Lakecliffe Blvd - Downgraded to "Planned 2015"

The masthead and a recent post include a diagram of the street project. Readers may have noticed that I tagged a portion of Lakecliffe Blvd as "Planned 2015." The use of "planned" was deliberate. The project has been delayed and the board has yet to provide full approval to proceed. We've been talking about this particular project since 2014. This section of this street is planned for 2015. So why is the schedule currently deteriorating more rapidly than the street?  On June I concluded that this project was in jeopardy and downgraded this project to only "planned." At this point there is a possibility it may not be completed in 2015.

How can I say this? It's my opinion that if a major project lacks a definitive schedule by July 15 of any current year that it will be increasingly difficult and more likely that it won't be completed in the current calendar year or for the budgeted price. It may also delay other, subsequent or conjoined projects.  That's the situation for the repaving of the second portion of Lakecliffe. Prior to the July meeting I advised the board and management via email that I had concerns that this street work would be further delayed. During the July meeting I concluded that urgency was lacking. In a few days it will be August, we remain in formulation and this cannot change until August 13, the next HOA meeting. There are no guarantees the board will move this forward in August. Delays will and do require contractors and the board members who are involved in this project to jump through hoops. That may be part of a plan. At this point I'd say, "Don't expect me or anyone else to jump through hoops."

What is occurring on Lakecliffe is nothing new. In fact, it was once remarked "We've been doing things this way since long before you arrived [and it worked fine]." In private I have disagreed and in this blog I've published only a small portion of what is fit to print and an alternative view.

It may simply be that a decision has been made that we've spent enough this year. We do discuss cash flow and we remain far ahead of the 2011 reserve balance requirement and the minimums set by the board two years ago. That is not an excuse to spend money. With water main failures each year, it is merely common sense to tackle mains crossing under streets. A street should last 35 years. A water main break under a street would also be terribly disruptive to residents. With reluctance on the part of some board members, the mains were replaced.

How are we doing with reserves? In 2016 our reserve balance should be about $1,500,000 higher than projected in 2011. The formal plan indicates that reserves should be $66,834 at the end of the 2016. We'll probably be at about $1,500,000 after Lakecliffe and with only nine roofs remaining in that project. The plan also indicates that our fees should be much higher than they currently are, with a collection of $488,000 in 2015 and $508,000 in 2016.

Our actual reserve collection in 2015 will be $376,000 which leaves $333 more in the pocket of each owner in 2015. That's about $28 less each month in fees. That is a lot of money.

When the board decided not to proceed with certain projects and would not set a schedule for them, I took the position we shouldn't collect money we have no intention of spending according to the plan. I've published charts on this in the past. In other words, a re-evaluation of projects by recent boards required a re-evaluation of reserve requirements. If we are going to delay certain projects then there is no need for excessive funding. In fact, this spring I initiated bids for stream repairs, which is one of those languishing areas at BLMH. (One is in good condition, one fair and one poor). It is probable this will require 5 years or more to do, and we do have some decks sinking into the streams as wooden piles rot. Boards prior to the ROCs decided to ignore these problems and probably had to once they realized what they had committed this HOA to when they began the roofing project in 2002. The ROCs, in an attempt to keep fees "as low as possible" also chose to ignore. How long can we delay? As long as boards roll the dice.

Why is scheduling for complex projects so difficult? We did a street last year. So what's the problem this year? This is a more complex project and it will be more costly. That was probably a trigger. We spent a lot last year and now we are going to spend more! Then we replaced water mains. That was probably the straw that broke the camel's back.

Let's say it is about a clash of ideals. Yes, you can take a horse to water but you can't force him or her to drink. I stated that the north section of Lakecliffe replacement in 2014 was a demonstration project. We want a street that can achieve a normal life, not fail within 10 years requiring that we tear up the HOA yet again. There is also the residual charge from the failure to increase fees yet again. But if this HOA won't come up with a real plan 5-10 years with specifics about capital projects then I have told the board publicly that I will not support reserve fee increases. In other words, I see no reason to penalize or punish owners for no purpose. Our fees really are high enough.

As I've written in earlier posts since 2009, planning at BLMH is sequential and at times haphazard; things may occur as a consequence of "no other choice." In colloquial parlance, I should state it this way. Moving forward requires that all board members agree, and some don't or do so unwillingly. Some still believe our fees should be higher than they are. In other words, a delay will keep reserves higher than they would otherwise be, as the money will not be spent.   The ownership, little involved, is usually oblivious of the politics.

The concept called "fast track" doesn't exist in the BLMH universe. We know what "emergencies" are; all other projects fall into the "eventual" category. Why is this HOA so able to deal with "emergencies?" One reason and perhaps the most important is because an emergency sidesteps the board. Management is free to act and to make decisions and is supported by a few. So the bureaucracy is side stepped and boards can justify the spending as "We had no choice in the matter."

Life cycle analysis is another foreign concept. I've observed that boards simply review the cost. That's one of three reasons our streets failed prematurely. There remains some resistance to spending more money to build something that will provide good service for two or three times longer. My point is, a street that costs $150,000 and is designed for 20-30 years is a bargain compared to a street that costs $110,000 and fails in less than 10 years.

Maintenance is also automatic but "projects" are not. We'll do annual maintenance because management and our maintenance contractor are on top of that and made plans during the previous winter. There doesn't seem to be a problem or any hesitation to spend maintenance dollars. Reserves are an entirely different matter. That is a historical perspective. Boards for decades did a "good" job planning maintenance budgets. Most get an "F" for future planning because they ignored or glossed over the reality of reserves, and began a $1,900,000 project without telling owners about the financial consequences (fees) which would be required by this board decision. Maintenance was and may remain the emphasis. Reserves, once called the "Replacement Fund" were allowed to languish. Possibly with good reason because after adjusting fees to meet reserve requirements the allocation increased from a low of 5% of fees to 25% to 30% of our fees. Our reserve contribution is the major source of our increase in fees and the financial pain experienced by some owners.

If we immediately removed reserve contributions from owner's fees that would immediately reduce fees by a substantial amount. That's the way it was for a decade or more and dealing with long term planning is a problem for most boards. Oddly, these same boards can, did and do worry about total destruction of the infrastructure. Go figure? But that's part of the "Look before you leap" and "He who hesitates is lost" mentality. We can always pull up some argument.

Annual maintenance is akin to survival planning. As some of us are operating merely from survival, it is no surprise to me that long term project planning is so difficult. We take steps to "maintain" the property. A long term president once remarked to me "You can slap paint on a pig, but it is still a pig." From this remark, I can understand why it is always like pulling teeth. There is this foundational attitude, historical ambivalence or hostility to reserves, a reluctance to spend money until it can't be avoided and the opinion that things worked well before.

Planning is also hampered by a lack of communications. Not all board members use email (according to management); that is apparently true, because some board members never respond to an email. I can only conclude that is their choice, because some of us do have Facebook pages, etc. Yes, there is also a need to discuss these things in an open forum. But then, we've been discussing this particular project since 2014 and each month in 2015.

A variety of board members have been avoiding the street project since 2007. In such an environment projects may be delayed, deferred, or drag on and on and on, waiting for someone to point out the elephant in the room. That too is nothing new at BLMH. I'm sure a few other HOAs have this problem. I've been told ours is well run. That makes me wonder about just what a poorly run HOA must be like.

Are there legitimate reasons from my urgency this year? A deteriorating street, potential water main issues, a need to hold pricing (materials costs are escalating and the board was advised of this in January-February of this year), a domino effect upon other projects (driveways, drainage work, roofs, exterior work and painting, etc.) and sufficient reserve funds. Need I go on?

What's the current status of the Lakecliffe street project and how did we get here? Let's take a look at the general sequence of events for this particular project in 2015:

• General Board discussion occurred during a meeting. I'll call this Meeting #1: Is this project to occur in 2015? Are we to go for engineering support and what is the scope of the project? This question is posed: Should we consider replacing the water mains under this street? I declined in 2014 to perform any kind of engineering for this HOA (I did the same in 2009 before running for the board and have done so consistently). Reluctantly for a few it was decided to spend some money on a proper engineer. 
• Further discussion at a later HOA meeting, which I'll call Meeting #2. Board agrees upon the segment of Lakecliffe and to approach an engineer and get an engineering bid for drawings and specifications.
• Several meetings later. Review engineering drawings. The board approves proceeding for street contract bids. Again discuss concerns about water mains under Lakecliffe. Argument: isn't this the appropriate time to do this? Board is hesitant and reluctantly agrees to get proposal for replacement of water mains. (Reluctance = a lack of enthusiasm). 
• At a subsequent meeting, with a bid in hand, the board approves work to replace mains under the street at three locations. This work is then rushed and completed in a matter of weeks so the street work can commence ASAP. I was there for the entire project as was the Maintenance Director and I was the "eyes and ears" for this HOA. I took samples and photos of the mains removed and provided a verbal report, a sample of the removed main to the board during two successive HOA meetings. 
• At meetings #5 & 6, discuss condition of Salisbury after replacement of water mains and installation of new fire hydrant and valves. Advise board of engineer's opinion about Salisbury repaving; the engineer was brought on site by management and at the request of the Architectural Director (me) while the main replacement was underway to review the condition of Salisbury. "Destruction" of this cul-de-sac was more extensive than expected. Board approves having engineer prepare drawings for replacement of Salisbury Court. Engineer's budget analysis is discussed, but no approval to direct management to proceed by the board. So, the project triggers are not pulled. As a consequence, project is again delayed. 
• Status as of July 23: Waiting for the next board meeting to decide to proceed or to abandon this project for 2015. 

So that brings us to today. We have engineering drawings for Lakecliffe Blvd, and a contractor, but no overall approval to proceed. That's the way it is. Eventually we'll get all our ducks in a row and the work will proceed. At this time, am I optimistic about the 2015 schedule? No, I am not. Am I frustrated or disappointed? Yes. More often than not, these things drag on. For example, replacing the bridge and patio over at the Thames waterfall; that's taken three years for partial completion, but the dangerous stuff was all taken care of. At this point, I'd like the stream work to be done before a deck because improved access means lower cost. So I have reluctantly decided to delay. I also told the board after three designs that weren't approved that I would not take the time to produce a fourth. More often than not, this is the course of events in this HOA.

Sometimes there are surprises. One thing discussed during the July meeting was a complete reversal by several on the board on an issue that has been a disappointment to me for three years. I was astounded. Several years of stonewalling suddenly vanished. But it took a slide show by me in June to get the point across and allow some board members to become aware of reality. Or perhaps the lawyers are now involved? Can't say. More on this amazing turn of events in a later post.