Little more than one year ago, property owners were presented with a proposed amendment to the covenants that would allow the establishment of a capital contribution fee (CCF). This was done without property owners having any advance opportunity to review the covenant language or question it’s contents. And now, in 2020, with a newly seated board, that injustice has been repeated.
For the record (particularly to our Big Canoe newcomers), while the 2019 CCF proposal was immediately recalled due to a serious error in the language of the proposed amendment, (1) that error might have been prevented if the amendment had been provided to property owners beforehand for discussion and review. All that said, here we go again.
Requirement for property owner approval of capital projects exceeding $1 million EXCLUDED from the proposed amendment language . . .
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- Although assured by leadership that revenue generated from the CCF could not be used for projects exceeding $1 million without property owner approval, (2) that restriction is absent in the proposed amendment.
- Further, the board goes one step further by including a presumed fact sheet in the ballot package titled “10 Things to Know About The Capital Contribution Fee” (3) specifying that “no capital expenditure of more than $1 million can move forward without a vote by Big Canoe Property Owners”. It is as though leadership wishes to convince us that something is contained in the amendment that does not exist. It is not there. This is intentionally misleading and is clear and simple deception.
A betrayal of trust . . .
Failure to include the requirement for property owner approval in the amendment language clearly demonstrates either an unbelievable level of carelessness by both leadership and the association’s legal counsel, or worse, an intentional lack of commitment by our board to honor much less enforce this promise.
It must be emphasized that the only statutorily required property owner approval of capital projects exceeding $1 million applies to those situations where funds are withdrawn from the restricted Capital Reserve Fund established in 2010. This restriction does not extend to other funding sources. (1) (Perhaps this helps explain the board’s reluctance to adequately fund the Capital Reserve Fund.) With leadership well aware of that weakness in our governing documents, the omission of this restriction in the current proposal is unconscionable and can only be viewed by this writer as a betrayal of trust.
(As it’s defense, the board will likely point to current Board Policy no. 153 while failing to mention that Board Policy can be changed on a whim via simple majority vote of the board, therefore, rendering that policy insignificant and unenforceable.)
Other concerns regarding the content of the proposed amendment include the following.
Acquisition and maintenance of Common Properties of the Association . . .
Item 1 (e) of the proposed amendment outlining authorized uses of the CCF funds includes acquisition and maintenance of the common properties. (4) Could this not mean that this revenue might be used in the future to fund another ridiculous land purchase such as that in 2016? And does this not mean that proceeds from the Master Plan Fund might be transferred to the operating accounts for routine maintenance of our facilities?
Unequal and disparate treatment of Class/Type A members . . .
Part of leadership’s argument in support of this fee is based on the premise that new owners have been entitled “to immediately participate in and enjoy all that Big Canoe has to offer” at the expense of current property owners and should now be required to pay their fair share. (5) Unfortunately, this argument falls short as the board fails to acknowledge that future lot owners which will be exempted from the CCF, likewise, are entitled to share in the same immediate enjoyment of all that Big Canoe has to offer. This disparity is problematic and glaringly indisputable.
Still behind closed doors . . .
And finally, it is truly unfortunate that our board, after granting themselves the privilege and opportunity to discuss and review the covenant language during many closed work sessions as recent as November 30th, (6) (7) (8) & (9) would not extend that similar courtesy to us as members of the association.
In conclusion, given the board’s refusal to include the statutory language in this amendment to require property owner approval on projects exceeding $1 million, coupled with the status of the inadequately funded existing Capital Reserve Fund, (10) this property owner will be voting no.
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If you would like to see additional articles posted in the future, please check back frequently or subscribe for an email notification. Likewise, please feel free to contact me at thepcrosses@gmail.com for questions or further discussion. Meanwhile . . . take care and best wishes for a wonderful Christmas.
Patricia Cross (10438 Big Canoe)
References:
- Save the Postage, December 3, 2019, bcmatters.org http://1) https://bcmatters.org/save-the-postage/#more-179
- Capital Contribution Fee Town Hall, November 17th, 2020 at 17:25
- “10 things to Know About The Capital Contribution Fee”, December 7th, 2020, Ballot Package. 10ThingsToKnow
- Fourth Amendment (proposed) to the amended and restated General Declaration of Covenants, Section 1 (d) at page three.
- GM’s Corner: “CCF provides sustainable source of capital to maintain and improve our community”, Smoke Signals, November 2020, pg. 5A
- Work Session Notes, November 30th, 2020 (POAwebsite>login>POA>meetings>BoardDocuments>WorkSessionNotesNovember30th)
- Work Session Notes, November 23rd, 2020 (POAwebsite>login>POA>meetings>BoardDocuments>WorkSessionNotesNovember23rd)
- Work Session Notes, November 16th, 2020 (POAwebsite>login>POA>meetings>BoardDocuments>WorkSessionNotesNovember16th)
- Work Session Notes, November 2nd, 2020 (POAwebsite>login>POA>meetings>BoardDocuments>WorkSessionNotesNovember16th)
- “Time to Talk about our Capital Reserve Fund”, November 18th, 2020, bcmatters.org http://10) https://bcmatters.org/time-to-talk-about-our-capital-reserve-fund/
I voted against the proposal, not because I don’t think we need to raise money, but because the strategy is impractical and imbalanced.
A flat fee has two flaws:
1. That the least expensive properties could pay 2% of their valuation while the most expensive class pays 0.001666666666667 % and I think that’s not reasonable.
2. Any fixed dollar amount will have to increase as the inevitable inflation occurs. This will mean revoting each time this is needed. That’s just unnecessary turbulence our community doesn’t need.
On the other hand a percentage fee automatically increases revenue as housing values rise. It spreads the financial load in the same fashion that property taxes do, and never needs to be put to a vote to change the %.
For those with the priciest homes, if they feel they shoulder an unjust burden, I’m sure a dollar or percentage cap can be devised.
I suspect the proposal as written will pass, but I think the case for it as written is flawed.