Highland Springs HOA Board of Directors
Meeting Held
August 23, 2011
Present were: Art Cross, Paul Hamilton, Pam McClellan, Ed Penaflor, Jennifer Garber, and Kim Boyd
Management Company Reports – Kim provided each board member with: 1) year-to-date cash flow statement, 2) management agreement, 3) resident list, 4) collections status reports, 4) subdivision lot layout, 5) Oak Aqua Inc. contract, 6) TruGreen contract, 7) bid specification sample, 8) statement of income and budget for each month, year-to-date
Lots on Center Road are part of the subdivision. They were fishing last year and Art asked them to leave. Art will talk to owners about being part of the subdivision and make sure there are no issues. Kim gave lot numbers as“107” on Center Road & “389” on 100 E.
Vacant lots need mowed. Old construction debris is on some of the lots and need removed. Huge eyesore and can’t be mowed because of this. Art & Kim will get with the owners, to get issues resolved.
Homeowners want to see leadership, and want to see things, proactively, getting done with landscaping, violations, etc. The board will work with the management company on violations until we are organized to do it ourselves.
Management Company Contract - Paul asked us to review the current contract with the management company, stating “if we sign it we will be locked in for the next twelve months”. Kim stated “I am not asking you to sign it. It is your current contract and is a “rolling contract” with a 60 day grace period for contract termination from either party. The contract is a breakdown of exactly what duties the management company is to perform for us”. The board will continue working with the management company until such time it feels a change is warranted.
Other Contracts - A discussion was held regarding the contracts with Oak Aqua, Inc., for the ponds maintenance, and TruGreen, for common area & pond landscaping maintenance. The board is looking to cut costs by scaling back both contracts and have only necessary services performed. A quote was presented, by Art, from Rosa Aquatics out of Galveston. The cost was $110 per application and expected to be 7-8 times. Kim stated “the ponds were developed as drainage retention ponds to control flooding of properties and not there to be pretty or fish in, and that is why they have been treated by the aquatics company as a drainage retention pond”. Art stated “the ponds can’t be treated as drainage retention ponds, they have to be treated as fishing ponds or we will end up with a lot more problems. Rosa Aquatics understands what we want”. Arts recommendation was going to be to stop the Oak Aqua, Inc. contract and hire Rosa Aquatics to replace them.
Oak Aqua Inc. – Total contract for the year is $3,180. Algae control of $1,900 and trash pickup of $315 has already been paid out for the year. The other three items of the contract: 1) riprap weed spray, 2) aquatics weed spray and 3) shoreline weed spray are paid as performed, and total $965.
Art made a motion to keep Oak Aqua Inc. contract until the end of the year, as they have been paid for the algae control and trash pickup, and eliminate the last 3 items of the contract (a total savings of $965 which will go back into the general fund). At that point we will take bids for the next season for algae control only and statd “as needed”. The motion was seconded by Ed and passed unanimously. Kim will contact Oak Aqua Inc. to not perform the last three items of the contract.
TruGreen – Total contract for the year is $6,814.42 and is invoiced as services are performed. We can eliminate, from the contract, anything we want. Contract may be terminated without notice. Kim has spoken with TruGreen regarding a refund for entrances, as they billed us for weeding that wasn’t done. We will be getting a refund for that. Paul asked what has been spent year-to-date. Kim responded that $4,986.04 has been spent. $202.23 in April was for round one fertilization, $472.30 in May was for pruning, mulch and first mowing. Art questioned if Paul was performing the mowing in May. Paul stated he mowed for a month but wasn’t sure when he started and ended, but will check his calendar at home. Kim asked “if that was when Paul fired TruGreen”. Paul stated “he did not fire them, but had just mowed the night before they showed up to mow and asked them not to mow again.” Kim stated “there was an incident when they showed up and were fired and then Paul started mowing.” Paul stated “there was no one mowing and he started mowing, after talking with Kim, and did so for a month.” Kim stated “she never had communication with regard to Paul mowing.” Paul stated“he has the emails at home” and Kim stated“she has the emails as well”. Kim said “when she found out Paul was mowing, she told him he had to stop.” Paul said “he can tell Kim the date the contract was put in place and then TruGreen showed up about a week and a half later and that is when the discussion took place. TruGreen started about a week later.” Paul doesn’t have the date with him, but does have it on the calendar at home. Kim will send us a spreadsheet of TruGreen expenses paid year-to-date and the date each service was performed.
The entire contract was reviewed for possible items to eliminate for cost savings. We only received one flower rotation in the summer. Kim will check to make sure we weren’t charged for the spring rotation. We don’t want the fall rotation. Jennifer asked “if we don’t have them do the fall flowers will we have someone else do the fall flowers?” Art stated “the current flowers should last until the first frost, as they are being well taken care of with the sprinkler system providing water. The association members are not happy with TruGreen and intend on setting up a landscape committee for 2012 to manage the entrances landscaping. We plan to have the committee established for removal of the fall flowers. If that has not been accomplished, volunteers will remove the fall flowers.”
Art made a motion: 1) no fall flowers ($210), 2) no fall broadleaf weed control ($189), 3) no trim and shape shrubs ($165), and 4) form a landscape committee. Jennifer seconded the motion and the motion passed unanimously.
Contract Bids – Kim presented each director with a sample “bid specification” form. She stated all bids will be put on a spreadsheet for board review. To properly budget for the year, all contracts should reflect exactly what services are to be performed with an annual maximum. All contracts require proof of liability insurance. If a contractor is not incorporated a W-9 is required. Art would like to keep contracts awarded to companies in the Kokomo area, not only to support our community, but for reaction time to our needs.
Budget and Expenditures– The board is concerned about saving money in the budget to put back in the general fund. Art was under the assumption that the association was running in the “red”. Kim stated we are in the black. We are self-sufficient and have been for several years. As a not-for-profit entity we have to be careful how much money we roll over each year. We have to show that the money not spent is being put back for “something”. We also have a “reserve” account on top of money held in checking. So we definitely have to be careful how much money we are “rolling over”.
Miscellaneous items discussed
1)Jennifer brought to the attention of the board a dead pine tree at the front entrance. Art and Paul will look into this and determine if it is on the landscape easement or homeowner property.
2)Pam brought to the attention of the board that at the back entrance, the irrigation system is watering the “Atlas vacant lots”. Kim stated when Beazer had the subdivision they had the irrigation system set up to water those lots promoting their sale. We need to get a bid to have those capped off.
3)Kim stated we have to be very careful taking care of the “action items” or other things ourselves. If someone gets hurt doing these, the association is liable. “Action items” being mentioned are: cutting down trees, messing with electrical, capping off irrigation.
4)Art wants to figure out exactly where the landscape easements are, so for future bids they are not figured into the square footage to mow. Kim stated entrances are part of the adjoining lots and the signs and flower beds are actually part of those lots, with the plat reflecting a landscaping easement. The HOA is responsible for the area in front of, just to the sides of and just behind the sign wall. Kim will pull the plat, showing the landscape easement boundaries, and bring to the next meeting.
Violations
A discussion was held regarding the “vacant lots” and “undeveloped lots” . The vacant lots are scattered throughout the developed portion of the subdivision and are the “problem lots”. Kim stated the undeveloped lots can be farmed. Pam showed on an aerial that all but the upper northeast corner is currently being farmed. The upper northeast corner has not been mowed and currently has thistles that have gone to seed. Both Kim and Pam stated it is illegal to allow thistles to grow and go to seed. No action was taken by the board.
Art gave Kim a list of problems properties and asked Kim to take action with regard to the following discussion. There is “boundary fence” down at 3 locations. Two are in terrible condition with whole sections of fence missing. There are kids coming through from Indian Heights and we have had over 50 cars broken into. Art has assisted a couple of people with putting the fences back up, but it is becoming time and cost prohibitive. Art requested that Kim send letters to these homeowners asking “nicely” for repair of the fences so we don’t have to take legal action.
Kim stated she does her “drive through” and compiles a violation list and sends letters as part of her job. She asked if we wanted her to continue doing this or wait for the list we send her. Art stated we do not have a committee setup to do this yet. Pam stated she thought it would be best to continue to have Kim do this until we were set up for it. Paul stated Jennifer is now the resident director and he can train her to do this. Jennifer stated she does a 6am morning walk and could do her job then. Kim stated she could work hand-in-hand with Jennifer, take her list and send out the letters. Then would check off the list which ones were good and which ones were still there. And then it would be up to the board to decide the next course of action. All violations will go through Jennifer and she will get with Kim to handle written communication with the homeowner. All actions need to be in writing. Kim advised that we don’t handle violations with our neighbors, orally. Wording can be left to interpretation. If the board decides to handle the letters, the managementcompany needs a copy for the file.
Kim stated she does what we tell her to do now. She is here to guide us. When we make decisions she will speak up if she thinks it is something we can get in trouble for or something she thinks she can get in trouble for she will make sure it is in the minutes if we decide to do something that is totally against the covenants. She is going to protect herself that way, but will let us know. That is her job and she strongly suggested we go over the management contract and read what it says. There is a lot more to property managing than some of things we have been involved with so far.
Paul asked that Kim send copies to Jennifer so we know what is being sent to the homeowners. Kim and Jennifer will create a violations report to present to the board periodically. Paul stated that he had created job descriptions for everyone and he has one for Jennifer since he did that job. They are in accordance with the by-laws and we can change that job description to reflect the changes. He stated the by-laws are very brief and don’t go into detail so he went into more detail. Kim stated a lot of the by-laws are contract covers and that is why you have a management company. Kim commented it sounds like in the future we want to go “self-managed”. Art stated how far in the future we don’t know. He also stated we have to look at whether we want a management taking the financial part. Kim stated it is not necessarily just the financial but it is the legal aspect. She has done this job, as well as others, and you have to make sure you cross your “t’s” and dot your “i’s”. As far as your duties, yes those are your duties for your by-laws but that is why you have a management company to take that burden off of you. Yes you do have guidelines, but don’t forget to use your management company that you are paying to do those things.
Art stated how far in the future we want to use Kim’s management company or another management company…that is in the future. It will be determined by how well we all work together and if we can get beyond some of the past issues. Art stated that almost everyone in the subdivision does not like Kim’s management group and comes from years and years. Kim stated a year from now there won’t be anyone who likes this board of directors. That is part of why you have a management company…Kim is the person they hate, that they don’t like. Pam stated it allows us to remain anonymous. Ed stated we are removed from that. Kim stated “do I want them to like me…no – I want them to follow the rules… That is my job to enforce the covenants and restrictions and they are never going to like me for that.” It boils down to - can the board of directors work with the management company and is the management company giving the association what it needs and looking out for the community.
Art stated you are always going to have people that don’t want to do nothing. They don’t ever want anyone to tell them what to do. We absolutely have that type of people. That pertains because of foreclosure and other people buying homes real cheap, maybe not the most desirable people in our subdivision. But that is what we have to live with. Kim stated that is because this is America and this is my property and I’ll do what I want. Art stated there were a whole lot of people upset at management because they don’t see the violations coming out and they don’t think anything is being done. They want things done - they want things changed. We don’t want to look like Indian Heights. You have two different groups. They don’t hate management – they just want things done. Kim stated they (the homeowners) don’t think she does anything. She gave a prime example of Art’s boat. She sent him 3 letters before he did anything. She did her job – she didn’t take him to legal like she should have. He was getting notification and chose not to follow the rules. She didn’t take him to legal because she knew eventually he would get it out of there. This type of decision will now be up to the board. Do you spend money for legal action or do you let it go. Trash can violations can be taken to court and you are going to win, but are you going to do it? How much is it going to cost to do it? Kokomo is very good for weighing on the side of the homeowner when it comes to homeowner against associations. A prime example here where judge put us in mediation and we had to decide who was going to pay what for the attorney fees, with regard to the “wood pile” case. It cost the association thousands of dollars. There are other cases that we won and we got the attorney fees. Did we every get it from the homeowner – no. They went into foreclosure and we lost it all. So that all has to be taken into consideration. And now the board will have to weigh that option as we no longer have anyone (the developer) behind us with deep pockets.
Pam asked if there are fines with the violations. Kim stated Indiana is a “no fine” state. The only way you can get money is when we mow their yard we can charge them that fee. When we take them to legal, that is when they start incurring legal fees. But we have to actually incur a cost before we can charge that back to them. We have to charge them the actual fee incurred. They can fight it – they can go to the judge and he can decide it. Art asked what happens if we charge them a mowing fee and they don’t pay it. Do we file a lien on their property? Kim stated we don’t file liens anymore because liens have to be renewed every year and there is cost with that. Now it’s small claims court. Generally we will wait until the next years dues – let it float on their account because it is only $35 or $40 to mow. It runs with the account until there is enough on the account to take it to legal. Payments made go to the miscellaneous fees first and then the association dues.