The Poudre Overlook Board only sent out the 2022 Budget to homeowners at 11:30am on Tuesday 11/30/21, with less than 31 hours prior to the Annual Meeting for most to digest and form their questions. Not that there’s much time allotted for the discussion – only 15 minutes, per the agenda.
While some were able to attend the 11/3/21 meeting scheduled with just 2 days notice at 530pm on a weekday when many would have difficult attending a Zoom meeting (some are still at work or in transit at this hour), many are probably unaware of what was discussed because there was not a recording made of the meeting for others to review at their convenience, and the minutes for that meeting have not even been posted in draft form. At best, homeowners would have to learn what was discussed by word of mouth – which carries with it significant problems, particularly because the Board did not show or pass out documents in advance. I requested them on the day the meeting was announced, but my question was ignored by Trademark.
During that meeting, there were several eye-opening declarations, claims, and proposals. I will break them down, but there’s some significant details.
LANDSCAPING
We first learn that there is no longer a Landscaping Committee. The Board is now the Landscaping Committee, which makes sense since Gloria Jones, who is now the Association President, has essentially taken a leadership role since 2017 when we first decided to embark upon the project to change the front grasses on overland to native grasses. Apparently, she intends to retain control of this aspect, and by dissolving the committee, we no longer have an opportunity as homeowners to participate in the activities generating the plans, scopes, and ultimately the expenditures on our common area landscaping.
It was clear from the fawning of the other Board members heaping praise upon Gloria that getting 4 bids was a major accomplishment. They thanked her repeatedly.
Then, they blamed the economy, inflation, and generalized our dilemma as “the price of everything is going up”, to justify the low bid being more than 30% higher than our 2021 contract. Of course, nothing on our end has changed, so given the fact that most of the landscaping is fuel and labor, this may be understandable. However, with fuel prices no higher than they were 4 years ago, the obvious question is whether we got a discount in 2020 or 2021 because the price of oil dipped for more than a year to some of the lowest prices in a decade.
They also mentioned getting quotes for the other landscaping contract – to mow the native grasses on the perimeter of the subdivision – which was scheduled months late in 2021 because both the Board and Trademark apparently didn’t think to schedule in advance, and only acted in May – leading to an invasion of noxious weeds that then created an additional expense in September. This is not to mention the fact that they decided to skip weed whacking the perimeter as well, which contributed to the weed problem.
But, if you look deeper into the budget, there’s also additional budget for weed control now ($1000) as well as an increase from $1000 to $2500 for mowing the native grasses in the greenspace. That is a 250% increase from 2021 – something that cannot be simply blamed on inflation or cost-increases. Neither the cost of fuel or labor has increased 250%. If the Board is not going to push back on this expense, isn’t that what Trademark is there to do for us and get us a better deal on our contracts? Weren’t their “connections” supposed to be part of the value of THEIR service?
ADMINISTRATIVE EXPENSES
This is the section with the most shocking increases. Not only is this section seeing a tripling of the overall budget from $7,509 to $25,279, but we have 3 major increases that deserve line-by-line analysis.
A. Legal Expenses: Our budget for legal expenses has been $500 annually for many years, and has been sufficient for our needs for more than a decade. All of a sudden, the Board believes we need to spend $15,000 (30 years of prior legal budgets) in 2022 in two parts. They want to spend $10k on “document revision”, and then increase the regular annual budget from $500 to $5000 – a whopping 10x or 1000% increase!
When asked to explain why, one of the Board members exclaimed “We aren’t attorneys!”
While that may be true, the Board, and our CAM have obligations in any list of duties or rights and responsibilities (See CAI, for instance) to know their way around the governing documents and applicable law. They cannot simply say they are too busy and remain willfully ignorant, and then go to the attorney for every single question they have that has even a tangental relationship to the law. They are abdicating their fiduciary responsibility to minimize legal expenses by elevating and improving their education annually, and passing the costs along to the homeowners for their own personal convenience or to avoid being responsible for making decisions when there are opposing legal opinions. They’ve lost sight of the fact that the general counsel is not an in-house counsel, and that they are not to take direction, but rather consider the pros and cons of advice that includes getting a second opinion when the matter of law is in good faith dispute, and other attorneys may even offer free advice in short sessions.
What I’ve personally observed is mismanagement of legal expenses since July that may, in fact, also be a violation of the CAMICB Standards of Professional Conduct. Trademark was allowed direct contact with VF Law, which created legal expenses that were neither approved by the Board, nor even known to the Board. We cannot have a CAM, particularly when the manager has no professional credentials or prior work experience (is essentially a trainee) having the ability to initiate legal expense on behalf of the Association. I’ve asked for a review per the CAMICB Complaint Process (which requires the Board review), and have not received a response in over 3 weeks.
It appears to me that what is needed is new boundaries and discipline on the part of Board members who are generating all of this expense, with focus, in particular, on engagement with homeowners on disputes informally to seek resolution without creating legal expense. If informal engagement doesn’t work, there’s hearings, bringing the issue to homeowners, and even mediation as options – long before we need to turn this over to an attorney. It appears the current Board simply wants to sidestep their duties and responsibilities to avoid being accountable for decisions in matters that may be disputes, but do not rise to the level of “legal matters”, even if interpretation of the governing documents or statutes is part of the dispute.
At the core of this is a lack of formal and ongoing education of Board Members, and it would appear to be wiser to spend $99 to get each Board member a credential from CAI, then to pour multiple times the amount into a budget so that we do not get better informed Board members.
B. Document Revision: The Board has had 2 years to explain the urgency for a complete overhaul of the governing documents. VF Law found our documents useable, and merely advised that we add specificity to avoid disputes (which then create legal expense). Again, an attorney does not need to be at the center of this. We can often find copy/paste solutions from other HOAs, and there is DORA as a resource. Ultimately, CAI is also a resource which may have templates, but at the end of the day, it is the community of homeowners that ultimately needs to directly participate to finally customize to the rules to the wants and needs of the community.
This can be done by volunteers, and as someone working on these very same issues at the legislative level, there are ample resources for us to address the vagueness of our documents in regards to rules. We don’t need roof shingle color rules that say “or similar” if we really want them to be only 2 manufacturers or colors – just change the words – this does NOT cost thousands of dollars, and no attorney even needs to be involved in such changes! Attorneys don’t pick colors!
But, most importantly, there are suggestions in the VF Law review for things like “superliens” to be inserted into our documents, which would then give the Board new authorities and powers – ones that they are unlikely to understand because of their declared instance on not understanding the law. Those powers are being used to take peoples homes and sell them from underneath them against their will – often over small fine amounts. Washington State has already created statutes to prevent this new power from being created, and Colorado is going to have sponsored Bills in 2022 that will do the same. We should not revise our documents in areas where the legislature may cause us to reverse our actions – possibly even in the same calendar year.
We should postpone suggestions like this until the legislature has finalized and voted upon their Bills next May/June. It makes no sense to make major changes that may be non-compliant with the law when we can anticipate such potential given the open nature of the legislative process. If CAI wants HOAs to have these powers, they should change the statute in the open light of day, not in semi-secret, before homeowners realize the dangerous aspects of such changes.
TRADEMARK’S CAM CONTRACT
Trademark has sought an increase in their contract. It should be rejected out of hand. They misrepresented the type of manager we would be getting by having a credentialed person, Mr. Rand, who holds the CAMICB credential of CMCA, and then assign someone as our manager who had no prior work experience related to managing HOAs, or even contractors, and only began working for Trademark the month we signed the contract.
They paraded a show horse, and delivered a wild mustang. And, we’ve suffered from that lack of experience. We’ve had problems with both snow removal and landscaping, and our manager does not appear to understand how scheduling for these contractors needs to be done, nor how to push back to get us the lowest cost.
While we can, perhaps, live with this manager, we should be getting a discount, not paying a premium. Otherwise, what this Board has not presented us with is whether they have sought out new bids from other vendors in the area. We chose Trademark, according to the Board, because no other vendors would work with us due to the litigation. If that is true, then since there is no longer litigation, it should open back up the ability to go back to any of those or any other vendors in the area. Certainly, we are not stuck with Trademark and have other options if they are going to raise their costs 40% after performing so poorly in their first year.
OTHER ADMINISTRATIVE EXPENSES
We then see in the last line of this section another 100% increase in “administrative expenses” from $1200 to $2400. What are these? Why did it jump to $1900 this year, and why is that now a permanent increase?
More information is necessary, and with only 15 minutes to discuss the ENTIRE budget before a vote, little details like this may slip off the radar or schedule.
SNOW REMOVAL
While this is in the Landscaping section, it deserves it’s own heading. In March of 2021, Trademark was contacted after the snow plows put giant piles of snow on the common areas sidewalks. Trademark, without bothering to read the governing documents or contracts, declared that everything was done perfectly.
Unfortunately, when they discovered due to a homeowner notice with a copy of the governing documents that it had an obligation to remove snow from the sidewalks adjacent to common areas, they didn’t say “oops, we made a mistake”, but rather went silent on the matter to homeowners. Apparently, they spent some money with the attorney to find out for absolute sure if the words in black and white were really really supposed to be followed, and eventually got some quotes from local landscapers, including the vendors we already use for summer contracts.
This is where it got weird. In that Special Meeting on 11/3/21, they announced that one of the vendors said that their price would be the same to do these shorter common area sidewalks as it would be to do the entire neighborhood. A discussion followed that, in the end, left the rest of us homeowners befuddled – the Board did NOT want to do ALL the sidewalks FOR THE SAME PRICE because . . . someone might complain about the quality of work.
We would still all have to do our driveways, but for a total cost to homeowners of approximately $15 annually, we could have our sidewalks cleared when the snow was over 6″ (with all their disclaimers on timing, of course). I can’t imagine a better use of our purchasing power. But, this Board, for some reason, questions the value to the community of such an arrangement.
My question is even better? How much more would it actually cost to lower that threshold to 2″? Wouldn’t that be nice if for $30-40 ANNUALLY, we all were relieved the burden of having to shovel more snow than we already have to in our driveways, patios, porches, and private sidewalks?
WHAT ABOUT THE FENCE RESERVES
Oh yeah, that came up on 11/3/21. While this budget doesn’t address the money we had allocated to replace ALL the fences, some of us are just learning that we spent all or nearly all the money on just the fence on the North side of the HOA. The $180 Special Assessment most of us paid for 3 years to replace the aging and deteriorating fences is “gone”. Yet, Ms. Hutchinson actually proposed out loud that in order to shore up other budget increases, we should consider “stealing from the reserves”.
Over in the chat, Keith Knight asked me if I thought that was allowable under CCIOA, and per my understanding, money from special assessments MUST be used for the stated purpose of the special assessment. It cannot be borrowed from or “stolen” from for any other budget purpose. That money should only go to fence replacement.
And, if prices went up (and will never come down, which is questionable), then we likely need to have that discussion pronto – particularly if we do actually anticipate wood prices to escalate further. If it was SO urgent that we all had to take out checkbooks in 2018, 2019, and 2020, then we should do the work. This has the feeling of being told one thing while they do another, yet again.
If it truly was urgent when it was sold, then it takes precidence over Document Revision – and that project should be funded and completed before we act on the wishes of a very few Board members who cannot articulate a reason why this is our top priority at this time. Fences falling over every time the wind blows seem to be more important to the real-world needs of this community than some theoretical benefit of removing the word “declarant” from our governing documents.
CONCLUSION
I believe we need more than 15 minute to discuss this budget, and perhaps postpone a vote until we have another meeting to go into the details. This late notice, major never previously disclosed details, and questionable decisions combine to make a rush to approve this budget a likely failure for our community.
I hope that others will speak up at the meeting, or send in their comments by email to avert a rushed decision on tens of thousands of dollars that would be better spent on our community infrastructure.