Budget Meeting on August 12.
The Board scheduled 10 to 50 minute sessions for the social committee, retreat and pool committee, maintenance, legal, bonds and debt service and public comment. Different individuals provided information about their prospective budget for the new year.
The most important part of the session was what the Board didn’t do. They announced at the meeting that a discussion of income – what we will be charged in fees and taxes – would be rescheduled for September 23.
Waterman characterized that meeting as where all the fireworks would take place.
The folks in the townhome areas should expect that the Board is going to propose imposing an additional fee on the townhome residents to pay for maintenance – including snow removal.
We should also expect a discussion about how they plan to manage the shortfall in revenue to pay the bond debt because the mill rate they gave to Jefferson County to collect in property taxes was lower than the actual mill rate imposed in the 2019 budget.
Here are some of the highlights from the presentations:
Retreat and Pool. Elaine Jones seemed to acknowledge community concerns about the pool this summer and agreed that it was time to critically evaluate the contract with the YMCA. There was also a brief discussion about eliminating rentals for the Retreat outside the community. Finally, she and the board talked about a survey committee to survey the community about how they want to use the retreat and pool.
Note that at the Regular Board meeting a week later, August 19, the board adopted a schedule for reviewing the contract for the YMCA, and our two management companies, the Brookfield company – Overlook – and CRS – the special district management company.
So, rather than review any of the contracts now, the Board stated they will not review the YMCA and Overlook contracts until 2020 and the CRS and auditor contracts until 2023.
They noted that as a matter of law the contracts must be reviewed annually but that they essentially are not going to follow that rule.
So, this Board will go ahead and adopt the budget for this year but will not critically evaluate whether or not to continue with the YMCA or Overlook until a year later – which is an important part of passing a budget. Indeed, that is the point of adopting a budget – critically evaluating the vendors services and deciding who to hire and how much to spend.
Why are they postponing this important decision. It appears to be a maneuver that does not benefit the residents.
Here is the policy statement they adopted at the August 19 meeting:
Terry Larsen talked about the sewer inspection. There was no conversation about the reserves necessary to fund future repair and replacement of the sewer system we own.
Terry explained that Brookfield is still working on gaining City approval for areas 13 – 16 that are built out but not yet formally conveyed to us for future management and maintenance.
Pete Hendel review the shrub and tree proposals for landscaping. The budget for all landscaping (including irrigation) for 2019 was $231,372. The 2020 proposal is $285,000.
It was noted again that snow removal in the townhomes was going to be a hot topic. Undoubtedly this has been debated privately by board members and the finance committee (which meetings are not open to residents). We shall see what they have to say on September 23.
Tom Waterman reported they are happy with current legal counsel. However, there was no discussion about the budget amount, how much was spent working with Big Sky’s counsel to threaten to sue Green Mountain Water and Sanitation (apparently now abandoned) or how much was spent in legal fees to respond to requests for basic information, including the agendas and board packets prior to the meetings, regular statements of money paid prior to the regular meeting, and non-privileged communications between our counsel and Big Sky (which the board still refuses to disclose).
The good news is that they announced that CRS will respond to requests for information instead of the attorneys which should at least keep the cost down and hopefully result in more transparency.
Tom Waterman also suggested that the Board will not mail out ballots for the next election in May. Instead he said the Board is considering requiring people to come to the Retreat to vote. This will be viewed as a maneuver to limit the number of voters, knowing that the current board’s majority base is from retired residents. There were similar maneuvers to manipulate the vote last year (2018) and the residents need to express an opinion on whether the vote should be by mail ballot or voting at the Retreat. The cost difference is not significant, particularly compared to the amount of money spent on a new floor and drapes for the Retreat.
Tom Waterman reported there had been no further discussion with their attorney about combining the districts or merging the HOA into the district. Note that merging the HOA into the district will eliminate the ability to have more control over the pool which would exist if it was conveyed to the HOA. Another approach is to get Brookfield off the HOA.
John Wendling talked about the bond debt. He reconfirmed the report from last year’s presentation that we will spend in excess of $2 million each year on repaying all the current bond debt which is based upon the “loan” from Brookfield. He noted that our tax revenue for 2018 was more than the debt so there was a surplus of about $165,000. He also noted that we will be paying the $2 million for the next 27 years.
That would increase both in amount and length of time if any additional bonds are issued.
Note the Board continues to flirt with the idea of issuing more bonds. This board is not willing to stand up to Brookfield and assert that the self dealing single party agreements (signed by the same Brookfield person for all parties) are legally void and unenforceable. At least one court of appeals has held in another context that such agreements reflect a conflict of interest and are evidence of bad faith on the part of the developer.
The Board is considering hiring a financial advisor however, everyone seems to agree there is already an abundance of financial expertise in the community and dominating the finance committee and board.
See the next post for a report on the Regular meeting August 19 and the fate of the social committee.
John Henderson