Letter to the ACHOA Board, Board Candidates and Fellow Neighbors

Webmaster’s Note: This article was written after the ArrowCreek Town Hall Meeting but before the Oct-Nov 2017 ACHOA Newsletter was distributed. Budget numbers and assessment fees are fluctuating and will fluctuate up until the board approves the budget at the ACHOA Board Meeting on November 7, 2017, currently billed as being held at the ArrowCreek Residents’ Center. If you have questions for the board, please come to the Nov. 7, 6 PM board meeting.

This was posted on Nextdoor.com and was replied to by Paul Burkett and Jim Verhey by the time this article is posted on ArrowCreek411. Paul’s and Jim’s responses are also here after Beate’s letter.

The following is by Beate McGhee:

I have read the CC&Rs, Bylaws and the Articles of Incorporation trying to
understand my rights and role as a resident of ArrowCreek and the power and
duties of the HOA board. I went to the Town Hall meeting on 9/26/17, I read
our president’s, Bob Kirtley’s posting, and other postings on ArrowCreek411
and various messages on the Associa website, and the emails from the board.
The following are some questions I would like to direct to the ACHOA board
and board candidates, and concerns I would like to share with my fellow
neighbors.

ISSUE CLARIFICATION
1) Added Purpose
The CC&Rs change regarding the added purpose ‘to cooperate with The Club of
Arrowcreek’ (TCAC) when the HOA board deems it to be in the interest of the
community was not in previously published redlined versions for community input.
The first time I saw it was on the blast email to homeowners one day before
the Town Hall meeting held on 9/26/2017. The change of purpose was not included
in the briefing at the Town Hall meeting.

Questions:
-Why was the added purpose excluded from the briefing?
-Why did the board not respond to owner’s questions and explain the intent
of the added purpose, its scope and limitations?
-In more recent publications by the board, reassurance is given that the
added purpose is not a “sinister” plan to subsidize TCAC. The amended CC&Rs,
and specifically the language of the added purpose, do they preclude
financial agreements of any kind with TCAC that could burden homeowners with
additional costs?
– Why is the added purpose needed?
-If the ACHOA is to “cooperate” with TCAC when it is beneficial to the
community, is there a reciprocal provision in the TCAC governing documents
to “cooperate” with the ACHOA?
-What role did homeowners have in the process of adding another purpose to
our community?

2) Board power to increase dues by 15% and implement special assessments of 15% year after year.
The Governing Documents Committee, that includes members of TCAC, proposed
that combined annual assessments and special assessments are not to exceed a
20% cap within a calendar year without a vote by lot owners. The HOA board
superseded this proposal without voter input and pertinent language does not
appear in the most current redlined version of the CC&Rs for voters to
review. At the Town Hall meeting it was simply explained that the board
found limiting annual dues increases to a total of 20% too limiting. End of
discussion.

Questions:
-Why after years of a balanced budget, secure (overfunded) Reserve Funds,
and years of no increases in HOA dues does the board find it needs to
maintain its power to implement an annual composite increase of 30%?
-What role did homeowners have in this decision?

3) Underfunded Budget 2018.
The Strategic plan identifies expanding amenities and offerings, and
enhancing and expanding the Residents Club as strategic focus areas. It
identifies budgetary needs to staff and maintain expanded amenities.

Per Town Hall presentation, the two main cost factors of the 2018 budget
are: a) $250K for architect & engineering expenses for the proposed
expansion of the Residents’ Club. b) $230K increase for payroll and benefit
expenses. These expenses are to be incurred before breaking ground for the
Residents Club expansion and before expanding other amenities.

The 2018 Budget is underfunded by $450 K and the deficit is to be covered by
surpluses from the previous two years.

Questions:
-Most board members serving on today’s board ran for election promising to
keep our HOA dues low. What are the anticipated costs going forward with
the goals of the strategic plan?
– What will the budgets 2019 and beyond bring forth for homeowners’ HOA dues
and special assessments when we may begin realization of some of the goals
of the Strategic Plan and in case we have other unexpected costs?
-Per strategic plan survey, homeowners thought that the Residents Club was
the number one amenity needing improvement. What role did homeowners have in
the current plans for a major expansion of the Residents Club rather than a
less costly improvement?
-Was consideration given to hiring part time employees, to save on insurance
and benefits costs on behalf of homeowners?
-What role do homeowners really have if annual budgets will automatically be
approved unless rejected by 50%+1 lot owners (>544 owner) at the annual
meeting in December?
-Will all homeowners be informed of the importance of the annual budget
meeting and vote in December?

CONCERNS
General: I am not sure I was able to find much evidence of any “check and
balance” system in the documents I read, nor in the governing process
experienced by me as a homeowner, but would very much welcome being
educated.

  • I am concerned that with the added purpose to “cooperate” with the
    owners of TCAC one element of a “check and balance” system is being
    removed as situations may arise where it may become unclear as to whose
    interest will come or should come first in the view of the HOA board, that
    consists of TCAC members and non-members.
  • I am concerned about the open-ended commitment by the board to
    “cooperate” with TCAC and possible interpretations and actions by present
    and future HOA boards.

Conflict of Interest: The HOA board that consists of TCAC members and
non-members is in the process of reviewing a Conflict of Interest Policy
that was already approved by board counsel. The policy was derived from the
NRS and the statutes of the Nevada Commission on Ethics.

  • I am concerned that the added purpose of “cooperating” with TCAC
    would make any conflict of interest policy for our community a meaningless
    document.
  • I am concerned that the added purpose of “cooperating” with TCAC may
    give rise to situations of at least perceived or potential conflict of
    interest.
  • I am concerned that such situations will not help unify our
    community. However, unifying our community is a specific goal of our
    community’s Strategic Plan.

Communication and Governing: The board already has the power to interpret
any provisions of the CC&Rs, can incur debts for the purposes of the
community, inforce and administer any provisions in our declarations. The
board announced that CC&Rs needed updating to take out language pertaining
to the declarant (developer), and to reflect changes in the law, but did not
inform residents about plans to make substantive changes and adding a new
purpose.

The timing of HOA meetings and Town Hall meetings is not considerate of all
subpopulations: from busy retirees to busy families. The last Town Hall
meeting was held one day after ballots had been sent out. Offering
opportunity for homeowners input via emails to the board or the managing
company is a very unsatisfying and unrealistic way of communication. In
recent days, the board and individual board members communicated with
residents via multiple email blasts to all homeowners, by a poster at the
gate, and by flyers handed out by the gate guards regarding the vote on
CC&Rs and Bylaws.

  • I am concerned that as a resident I have very little influence on
    decisions made by the board on behalf of the community based on a very
    inefficient communication process and subsequent lack of transparency.
  • I am concerned that, other than community member comments at HOA
    meetings, there is no official venue for questioning or opposing views and
    concerns to be heard, while the board and individual board members have
    multiple venues at their disposal.
  • I am concerned that regarding the vote for the amended CC&Rs’ and
    Bylaws there was little time for open and two-way communication to fully
    understand the implications.
  • I am especially concerned about my HOA dues increasing without the
    possibility of providing input or a vote on those increases.

POSSIBILITIES FOR CONSIDERATION

  • Consider changes to the CC&Rs and Bylaws that would formally
    establish homeowner input into the decision making process before major
    decisions based on a democratic process allowing for an equal and inclusive
    review of pros and cons.
  • The CC&Rs are not broken; there is no urgency to fix them. We do
    have everything to gain from taking all the time needed to make the CC&Rs
    into something that represents and empowers all homeowners and have all
    concerns heard and discussed.

Speaking for myself and perhaps other ArrowCreek residents trying to stay
informed and making an informed decision as a resident when we are asked to
vote is not easy for several reasons, including reasons on a personal and
procedural level. Improved communication and generating confidence that
homeowners do have control and can make a difference may help overcome some
of the difficulties. Regarding the CC&Rs, the Bylaws, and the 2018 Budget
there are questions and concerns that have yet to be adequately addressed by
our ACHOA board.

Respectfully,
Beate McGhee

ADDENDUM AND UPDATE 10/17/17
I incidentally came across a new draft of the 2018 budget posted on the
ACHOA website. One day later, the budget changes were also announced in the
ACHOA newsletter.
Major changes I found include:
Monthly HOA dues: up $20, instead of $30.
Payroll & benefits in 2018: up by $260K instead of $230K.
Architects and Engineering for Residents Club: down to $50k from $250K
Grand Total deficit: $560K instead of $450K.

Although some of the details have changed, most of the questions and
concerns above remain valid in my opinion. How are homeowners to keep track
of a quickly changing managing plan and a series of communications from the
board, and make a sound decision on the CC&Rs and Bylaws that will govern
our community for years to come?

Beate McGhee

*********

Paul Burkett response:

The Budget was a draft as presented at the Town Hall Meeting (Version 4). That was made every clear at the meeting. In addition, it was stated that the Budget would go through further changes as additional information was received from the Reserve Funding Study Vendor, feedback from the Town Hall Meetings and information from other Board Advisory committees including the Resident Center Task force that had not met prior to the town hall meeting. . It was also stated that version 5 of the Budget would be coming out and it would be posted on the website and an explanation would be provided before the Board Meeting. The version 5 posted is the version that the Board will review and approve at the November 7, 2017 Board. Meeting. This has been the procedure and approval process since 2005 and it has not varied significantly. The fact that this is the first increase in five years. has brought this process to increased scrutiny.

*********

Jim Verhey response:

In my observations over the past weeks there seems to be a number of fundamental questions being offered to focus on what HOA leadership is really doing on a potential vote for diminishing Member authorities and expanding Board authorities.

It seems with what I’ve seen that the more questions that are asked the fewer answers are given. Or worse, more obfuscation, diversion, and recriminations are delivered from the leaders that be  troubling.

The questions need to be answered and despite the bureaucratic and process variations with the budget, etc.; clearing up clerical issues, etc.; the fundamental questions need to be answered clearly and in full. Members need to understand the true implications of what seems to be an aggressive effort with the Governing Document changes for a potential shift to centralized / undemocratic / special self interested control powers within the community.

Onward and Upward ……..Hoping for real, revealing and informative answers as we progress to a vote for establishing a Member Democracy.and a true Common Interest community with friendliness, collegiality and trust.

Regards,

Jim Verhey

This entry was posted in AC411, ACHOA, ACHOA BOD, ACHOA Bylaws, ACHOA CCRs, ACHOA Governing Documents, ArrowCreek, ArrowCreek 411, ArrowCreek HOA, ArrowCreek411 and tagged , , , , , , , , . Bookmark the permalink.

3 Responses to Letter to the ACHOA Board, Board Candidates and Fellow Neighbors

  1. Pingback: Important Opportunities for ArrowCreek Owners | ArrowCreek411

  2. Pingback: A Plan for Getting Questions Answered by the ACHOA BOD | ArrowCreek411

  3. Interesting that by reducing the monthly HOA assessment by $10, the income side of the Arrow Creek budget goes down by
    $10.00 x 1086 lots = $10,860.00 x 12 months = $130,320
    $450,000 (version 4 deficit) + $130,000 = $580,000

    Version 5 deficit = $560,000

    Hmmm, just playing with numbers……but the take–away between the 2 versions is simply the $10/month/lot reduction from $30 to $20. Still no answers to even the questions asked at the town hall for how numbers were derived.

    Like

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