October 18, 2016

Today's Blog post deals with the Board Meeting and assessment vote on October 25, 2016, as well as my thoughts on our professional management.

Before we get into the assessment issues, I finally have found the apparent, primary reason for the Board approval of the repair contract with ThunderBay (TB) for Roof C.  As you know, the repair proposal with TB was approved rather than the full roof contract with Martin.  I reread the minutes from the July  Board Meeting, when the contract was approved and there it was.  The $1,200 yearly saving in the maintenance contract that was approved was contingent  upon approving the TB proposal for repair of the roof of Building C.

I understand that this deal was negotiated by Kimberly.  She actually traded a yearly $1,200 savings on the maintenance contract for a repair contract for Building C that cost $10,000 more than the competitor! Of course, we now have only one roofer.  And a roof that will likely need replacement in ten years!

The President's Letter to Owners.

Since I started work on the Blog, Janet has sent the owners a letter in which she tries to support the assessment and projects.  My impressions of that letter follow.

Roof Contracts.  The roof contracts contained in the Assessment Breakdown are all bills that should be paid out of the Roof Reserves.  The first vendor listed, TB, is our roofing company.

The Maintenance and Cleaning Agreements that Janet mentioned in her letter (with excellent detail - something that Kimberly should be doing when introducing contracts) are contracts of which I very much approve.  However, to put this in General Operating is way off base.  We have plenty of money in the Roof Reserves and the roof reserve is the account which should be used to pay for that $8,200, instead of putting that on the backs of the owners in the form of an assessment..

The Association had $36,697.99 on 9/30/2016, in the Roofing Reserve, according to our September Financial Report.  With $2,083 budgeted monthly, that means that  $8,432 will be added to the Roofing Reserve for  a total of $45,029.99 on January 31, 2017, the end of the fiscal year.   Pay for these contracts utilizing the appropriate account and the General Operating Fund need not be reimbursed.

Janet didn't address the two bills from the Breakdown that lists two payments to our roofing contractor, TB, for scupper repairs totaling $1,431.    Again, there is a Common Roof  Reserve for payment of those items.  No need to reimburse the General Fund (meaning assess our owners) when roofing reserves should be used to pay for those items!

The TB Clubhouse Roof Contract.  While it is true that there was overage in the mansard installation because of termite ridden boards, the immediate problem we faced was the nonpayment of assessments from 212 and 214.  However, in November 2015, Wells Fargo paid not only the assessment but the maintenance for Unit 212.  Unit 214 recently sent in a check for over $6,200 that covers the assessment and maintenance for that Unit.  The books should show that all Units have paid their portion of the assessment - a total of $73,000.

Here is the data:

TB roof contract = $6,614     Aluma mansard contract:  $66,000     Assessment:  $73,000

TB Billing:         $6,614   +     $546.50 extras             =               Total:       $7,160.50
Aluma billing:  $66,000   +  $2,244.00 extra boards   =               Total:     $68,244.00

Total billed for both projects:  $75,404.50   Assessment:  $73,000      Overage:  $2,404.50

The $2,404.50 is the money that should come out of the General Operating Fund, not $4,228.

It is likely that the Breakdown figure was determined prior to the receipt of the money from 214.  The balance should be changed to reflect the assessment payment by 214.

The TB data is from the TB invoice of December 12, 2015.  The Aluma data can be found in the January 2016 financial report.

One interesting tidbit:  Resource shows assessment income of $73,541 on January 31, 2016.   This is reported before the assessment money received from Unit 214 could be counted.  The real income here should be less than $73,000. Perhaps part of this is interest, maybe somebody overpaid (unlikely) or this is just a Resource bookkeeping error.   At any rate, Resource should take another look at this, as it may make a difference in the Balance Due, as listed in the Breakdown.

PRS and Bravo.  The work done on 105, 110 and  113 that Janet listed was absolutely necessary.  The Association was responsible for making repairs in Unit 113 that could have avoided this mess. You recall the Laub contract that was signed 2014.  That contract cost us $5,200 to make the water intrusion issues in 113 and 204 go away.  It didn't.  As a result, the buildup of mold in Unit 113 was intolerable.  Because the Association should have addressed the issue in 2014 and took action to prevent further damage, the Association is, therefore, responsible, in my mind anyway, for rehabbing that unit.

Among the Bravo items that Janet did not address but was listed in the Breakdown, was the  $3,200 payment to Bravo for that paint job on the exterior of 113/213, part of the ill-conceived "Paint Buildings Project".  Now, whether it was a correct solution or not, the fact is that this contract was a paint job - even though some would describe it as water intrusion prevention.  We have a reserve for paint (August balance = $10,944), and this is where the money to pay this item should come from.

Update:  Bravo was actually paid $3,950 from the Paint Reserve for painting on Bldg. D.  Why then are we being asked to reimburse the General Fund via an assessment, for an item that was correctly paid from the Reserve Fund?

Dumala Paving:  Last time I checked, we had a paving reserve account.  This is a road repair contract.  It seems very appropriate that this paving expenditure should be paid out of the paving reserve account.  The balance as of August 2016 = $10,970.   More than enough money to pay this bill.  This has nothing to do with the General Operating Fund.

The other items  described in the Breakdown were Common Maintenance issues.

Drainage.  In her letter, Janet talks in generalities when addressing the drainage issue.  There is nothing in her letter that gives us a reason to approve $20,000 for drainage.  Is there a contract proposal?  How did they come up with the $20,000 figure?  What kind of work is involved?  Her letter does not adequately address the drainage issue sufficient for me to vote yes for this project.  And further, those snowbirds that got her letter must also be unimpressed.  If this is the only thing that the drainage project has going for it, then I say, forget about it!

Rear Stairwell Repairs.  I'm just a little confused about terminology Janet used in her Letter to the Owners.  She starts talking about stairwells, then stairs then steps.   So when I substituted steps for stairs, then I was able to follow what she was saying - I think.  It appears that there are 26 steps that are in need of repair or replacement.  So with 12 rear stairwells, we have an average of a little over 2 steps per stairwell.  Now what a contractor sees and what is seen through other eyes may be two different things.  I didn't, frankly, go around to all the stairwells and check them out. Owner Richard Lindner did and he has a very different view of the amount of the cost of the repairs.  I tend to agree that the repair/replacement costs are higher than warranted.

Janet ended her letter with a plea that "we need to start working together to find solutions to today's issues".   The grand ideas that Janet has developed have been entirely hers (plus her contractors and Kimberly).   Who is it that they consulted for opinions on the Building Paint, Stairwell Repair and Drainage issues?  There have been no open discussions on any of these projects.  No group meetings.  No newsletter.  No requests for comments.   You have to wonder how firmly Janet believes in "working together to find solutions" when her actions are so distant from her words. Unless I missed something, her Letter to the Owners, was the first of any substance regarding either the drainage or stairwell repair issues. These are issues that she has identified that are, supposedly, of critical importance to the Circle.  Our owners also have the best interests of the community and when it comes to maintenance projects in the Circle, we'd like the chance to prove it!

Board Meeting.

Update:  The agenda has been posted and they will be accepting our ballots at the door as we enter.  That strongly implies that there will be no additional information provided to help you determine how to vote.  It is take it or leave it!  I'm going to leave it.

Aside from the Janet letter, all we know about the Board Meeting, is in regard to the assessment - the agenda has yet to be posted.  The meeting  is a Special Board Meeting called because an assessment is being considered.   The assessment is for $105,000, a lot of money.  I have some thoughts on the assessment.

Per the Breakdown that was provided in the packets sent out by Resource,  the assessment is designed to reimburse the General Fund for expenditures made to several vendors.  These bills were selected from Resources Unbudgeted Maintenance account, continuing the farce of having two distinct maintenance accounts.  Repaying the General Fund is just a rather obvious method of putting the onus on the owners to pay for some billings instead of the reserve funds.

If you are in the area and will be attending the meeting, you are likely to get some more assessment details presented to you to help make up your mind.  Snowbirds won't be privy to the information that will be presented at the meeting.  The Janet letter is not very helpful.  Snowbirds are apparently being asked to vote for this assessment on blind trust.  With the track record of this Board, it would be folly to trust them to do the right thing with your money - just my opinion!

We do have some budget issues that are going to put us in the red, come the end of the fiscal year.   Reimbursing the General Operating fund is just window dressing for an assessment to balance the budget.  No matter how you frame the issue, we're deep in the red and the management needs to do something about it.   Owners understand budget issues - just give us the facts!

My suggestion:  Back up! Slow down!  Redo this assessment by dumping the projects; they are not a problem that is a dire need.  Remove those bills that can be paid by reserve funds.  A vote by the Board is all that is necessary to okay an assessment to balance the budget.  Take care of the immediate need -  balance the budget.  Vote on the projects at the Annual Meeting in February.   That would give management time to justify the need for the two projects that they are pushing.  And will also give the owners some time to, perhaps, be convinced that these projects are necessary!

My vote is No on this particular assessment.  Obviously there are some issues that we as an Association face.  The budget likely does need a cash infusion.  And some expenditures may be required to fix the drainage and stairwell issues.  But this assessment was presented with far too many holes and with too little supporting information.  I believe the appropriate phrase in this instance is:  Come correct or don't come at all!

Resource.

It was noted in the May 3, 2016, Board Meeting, that the contract that we had with Resource was renewed.  The contract expired on May 1, 2016, with one year of experience under their belt.  The management fee was $750 per month with an escalating clause that allows a 5% increase.  As I understand it, the new monthly rate is $787.50.  That is a premium rate for property managers in this area.  There was no discussion regarding the renewal and, if there were contrary opinion, there was no opportunity to express them.  My initial opinion was that Resource should be given another year, so this is not a big thing for me.  However, time has a way of changing things.

The question before us is:  are we getting premium service from our property manager and our management company?  Are they living up to their obligations?  To me, the answer is no.

Resource has a lot of capability.  Support specialist abound.  But what they've done for our community is just routine stuff -  nothing special - any management company could do what Resource does and probably cost us less.  In your mind is there something that Resource has done that stands out?  They're there; they collect their management fees each month; they issue financial reports as required and tend to some of the small state mandated issues that are applicable to 55+ condo communities.  Sometimes they even answer phone calls.  And, yes, they do well in processing assessment notices.  In other words, they do a similar job that other management companies do for a lot less.  No premium service here!.

I've given examples here and in previous Blog posts in reference to the bookkeeping Resource does. Remember the billing for the Clubhouse cleaning company that ended up in Common Maintenance? The payments made to TB that were paid from Common Maintenance rather than the Roof Reserves?  And the way they handle the flood insurance so that we get a false impression  of the negative/positive balance at the end of each month.  Their bookkeeping is no better or worse than other management companies - but it isn't premium.

But the test of a management company is in the manager.  We have Kimberly.  Kimberly started slowly and worked her way in slowly.  Now that she is established, she has become more important in the grand scheme of things.  Now she is the de facto President, running the Board Meetings when our President is not on site.

Notably, and unfortunately, she has become an enabler for Janet!  When the paint job on the exterior of Building D to waterproof Units 113 and 213 was being considered, I'm hearing that Kimberly is the one that said, yes!  You can sign a contract, have the work done and label it as an emergency - even though it obviously was not.

Of course, Kimberly made the decision to save us money with the maintenance contract with TB, trading the $1,200 maintenance saving for a roof repair contract that cost $10,000 more.  This I have discussed at length, ad nauseam.   This action alone should cost her the management position at Aspen.

How often have you seen Kimberly walking around the yard to check out the things that need to be done?

It is my opinion that Kimberly is not really working for the Association as much as she is working for Janet.  She is not doing the job for which we are paying Resource:  protecting the interests of the Circle.  We should do an evaluation of her work and of Resource  when a new Board is elected in February.  It seems like a new property management company may be called for.  At the very least, a new property manager should be requested.

Just my opinion,
Andy Johnson

September 16, 2016

Today's topic primarily covers the financial report issued by Resource for the month of August but also touches on a couple of other issues.

August Financial Report - Unbudgeted Maintenance

This is about the Unbudgeted Maintenance Repair budget item invented by Resource and reported in my last Blog posting.  The amount that is shown in this account has risen exponentially.  Last month there was a total of $2,195.50 in that account.  This month, the balance is $19,755.44.   Certainly caught my eye!

We discussed this item in the last topic as it arose as a new budget account invented for god-only-knows what purpose.  To me, any payment made of a maintenance nature ought to be put in the Common Maintenance account.  What's gained by breaking the maintenance items into two???

Her are the issues that I found in the Unbudgeted Maintenance:

• Two payments were made to Thunder Bay, our roofer, totaling $4,943.50.  Now I doubt that Thunder Bay was running around washing windows or doing other maintenance type things.  So what is it doing here?  That company is a roofer.  This item should have been placed in the Common Roof Reserve account.   

• Two payments totaling $1,235 were made to Land Design, our landscaper.  This money was transferred out of the budget item: Tree Trimming/Plants.  What does this accomplish?  This isn't just a budget error that Resource is prone to make.  There had to be some thought in this action to transfer an item, placed somewhat legitimately in it's appropriate slot, to the Unbudgeted Maintenance account.  It  defies explanation. 

• You'll be happy to know that the money that Resource paid to our clubhouse cleaner, J W Services, $158,  and put into Unbudgeted Maintenance, has now been  placed in it's proper slot.

The rest of the payments that appear in this budget item seem to be of a legitimate maintenance type.  But some were re-coded and removed from Common Maintenance.  This little switcheroo has reduced the balance in Common Maintenance from $20,849.95 to $4,366.91. Now instead of being way over budget in this account, we are now under budget to the tune of $2,633.09.  Amazing what budget gimmicks can do!

What constitutes an Unbudgeted item anyway?  Our budget for this fiscal year included $12,000 for common maintenance, obviously not enough.   Looking at the items that appear this month, there is no rhyme or reason, that I can tell, for some of them to be placed in the Unbudgeted Maintenance category and others to appear in the Common Maintenance.  Just what has that accomplished?  Curious minds would like to know.

The Deficit

Looking at the August Financial Report, one would think that the Circle is doing well.  The net positive balance reported between income and disbursements is $27,990.24 on the positive side.  The operating cash is reported at $55,212.65.  Pretty good right?  No!  there is a big elephant in the (financial) room.  It's called flood insurance!

We've budgeted $56,000 for flood insurance and we better hope that will be enough.  Because the payment must be made in November!  Our Hazard insurance payment is due also in November, at about $15,000.  A combined total of $71,000.  There's a reason Betty reports the cash on hand and says that may seem like a lot, but really isn't.  Because that cash isn't sufficient to cover the flood insurance payment and the hazard insurance payment and usual monthly expenses of about $10,000.  Not even close!  We still have the months of September and October to accumulate sufficient cash to get us through November but that ain't happening.  Why?  Because our income already  includes the prepayments of some of our owners, thus reducing the normal monthly income flow.  And because there is at least 1 payment out there still to be made:  the painting of the exterior of 113 and 213 @ $3,800.

We show a positive balance because of a screwy accounting method that Resource uses for flood and hazard insurance.  They put a big fat zero in those categories each month because they figure it isn't an expense unless it has been paid.  As a result, you can look at the balance sheet and get the skewed numbers that indicates a positive balance when, in fact, that balance is really far out of whack.  Because the flood and hazard insurance expenses are not counted!

The Circle, pre-Resource, used to handle this little bookkeeping problem by referring to the Flood Insurance as a "deferred expense".  They plugged in the budgeted amount each month and it accumulated.  That way you can look at the flood insurance account and see what moneys should be available and you don't get the skewed balance.  Sounds reasonable right?  Nope! I requested that Resource make that change.  But as with all things Resource, it wasn't done despite the fact that it would make our Board's job just a bit easier.  Is it Resource arrogance or are they just too big to make small adjustments to meet our needs?

This budget screw-up also effects our bottom line at the end of January.  Instead of the money accumulated in December and January, being treated as an expense, it isn't.  Therefore, that entry reduces expenses and inflates the net balance.  If that money was counted as a deferred expense, then that expense would be counted and a true balance would be reported!

When all is said and done, I would suggest that our deficit is somewhere in the neighborhood north of $20,000.  That needs to be made up if we have any hope of achieving a balanced budget at the end of the fiscal year.  That also assumes no further "unbudgeted maintenance expenses" between now and the end of January.

So the question is, what are we going to do about it?  There will have to be a budget adjustment or assessment at some point in the future.  It will be coming and we will again be asked to pony up.  Perhaps we will get some answers to be the fiscal mess - or perhaps not!

Roof C Contract again.

First of all, I would like to make a correction of a statement I made regarding the roof C contract in my initial writing.  I corrected my mistake in a subsequent writing but likely as not, that correction will not be noticed by our readers, except the very discerning ones.  What I said was that the area to be covered by the foam on the roof in their contract proposal is the same as the proposal that ThunderBay (TB) originally gave to me a year earlier.  That was wrong and Kimberly was quite correct in her statement that the contract language called for an increased area to be foamed.  This was negotiated in the second incarnation of that proposal.
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But what of it?  That does not change the fact that was a repair proposal.  Period.  The differences between the Martin full roof proposal and the TB repair proposal are enormous: contract price, warranty coverage, lifespan of the roofs and, yes,the area of the roof to be covered (full vs. partial).  The Martin contract proposal is the obvious pick when all is considered. The only positive factor for TB in the decision, is that they apply 2 top coats to the roof after spraying.  If  that makes such a difference, then have Martin give a quote with an extra coat.  It still would be a better value.

I am still trying to understand the dynamics that went into the approval of the ThunderBay contract proposal..   Who buys a roof repair option with a 10 year life span when a full roof replacement with a 20 year option is available?  Nobody!  So why did that happen?

My theory is that it may be due the sentiment, among our Board Members, that we should only have 1 roofer.  That having more than 1 roofer would, in effect "spoil the broth" or whatever.  Now if we were talking about having 3 or 4 different roofers, that might be the case.  But here, we were talking about only 2 roofers.  Each with different strengths.   TB is excellent in maintenance, as their record over the past year and a half proves; that's their strength!  Martin appears to be very good with foam roofs as Buttonwood has decided; foam roofs are their strength!  So to say that the 2 of them could not coexist as our roofers is ridiculous.   Both roofing company's could have been utilized, each with their respective strengths.

And this may well have entered into the thinking that went into the approval of the TB contract.  As I recall, Kimberly held up the processing of both the maintenance and the roof proposals, as she wanted to get a proposal for maintenance from Martin.  When Martin opted not to give her a proposal for maintenance, I believe the die was cast.  TB would be given both the maintenance contract and the roof repair contract and we would have only 1 roofing company.   It seems likely that if Martin had given her a maintenance proposal, Martin's C roof proposal might have been approved.  Just to keep to the fallacious idea that we should have only 1 roofer.  And the Circle is $10,000 poorer.

Why a Blog?

I've been asked, why am I doing the Blog?  I've been accused of doing this due to sour grapes on my part or the Monday Morning Quarterback stuff.  I am no egotist and my name does not have to be in the limelight.  I certainly wouldn't be doing this Blog if everything was going well.

But the 1st Board Meeting of any substance, the July Meeting, suggested to me that we were going down the road once traveled and led by the Property Manager, Marilee from Ameritech.  She put her strong imprint on the Circle when the President resigned.  She and that Board were responsible for running up a $23,000 budget deficit and for decisions that contributed to really poor morale within the Circle.  That Board also went the emergency route to sign a contract without Board approval to repair the water intrusion issues in 104 and 213 for $5,200 - we're still having the same issues with those 2 units today!  And nobody, including me, called them out!

I saw the same pattern emerging here in that July meeting.  Kimberly ramming a roof contract through the Board without proper debate.  Contracts being let without Board Approval.  Important issues being overlooked (see foreclosure of 214) while dubious projects are undertaken (see the Paint Project).  Kimberly running the meeting while our President was unavailable (one of the reasons to elect only a President that will be on-site).  This was all too familiar and reminiscent of that past Board that was a failure.

So this time, I am trying to make a difference and make the Board President and Property Manager accountable to our owners.  The Blog was the answer as I was able to reach out to our snowbird owners as well as those here at home.  That's the wonder of the new electronic age!

Frankly, I would rather not be doing this Blog.  I've got more important things to do (like take a nap).  But I do believe this Blog is necessary, given the situation that the Circle finds itself in and the fact that our Board and Property Manager needs to be reined in.  I take no pleasure in doing this but if it makes the Board and Manager more accountable, mission accomplished!   At this point we still have work to do.

Just my opinion,
Andy Johnson

August 18, 2016

Budget and Common Maintenance.  I reviewed the financial report for July and there seems to be some reasonable questions that should be asked of our Board and Manager.

What stands out to me is the money spent on maintenance.  According to the minutes of the July 19, 2016, meeting, our President reported that there were several unexpected issues that surfaced for which no money was budgeted.  She says that most of the issues have to do with the age and condition of our buildings.  And she speaks of an assessment or increased maintenance fees that RPM and the Board are considering.

According to the July 2016 Financial report, the money spent for Common Maintenance for the 1st 6 months of this year is  $20,849.  And this does not include the money that  will be paid for the paint job on the exterior of 113/213, rumored to be $3,800.  The budget allotment for the year is $12,000.

RPM has introduced a new budget item:  "Unbudgeted Maintenance Repairs" with an expenditure total of: $2,195.50.

The total expenditures for both maintenance categories for the six month period is  $23,044.50.  In the last 4 months the Association has spent approximately $15,050 on maintenance.

In the laughably, inappropriate Unbudgeted Maintenance Repair item, the General Ledger for June 2016, shows a payment for $158 to our cleaning service - J.W. Services, an entry that really belongs as a Janitorial expense.

The other payments made in June  for the Unbudgeted Maintenance were to  Bravo:

• $1,762.50 for waterproofing  Unit 113 
• $275 for a 25% deposit on waterproofing Unit  110.

Common Maintenance shows payments to Bravo:

• $587.50 with the notation of 25% down - presumably for Unit 113
• $825 for waterproofing for Unit 110.

Lousy bookkeeping aside, those are 2 contracts folks: $2,350 and $1,100 - each with a 25% down payment - you don't make a down payment without a contract. 

The Bravo contracts are two that we know were processed in June.  We also suspect that a contract with Dyco for their chip/crack report was processed, perhaps in May.  It is rumored that Professional Rehabilitation Services (PRS) received a contract for $1,300 for inside repairs in Unit 113, probably in April.  And we have the exterior paint job on Units 113/213, another contract with Bravo for $3,800 that was completed this month.  These are contracts that we are reasonably certain were done in the last couple of months.  How many more contracts are out that we don't know about?  Most of the above are contracts could be/should be presented to the Board and the owners for approval.  None except possibly the PRS contract can be construed as "emergency" and that would be a stretch. 

When it comes to contracts for the Circle, Janet and Kimberly are stealth operators - contract proposals  fly in, are processed and contracts fly out, and nobody is the wiser!

Just out of curiosity, I reviewed the Board minutes for the last 6 months.  I wanted to find out if the Board was keeping us fully informed on maintenance expenditures.  Here is what I found:

• In February no maintenance expenses reported.
• In March- the Board approved a contract for $1,500 to Dumala to work on the drain pipe from the roof of Building A to the ditch. Also, a contract for $5,214 was signed to replace the water valve leading into our Circle plus other plumbing needs associated with the water line break into the clubhouse.
• April - power washer was purchased - price not disclosed.
• May - A contract?? was reported with Dyco to examine our buildings to determine the level of potential water intrusions through chips and cracks in the exterior walls.
• June - no Board Meeting, although from the financial reports presented above, we know that at least 2 contracts to Bravo, worth $3,450 were processed during the month.
• July - Bravo soffit work contract was discussed but not approved by the Board for $3,800.  And a wind mitigation survey was apparently approved for $600.   

As far as the minutes are concerned, that is the maintenance information available to the owners.   Obviously, little or no accounting of the maintenance money or contracts has been presented at the Board Meetings in the last 4 months.  That includes the contracts that we are reasonably confident were processed during that period.  

Now, as noted above, Janet and Kimberly are talking about a need for an assessment or budget adjustment because of the maintenance expenses.    Shouldn't the owners know what the maintenance issues are, that is costing us a whole lot of money, before we consider an assessment or increased maintenance fees?  If Janet and Kimberly are going to be wanting extra money from us, then, I think, we should have a little quid pro quo from them and demand a full accounting of maintenance contracts and expenses!  And we should require that all contracts, short of a real emergency, be presented to the Board for approval and published in the Board minutes!

Flood Insurance News.  Recently there have been a few articles in the local paper regarding flood insurance.  It seems that the huge increases in flood insurance (ours have doubled in the last 4 years) are set to continue.  We won't know for sure until the November bill becomes due.   Obviously large increases mean larger maintenance fees.  And this is not the fault of the Board since FEMA dictates the flood bill.  Private insurance has yet to impact condominiums.  It doesn't look good, if we are to believe what the papers are saying.

Just my opinion!
Andy Johnson

August 14, 2016.  

The deed has been done.  Our President has apparently signed a contract to have the exterior of Units 113 and 213 painted.  Aided and abetted by our Professional Manager, she has proclaimed - apparently -  she has made no public accounting of her actions - that those units had to be painted without Board approval because it was an emergency! And painters started on D building yesterday, front, back and side, a job that will likely cost over $5,000.

Never mind that the issues involved with 113 extend back to 2014 when $5,200 was spent on an emergency basis on a system designed to carry away water from the slabs of 104 and 113.  How did that work out?

To define this situation as an emergency is really stretching credulity..  How 213 was included in this is even more remarkable.  Two thirteen has had absolutely no water issues from cracks, caulking or otherwise.  I can say that because the owner of 213 agrees and has suggested that there is an alternative reason for the difficulty with the water intrusion in 113.  I can say that because I checked 213 regularly for any sign of water intrusion and there was none;  the aroma in that unit is sweet without a hint of mustiness associated with water intrusion, mold or mildew.

So where do we go now?  Are there any more "emergencies" that are on the horizon for more paint jobs?  Are we finally going to have an accounting of the actions taken in the last couple of weeks about this water intrusion issue?   Will there be a Board Meeting so that the rest of the Board and the owners can express their views?

Mind you - there has never been a full discussion of the need for painting 113 or even for painting of  all the buildings. This problem was first mentioned in the Manager's report in the Board Meeting of  July 19, when Kimberly mentioned that requests for proposals were being taken for the building paint job.  Janet, in her President's Report, mentioned the need of a possible assessment for multiple building repairs.  There was no mention of a contract or even a need for painting of 113/213.

As Janet's memorandum says, which is quoted in the most recent Blog post, the experts she has called in to assist with identifying the problem do not agree on exactly what is happening.  And we have owners here in the Circle, with construction experience that strongly disagree with an attempt to paint our buildings because of a very questionable decision that water intrusion in our units is caused by cracks and chips.

Whether you agree that painting the buildings is a "necessity" as Janet believes, or not, you have to be  concerned about the way this whole thing went down.  A President using their power to act in this manner without even the benefit of  a serious public discussion, is behavior that should not be sanctioned.

This is a very contentious issue.  Our President should be seeking the advice and consent of the Board and the owners and not taking action, much less questionable emergency action, on this problem.  Our President should be giving this problem some very careful thought.  CYA should be on her mind!

Just my opinion!

Andy Johnson

August 11, 2016

I'm sure that there are a lot of questions regarding my Blog since it was issued.  So I am happy to report that the Blog was very successful, and I have to give thanks to Kathy Corey who sent emails to all the owners of whom she had an email address.  The Blog got widespread attention because of Mrs. Corey's actions, which occurred  before I wanted to release it.  I sent it out to a select few owners to get feedback on whether those owners thought the Blog was of some value and if it should be continued.  Mrs. Corey beat me to the punch and released the Blog link before I was ready.  It helped  that the rant that Ms. Corey sent along with the Blog address, probably got the owners attention and curiosity which helped increase the viewing numbers.  To date, the statistics show that  the Blog has been viewed over 110 times.

I'm happy to report those numbers because, for better or worse, it highlighted the interest that the owners are taking in the business of the Circle.  Our owners are the bedrock of the community - engaged and participating owners  are the ideal and necessary if we are to keep the community together, thriving and making our home a better place to live!

Today's editions is a combination of news and views of events following the last Board Meeting.

The Building Painting Project.  Our own Wikileaker, sent me a copy of a memorandum authored by Janet regarding many things but in particular, the Painting Project.  There is one interesting item in the memorandum which gives me pause.  If my reading of the memo is correct, it appears that Janet has already started the process of painting the building without Board approval.

The portion of the memo in question is reproduced below:

Water/Moisture Issues - Units 110/113 - Kim has had 3 contractors and an engineer come out to try and determine the cause of the water/moisture.  Of course, they have varying opinions and uncovered the potential issue of footings under the FL rooms.  Unit 113 doesn't seem to have a problem in the back of the unit; it seems to be concentrated on the side and front of the unit.  Units 113 and 213 are being painted and sealed with the Dyco product as it has been speculated that the moisture may be coming through the walls and not up from the ground.

This is a very contentious issue as we have 2 male owners in the Circle that have been associated with the construction industry, that are adamantly opposed to the paint project.  As highlighted above in the memo, her own experts apparently do not agree with the cause of the problem.  Additionally, the owner of 213 insists that he does not want his unit painted and he does not wish to see $60,000 spent on what he says is not a solution to the problem.

When you look at this problem logically, the units that Janet has cited as having water intrusion issues due to paint chip problems - 104, 105, 110, and even 113 - are really issues from water coming into the units under the slab.   I say that the money can best be spent on the sealing the buildings against the growing issue of mold, mildew and water arising from water intrusion under the slabs.

There is no emergency associated with this problem.  A Board Meeting should be called and a serious discussion of the issue should be done before action of any kind is taken..

Foreclosure of 214.  Janet has informed me that that there was indeed a report on the foreclosure in the May Board Meeting, which is contrary to what I reported in my Blog.  I had checked (and rechecked) the minutes of that meeting and found no mention was of 214.  She tells me that it was reported that there was no new information in the foreclosure process.

And that, to me, is news, very troubling news.  At the March meeting, IIRC, the last meeting that I was a Board Member, we had a very animated discussion about 214 and the role that Ms. Hathorn had played.  I had reported that Anne had admitted to me that the filing had been held up because an assistant who was supposed to do the filing, did not do so.  Also, she had received a payment plan from the owner of 214, so she was holding up the process until she was able to determine if the plan was legitimate.  Both the Board and the audience was outraged at the delay and many felt that Ms. Hathorn should be fired at once.  It was decided that she should be allowed to finish the process and then alternative legal representation should be found.  The status of the foreclosure was still: not filed!

So in the Board Meeting of May 2016, it seems that somebody did contact Ms. Hathorn to check on the status.  However, it seems very definite that the $64,000 question was either not asked or not answered:  Has the foreclosure been filed?

Failure to ask that question and to bring the answer to the Board Meeting resulted 2 months delay in the processing.  Somebody was asleep at the wheel!

C Roof Contract.  The Board approved a contract with ThunderBay to repair C Roof.  My personal belief, is that that was a poor decision.  And I really have only myself to blame.  I received both the Martin proposal and the ThunderBay proposal during my period as President.  And, unfortunately, I passed those proposals along to the new Board, never thinking that when the details of two contracts were compared, that ThunderBay would emerge the winner!  I should have trashed the ThunderBay proposal.

The details of the contracts are starkly different:

ThunderBay was proposing a repair contract,  to spray foam over the roof to: "elevate the surface as required to reduce the amount of ponding water on the roof surface." The proposal was designed to give the original roof an additional 10 years of life - more than that was a bonus.  They would not be removing the drains, a consistent source of leaks in roofs in the circle. The warranty was for 10 years but didn't cover any leaks resulting from drain problems.  The financial terms were changed to spread the cost over a longer period.  The cost was $37,772.

Martin Roofing was proposing a new foam roof.  They offered a new roof warranty of 10 years with a warranty extension available at additional cost.  As a new roof, it was designed to give us 20 years of life.  The drains would be removed eliminating a potential leak problem.  They offered no change in their payment terms.  The cost was $27,400..

Martin's proposal was the same as their proposal to Buttonwood and their Circle elected to have all 6 of their roofs done with foam by Martin.  We had a foam roof on B Building which gave us satisfactory performance for 20 years.  Since we are dealing with foam in both contracts, it appears that the difference was the fact that ThunderBay proposed to put 2 coats of protective coating on the foam surface.  Two coats of coating is a deal breaker?  Then get Martin to put on 2 coats in his proposal - it would probably still be a lot less expensive than the ThunderBay proposal.

In my little world, the new roof offering 20 years of life  trumps a repair roof offering 10 years of additional life.  However, there was very little discussion of the merits of either proposal except for the comment that Kimberly made that Eric had told her that there was a problem with Martin's roof due to bird pecks.   The contracts had been distributed to the Board Members giving them an opportunity to read and, hopefully, understand the contracts - I doubt that they did since you have to look close to see the word "repair" in the contract.  The details of the contracts were not read to either the Board Members or the audience.  No discussion of the relative merits of the proposals took place,  The approval process took five minutes or less from introduction to approval.  And the Circle got stuck with, in my opinion, a bad contract.  My bad!

Another bad is the statement that I made in the 1st post re: C Roof Contract.  Kimberly has stated that there would be more foam coverage in this contract than the repair contract that I got from ThunderBay last year.  That appears to be true and I was incorrect in the statement that I made regarding that issue.  But what does that mean?  Well, apparently the roof will be closer to being completed covered with foam - but it still leaves the building vulnerable to those drain leaks.  The point of the contract proposal was to eliminate the ponding - this contract will do that.

That's it for today.  I plan on continuing this Blog and posting as issues of importance arise.  If you are interested in following the Blog, you might want to bookmark this page.

Andy Johnson

Aspen Circle News and Review

The purpose of this blog was, initially, to highlight Board activities and critique actions that I thought warranted criticism.  The Blog was not created just for the sake of criticizing but to point out the actions that were questionable in the hope that the information in the Blog would contribute to making the Board more accountable to the owners.  It was done also, to inform those owners who are unable to make the meetings (particularly the snowbirds).  And to help those who have gone to the meetings and come away not understanding what took place.

I've decided that their is value in opening the Blog up to other activities as well.  Those semi-serious activities that are happening in the Circle, whether Board related or not.

Again, this Board represents only my opinion and does not necessarily reflect the views of other owners in the Circle. 

Board Meeting of July 19, 2016

C Roof Contract:

Kimberly, in introducing the 2 contracts up for bid (Martin and Thunderbay), stated that she had talked with Eric, the owner of ThunderBay, about Martin's work.  Eric had told her that, in his experience, he has seen holes (bird pecks??) in the roofs that Martin has done.  Kimberly presented that information to the Board.  Presenting a contractor’s opinion of a competing contractor's work in a supposedly neutral contract review process is not correct and is unethical.  A response to this charge made by Eric was neither obtained from Martin nor presented to the Board. 

The contract proposal by ThunderBay for the C roof was presented simply as a contract proposal for Roof C, not as it is:  a repair contract.  This contract is designed to extend the useful life of the roof (a ten year option), not as a full, new roof as was Martin's proposal (a 20 year option).  This is, in fact, the same repair contract that was presented about a year ago with different warranty and payment  options.   

ThunderBay will not be removing the 3 drains but spraying foam to "elevate the surface as required to reduce the amount of ponding water on the roof surface".  In other words, it is simply dealing with the ponding problem on that roof.  Not removing the drains is significant because the warranty presented by ThunderBay will not cover leaks involving the drains.  We know that a significant number of roof issues that we have had in our buildings, have resulted from drain problems.  In fact, at least 1 of the roof issues that C has experienced since this roof was installed in 2006, was from a drain currently installed on that roof.   Also, there is nothing in the contract language that suggests a greater area will be sprayed which was stated as fact at the meeting.

The Board unanimously approved the ThunderBay contract proposal.

The Martin proposal would have removed the drains, thus eliminating potential problems in the future.  A foam roof alternative should not be rejected out of hand as it has been proven to be a viable and less expensive option for flat roofs - as we know from our own experience with a foam roof on Building B.   

If there was a legitimate problem with the Martin proposal and their work or any contractor, and it is verified (and not based upon a competing contractor’s comment), then simply table the item and get another proposal. 

This is a commentary on the way the contract was presented and the facts that were glossed over to arrive at the decision that was made.  If the Board Members were legitimately aware that they had approved a repair option for C roof, then so be it.  The problem is that there was no airing of the issues involved in this contract before the vote.  There was absolutely no discussion by the Board Members, of the contract prior to the vote.  The details of the contract were not presented to the rest of the Board and definitely not to the audience. This is not a process that should be generally followed when bidding proposals are up for approval!

Props to the Board for getting a reduced Maintenance Agreement with ThunderBay saving the Association $1,200 yearly.

Water Intrusion Issues: 

The President reported that there are issues with cracks/chips in the paint of some of the buildings leading to water intrusion issues in a couple of units.  I understand that she was referring to the units of 104, 105, 110 and 113.  The management answer to preventing the water intrusion issue is to waterproof the buildings by a new paint job with a product from a contractor that would prevent water intrusion due to chips and cracks in the exterior.  The paint job would cost $16,000 per building and, with six buildings, I understand that we are talking about a total of somewhere above $60,000.

Now I am aware of the issues with 113, a legitimate crack/chip problem that dates back to 2014. The reason for the large expense associated with repairing that unit is due to the leak not properly diagnosed in 2014, allowing mold and mildew to build up until the problem became very severe.   

However, the problems in 104, 105 and 110, as far as I know, are not due to chips and cracks in the exterior paint; but are issues related to water coming into the unit from under the slab.  So, in 10 years since the last paint job, we have had issues with 3 units  with water intrusion difficulties due to cracks and chips (I would add 116 and 216 to that list since they had unexplained water intrusions last year) and only 1 has been verified!

Now $60,000 is a lot of money to spend for the possibility (not probability) that there may be more water intrusions in the future related to cracks and chips.  

To paint all of our buildings for the possibility of the protection it would provide for a couple of units, does not seem to be cost effective.  We are scheduled for a paint job in another 10 years.  Why not see what happens and make repairs as they come up instead of panicking about the possibility that one or more units may suffer water intrusions.  Fix the water intrusions as they happen, and do it very quickly.  The leaks resulting from cracks and chips are small, not of a gushing nature and easily repaired when found quickly.  The Association is now aware of the problem and, if any unit experiences water intrusion due to the cracks and chips, then fix it!  

We should take a wait and see approach.  Handle each issue as it presents itself, and budget for the extreme paint job when it is due (in 10 more years). If this problem continues and rises to the level of epidemic proportions, then proceed with the drastic action that is currently being proposed but not before!

Foreclosure - 214

In March of this year, Ms. Hathorn admitted to the fact that her assistant had failed to file the paperwork necessary to process the foreclosure on Unit 214.  Further, she indicated that she was holding back on processing the foreclosure in lieu of a payment plan that she had received from the owner.  This information was reported at the March 2016 Board Meeting.  At that meeting, I resigned due to health issues and informed Ms. Hathorn that Kimberly would now serve as her contact person for the Association.

In May, another Board Meeting was scheduled and, per the minutes of the Meeting, no mention of the Unit 214 foreclosure was made.  Now, in late July, we find that there was again a delay of filing, again due to a possible payment plan.  Four months after our attorney was scheduled to file the foreclosure paperwork, and still that paperwork had not been filed!  A motion was made and approved by the Board that Ms. Hathorn be told to file the foreclosure within 2 weeks.

So the questions are:  What happened between March and July that resulted in the delay of filing?  We have been told that the holdup was the supposed payment plan but that can't be all that has occurred in that time span.  Who has been monitoring the foreclosure process during this period?  Why wasn't this delay reported to the owners in the May Board Meeting?

Obviously, this delay has caused some serious problems for the Association, particularly in the financial area.  Hopefully, the latest Board motion to file within 2 weeks has been accomplished by Ms. Hathorn.  And, hopefully, our management is now monitoring the situation so that we can finally move forward in the process!