As discussed in my article COOKED BOOKS: How to Hide HOA Legal Expenses With Cash Accounting, the POHOA Board held back posting legal expenses until the 10/31/23 report. This report, of course, was posted at 213pm on 11/14/23 – Just 4 hours before the Regular Board Meeting where the 2024 Annual Budget was approved.
Even if anyone noticed, President Ballweber rebuked multiple homeowners who attempted to speak during the budget discussion. Those present were not allowed to see the budget they were voting upon. And, the only numbers that were discussed were difficult to translate into a thorough analysis of the 2023 budget.
The highlights of Treasurer Jones comments were:
- Overspending on the Fence Repairs Budget by over 250%*
- He was limited in raising assessments more than the “Denver CPI of 4.6%”
- The new annual assessment would be $699
- He estimated a profit of $15,000 for 2023
- In spite of raising assessments $2700 in 2024, the estimated profit would be lowered to $9,500
*President Ballweber jumped on Treasurer Jones characterization of “overspending” the 2023 Fence Repair budget, and wanted it known to the audience that there was nothing the Board could do because the fence broke. The problem here is that the fence has broken EVERY year, and we ALWAYS exceed our budget for this line item. Meanwhile, Reserves collected through Special Assessment 2018-2020 appear to have vanished, so instead of these repairs coming from those reserves, somehow they are booked as an expense.
The explanation from former Treasurer Hutchinson is that because the fence is connected to the ground, it is an expense. While she is likely a competent accounted versed in generally accepted accounting principals, the layperson’s explanation leaves many homeowners wondering what the heck this means. We’ve been told our Reserves are “gone” after spending just $32k in 2021 (at the height of lumber prices), while the total amount of the special assessment ($46,980) exceeded that amount.
These numbers just don’t add up!
LEGAL FEES DOUBLE IN OCTOBER
Meanwhile, we see the predicted hiding of legal expenses finally revealed in October. While the amount spent January through September to be artificially low, the amount finally booked in October doubled the amount spent YTD. The bigger question is about what the POHOA Board plans to spend in November and December (when no one is looking any longer, as they are posted a month or two after the fact).
The statement that the HOA will have $15k in “profit” by the end of the year is curious, as it relates to legal expenses. In the vast majority of other major line items, the amounts spent are already in the past. The sprinklers are turned off, and landscaping expenses are at a minimum. The YTD number is likely close to the annual total.
Yet, we still have collections of nearly $10k in dues, yet the income is only going to increase by less than $2k. That indicates some major expenses in the coming 2 months, and besides rental of a meeting room for the annual meeting and the mailing expense, there’s not too many line items BESIDES legal expense that could run up this amount.
This makes it likely that in spite of President Ballweber really really not wanting anyone to associate this Board with “overspending”, that $5k budget is unlikely to be held through the end of the year. There’s probably another $2-5k in legal expenses for which they have the bills in hand, and given that they go into Executive Session EVERY meeting (without EVER updating us), there is a growing suspicion that they aren’t close to settling the matter of the “dog incident” after a year and probably spending $4k on it this year (and maybe $8-10k once they book the expenses by paying the bills accumulated this calendar year).
If they are raising the legal budget again, I think that is a central topic: We are now in a 3-year period where the HOA has spent more than $25,000 on legal fees, when that dwarfs what was spent IN SUM from 2004-2020 when the budget was $500 annually. Legal expenses, as Walker Flanary and his proxy supporters go after other homeowners with the powers of the HOA, appear to be rapidly escalating with very little to show that benefits the actual community.
But, for some reason, the average homeowners in POHOA are either oblivious, willfully ignoring this pattern, or are somehow supportive of spending all of our money this way.
NO MONEY IN RESERVES FOR STORMWATER DRAINAGE FACILITIES
Meanwhile, we have discovered that the Association has NO BUDGET and NO RESERVES for Stormwater Drainage Facilities even though we already have damage, and we are facing a replacement cost of between $100-500k at some point in the future. Attempting to raise this issue at the 11/14/23, President Ballweber shouted down any attempt to add it to New Business, and literally physically chased homeowners out of the room who tried to get answers to questions.
While spending all this money accomplishing nothing on legal fees, we fall further and further behind in raising funds for expenses that may be over a more distant horizon, but are nonetheless major and unaccounted for in 20 years of HOA budgeting. I guess we kick the can down the road another year until we get Directors who recognize that PID isn’t going to pay for this, and neither is Larimer County (both disowned the assets in August of 2023 unequivocally).
IMAGINARY NUMBERS
So, homeowners, who have a weak power to VETO an HOA Budget (if President Ballweber allows a vote this year, after rushing the meeting to a close in 2023 to disallow a vote), are left with IMAGINARY NUMBERS to analyze the 2024 budget. Treasurer Jones comments will not be available to homeowners in time for the Annual Homeowner’s Meeting (if they are ever made available at all), and while some budget may be mailed out, we could also see the clever maneuver of President Ballweber where the meeting notice doesn’t include a paper copy of the budget, but owners are told to go find it on the website – when many are blocked from access!
It is therefore hard to have specific criticisms, but it is clear that if we are adding $2,700 of income (and are likely earning $1-2k in interest income), but the profit (net income) is going down by $5k compared with 2023’s estimate, that there is some major expense planned.
Meanwhile, Treasurer Jones repeatedly celebrates being under-budget on many line items. And, while that is probably laudable, there’s a good reason to ask why the budget for these items is not reduced – and the planned net income does not begin to fund the Stormwater Drainage Facilities.
Unless, of course, this Board is simply hell bent on using legal strategies to drive targeted homeowners out of the neighborhood with their “enforcement” activities. It became plainly obvious that Director Flanary, in particular, aims to do this. One homeowner emailed the Board in the past 2 months to advise of concerns with Hostile Environment Harassment related to their protected class. And, in response, Director Flanary said “nonsense”.
If Director Flanary cannot recognize he is inciting a significant percentage of the homeowners to make other homeowners feel so uncomfortable simply living in this neighborhood that they have to consider selling their home and moving. While he was just a homeowner when I litigated in 2020 over the same problem, I was told that the Board could not intervene. But, when he is using the powers and authorities of the HOA to accomplish the same, intentional or unitentionally by the way, he creates liability for all of us under FHA/HUD law.
We should not be asked to fund his program to harass, threaten, intimidate, or pressure other homeowners to sell their homes and move – particularly when some of them are members of a protected class. And, it appears that the legal budget has become a tool of this effort.
It is time for transparency and sober consideration of this serious issue. And, my sense is that the vast majority are simply not up to the task. I hope someone recognizes that this is neither a conspiracy theory, nor is it frivolous. The facts are in the open warranting more examination. But, I remain pessimistic because the campaign to dismiss my words and opinions is too effective at this time, in my opinion.
The Board is welcome to respond or present opposing facts. Their silence is deafening.
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