In Momentum, for the Present

Each of the board members gave a short progress report to the owners who attended the recent annual meeting of the HOA. How many owners was that? Oh, about 14% if we include the members of the board! The motivated owners who attended are actually statistically outnumbered by the delinquent owners. Is that a good thing?  Meanwhile, some promote this HOA as a retirement community. Whatever it is, as long as they pay their fees, the owners can call it whatever they like. I prefer "Club Med Wheaton." Club Med offers just about everything for singles, couples and families, but doesn't have a "Club Med Retirees" website. Same as BLMH.

2014 Reality
I provided a two-part presentation to the shareholders. Part one is included in this post.  The second part will be posted later. During the meeting I overheard one owner say "Norm's been on the board for more than four years, hasn't he?" No, I haven't but it does seem to have been much, much longer.

The Importance of Momentum
You might well ask "Is momentum important?" In this circumstance it is. I define momentum in this circumstance as the ability to define a plan so as to achieve a desired result,  There is such a thing as negative momentum. For a decade or more this HOA implemented a plan "to keep fees as low as possible." It was a stunning success for our owners in the 1990s; low fees accomplished by minimal infrastructure repairs and no saving for long term reserves. Then in 2002 the new roofing program began and the bill came due.

At BLMH our momentum was in reverse. Yes, a HOA can achieve negative momentum. It is what is called "a downward accelerating spiral." If a HOA falls behind in maintenance and reserves as this one did, it is very, very difficult to catch up. The professionals I have discussed this with do agree. It takes time to build finances, it takes time to build a team, it takes time to shape opinions, it takes time do the the necessary maintenance (not only for this year but for past years) and it takes time to undo past mistakes. It takes time to demonstrate the possibility. It takes time to get owners on board, and it takes time to counter the misconception "What we did always worked." Based upon what standard? Yes, it is true we do have a plan. But then, this HOA has always had a plan. The problem is seldom planning; it's execution. We've had decades and decades of plans. So how is it we had no reserves?

If in reverse momentum and if things are spiralling out of control, time is one thing we might not have. In 2008 the clock had run out. Not simply for this HOA. That was the environment I encountered.

It takes an incredible amount of effort to get a body which is at rest to begin to move. If it is going in the wrong direction, even more energy may be required to shape opinions and alter the course. It is important to realize that the boards at HOA operate entirely at the whims of the owners. Past boards trained our owners and created financial expectations. The owners then elected boards to implement those expectations. It was a circular, mutually reinforcing system, and in our little bubble it was perfect, for a time. How to break the bubble, create a consensus to change opinion and create a will to succeed? Well, the bubble would and did break of it's own accord. No help from me was required. "If it is too good to be true it probably is" and it was. It was smoke and mirrors. Bute everyone loved it.

To move forward in such an environment persistence and communications are a necessity. At BLMH the first task was to improve the newsletter concurrent with slowing the current direction. Only then could movement be created in the necessary direction. It was somewhat like getting in the way of a boulder rolling downhill. During the two years prior to my work on the board my task was to slow down that downhill boulder. Only after it was stopped could the real work begin. Only after a sufficient number of owners were willing to take the steps toward "a better way" could the real work begin.

There was no real consensus about the newsletter. But there is always a need for results. I did what I always do. I don't care about promises; those are so easily broken.  I do care about commitments and that's what I made. The newsletter is a reflection of my commitment to commitment. I have 50 years as an adult of training, education, trials, errors, failures and results to draw upon in this arena. I have learned what works best, what doesn't, and how to get results. I applied all of them here.

For the next four years, the task was to move that boulder, this behemoth of a HOA, in the necessary direction. It was initially slow going, but a tremendous amount of background work had to be done and commencing in the fall of 2010 there was very little time remaining to get visible action. There wasn't a team in place capable of the necessary tasks or capable of making the necessary decisions. Building such a team of volunteers was job one. Of course, most owners were of the opinion "not me." Yet, only after that work and foundation was in place could the energy be expended in a useful way to implement and achieve the plan. In essence, the immediate task was to push that boulder uphill.

After stopping this behemoth, only then could this entity be guided in a controlled manner and in the desired direction. That was another challenge. Simple movement requires constant pressure and constant intervention. But what was really necessary was accelleration. It's a continuous, never ending process. This HOA lost momentum about 1990. It apparently coasted for a decade. The situation in 2008 was a direct consequence.

Achieving momentum required developing sufficiently detailed plans to get that backlog done. In my case, I developed a very specific 5-year plan. Some of it was published here in 2010. Vital portions were presented to the owners and it is my guide for my various presentations to the board(s). I didn't and don't generally call it a "5-year" plan because our society has so little capacity for anything long term. Some owners (too many) demand immediate response, immediate satisfaction and immediate results.

Revealing the Reality of a 5-year Plan
At the annual meeting I used the term " 5-year plan" as the linchpin of my presentation to the owners. A few years ago such an expression was greeted with "Why should we pay for the benefits of future owners?" Yes, we have made progress.

In fact, each year I hone that plan, incorporating what has worked, what has not, new issues or problems that have been uncovered and financial reality. The 5-year plan is therefore a work in progress. But it and the accomplishments are real. This procedure is what I call "continuous improvement."

Momentum requires putting in place many things. First and foremost it requires developing that plan. It requires the identification of problems, establishing priorities, numerous detailed surveys, the preparation of detailed plans, many discussions with the board, management and the contractors and then assembling the teams to do the actual work. It also requires getting the job done. This is not easy in a cooperative venture. Persistence is required. Once the plan is developed it must be uses. Large projects requires years and I consider BLMH to be in actuality one very large project with many smaller components. Achieving momentum is far more difficult in a sometimes belligerent, hostile environment with intransigent individuals. It's all part of the challenge.

To build momentum requires developing consensus and agreement with the board and management. There are compromises to be made. It is necessary to know what is really important and what is not. Momentum is a fragile thing and it can be easily destroyed. To build momentum requires real accomplishment. Paint, sod and mulch alone won't get the job done. Part of the plan is to build value. That requires infrastructure maintenance. In fact, looking at the list one could argue nothing has been added to this HOA. Some of the maintenance initiatives are improvements, most notably the design of the roofs. But that was started in 2002 by others. What I have done has been for the primary purpose of creating stability and some certainty.  I have also avoided waste of precious capital.

This is the partial list of accomplishments using the "plan" since October 1, 2010.
This list was presented to the owners  It is a product of momentum, planning, preparation and perseverance:

"I’ll be brief. It’s been a very difficult four years, but a lot has been accomplished and this Association has moved forward in many ways. The difficulties included increased delinquencies, a steady stream of foreclosures and infrastructure issues. I provided a partial list on the candidates form:

1. 26 roofs replaced
2. 43 drainage improvements
3. 41 driveways sealcoated 
4. 17 garage floors replaced 
5. North portion of Lakecliffe replaced
6. 4 years of street patches
7. 1 foundation lift
8. 5 wingwall foundation repairs underway
9. Engineering analysis of all remaining streets completed
10. 5 brick retaining walls added or to replace rotted timbers
11. 2 new benches with patios 
12. Thames stream partial repair and new bridge and walks installed
13. 2 stream pumps and pits replaced, 3rd scheduled 2014
14. Testing of all water main shutoff valves 4” or larger
15. 1 flood
16. 8+ water main breaks (six in 2013!)
17. Surveyor surveys and drawings of north and south lakes undertaken and completed
18. Dam Study and permitting underway
19. COD issues
20. City council meetings attended and discussions
21. One reserve study prepared
22. A second reserve study reviewed and a third underway
23. 300 pages of reports prepared and submitted
24. 150 spreadsheets prepared
25. Substantially improved newsletter
26. Strengthened delinquency accounting and procedures
27. Improved financial controls; the association has strengthened procedures pertaining to delinquencies, and now has a financial contingency account to deal with water main failures. It also has a “bad debt” account for foreclosures."

I've done exactly what I said I would do and I have fulfilled my obligations as Vice President and Architecture & Maintenance Director of this HOA. I've followed the procedures I published here on the blog. I sometimes did this with absolutely no help and at times with every possible impediment.

There remains more to do. At present I'm creating the latest iteration of my 5-year plan for presentation to the management the board and owners.