NOTE: I've followed the development of the Reserve Study through transcription - the words of the board , fact finding - to the best of my ability, and quoting the words of the study itself. You should review transcriptions, listen to board meeting tapes, and read the Reserve Study yourself for your own verification.
In my opinion, the reserve study lacks solid foundation, structure, full board interaction with the vendor, and therefore is not an instrument that will serve us in moving forward "in the best interests of the association." I believe it has turned out to be a position document serving in the interests and isolated thinking of "some" on the board. Because of the way it was developed, it could appear to set the stage for a term that "some" on the board like to use - PRECEDENT. Remember, as soon as they begin to claim they are following it, it becomes part of our history, and the term precedent will follow. EXAMPLE: Remember about a year ago when DeMarchi told us that the board had to assign reserves, they used the figures he wanted to use, and rather than it being a paper declaration, it became fact and the board assigned assessment dollars according to his plan. He has been on record, in the files, of trying to peddle his method since early 2009. Go the compliance file regarding 2008, that was filed in early 2009. A document intended to guide built on secrecy, lack of engineering, and false statements to the vendor cannot serve our community. Your silence over months of mismanaged meetings, broken bylaw and policy, acceptance of the board's failure to respond to residents, undocumented legal opinions, denial of information to "some" on the board, has empowered the board to move forward with this ill begotten document that will haunt us for years.
If you read the document's wording you may find that the vendor has taken the assignment but covers their credibility, with repeated instructions to the board, qualifications noting what they were told by the board, and provided by the board. As you read through you may determine that they are placing reality into the document, to the best of their ability. I don't blame the contractor/vendor for the product. Personally, I would not have contracted with this board for this type of assignment.
Review some of the advice from the vendor to the board, in the vendor's own words. Ask yourself, based on actions and words of this board, whether they have set a "precedent" that you believe would indicate they can follow this professional advice? Go back to board minutes, transcription, documents, and answer the question for yourself.
*It is suggested that the association select a funding plan. There are four basic strategies that most associations select from. From the study, "It is recommended that the association CONSULT PROFESSIONAL to determine the best strategy or combination of plans that best suit the association's need." They recommend the following: 1) a financial advisor to determine tax implications, 2) American Institute of Certified Public Accountants (AICPA) for their reporting requirements. Read Section 10: Definitions, and the type of information required and ask yourself if a transitioning board and it's related view and structure for finance, can make these decisions? Think about it. We've had three treasurers in two years. All sit currently on the board. There have been months during each of their reigns as treasurer that they've claimed they didn't have accurate reporting because they (each) of them were reporting in "their world". Not one of them is a CPA. Currently, our accounting department consists of two bookkeepers and our treasurer. Not one of these treasurers have wanted a CPA managing our finances on an ongoing basis. How many times have we sat in meetings where they have said they have the expertise? What are the chances they will change their ways and hire a CPA to do our books? I believe little to none. What do you think?
*Numerous times, as you review the report, regardless of the asset, the study states, "In order to ensure a high quality installation, the client may wish to obtain the services of independent (roads, roofing, etc.) consultant to work with the client and (roads, roofing, etc.) contractor providing installation." Again, how many times have we sat in meetings where they have said they have the expertise? They know it all. Need I remind you of the fiasco of the roads contract of 2010. McBride suggested they bring in engineering. Many still sitting on this board today, ignored, scoffed, voted to continue with the same vendor who hadn't shown up for weeks, and they were later notified by the state that their contractor was unlicensed and uninsured and had been fined by the state. Last month we were informed that one of the sections worked on - Duck Pond, would have to be re engineered and then done again. Go back to the transcriptions of 2010 and read what several of these vary board members had to say. What are the chances they will change their ways and hire consultants in all the areas recommended in the study? I believe little to none. What do you think?
*Your board did not want to pay for proper engineering in the development of the study. There are more than a few instances where there wasn't proper information provided. Again the vendor is left reminding us of the fact that they didn't have proper information and advising the board to get the information because lack of it poses a liability. From the study regarding Slopes - Dike Repairs, "The board ha agreed to use a temporary figure to allow for the reserve study to be computed. The allowance is NOT BASED ON ANY MEASUREMENTS. The board will be soliciting a quote from an appropriate contractor. Once a reasonable figure can be ascertained, we will input the unit cost and recompute the reserve study. Slope failures can represent a SIGNIFICANT POTENTIAL LIABILITY TO A CLIENT. As the extent and nature of this liability is largely INDETERMINABLE, we have used ARBITRARY estimates based upon PAST HISTORY, direction from THE CLIENT or its REPRESENTATIVES, our own experience, ......" Remember this board wouldn't even share information with each other. It could appear that they are just territorial and will continue to have all their own individual claimed expertise. What are the chances they will change their ways and hire consultants in all the areas recommended in the study? I believe little to none. What do you think?
*The study speaks to contracting. I'm not going to spend a lot of time reminding you of all that is currently going on. Please review transcriptions, other documented articles, and go examine the files yourself. The cautions to the board from the study are quoted.
"Despite the extra work routinely required track down a contractor, it is advisable to get 2-3 bids if work is anticipated to be substantial."
"The contract's work scope should be explicit."
"All documentation used with proposals should be included in the contract. Hold at least 10% retainage on any job to ensure a contractor completes a punch list (the loose ends that still need to be completed."
"Make sure you get a copy of workman's comp if required, w-9 form, and a certificate of insurance with THE ASSOCIATION LISTED AS NAMED INSURED."
"Due to the amount of roads, your community should strongly consider having a street study performed by a licensed engineer that specializes in road design and repair."
There have been a number of documented articles regarding contracting. During the last 4-6 weeks I visited the office to review the request for proposal, contract, license & insurance, of the contractor DeMarchi had hired for work on Francis Parker and Joanna Gillard Lane. There wasn't a written document to review as a request for proposal. I wasn't provided license and insurance. The contract couldn't have contained the specs required in the request for proposal because there didn't appear to be one. One of the few contracts that I've ever reviewed that contained a hold back for performance of contract was the contracts related to the dredging. I have reviewed sketchy contracts with advances, one with over 40% of the total contract. Your board has lamented that they can't get contractors to bid. During the run up to the 2008 elections McMillin spoke about contracting. After he was elected we all watched him secure bids, properly on contracts less than $1,000. He expressed numerous times that it was no problem to find people. What has happened? DeMarchi's current projects have not been of a high cost, but he has a plan and the work is being done in segments. It could amount to a large total. Go back and read what the study says about drainage. Remember, recently to avoid real search for contractors, your board actually spoke of hiring our president. What are the chances they will change their ways and actually follow the recommendations in the study? I believe little to none. What do you think?
In the end, you will be the judge as to whether the study has value. You will be the judge as to whether this board is capable of following the study. Remember it is rumored that two of them will be running for board again. Decide wisely. Three more years of this? Good or bad, it will be up to you.
NEXT: THE STUDY AND THE CANAL LOT OWNERS. HOLD ON, BECAUSE IT COULD BE THE BOARD DIDN'T WANT ALL BOARD MEMBERS TO HAVE COMMUNICATION WITH THE VENDOR BECAUSE THEY DIDN'T WANT YOU TO KNOW WHAT THEY HAD TOLD THE VENDOR UNTIL IT WAS A DONE DEAL. WHAT COULD BE IN THE BOARD'S MASTER PLAN?
