Property owner protections & controls in jeopardy . . .

As additional details regarding the $5,000 Capital Contribution Fee continue to trickle in, the information has dictated continual updates on the subject by this writer.  Less than two weeks ago, dissimilarities between the twelve compared communities were noted along with the offering of alternative ideas and solutions to the proposed fee.  (See “About that $5,000 fee”)

Several days later it was learned that the POA board had agreed to grant the developer an “exemption” from the Capital Contribution Fee (1) (See “An update to about that $5,000 fee)

The POA board’s exemption from the $5,000 Capital Contribution Fee is given to influence the “developer’s” conduct.

• The developer does indeed have the right to veto the proposal for a capital contribution fee which would result in the proposal not being presented for vote.
• Likewise, the board has the right to challenge an exercised right to veto through appropriate legal avenues, most specifically, arbitration as detailed in the covenants.  (2)
• The developer does not have the right to receive an item of value (i.e. exemption from the capital contribution fee (minimally valued at $125 – $250,000) (1)  as an inducement to waive their right to veto the proposal.
• The board, as well, does not have the right to offer an exemption to the developer in order to influence them to waive their right to veto the proposal.

Requirement for property owner approval of capital projects exceeding $1,000,000 per Article VI, Section 13 will be deleted . . .

And now . . . receipt of the actual ballot package and proposed amendment reveals that Article VI, Section 13, of the 2010 and 2012 amended covenants (3) (4) will be “deleted in its entirety” (5) and replaced with the new proposal.  The deletion of this covenant has been omitted from any discussions with the property owners.  Information that has huge, wide-ranging consequences.  Restrictions, protections and controls found in this covenant include the following requirements:

• Property owner approval for capital projects exceeding $1,000,000 (cpi adjusted) – deleted
• Establishment and administration of a restricted capital reserve fund for the repair, maintenance and replacement of Association property – deleted
• Requirement that a capital reserve study be performed by a Reserve Specialist every 3 – 5 years – deleted
• Management of the restricted reserve fund balance consistent with reserve requirements identified in the capital reserve study – deleted

This is more than just a lack of transparency.  This is an omission of pertinent and vital information that should have been openly addressed and discussed with property owners in advance.  Why that has not been done is perplexing at best.  Likewise, for whatever reason, leadership of the Finance Committee that has been actively involved assisting and supporting the proposal of the $5,000 Capital Contribution Fee, has made no mention that the restrictions and controls found in Article VI, Section 13 would be deleted upon approval of the $5,000 fee.

Obviously, property owners are urged to vote No.

Lastly, to be fair, one must also look at what protections could be gained by approval of the $5,000 fee, and the answer appears to be zero.  There is nothing in the proposed language to the covenants that even specifies how the projected one million additional annual dollars will be spent much less how such a large amount of money will be controlled, invested and tracked.

Quite honestly, this proposal should have never come to vote.

It has been a waste of time, resources, money and emotions of leadership and property owners alike.

If you would like to see additional articles posted in the future, please subscribe for an email notification.  Likewise, if you have questions or would like further discussion, I can be contacted at thepcrosses@gmail.com

Patricia Cross (10438 Big Canoe)

References:

1  Board of Directors Meeting, November 21, 2019 – (POAwebsite>login>POA>meetings>videos>NovemberBoardMeeting @ 31:00)

2  Amendment to the Covenants, January 18, 2005, Pg. 12, Section 7 (b)(c)(d) (POAwebsite>login>POA>GoverningDocuments>Covenants>Covenants 2005)

3  Second Amendment to the Covenants, August 21, 2010 – (POAwebsite>login>POA>GoverningDocuments>Covenants>Capital Reserve 2010)

4 Third Amendment to the Covenants, December 1, 2012 – (POAwebsite>login>POA>GoverningDocuments>Covenants>Covenant 2012)

5  Fourth Amendment – Proposed, Page 3, at 1. (included in the Ballot Package)