Weblog encounters
Sugar Valley Lakes
This response to the Association Managers Notes was submitted to be posted on the Association's Website but was never posted. It appears on this site for your review. Members are urged to submit your comments to be posted here.Robert Lowe's Response to the Association Managers Notes
My name is Robert Lowe. This posting is a rebuttal of the statements
made on the MANAGER NOTE PAGE (November 1 2008 timeframe) of the Homes
Association’s Website. The Manager Note page was actually a direct
response to a posting I had done on the SUGARVALLEYLAKES.COM website
entitled “Sugar Valley Lakes – A Bailout Plan Expected This Year” where
I had an introductory sentence: “Rumor has it that the Homes Association
will be working for their own version of a bailout plan at the upcoming
Annual Member Meeting!” The Association’s Manger response stated that
Rumors hurt us all and implied that if you want information, contact the
Association’s Office and they will TELL YOU or provide you with the
proper documentation for the information you seek. The original article
appears last on this page and the Managers Notes next. So if you
havent read these comments, scroll to the bottom and read them first.
In my rebuttal, I intend to make clearer those statements that have been
made to appear as Rumor by the Manager’s response. I intend to show that
sometimes the TRUTH hurts. Here we go.
The Manager’s Note made a statement that read “LAST YEAR WAS THE FIRST
TIME IN FIVE THAT THE ASSOCIATION DID NOT BORROW ANY MONEY!” I have
information to the contrary; the information comes from two accounting
balance sheet reports, both provided by the office (these are not
rumors). A balance sheet printed on 01/17/08, last year one week before
the Annual Meeting shows a Liability called “2410 - Short Term Notes
Payable” with a balance of $93,000. A balance sheet report printed
10/31/07 shows three accounts as follows:
2401 – Citizens Bank Loan/ptruck and carts $59,191.77
2402 John Deere Credit/util tractor $28,780.50
2403 F & M Credit Line/eoy expenses $25,000
Now for you non-accountants here is a short account definition and an
interpretation of what the numbers in the reports above mean. An
Accounting Balance Sheet is a report that shows three things; assets,
liabilities and member equity. The assets are those things of value we
own, like a bank account or a tractor. A liability is something we owe
to another organization or person. Equity is simply Assets (minus)
Liabilities (like our net worth)
From the above numbers provided on documents from the Association we
learn: this year on January 17 the Association owed $93,000 for a
short-term loan carried over from last year at least through at least
January 17. Last month on October 31, the Association owed
$112,972.30. Now, with these facts, the Managers response doesn’t make
any sense. I have to assume the manager would have no good reason to lie
in his statement. The only remaining conclusions that I can come up with
are of these: 1) The accounting documents being given to members are
worthless; or 2) the Manager is not familiar with the balance sheet, or
3) the manager is being given wrong information by someone in the
accounting office.
The second statement from the manager was that my comment that the
Association bought an almost new holding tank pump was purchased by the
Association was incorrect. He stated: ““WE BOUGHT A NEW PUMP TRUCK TO
SERVICE OUR RESIDENCE BECAUSE THE TWO PREVIOUSLY OWNED TRUCKS WERE WORN
OUT . . .” Again I will trust his statement that a NEW truck was
purchased. I stand corrected, I said almost new. I didn’t realize the
NEW truck had been purchased from a DEALER. The real point, however, of
my original comment was lost in the new vs. almost-new argument. The
issue that I was raising was that the Association is spending our money
to purchase an Asset that is only used to serve a small percentage of
the Membership. The manager affirmed that statement when he said it was
purchased to SERVICE OUR RESIDENCE. I disagree with the responses made
by the manager. He continues: “BECAUSE THE TWO PREVIOUSLY OWNED TRUCKS
WERE WORN OUT . .” The manager is correct; the Association had two
trucks prior to purchasing the NEW truck. And yes one of the trucks was
probably getting old. But what the manager doesn’t tell us is that the
other truck was destroyed by an employee when he forgot to open (or
close) a valve and the entire tank imploded (sucked all air out). The
manager also didn’t tell us that it was the same employee who wrecked
the dump truck that was replaced insurance proceeds. That pump truck
wasn’t worn out as we were told. I posted below a picture I made
of the old truck for your review. You can make your own informed
decision in this matter.
As far as the dump truck, backhoe and tractor, my only response is that
as long as this equipment (and the employees or contractors who run
them) is used solely for the improvement of the common properties, I
have no problem with the Association’s investment. I consider the golf
course an asset just like the roads and lakes. If however the
association management provides personal services to any member, even
for a fee, it is violating the Covenants. Rock hauling for some members
with the gravel truck was the issue I was raising in my original
article. In reply to the Managers Note: “$95,000 IN FIVE YEARS ON
EQUIPMENT REPAIR IS NOT AN INVESTMENT; IT IS A DEAD EXPENSE ON EQUIPMENT
THAT WAS NOT WORTH REPAIRING.” I would only say, that if the balance
sheet and profit/loss statements were published in the Annual Member
Newsletter like I have been requesting for at least 5 years, the members
would know more about these and other expenses.
In regard to the upcoming election, the Manager’s Notes states that WE
ARE holding elections this year. It implies that my comments were rumor.
All right, here are the facts. This year in September after all the
summer members had gone away, the Association held its annual pig roast.
This year, since I was at the lake, I decided to attend. I was
approached by a past board member who told me that the Board had made a
statement at a recent meeting that they were not going to hold an
election. He stated that some members were considering hiring a lawyer
to force an election. He asked for my opinion in the matter. I replied
that I am not a lawyer and cannot give legal advice, but if it were me,
I would write a letter telling the board that if they don’t hold an
election, I would file a lawsuit. Sometime later, I went to the
Associations website and found in the September minutes the following
statement: “Ed Peery asks if there will be election this year to replace
the three (3) appointed board members? The board responded by saying
there would be no election for this purpose. One of the appointed
members came in second in the election, one was selected by the board
and one was chosen by the person leaving.” I don’t know what other
evidence I needed to conclude there would be no election this year.
After I published my article, and learned that there would indeed be a
meeting, even before the Managers Note. I was so proud of myself, that
perhaps it was my webpage that changed the direction being taken. I
thought, here is just another example (of the many) where my website, by
making the members more aware has changed policy. It was only lately
that I learned the real reason for the change. I learned that one of the
Golf Club members is running for the board. Now, for those who don’t
know, the Golf Club is composed of some very influential Association
members. The Golf Club regularly makes donations to projects that are
needed by the Association. It is a very organized group of people and
does have extreme influence on this Homes Association-more than most of
us know! My bubble has been burst. I now believe it wasn’t my website
that forced the board to hold an election, it the Gold Club who wants
their member to represent them on the board. That’s the reason we are
having an election.
In regards to the Sugar Valley Bath House, the Managers Note states that
it has not been open for two years because it is broken beyond repair.
There are differing opinions and conflicting statements on this issue.
Two years ago, members were told by the Manager that the bathhouse was
dangerous and would not be opened for 2007. At the January 2008 meeting,
I personally asked why it had not been open for the summer. The managers
reply was that several members on that side of the creek had not paid
their assessments and the association was not going to let them have
showers and facilities for free. I personally heard the manager make
that comment at the meeting as did other members. Now we are again being
told that it needs to be demolished. Two week ago, I sent a letter to
the Manager and the President of the Association telling them that if
necessary I will file a motion in Linn County District Court stopping
the destruction. I also requested that if there is any report from a
qualified inspector or a county officer to the effect that building
needs to be destroyed, I wanted a copy of that report. I have not heard
anything from the Manager or the President or any other Board member. I
have also discussed this issue with some of the people who live near the
bath house. They told me that they offered to help with any needed
repairs to the building but received no reply. I have personally
inspected this building and it is not beyond repair. It does need the
showers and toilets replaced as they have already been torn out. Folks,
there is no rumor involved in this case. What we have here is a failure
to communicate.
From the Managers Note on the bylaw/covenant changes, it is apparent
that my comments are completely true and not based on rumor. It will be
interesting to learn what Bylaws/Covenants the Manager intends to
change. The Covenants and Bylaws are like our version of the
Constitution and Bill of Rights. The clauses are here to protect the
members and not just give power to the Board and the Officers and
management. We need to pay very carful attention to the changes being
proposed and the process used to change them. If we are not careful, our
rights may be violated in the very process. I fully agree that members
should pay the Assessments duly levied by the Board in accordance with
the Covenants. I also agree that the Board and Management are required
to follow the Covenants in how the Assessments are used. I believe that
the over one-fourth of the membership that has stopped paying dues has
done so because they believe their assessments are being misused. If it
were just a hundred or two, I would blame the members. When this many
members rebel, I have to blame the organization. These members have had
no power to stop the Association from this misuse, so they only have one
alternative. They abandon their property and discontinue paying
assessments. Given that their lake property is the only thing that can
be taken away from these members, there is nothing gained by changing
the bylaws. There are problems with the Bylaws however; they give too
many rights to the members. Some people want to change that.
So, in summary, I want to say that rumors don’t necessarily hurt us all.
The fact is that sometimes the TRUTH hurts some people but not all of
us.
Managers Notes (From Association's Website)
THIS
IS IN RESPONSE TO MR. LOWES FRONT PAGE ON HIS PERSONAL WEB SITE.
THE
ARTICLE IS HEADLINED “
THAT IS
A GOOD IDEA; THIS ASSOCIATION NEEDS A GOOD BAILOUT PLAN, GOT ONE?
THIS
ARTICLE SHOULD TELL YOU SOMETHING AS THE FIRST WORD IN THE ARTICLE IS ‘RUMOR’!
THE ARTICLE STATES THAT FOR THE FIRST TIME IN YEARS THE ASSOCIATION IS CARRING
OVER A DEBT, LAST YEAR WAS THE FIRST TIME IN FIVE THAT THE ASSOCIATION DID NOT
BORROW ANY MONEY!
THE USE
OF THE BACKHOE ON THE GOLF COURSE WAS NOT AT THE REQUEST OF ‘A’ MAINTENANCE
PERSON, THE BACKHOE IS NOT ASSIGNED TO THE GOLF COURSE, AND THE COURSE CLOSURE
ON CERTAIN WEEKENDS IS A CONTINUED SCHEDULE FROM YEAR TO YEAR. FACTS NEED
TO BE GATHERED BEFORE SLANDER BEGINS, INVESTIGATE BEFORE YOU INVEST. AS
GOES THE ELECTION, ACCORDING TO THE BY-LAWS ARTICLE VII, BOARD OF DIRECTORS,
SECTION 2. READS AS FOLLOWS…
“VACANCIES IN THE BOARD OF DIRECTORS SHALL BE FILLED BY THE REMAINING DIRECTORS.
ANY SUCH APPOINTED DIRECTORS SHALL HOLD OFFICE UNTIL HIS SUCCESSOR IS ELECTED BY
THE MEMBERS, WHO ‘MAY’ MAKE SUCH ELECTION AT THE NEXT ANNUAL
MEMBERS MEETING OF THE MEMBERS OR AT ANY SPECIAL MEETING DULY CALLED FOR THAT
PURPOSE. WE ARE HOLDING ELECTIONS THIS YEAR ANYWAY, REMEMBER, THIS
ARTICLE BEGINS WITH RUMOR, NOTHING IN THIS ARTICLE WAS OR HAS BEEN VERIFIED WITH
ANY INDIVIDUAL IN THE OFFICE OR BOARD OF DIRECTORS.
“FROM
AND AFTER THE EFFECTIVE DATE OF THIS AMENDMENT TO THE DECLARATION OF COVENANTS
AND RESTRICTIONS, THE ANNUAL ASSESSMENTS FOR BOTH SINGLE AND MULTIPLE OWNERSHIPS
MAY BE INCREASED OR DECREASED BY THE BOARD OF DIRECTORS OF THE ASSOCIATION FOR
EACH SUCCEEDING YEAR BY AN AMOUNT EQUAL TO THE INCREASE OR DECREASE IN THE
CONSUMER PRICE INDEX AS CALCULATED BY THE UNITED STATES GOVERNMENT”.
MEMBERSHIP PERMISSION OR APPROVAL IS NOT REQUIRED BY LAW.
Sugar Valley Lakes - A Bailout Plan Expected this year
Rumor has it that the Homes Association will be working for their own version of a bailout plan at the upcoming Annual Member Meeting!
The Homes Association has grown deeper in debt, and for the first time in years has carried over debt beyond the couple months it took for new assessments to come in to repay short term loans to the bank. The Association has been on a spending rampage this year, buying an almost new Holding Tank pump truck so a few of the residents can have their septic tank cleaned out by the Association.
The Association also bought a newer gravel truck and a backhoe. The gravel truck is used to haul gravel for those members who want to pay a fee and haul some gravel for selected roads (but not where my lots are) within the subdivision. The backhoe was needed by the maintenance person to maintain the golf course to keep its reputation best golf course in the region, and to repair some drainage problems on selected roads (again, not where my lots are).
From looking at the Association's own web site, the elements of the bailout plan appears to include changing the bylaws to make it easier for the Association to get more money from the membership and to give the Board more rights (taking away ours at the same time). According to the minutes, the old by-laws just aren't keeping up to date with the current trends of the Association. The bailout plan also appears to involve avoiding an election this year to re-elect the temporary Board positions vacated by three resigning board members this year. Apparently the new board appointed board is happy with its own composition and doesn't want to bother the members with another needless election, even though the by-laws require temporary board positions to be re-elected by the membership at the next annual member meeting.
With the Association being so far in debt, it will likely be asking for another assessment increase. They are further in debt even though they have not re-opened one of the bath houses at Sugar Valley in two years, and even though they haven't replaced the stool in the only remaining bath house, and even though the Association has closed the golf course for many of the weekends this summer so they could rent it for private tournaments. Most residents and local (mound City) golfers do their golfing during the weekday, so these private weekend tournaments don't affect them. They are still in debt even though they have raised the annual Assessments from just over $100 a few years ago (that same year we had near a $100,000 surplus) to nearly $140 last year, without the member's consent. So, at this rate, it is just a matter of time before the Association Board will be needing their own version of a Bailout Plan. You can expect our Board to do the same for a few of our members as the US government did for the banking industry a while back. And, just like that bailout, you guessed it, the rest of the membership will pay for it. Folks, get your checkbooks ready! You can rest assured, this bailout is coming-an soon.