Post by navy85 on Jan 6, 2006 22:37:52 GMT -5
I received my documentation. I was asked to meet with SBB and the HOA Board to discuss this and did so yesterday afternoon.
Present at the meeting were Fred Shapiro, SBB President; Lora Compton, SBB Sr Community Manager; Roderick Middlebrooks, HOA Board Member; Judd Austin, HOA Attorney; and Malcolm Louden from Centurion American (and who I understand will be coordinating the Advisory Committee for the board).
They gave me two documents - the 1st Amendment to the Second Amended & Restated DCC&Rs, which actually established the Working Capital fund in September 2003, and the 2nd Amendment, which changed the universe of allowable expenditures for this fund. Note that this second document was filed on December 29, 2005 - after the annual meeting where I was told it has been changed (Judd Austin did state that he misspoke at the homeowners meeting and should have said he did not know). Both of these documents are posted on the woodlandsprings.com website, under Documents & Downloads >> DCC&Rs (thanks, Dave, for finding the filed copy with Tarrant County), and on the Yahoo Groups website under Files >> DCCRs. I was also given a summary of the Working Capital fees collected and expenditures from the fund through November 30th.
I don't like the revised definition of what the working capital fund can be spent on; this allows the HOA to use capital funds to pay for operations & maintenance expenses. In my line of work, this commingling is a big no-no, has tax implications, and has gotten people fired. I do not know if there are any legal or tax issues associated with this practice by a homeowners association, or if there is any recourse we have, especially when we are in the Declarant Control Period where the Declarant (Mehrdad) gets to make all the rules. The bottom line is that as of November 30, the working capital fund balance was $5,224.30.
The capital funding summary shows a total of $134,200 in working capital fees collected and seven expenditures totaling $129,948 (the net does not balance with the amount in the money market fund - I did not ask about it at the meeting but will follow up, although the difference is in the homeowners' favor). I see six of the expenditures as legitimate uses of this fund. The seventh - and over 80% of the total - I do not. They are using the working capital fund to pay for gate monitoring and security at the pools. The total amount is shown as over $111,000, which I assume is for the two summers we have had gate monitors. I did express my opinion that I did not agree with it, but that the DCC&Rs give me little choice.
I have received the answer I was afraid I was going to get - most of this money was spent on operating expenses. I am also concerned that the capital fund is only about $5,000 for the infrastructure we have (another issue is whether the HOA even has an asset list) and the intent is to set aside only $40,000 of an anticipated $65,000 in working capital fees for 2006. Further, the wording of the 2nd amendment provides no guarantees that this amount will actually be set aside, or that it might not be used in subsequent years.
The amount collected is not as high as I thought it might be since the fund was not official until 2003, according to the 1st amendment (although I know of at least one homeowner who closed prior to that date who paid into the working capital fund).
I have communicated this information to our Advisory Committee so they can digest it before their next meeting.
Present at the meeting were Fred Shapiro, SBB President; Lora Compton, SBB Sr Community Manager; Roderick Middlebrooks, HOA Board Member; Judd Austin, HOA Attorney; and Malcolm Louden from Centurion American (and who I understand will be coordinating the Advisory Committee for the board).
They gave me two documents - the 1st Amendment to the Second Amended & Restated DCC&Rs, which actually established the Working Capital fund in September 2003, and the 2nd Amendment, which changed the universe of allowable expenditures for this fund. Note that this second document was filed on December 29, 2005 - after the annual meeting where I was told it has been changed (Judd Austin did state that he misspoke at the homeowners meeting and should have said he did not know). Both of these documents are posted on the woodlandsprings.com website, under Documents & Downloads >> DCC&Rs (thanks, Dave, for finding the filed copy with Tarrant County), and on the Yahoo Groups website under Files >> DCCRs. I was also given a summary of the Working Capital fees collected and expenditures from the fund through November 30th.
I don't like the revised definition of what the working capital fund can be spent on; this allows the HOA to use capital funds to pay for operations & maintenance expenses. In my line of work, this commingling is a big no-no, has tax implications, and has gotten people fired. I do not know if there are any legal or tax issues associated with this practice by a homeowners association, or if there is any recourse we have, especially when we are in the Declarant Control Period where the Declarant (Mehrdad) gets to make all the rules. The bottom line is that as of November 30, the working capital fund balance was $5,224.30.
The capital funding summary shows a total of $134,200 in working capital fees collected and seven expenditures totaling $129,948 (the net does not balance with the amount in the money market fund - I did not ask about it at the meeting but will follow up, although the difference is in the homeowners' favor). I see six of the expenditures as legitimate uses of this fund. The seventh - and over 80% of the total - I do not. They are using the working capital fund to pay for gate monitoring and security at the pools. The total amount is shown as over $111,000, which I assume is for the two summers we have had gate monitors. I did express my opinion that I did not agree with it, but that the DCC&Rs give me little choice.
I have received the answer I was afraid I was going to get - most of this money was spent on operating expenses. I am also concerned that the capital fund is only about $5,000 for the infrastructure we have (another issue is whether the HOA even has an asset list) and the intent is to set aside only $40,000 of an anticipated $65,000 in working capital fees for 2006. Further, the wording of the 2nd amendment provides no guarantees that this amount will actually be set aside, or that it might not be used in subsequent years.
The amount collected is not as high as I thought it might be since the fund was not official until 2003, according to the 1st amendment (although I know of at least one homeowner who closed prior to that date who paid into the working capital fund).
I have communicated this information to our Advisory Committee so they can digest it before their next meeting.
Instead he lied... oh, sorry, misspoke and said that there was an amendment. He's a frickin attorney, and should know the difference between telling the truth and lies!!!! I know most attorneys can be crooks, but come on!!! He was probably hoping that no one would ask to see that amendment and when he was asked about it I betcha he got a bit of sweat on his brow!!!! I agree with Nursey .. it is very very shady!!! There has got to something that can be done, but what??? 