The POA board is applauded for quickly acknowledging the significant “drafting error” (1) found in the proposed amendment and ballot package for the $5,000 Capital Contribution Fee that would have deleted the entire Article VI, Section 13 of the covenants dealing with the capital reserve fund and property owner approvals. Although the board plans to make that correction and remail the ballot package, the existing lack of any protection or controls in the new proposed language has not been addressed.
Perhaps we should save the postage as discussions with several property owners within the last day have revealed even further unacceptable weaknesses with the proposed amendment, and covenants in general, that have apparently been overlooked.
Property owner approval is NOT required for ANY capital project, regardless of amount, if funded outside of the present capital reserve fund . . .
Specifically, after discussion and research, it is apparent that the $1,000,000 property owner approval requirement found in Article VI, Section 13 (c) (2) of the covenants applies only to those situations where funds are withdrawn from that restricted capital reserve fund with a present balance of $2.772 million. Regardless of any discussions or policies otherwise, no requirement for property owner approval of capital projects can be found elsewhere within the BCPOA covenants, which govern. Therefore, this approval requirement would not apply to capital projects funded by the $5,000 proposed fee or the recently approved $25 assessment for capital UNLESS those funds were earmarked to the present, restricted capital reserve fund which the board has chosen not to do.
This loophole and weakness in controls must be addressed now . . .
Obviously, this must be corrected, not only by amending the present language of the proposed amendment, but also by amending the covenants to establish a property owner approval threshold for ALL capital projects, regardless of the source of funding. This would also be an appropriate time to reduce that approval threshold to a more reasonable amount as agreed upon by the property owners.
Let’s get this right and table the vote pending further discussion . . .
Considering the number of issues and questions that continue to arise, it might also be suggested that this vote be tabled for now. As mentioned originally (at “About that $5,000 fee”), “simple revisions to POA rules and regulations require three readings over several months prior to approval. A covenant change is significantly more important and enduring and should command similar due diligence.”
Such a delay would provide an opportunity for discussion and dialogue between the board and property owners.
Likewise, this delay could also provide the board with the opportunity to appropriately challenge the developer as dictated by BCPOA covenants (3) . . . specifically, (1) “discussion”, (2) “reach a resolution or table for 60 days” and finally (3) “alternative dispute resolution.” Immediately agreeing to an inequitable exemption at the discussion stage and valued by the board at $125-$250,000, does not appear to be in the best interest of the remaining property owners.
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 Eblast – A Notice from the POA Board regarding the ballot for the Capital Contribution Fee, December 2, 2019
2 Third Amendment to the Covenants, December 1, 2012 -(POAwebsite>login>POA>GoverningDocuments>Covenants>2012)
3 Amendment to the Covenants, January 18, 2005, Pg. 12, Section 7 (b)(c)(d) – (POAwebsite>login>POA>GoverningDocuments>Covenants>2005))