. After all, these owners are "our neighbors and friends." The veil of secrecy kept other owners uniformed. In some HOAs all discussion about delinquencies and foreclosures was held behind closed door "executive sessions," and so the general owner population had only the knowledge that there were, in fact, delinquencies. Who and in what amounts was not revealed. For its part, the general ownership didn't want to know just how serious it was. The owners had their own problems to deal with, and solving this was solely the duty and responsibility of the board, wasn't it?.

Today, 7 years after the onset of the "Great Recession" the U.S. economy continues to mend, unemployment remains high with many of the recently employed in low wage and/or part time jobs.

$232 Million Isn’t Enough at College of DuPage - "It's a spending and taxing machine"

The Following video was published on June 30, 2014

"Adam Andrzejewski lays out the College of DuPage Pay-To-Play With Governor Quinn- election votes for $20 million Construction Grant? The public comment at a board of trustees meeting is based in full on an email from President Robert Breuder to trustees detailing a political strategy to concoct a scheme to secure funding for an un-needed project."

The following is dated June 24, 2014 by the group "For the Good of Illinois" This post has highlights of an article over at that website and a brief video of an excerpt from a COD Board of Trustees meeting dated May 22, 2014.. The full article is on the forthegoodofillinois.org website here:

Clicking will open a  New Window> COD is a taxing and spending machine

The next video: "FREEZE PROPERTY TAXES, FREEZE STUDENT TUITION 

College of DuPage (COD) is a community college in Northern Illinois. It’s a spending and taxing machine… QUESTION: “Whose home is worth more today than in 2008- at the height of the DuPage County real estate market?” ANSWER [from the audience] : NONE.

FACT: Since 2008, College of DuPage hiked property taxes by 59% while home values declined. QUESTION: ”Who believes that a community college president- anywhere in Illinois- should cost taxpayers $500,000 per year?” ANSWER [from the audience]: NONE 

FACT: COD President Robert Breuder costs us nearly $500,000 yearly."

http://forthegoodofillinois.org/blog/2014/06/232-million-isnt-enough-at-college-of-dupage/

Video - Freeze Property Taxes, Freeze Student Tuition
Adam Andrzejewski, founder and Chairman of For The Good of Illinois gives public comment at College of DuPage budget meeting [on May 22, 2014].. Spending $160 million dollars leaves $72 million in the bank. That's enough to rebate a full year of property taxes or free student tuition. Andrzejewski only calls on the board to stop the hikes in taxes and tuition!

COD - "After media pressure, thankfully, some sanity finally resulted."

The Following video was published on Jun 30, 2014

"Adam Andrzejewski lays out the College of DuPage Pay-To-Play With Governor Quinn- election votes for $20 million Construction Grant? The public comment at a board of trustees meeting is based in full on an email from President Robert Breuder to trustees detailing a political strategy to concoct a scheme to secure funding for an un-needed project."

This is the third of three posts about how COD lost the opportunity for $20 million in state funding. 

A series of articles on July 1-3 at the Daily Herald provided the initial insights into the recently exposed attempt by the College of DuPage to get state funds through misrepresentation. Links to the article and to the "For the Good of Illinois" website are included in this post. 

The Daily Herald article states: 

"The College of DuPage won't receive a $20 million state construction grant now that Gov. Pat Quinn has seen an email detailing President Robert Breuder's strategy to secure the long-promised funding for the Glen Ellyn school. "

Here are excerpted statements made by the Governor and his spokesman on the decision to withhold the funds: 

Apparently the funds were withheld because "The tactics used by the president [Robert Breuder] in his email" and "We are suspending the possibility that they can submit a project for that funding." "We have no tolerance for any misrepresentation of how funds will be used," said David Blanchette, a spokesman for the governor.

According to the Herald article "Blanchette said $25 million in capital funds were appropriated for COD in 2009 by the state legislature as part of the Illinois Jobs Now! program. To date, $5 million has been obligated toward the demolition of structures on the Glen Ellyn campus."

The Herald also revealed that "Breuder's email was made public last week by an Elmhurst-based government watchdog group that obtained it through a Freedom of Information Act request.

The group, For the Good of Illinois, accused Breuder of coming up with an "unplanned" classroom building proposal to help secure the $20 million.  [Adam Andrzejewski is chairman of For the Good of Illinois]. According to the article Andrzejewski said "Breuder pressured the COD board to fast track the classroom project to obtain the $20 million state grant."

"The COD trustees quite obviously have a president whose leadership style and public actions are very troubling," Andrzejewski said. "The trustees need to reassert control of school governance."

He said Quinn "made the right call" by deciding to withhold the grant money.

"Until today, Dr. Breuder's entire strategy was coming to fruition in real-time," Andrzejewski said. "The only piece missing was Governor Quinn granting the money. After media pressure, thankfully, some sanity finally resulted."

Clicking will open a  New Window> Daily Herald July 3 article - COD


Clicking will open a  New Window> For the Good of Illinois Website