Updated -Some Observations About SS and Retiree Well-Being

(See Notes) - Added Medicare Premiums 2016

In any HOA, some of the owners and residents are retirees. The incomes of  retirees are determined by pensions, savings and social security benefits. I'm going to quote a well known financial writer "Social Security wasn't designed to be an investment vehicle for retirees; instead, it had the goal of providing at least a modest supplement to retirees' incomes."

The important word above is "supplement." There was no intention for retirees to live entirely from social security. According to the Social Security Administration "Social Security made up 50 percent or more of the retirement income of 66 percent of Americans age 65 and older in 2009, up from 64 percent in 2008. However, in August 2011 the SS Administration stated that "more than a third of retirees (35 percent) receive 90 percent or more of their income as a monthly payment from the Social Security Administration."

More recent data indicates that Social Security benefits represents 90 percent or more of income for about 44% of all retirees who receive benefits. (2012 data, released 2014). Intended or not, for about nearly half of retirees social security income has become their main source of income.

Currently, about 12.5 % of Americans are retired and receiving SS benefits. The SS Administration estimates that 97% of all Americans aged 60 to 89 will receive such benefits. Furthermore, those benefits are modest. "The average Social Security retirement benefit in June 2015 was $1,335 a month, or a bit over $16,000 a year." For retirees over the age of 65 the median benefit  was $19,276 or  $1,606 per month in 2012. Single retirees (including widows and widowers) over 65 received $1,183 monthly in SS benefits while married retired couples received $2,029.

Using Median data can be deceptive. Here are some additional data using quintiles, The advantage of quintile data is it divides the population into five groups. Those groups range from the lowest 20% income via SS benefits to the highest 20%. This provides a better indicator of the income extremes. Here is same information presented in the paragraph above, but for a one-person beneficiary family. This includes all SS income for all beneficiaries aged 65 or older.

• Lowest Quintile: $791 per month.
• Highest Quintile: $1,483 per month.

It is impossible to determine the specific sources of income for the elderly in any HOA, or their net worth. That information is personal and private. The financial status of retirees is also determined by where they live, their earnings while performing their duties during their working years, and their current health.

But figuring out some of this isn't rocket science. The deterioration in retirement income since 2008 should be a cause for concern for all of us. The financial panic of 2008 wiped out a lot of the retirement saving of those over 55 at the time. Extremely low interest rates on cash savings and low bond returns have also taken a toll on the financial health of all of us.

There is no question some retirees are struggling. "Some" might actually be "many."  One thing to be aware of is the current financial status of all of us. HOA board members do get a glimpse into the financial health of the owners of the HOA. This information occurs as foreclosures and delinquencies.

Future Financial Well Being Issues
Another indicator of future financial well being is the national savings rate. This has steadily declined for about the past 40 years. In 2014 the rate reached was a measly 4.8%. The long term average is 8.4%. According to JPMorgan there are an alarming number of people who are not even interested in saving. "In 2014, only 44% had tried to calculate how much money they would actually need to save for retirement."

So, it is common knowledge that we will live longer, but we are saving less. So where and how will those people live? If they are in HOAs, I will expect they will demand lower fees. After all, it is a fact that couples age 65 today have an astounding 97% chance that at least one of them lives another 10 years and an 89% chance that one experiences their 80-year birthday. Most of those 40 somethings and 50 somethings will certainly live to beyond the age of 80. Will they do well on $1,600 a month in SS benefits? Of course not.

From my October 14 post: 
For anyone who is interested, I've read reports that most probably anyone living on social security income will get the same amount in a check next year as they did last year. This is also true for many workers. No salary or wage increases for many in 2016. I do take the well being of our shareholders into account when looking into budgets and fees. [Posted at the Social Security Website October 15: "No Cost-of-Living Adjustment for 2016"  by  Jim Borland, Assistant Deputy Commissioner, Communications, SSA  - "The CPI has not risen since the last cost-of-living adjustment in 2015. As a result, your SSI benefit rate and, for most people, your Social Security benefit amount will stay the same in 2016."]

Medicare Premiums 2016
Why did the Assistant Deputy Commissioner state that the 2016 benefit amount will stay the same for most people? It is possible that some retirees will see an increase in Medicare Insurance costs. These costs are automatically deducted from their SS amount.

According to USA Today: "Retirees have been bracing for a large increase in Medicare Premiums for 2016. However, the US House of Representatives passed a bipartisan budget deal on Wednesday, October 28. It has yet to go to the Senate.Without the deal, some 30% of 54 million Medicare beneficiaries would have seen Part B premiums jump 52% in 2016, from a base rate $104.90 per month to $159.30. With the proposed budget deal, about 17 million beneficiaries would see their Part B premiums rise 14% instead, to a new base rate of $120 per month in 2016, plus a $3-per-month surcharge."

Notes:
1. Click the following to go to the primary source of SS data for this post:
https://www.ssa.gov/policy/docs/statcomps/income_pop55/index.html

2. Click for USA Today article on Medicare Premium increase for 2016:
USA Today - budget proposal could mean no 52 jump medicare part b premiums

3. Expanded this post.

Higher Learning Commission Report on College of Dupage - Does Not Meet Core Components

The "College" of DuPage has released the following information about the Higher Learning Commission "Advisory Visit" in July, 2015. I've included links at the end of this post.

The HLC issued a 45 page report. Because of the findings of the HLC at the college the HLC "will consider imposing the sanction of Probation" on the college. Here are excerpts from the October 15, 2015 letter from the HLC to the college:

"The Advisory Visit took place on July 21-22, 2015. The team subsequently compiled its findings regarding the College’s compliance with Commission requirements in a report. As is typical with an Advisory Visit, the report makes no recommendation regarding Commission action. With this letter I am providing you with the Advisory Visit Team Report to you along with the options available to the Board in policy based on the findings of the team.

The evaluation team determined that the College does not currently meet Core Component 2.A related to issues of integrity; and Core Component 5.B related to issues of effectiveness of administration and governance. In addition, the evaluation team determined that the College meets Core Components 1.D, 2.C, 3.A, and 4.A. but with concerns.

Because the team has found that one or more Core Components are not met, the Board will consider imposing the sanction of Probation. The Board may also consider the sanction of Notice if the Board concludes that these Core Components are met but with concerns.

The sanction of Probation is disclosed publicly by HLC and indicates that an institution is not in compliance with one or more of the Criteria for Accreditation. An institution that is placed on Probation must host a comprehensive evaluation visit within no more than two years from the date the sanction is imposed to demonstrate that it meets all the Criteria for Accreditation and has remedied all the issues that led to the imposition of the sanction. At the end of the Probation period, HLC’s Board of Trustees determines whether to remove the institution from Probation or withdraw its accredited status. (See Commission policy INST.E.10.010 for more information about sanctions, Show-Cause and related policies.) It is important to note that an institution on Probation remains accredited. The Board, at its discretion, may determine based on the findings of non-compliance that a Show-Cause Order is warranted instead of Probation.

Alternatively, the Board may conclude the College meets these Core Components but is at risk for noncompliance in the future if these issues are not immediately resolved and may impose the lesser sanction of Notice. The Board may also determine that the HLC should continue to monitor the institution but not impose either a sanction or show-cause.

The report of the Advisory Visit team is enclosed for your review. You have the option of providing a response to the report and to this recommendation, which I will need to receive no later than October 29, 2015. In that response, you should identify any errors of fact in the evaluation team report as well as respond to the substantive findings. The Board will consider the team report, its options for action as noted above, and your response at its next meeting in November 2015, or at subsequent follow-up meeting. The action of the Board will be communicated to you following its meeting."

The letter from the HLC also states that "I further notified you that, although the team had the authority to review the College’s compliance with all of the Criteria for Accreditation, it was specifically charged with reviewing the College’s compliance with the following:

• Criterion One, Core Component 1.D, “the institution’s mission demonstrates commitment to the public good,” including but not limited to Core Component 1.D.2, “the institution’s educational responsibilities take primacy over other purposes, such as generating financial returns for investors, contributing to a related or parent organization, or supporting external interests,” with regard to public concerns about whether the College is appropriately dedicated to its mission and demonstrating commitment to its mission by ensuring that educational responsibilities are primary rather than secondary to supporting other interests;
• Criterion Two, Core Component 2.A, “the institution operates with integrity in its financial, academic, personnel, and auxiliary functions; it establishes and follows policies and processes for fair and ethical behavior on the part of its governing board, administration, faculty, and staff,” because it is not clear based on these reports that the College has or follows effective policies and processes to support its operations and decision-making. Because of this concern, I am also asking that the team review Assumed Practice A1, “the institution has a conflict of interest policy that ensures that the governing board and the senior administrative personnel act in the best interest of the institution;” 
• Criterion Two, Core Component 2.C, “the governing board of the institution is sufficiently autonomous to make decisions in the best interest of the institution and to assure its integrity,” including but not limited to Core Component 2.C.3, “the governing board preserves its independence from undue influence on the part of donors, elected officials, ownership interests, or other external parties when such influence would not be in the best interest of the institution,” because of concerns about apparent conflicts of interest and self-dealing. These allegations raise questions regarding whether the Board has sufficient autonomy to act outside the agendas of individual Board members and consistently acts in the interest of College constituents or whether the Board is influenced by other interests; 
• Criterion Three, Core Component 3.A, “the institution’s degree programs are appropriate to higher education,” due to information regarding the change in assigned credit hours for a program without a concomitant change in instructional or educational program requirements; 
• Criterion Four, Core Component 4.A, “the institution demonstrates responsibility for the quality of its educational programs,” related to the questions raised regarding the Suburban Law Enforcement Academy, the changes to its program, and resulting changes to College data points such as enrollment of students based on full-time equivalency; and
• Criterion Five, Core Component 5.B, “the institution’s governance and administrative structures promote effective leadership and support collaborative processes that enable the institution to fulfill its mission,” and specifically Core Component 5.B.1, “the governing board is knowledgeable about the institution; it provides oversight of the institution’s financial and academic policies and practices and meets its legal and fiduciary responsibilities,” because it is not clear that the Board and administration have provided effective leadership."

Letter over at the Edgar County Watchdogs:
College-of-DuPage-Letter-10-15-15-FINAL.pdf


Report over at the Edgar County Watchdogs:
COD-Team-Report-Final-101515.pdf

Home of Edgar County Watchdogs:
http://edgarcountywatchdogs.com/

(Community) College of DuPage Builds New Road

The Community College of DuPage has built a new road which was described as "proposed." To my knowledge this was not discussed during announced and open zoning board meetings. That was the approach agreed with taxpayers and the county Zoning Board for all new construction on the campus.

The road is in the left of the aerial photo above. There has been a lot of construction on the Glen Ellyn campus since 2012. The new road on the campus required a large curb cut into Fawell/22nd Street and other modifications to the street. This obviously required the approval of the county and /or the Village of Glen Ellyn. One simply can't modify a public road. That approval was apparently given in 2013-2014. I know a lot of people drove on Fawell (22nd street) and saw the work going on. It couldn't be missed. To my knowledge no one asked how this was occurring. I didn't bother because I knew that the politics involved would be a real time waster on my part. The Breuder Brigade and its small army of communications staffers would thwart any attempt on my part. The county apparently preferred to look the other way. I do want to state that this is a wonderful example of how government at all levels is operating solely for special interests. There is absolutely no doubt in my mind that this publicly funded college, the "Community" College of DuPage is simply another special interest which has been operating for its own purpose. It remains to be seen if the college can return to its core mission. And at what cost to the taxpayers and the students.

This is a photo of the new entry road into the college. The buildings in the background are in Wheaton. The road was build along residential buildings and replaces grassy fields. This changes further the character of this residential neighborhood.

So how did this street happen? During the most recent public zoning hearings this new road was described as "proposed." It was never explicitly discussed and approved before residents. It runs along the Village boundary with Wheaton which is backed by homes and apartments. Such a road would require cuts to the curbs on Fawell/22nd street. It also required the removal of grassy medians. One should ask "How could these cuts occur without some approval?"

Here's the earlier "Facilities Master Plan" that was published by the college. This was used in an attempt to get DuPage County resident buy-in for the schemes of the college:

Here is a portion of the "Planned Development Site Plan" as provided by the college during the zoning hearings. This plan is "Revised June 18, 2012". The new road at the far left was connecting to item "A" which was defined as a "new parking lot" in the list of "proposed". 

So how did this road get built?  Here is one explanation. On July 17, 2013 I posted about an article in the Daily Herald. The article was in the Herald on July 14. The title was "A new day for once-feuding Glen Ellyn and COD?"

In the article there was a smiling photo of Glen Ellyn Village President Alex Demos. The article stated "Glen Ellyn's new village president says it's a new day for the village and College of DuPage -- two governmental entities that had a protracted and expensive legal dispute over jurisdictional matters for more than two years." Here is a published photo of Village President Alex Demos. Why is he smiling? Could it be that he personally worked to see that the curb cuts for the new road were approved by the village? All as part of the "new day." One wonders what other deals were struck with the Breuder Brigade. 

:

Lakecliffe and Salisbury Street Construction Update

October 16, 2:30pm; Major work is complete. Stripping, cleanup and misc. landscaping remains.

Here's a link directly to the latest and updated post:

http://briarcliffelakes.blogspot.com/2015/10/lakecliffe-reconstruction-is-proceeding.html

Some observations from the HOA budgeting process

Doing the annual budget in our HOA is always difficult. I wish more owners would attend the budget session but they don't. This year, fewer than 1% attended. We spent about 2 hours discussing the budget for 2016. But only three people in this HOA know that [other than board members, who are also owners.].

The board members take differing positions. I look at it as a balancing act. Balance projected and identified costs for 2016 with anticipated income via fees. Look at reserves very closely for the next 10 years. Take into consideration the possible financial well being and other costs for our 336 owners. Then mix this stew together and Voila' we can arrive at a possible outcome.

Other board members take very different views. Some operate from fear, others don't want to cater to the lowest common denominator. Others sit quietly and play "follow the leader." Frankly, I'm not satisfied with that.

I'm a very pragmatic guy. I know what it costs this HOA for each foreclosure and I do think we have an obligation to the shareholders. It is a balancing act.

For anyone who is interested, I've read reports that most probably anyone living on social security income will get the same amount in a check next year as they did last year. This is also true for many workers. No salary or wage increases for many in 2016. I do take the well being of our shareholders into account when looking into budgets and fees. [Posted at the Social Security Website October 15: "No Cost-of-Living Adjustment for 2016"  by  Jim Borland, Assistant Deputy Commissioner, Communications, SSA  - "The CPI has not risen since the last cost-of-living adjustment in 2015. As a result, your SSI benefit rate and, for most people, your Social Security benefit amount will stay the same in 2016."]

Unfortunately, HOA costs do increase from year to year. This shows up in contracts as well as utility bills. For owners, the problem might be more direct. In recent years health care has become an ever increasing burden and there is no indication that Medicare payments by retirees will be the same in 2016 as they were in 2015. Obamacare had become for many an insurance nightmare.

All I can say is, I'm aware of the bigger picture and I do take that into consideration when planning any finances for 2016.

Budget Meeting 2015

Last night was the annual budget meeting. This was an open meeting for all owners to attend. It is, in fact, one of two most important meetings for this HOA. The annual meeting is the other. The annual meeting can and did include various "State of the HOA" reports by board members. The budgeting meeting lays out the entire budgeting process with board discussion and owner observation. There is an opportunity for "Homeowner Comments." The board expects the shareholders of the HOA to provide constructive comments.

Why is this annual budgeting process so important? It will determine not only the fees this year, but also will impact future years. The board knows this and it and management has spent some weeks doing the preparatory work.

Last night, any owner who was present was made fully aware of the following budgeting plans, the projects and methods the board is considering in order to accomplish the next ten years here at BLMH. Details of the following were openly discussed. It was part of a 3-1/2 hour meeting. Now, how much of this do you think a board can compress into 3 pages of a newsletter, along with all of the other business? Answer: Not much. A letter will provide some additional explanation, but it is impossible to compress a 3-1/2 hour meeting into two pages. Here are the core budget discussion items:

1. Review of 2015 budgeting and costs; How well did the board do last year and what did they miss? What changed? 
2. Operations and Maintenance projections, by category for 2016.
3. Projected Total Reserve Expenses 2016-2025.
4. Projected expenditures for Streets, curbs, catch basins, 2016-2025. 
5. Projected expenditures for Unit Patios and Decks, 2016-2025.
6. Projected expenditures for Common Area Decks, Gazebo, Pedestrian Bridges , 2016-2025.
7. Projected expenditures for Concrete Ponds, Creeks, Walks, 2016-2025. 
8. Projected expenditures for Drainage, Landscaping and Trees, 2016-2025.
9. Projected expenditures for completing the Roofs, 2016-2025.
10. Projected expenditures for Exterior Lighting, 2016-2025. 
11. Projected expenditures for Water Mains and Related Replacements, 2016-2025.
12. Projected expenditures for Interior Carpeting, Intercoms, Lighting, Mailboxes, Entry Doors, 2016-2025.
13. Projected expenditures for Garage Floors, 2016-2025.

It is only after a thorough review of the actual and projected 2015 expenditures for the property that it is possible to discuss the budget for 2016. This is far more complex than anyone's home budget. Fees are determined by looking at real costs, determining the cause of any 2015 "misses", making adjustments for next year knowing what we know about water rate, electricity, contract and other costs. To this is added projections for capital expenditures. Sounds simple, doesn't it? Well, when one compresses weeks of work and a three hour meeting into three sentences, of course it will sound simple. However, this need not be more difficult than it actually is.

It has been a priority to see that the board is aware and informed. We have been thoroughly discussing the issues. We did consider the opinions and concerns of each board member last night. Owners will get a newsletter, but the articles are merely the tip of the iceberg. Many owners forget that board members are owners, too. Many owners also decide to ignore the knowledge and insights of the board. Here is a wake up call: Who is most aware of the situation in a HOA? An owner who lived here for decades and never attends a single meeting, or a board member? One would think the answer is obvious, but some of the oblivious think they are more informed than board members. I do wonder where they get their information so they can come to this conclusion. It certainly wasn't by poring over and reviewing about a thousand pages of reports ad studies in the past year, or building or reviewing tens of thousands of cells in multiple spreadsheets.

So how many owners actually attended the meeting? What would you think would be the answer to that question? Here is an HOA in which only a few years ago some (a very few) owners made complaints about transparency and so on. So the meetings which were announced, were moved to larger facilities to accommodate the alleged interested owners.

So, how many did, in fact, show up last night? Answer: Four. One owner, who came on a personal matter left a few minutes into the meeting. So Three owners remained to observe the budgeting discussions. That's fewer than 1% of the HOA shareholders. I guess the 99.1% had other things to deal with.

Will Owner Fees Increase? 
That's apparently all that owners in our HOA are interested in knowing. "Please, spare me the details or the issues, or the concerns."

When I am asked the critical question, I have a stock answer. Fees need to be adjusted for inflation. Inflation, as we all know is the cost of all goods and services. This HOA purchases electricity, water, and everything from snow removal to landscaping services. Reserves are also annually adjusted for projected inflation.

So, the simple answer is that from year to year, we can and should expect fee increases.

In the budgeting area, HOA boards attempt to predict, with expert opinion, the costs next year as well as for the next ten years, and beyond. Future costs require inflation adjustments when we are planning.

So, what do you think? Will costs increase? Should HOA budgets increase to cover costs which increase over time, just as occurs with our personal water bills, insurance and so on?

Budgeting 2016 - Oh, Oh!

It's that time of year again for the annual budget meeting. This is one of the more difficult tasks faced by boards. But this task should not be more difficult than necessary. In fact, it is my opinion that boards frequently get caught up in emotional issues and beliefs. These then become translated into positions. Rational discourse can be difficult. It happened last year and it will happen again on Thursday.

Why is this? IMHO, some boards fail to understand the budgeting process. Large numbers can be scary. We may fall back on simplistic arguments "Fees must always increase."

It is essential to establish budgeting priorities, work with management and do our fiduciary duty while operating in accordance with the Illinois Condominium Act. Even doing this, boards can stumble. Some boards were "burned" by oversights. Some members of some boards became a reaction. Others remained oblivious. Some walked when it got difficult.

This HOA apparently ignored the "elephant in the room" for decades. What is that? It's the reserves. Once called a "replacement fund" it was not the main event in the budgeting process for decades. Then in 2002 the board made a momentous decision. It decided to embark on a series of projects which would ultimately costs more than $3,000,0000. Now, that's not necessarily a problem. But it is if a HOA has falling reserve balances and less than $400,000 accumulated reserves, and collects far less than the required amount each year.

How much is $3,000,000? It's $300,000 each year for 10 years. Moving from $180,000 annual reserve collection to more than $300,000 each year is a huge change. How much? More than $30 each month for the average owner. Then add the other requirements for reserves, and requirements for increases to Operations & Maintenance and fees could increase by more than $50 a month. And they did.

A board member with decades of experience and fond of quips would use the expression "follow the money" from time to time. That's what I've been doing since about 2002.

Boards didn't do a good job of communicating the problem to owners. In fact, it remains unclear to me if the boards and presidents fully understood the nature of the problem. Where was that money to go? To new roofs, new driveways and drainage improvements necessary because of the new downspout configurations. This is simple arithmetic. Multiply the cost of one by 44 and add inflation. Voila'.

It was a very, very difficult ten years and today we are not yet complete. Why? Because we've been saving money for ten years while pushing back the replacement of some roofs, etc. So the roof in the building in which I reside is approaching 23 years of age. Not a good thing for a roof designed with a life of 18-20 years.

So What is the Problem?
The chart above shows the possible condition of reserves, looking ahead for a decade. Three board members (Treasurer, Maintenance and Projects/VP) have been working on this for over a month. In fact it was discussed by the entire board during the August meeting.

The chart which is an example and not "cast in stone" would indicate this HOA is doing a good job dealing with the "elephant in the room." It is amazing the transformation that has occurred since 2008. Remember, we have also replaced four sections of water mains and the chart also reflects the early replacement of Lakecliffe and other cul-de-sac street projects.

However, old beliefs are difficult to manage.

Budgeting can be complicated by the fact that boards should attempt to project all of the O&M costs for an entire year and not collect more than necessary. Here at BLMH we are hamstrung by the fact that our budgeting process occurs in October, long before all of the bill have come in and have been paid. In fact, to keep within annual O&M budgets boards may from time to time push current bills into the next year. Not a problem, unless someone doesn't adjust next year's budget to deal with this. From time to time such land mines have been left for new boards. I call that " throwing the new board under the bus." Can't happen? Sorry here at BLMH "been there done that."

Owners don't get very involved here. But from time to time they'll fire a board. Happened once in 2008. Owners were fed up with fee increases which were not well understood by the owner body and not explained by the boards. Some long time board members didn't appreciate being executed or the lack of confidence.

Knowing all of the above, it is easy to understand why some boards or board members might be a bit edgy about the budgeting process.

Do Fees Have to Increase Each Year?
That's one of the long held beliefs. In fact, what needs to occur each year is budgets need to be adjusted for current reality using what is known. This includes Operations, Maintenance and Reserves. Then fees are calculated. Boards are also responsible to the shareholders and are required to uphold the Illinois Condominium Act.

However, using "beliefs" some boards may count the pennies and then arbitrarily increase fees. The amount may be between 3 and 5 percent annually. In their defense, this is also an attempt to smooth budgets from year to year. But is it a backwards approach and in my opinion not proper.

In fact, boards really must focus on 10 year projections as well as annual O&M expenses. Budgeting can be complicated by the fact that boards should attempt to project all of the O&M costs for an entire year and not collect more than necessary. Here at BLMH we are hamstrung by the fact that our budgeting process occurs in October, long before all of the bill have come in and have been paid.

In any one year it is possible that reserves may fall behind, or actual O&M expenditures may increase beyond expectations. Is this a serious problem? No, it is not. Boards can compensate in the next year, can do short term (less than 12 month) borrowings against reserves to handle bills that come in above budgets. Boards can then adjust in the next year.  Simple, really.

So why the difficulty? It is a historical perspective. A few years ago this HOA had about $180,000 in reserves, had maintenance requirements piling up, didn't have an independent reserve study and frankly didn't have a plan.

Today we live in a very different reality. Good Job! Now let's act in accordance with that reality. But old habits are difficult to break.

I find this somewhat amusing. When I was attempting to join the board, there was a populist refrain "Don't elect Norm, your fees will go up!" Fear is a powerful motivator. Of course, no one runs for a board position for the purpose of raising fees? Or do we? Of course, no one would get elected if they published in the bio "I want to raise your fees by 10% a year." But at times I do wonder. Actions speak louder than words. I hope owners are watching. Very few attended last year's budget meeting. They missed some interesting and contentious discussions.


Notes:
1. Updated to correct description of one chart item.
2. We have 4 small residential buildings. The remainder are double the size of the small.  I use 42 as an average.

Lakecliffe Reconstruction is Proceeding - Update

Updates Friday, October 16 

2:30pm - Workers are removing construction vehicles. Major work is complete. Stripping, cleanup and misc. landscaping remains. Residents should read the construction signs and follow directions.

7:30am - Wheaton's trash and recycling contractor was on the property at 6:07am to clear the way for the asphalt trucks. This was as pre-arranged by the association. The street was prepared at 7:15am and the first asphalt truck arrived at 7:33am. Work is beginning at Salisbury which is a more complex paving area. It will then proceed toward Briarcliffe Blvd.

Updates Thursday, October 15 

5:00pm - Driveways are complete, all barricades are down. Notices are posted in the building lobbies, all 44 of them. Bottom line is, we a moving to final street asphalt tomorrow. Equipment has been positioned and this will be a period of intense activity.

10:00am photos - Work on driveways and parking is proceeding:

Everyone is watching the weather radar as the conditions are overcast. Rain would not be welcome at this time:

7:00am/8:00am:
Yesterday early afternoon management did post update notices in the entry foyers of buildings directly impacted. The HOA website was also updated.  Work is proceeding on the driveways.

Update Wednesday, October 14. 10:30am
Well, things did slow down but work it about to resume. Completion of driveways will be next. Then the final street work. The interruption and delay with ComEd has been resolved, I understand. We are all eager for this to be completed. Look for postings in the lobby of your building, and check the official HOA website from time to time. At this point, it is in the hands of the professionals.

Update Saturday, October 10, 2015. Photos 10:30am
Work is progressing well and will continue next week. Multiple notices have been posted advising residents of adjustments to trash and recycling pickup, street parking restrictions and construction updates.

It was a good week. Weather cooperated and the contractor, our management, maintenance and several board members worked diligently to make this as rapid, trouble free project as is possible within reasonable budgets. Additional communication efforts were also made.

Next week should be the conclusion. Of course, this will be determined by weather and breakdowns. Breakdowns? What's that?  For example, with the construction in the area cement is in short supply. Cement is a vital ingredient in concrete which is used for curbs and walks. There was a power outage (two, actually) and this also delayed the work while ComEd researched the problem.

Sample of Photos, October 9, 2015

Update Wednesday October 7, 2015, Photo at 3:46pm
Two notices were posted in the entrance of each building in the construction zone and on every cul-de-sac that connects to Lakecliffe.  One is on the bulletin board and the second is taped to the glass so anyone inside can see it. Additional notices were added to each of the construction signs. This is under the request of the engineer and the contractor. No parking on New Asphalt. No kidding. Towing is probable.

Update Wednesday October 7, 2015, Photo at 8:33am
The binder course is being laid. This is one step of this multi-step process. Another layer of asphalt will be laid in a day or a few.  This new surface cannot be parked on tonight. Notices will be posted in the areas with the new street or the connecting cul-de-sacs. Large signs will also be posted.

Original Post Monday October 5, 2015
The view early this morning.

Board Vacancies - The Problem

As I stated in the previous post, our HOA has had great difficulty filling board positions in recent years.

This may simply be the way it is in HOA volunteer organizations in which some owners pretend they live in an apartment complex while others pretend it is a retirement village.

Here are some observations about boards since I've been living in this HOA. There has been great difficulty getting anyone on the board for more than a term or two. There has been an unequal distribution of tasks. These have been determined by director's title and the historical precedent of picking and choosing jobs. When the list didn't fit a board member's desire, boards sometimes created a position that was palatable to the board member (communications director, webmaster, etc.). Other factors have included skills, tools unavailable (computer, printer, email, etc.), health and willingness to put in the necessary time. Age is certainly a factor, because as weage, we become physically less able. We may also face cognitive decline. These conditions are normal and natural. It would probably be best for the HOA if our board was comprised of individuals younger than 60. That's a generality.

Time requirements is another problem. It has been noted by our most recent president that I've put in between 700 and 500 hours per year "serving" this community. I sometimes cringe when that number is mentioned. The larger problem is the owners who might consider a position on the board. Who in their right mind wants to volunteer 500 hours annually for a HOA? Some owners might think that this is the required amount. It isn't. I've had to do this because 1) This HOA was in serious trouble a few years ago, 2) The unequal distribution of tasks made it necessary and 3) Skill required to get the job done and I do have the requisite skills.

Board turnover after a term or two is also a problem. It takes a while to come up to speed and because most owners don't regularly attend HOA meetings there is little preparation or foreknowledge prior to being elected. So it becomes "on the job" training. With all of the cycles that a larger HOA must go through, some tasks are only done once per year. It may take two or three years to get into the groove, as it were. But board members frequently leave at the end of one or two terms. Some run.

At the opposite side of the spectrum, some board members may seem to set longevity records. But that is the exception.

In fact, for the past 5 years, more and more tasks have been pushed to one or two board members Everything from supporting the enforcement of Rules and Regulations to decisions about fees (delinquencies), cash flow, attending City, COD and Neighborhood meetings, preparing the newsletter, doing reserve study tasks, performing all manner of surveys and so on.

I suspect some boards have enjoyed this as it allowed some members to avoid the enmity of unhappy or delinquent owners. That's what happens when a board is fractured and unpopular duties are performed by one or two. The others will have the opportunity to duck, cover, and blame it all on "Nasty Norm" or whomever. The one or two who are most visible become the target of the dissatisfied owners. Other owners aren't stupid. They hear or observe some of this and it makes it more difficult to enroll board members. We might as well hand out targets for them to paint on their backs and signs to carry which declare "I'm a board member and that makes me a leper and unpopular." There is the example of the individual who attended a club event and was asked who she/he was. When it was discovered she/he was the spouse of a board member, people immediately lost interest and some walked away.

BLMH, being the behemoth it is, has a full time management firm, but not full time on-site managers. Boards over many years have willingly or unwillingly made a variety of decisions to "save money." For example, this has occurred as in-house street design and project management, and numerous project delays, sometimes for no reason other than a lack of funds or board "man or woman power." I know of a former board member who stated that he/she frequently picked up trash on the property. And so on. This approach over decades created not only the streets we have but also the image of the board and the expectations of owners. Some owners think we are incompetents and janitors. Which is so? I leave it to the reader to decide.

Because boards are comprised of volunteers and there is sometimes desperation to fill a position, skill may be an afterthought. A criteria might be "How much or how little damage will she/he do on the board?" After all, all board members vote, and some my be inclined to discuss sensitive issues outside the HOA meetings with owners. But boards need to fill positions, and what was needed first and foremost was bodies. For the politicos, getting a compliant body on the board is a win, as this is someone who can be manipulated to vote in a specific direction.

As for bodies on the dias, in some years, that's about all the owners got on the dias. Boards are so overloaded that it is common that anyone who shows up will have a position.

Being comprised of volunteers, the boards may face an impossible task. Some volunteers have a personal agenda and the easiest way to get that personal want realized may be to get on the board. Some want power and access to money decisions. A few might have an overwhelming interest in damage control and protecting their unit values. A few may also be on the board to keep others off; there are a limited number of positions available and each board member does vote. Others simply want to be popular. After all, these are my "friends" has been the occasional refrain when discussing the situation of owners who are not board members. For that reason, upholding rules can be very difficult. Most owners expect the board to do the dirty work, and some board members have found this to be impossible for them. When this occurs, boards fail to fulfill their duties and more and more increasingly difficult or unpleasant tasks will fall to the one or two who might be willing to do them. I've had a lot of unpopular tasks pushed my way. It reminds me of that old Wheat Chex commercial "Give it to Mikey" said the kids. Some boards are very undermining and some board members relish throwing others "under the bus" as long as it isn't the favorite contractors, etc. The rest of us are road kill! No kidding, it is immaterial if it is to be another board member, an owner, a manager or a less than favorite contractor. At some point we may each become road kill for such a director.

In recent years, the number of personal attacks by owners have increased and I am not the only board member who has been threatened. That is probably the "dirty secret" about BLMH. However, this HOA is not alone in this. Professional managers have informed me of brawls at other HOAs.

Some of this may be inevitable. Real estate professionals may not vet or inform potential owners of their duties and responsibilities as HOA owners. It's all about the sale and the commission. Condos are just like homes, aren't they? Or perhaps they are believed to be apartments which will appreciate over time and provide a nice windfall to the owner. Some owners discover after purchase the reality of fees, what living in such a community involves, the fact that the reserves are not a slush fund for owner exploitation, the HOA isn't a social club or a piggy bank or get rich scheme. The last two hit home in 2008. After the cold shower, some owners are bitter and feel that others betrayed them. The alleged culprits include the government, banks, real estate professionals, boards, etc.

For the most part, bitter owners have no one to lash out at but the management and the board, and some do.

There are consequences. Owner nastiness, board member nastiness, lack of support by other owners (beyond an "attaboy") have all contributed to produce our boards. These are sometimes not fully staffed, or we have the same people coming back year after year after year. The board is getting older, and older and older. Why? It's simple, No one wants to do this job. Everyone demands results. But some one else should uphold the rules, because "these are my friends" or I won't or can't. Some owners don't have the stomach to deal with nasty owners and some owners are unfit to be fiduciaries.

As I have repeatedly stated, owners get the boards they elect and deserve. From time to time a board will appoint someone to a vacancy but that appointment only occurs because owners couldn't bother to elect someone.  Once in a while a champion may appear, but that is rare. Most people prefer to put their skills to work making money, in a hobby, or making a difference in a larger way. HOAs are supposed to be a place of "community" living in which the "community" participates.  But many HOAs are not.

The miscreants are waiting in the wings. That's the way it is in many HOAs today.