CLUBHOUSE DETAILS….TO DO WHAT’S BEST INTEREST FOR PROPERTY OWNERS LET’S PRESS PAUSE BEFORE IT’S TOO LATE!

As we begin a new year with the first 2019 Owners Association Board meeting held on February 5th, there was a distinct change in how the board is now operating. It was a welcome, refreshing one for anyone in attendance.  For those of you unable to make the meeting, here’s a summary of the evening:

New directors took their positions: Karen O’Neil – President; Chris Martinez – Vice President; Paul Rutkowski – Treasurer, ACC Liaison, and Secretary; and the remaining board members Directors.  It should be noted that neither Ricky Gonzales nor Shawna Klein were in attendance for this important initial meeting and vote of new board positions by board members.

THE OVERVIEW

What was profound about this meeting was that for the first time since the inception of the Owners Association turnover board in 2011, a true business meeting was held.  Discussion did not focus on the next big social event or activity, but rather the business operations of our association. 

Among the notable changes were transparency, open discussion, financial disclosure, a state of our owners’ association financial resources, a full discussion about the upcoming clubhouse build—the budgeting, how the newest proposed capital improvement (the clubhouse build) will impact our operating budget and so on.  Audience (property owner) participation and questions were met with responses from the board not typically heard by those asking the questions previously.  The standard “we’ll get back to you” or “we don’t know the answer to that question” were no longer apparent and effort was made to respond to questions from the audience regarding the numbers and information being presented rather than stall off the question to meet what used to be the 1 hour meeting adjournment standard.

A new board member, one who was not considered a sure thing to be elected because he stood alone in thinking, amongst those candidates elected, that transparency and better accountability was owed to property owners took the floor.  Paul Rutkowski briefed a thorough, knowledgeable and a surprising financial report to the audience which was not only enlightening, but eye opening.  

It was also very concerning.  Some of those findings included in the report were:

  1. Actions taken by the previous board resulted in unsuccessful legal decisions which caused a substantial increase in our insurance premium and insurability which were not budgeted.
  2. It was noted that Spectrum hasn’t been doing their job particularly well in some situations
  3. Sitting board members haven’t performed their jobs in the past
  4. Paul laid out a completely transparent report outlining our financial history, our current financial state, the state of our finances when we begin the start of construction for the clubhouse, those fees, items and expenses which are incorrectly accounted for or not properly allocated in our financials, and so on.

The report was stunning in its detail and was not unlike similar accountings which have been brought forth by previous audits performed by other property owners not on the board in recent years who were seeking to determine how the annual budget was allocated, where our money was going, and why the numbers just didn’t add up on the financials. In fact, Paul reported much of the same discrepancies and concerns that were voiced previously confirming what has been a concern for some time now.  We don’t have a handle on how our money is being spent!

Paul conveyed that our past treasurers had not done a thorough job providing the type of accounting that the neighborhood has been asking for, that our board has not been actively involved in the business operations of the neighborhood, but rather allowed Spectrum to “take the ball and run” and handle all the management aspects of the community when it comes to the business operations of the association.  With the exception of planning the beloved social activities our neighborhood is blessed to have available to it, there’s been a fairly hands off participation by the board when it comes to ensuring expenses are appropriate, budget line items are met, and the monies collected by Spectrum for their management fee and additional expenses for which they can bill are reasonable, founded and accurate. 

Further, the financial planning for the upcoming clubhouse build has not been thorough, did not consider any contingencies, change orders, other expenses, or the increases to overhead that would occur during and after the build. 

Floated as a potential revenue increase to the neighborhood to offset the deficits created by the clubhouse build would be the increased revenue from rental of the clubhouse with its new amenities. While that’s good “hopeful planning” that increased revenue would occur from rental fees, there is a limit to the expansion of revenue that can occur given we have a closed number of participants who might be renting the clubhouse — namely property owners. 

Should the idea being floated to rent out the clubhouse to make more revenue mean opening it to public rentals, we then open the door for the park to potentially become a public park, our revenue to be potentially taxed, our park property taxes to increase considerably as the park becomes a commercial venture and oh by the way…..the property owners will still be paying for the use and wear and tear the public will inflict on our park through their continued assessment fees. How does that benefit property owners? 

Remember, we have a private park for property owners, owned by property owners and not intended to be open to the public.  Our social events already bring in traffic from surrounding neighborhoods, San Antonio population and elsewhere due to the amount of advertising and other social media traffic touting their existence along with our open gate, no checks and balances to ensure property owners are able to utilize the park policies. Think about the traffic, the overhead expenses which will increase, the liability we expose ourselves to as the owners of this currently private park property, among other things by opening rental of the clubhouse and grounds to the public at-large as well as continuing to hold open gate events which anyone can attend!

Nothing was projected to offset the overhead and budget deficits should rental revenue not come in on a level that is anticipated, or in the alternative, other expenses became apparent which were not budgeted for.

There are not currently enough funds saved to cover both the continued reserves necessary for functional obsolescence and end of useful life for our existing amenities as well as the projected additional overhead costs which will occur with the new facilities even though we have had 7 years of opportunity to save in planning for this eventual capital expenditure.  The board has not planned effectively for the eventual increase in budgetary expenses the clubhouse build will bring to the operating budget.

OUR CURRENT FINANCIAL PICTURE

We bring in income each year if everyone pays their assessments in full of $681,000 +/- (this is money collected annually — you cannot count the money in the reserve account as operational for the budget — it must be set aside. If you look at the previously approved budget it was counted as a means to say we have those funds available to expense).

Paul’s proposed 2019 revised budget presented during the meeting shows a reduction in cash flow of  (-$295,000.00+/-) – yes you read that correctly, (-$295,000.00+/-).

Can you guess where that significant loss might be made up?

Some but not all of the reasons for the loss include:

  1. aggressive fining in the past where 100k +/- was written off as bad debt resulting from a bankruptcy. Paul also stated that fines may not be as aggressive and collectible in the future (the fines cannot be enforced legally as has been demonstrated with the recent court cases which have been lost due to overreaching decisions made by the board that are not backed by our deed restrictions),
  2. depreciation for 2018 and previous years not included. Depreciation amount shown in the P&L presented by Spectrum was ($73,130.00) when in reality; the amount should be ($153,982.00).
  3. new Directors and Officers Insurance which previously wasn’t budgeted for separately but is necessary
  4. lifeguard payroll changes necessary as a result of an event which occurred necessitating an increase in the number of lifeguards on duty
  5. insurance expense increases due to loss of current policy and new policy costing considerably more again due to the decisions made by the board which then turned into lawsuits which were lost.

The budget the old board presented to property owners in October of 2018 for 2019 which was approved by board vote, not property owner vote, set expenses at $765,000 +/-.

The proposed revised budget Paul presented with the necessary expense changes, additional clubhouse costs and payments not previously accounted for now sits at $976,660 +/-  ….why didn’t the proposed budget approved in October 2018 include the monthly loan payments we will begin to make this year? Click here to see Paul’s proposed 2019 budget information.

Loan payments will last for the next 10 years unless we accelerate payoff at some point.  That means the budget will be impacted for the next 10 years.  Of course, if we accelerate payoff, we need the additional revenue to cover doing so.  Where will that come from?

WHERE DO WE GO FROM HERE?

As a business owner and a long-time property owner in the neighborhood, I could not believe the board is planning to begin the destruction of the old clubhouse and the build of the new clubhouse without the proper financial keys in place to make the project a success much less fundable without a sizable assessment account increase.

And on that point, please understand the assessment account fees can only be raised by 10% each calendar year, not some arbitrary figure that the board tries to throw out in the future as a “special assessment” to meet the shortfall our budget is facing with the new clubhouse build. This is clearly outlined in our deed restrictions….no increase of assessment account fees can be made in excess of 10% per annum.  So this year that would mean $21.70 per assessment. Does that equate to cover the loss outlined above when you multiply it by the 2,600 +/- assessments collected?

Is this good business practice?  If you owned this business, would you keep moving forward obligating your investors (property owners) to the mounting debt and obligations without a solid plan in place to cover expenses and justify the costs?  Wouldn’t you think it smart business practice to put a pause on the process and regroup before moving forward?

Do you recall the Owners Association meeting this past year where one of our now previous board members stated to the audience after a property owner asked if there would be an increase in our assessment fees to cover this clubhouse build?  It went something like this – this board won’t raise your assessments to build this clubhouse. Do you also remember the follow-up statement which went something like this – I cannot predict what another board might do, but we won’t raise your assessment fees? 

What the board did not tell you is our annual assessments will be pledged to the lending institution as collateral for the loan.  This could restrict the amount of money for the reserve fund, maintenance of other capital projects and yes, even the beloved social events which have become so popular. The lending institution will ensure it receives every penny it needs to maintain the debt servicing before it allows another dime to be spent in our neighborhood on anything else.

It is important for each property owner in Timberwood Park to understand that the association is just that— an association of property owners who have been assigned the developer rights that existed in our neighborhood under the developer’s jurisdiction.  Those rights were to collect, manage and spend the mandatory assessment fees which are levied against each property owner in Timberwood Park to maintain the common areas of the neighborhood along with providing architectural control according to our deed restrictions.  Our deed restrictions clearly outline each of these rights in each unit of the neighborhood and the Partial Assignment of Developer Rights clearly outlines these rights being transferred to the Timberwood Park Owners Association. There are no other rights or legally binding ability for the board to operate under.

Owners, it’s time to say STOP and Re-group.  I am not advocating to completely scrap the build of the clubhouse, but where’s the emergency and rush necessary?  I am advocating to “pause” the project until such time as the benchmarks are in place to ensure a successful project and not obligate the owners of this neighborhood to excess debt and assessment account increases just because the board is in a hurry to get the project going. 

I urge you to be sure to pay attention to any upcoming meetings, e-mail traffic, board messages, etc. discussing the clubhouse or other business in our neighborhood.  Attend, vote, provide your voice to say, “there’s no rush……let’s pause and take a step back and figure this out properly before we make a HUGE mistake that may cost us all!”

REMEMBER TO VOTE FOR ELECTIONS OF BOARD MEMBERS FOR THE HOA!!

Just a quick reminder the deadline is coming up to turn in absentee ballots for the annual TPOA board elections.  Be sure to cast your vote for the candidates of your choice by 1) mailing in your absentee ballot before deadline time, 2) giving your proxy to a neighbor you know plans to attend the meeting to cast a vote on your behalf, or 3) attend the annual meeting and vote yourself!

This year there are new candidates and 3 spots open to fill so make your vote count!

Happy Thanksgiving to all my neighbors and friends!

REMINDER: 1st EVER MEET THE CANDIDATES FORUM ON OCTOBER 30, 2018 AT THE CLUBHOUSE!!

REMINDER TO ALL….

IN ADDITION TO SEEING SOME AND/OR ALL OF THE PROSPECTIVE CANDIDATES AT THE UPCOMING HALLOWEEN EVENT WISHING TO SAY HELLO TO EACH OF YOU PLEASE PLAN TO ATTEND THIS 1st EVER HOA CANDIDATE FORUM!

 

One of our HOA candidates has made the effort to put together an opportunity for property owners to “Meet-the-Candidates” at the Timberwood Park Clubhouse!  Please mark your calendars and plan to attend to learn more about the candidates running for office for your HOA!

From Paul Rutkowski, Candidate for the Board:

Hi Everyone,

You are cordially invited to participate in a “Meet-the-Candidates” meeting/forum at the TWP Clubhouse on Tues. Oct. 30th starting at 7 PM. I have reserved the clubhouse and the overall plan for the evening is to allow each candidate 12-15 minutes to present our platforms and answer questions from the HOA members.  The idea is to provide an opportunity for HOA members to be better informed about who we are as well as learn our positions, thus providing an opportunity to make better decisions on whom they want to vote for. There are nine candidates and my hope is that each candidate will be able to attend! And of course, we all want YOU to attend as the property owners casting votes!!!

In an effort to allow the process to be random and objective, I suggest that we candidates draw names from a hat to see who presents, 1st, 2nd, etc.. I hope you all can make time in your schedules to participate.

I’d love to hear from you!

Thanks,

Paul Rutkowski

A fellow TWP HOA Board candidate

210-827-0299

paul.rski68@gmail.com

 

THIS IS A GREAT OPPORTUNITY TO LEARN MORE ABOUT YOUR CANDIDATES!!!  PLAN TIME IN YOUR SCHEDULES TO ATTEND THIS CASUAL OPPORTUNITY TO MEET THE CANDIDATES!!!

MEET THE CANDIDATES OFFERED AT THE CLUBHOUSE!

One of our HOA candidates has made the effort to put together an opportunity for property owners to “Meet-the-Candidates” at the Timberwood Park Clubhouse!  Please mark your calendars and plan to attend to learn more about the candidates running for office for your HOA!

From Paul Rutkowski, Candidate for the Board:

Hi Everyone,

You are cordially invited to participate in a “Meet-the-Candidates” meeting/forum at the TWP Clubhouse on Tues. Oct. 30th starting at 7 PM. I have reserved the clubhouse and the overall plan for the evening is to allow each candidate 12-15 minutes to present our platforms and answer questions from the HOA members.  The idea is to provide an opportunity for HOA members to be better informed about who we are as well as learn our positions, thus providing an opportunity to make better decisions on whom they want to vote for. There are nine candidates and my hope is that each candidate will be able to attend! And of course, we all want YOU to attend as the property owners casting votes!!!

In an effort to allow the process to be random and objective, I suggest that we candidates draw names from a hat to see who presents, 1st, 2nd, etc.. I hope you all can make time in your schedules to participate.

Also, I am working on a 2nd “Meet-the-Candidates meeting in Nov. to allow more residents to get to know us all, but at this time it appears the clubhouse may be in the process of being torn down so I am seeking other possible locations and dates available to send out to the neighborhood once they are secured.  I’m looking at Timberwood Elementary as a potential site to keep the meeting in our neighborhood for easy access to all. I’ll work thru Jacob Fey at Spectrum to communicate that info  to you or you may send me your e-mail address.  I’d love to hear from you!

Thanks,

Paul Rutkowski

A fellow TWP HOA Board candidate

210-827-0299

paul.rski68@gmail.com

 

THIS IS A GREAT OPPORTUNITY TO LEARN MORE ABOUT YOUR CANDIDATES!!!  PLAN TIME IN YOUR SCHEDULES TO ATTEND THIS CASUAL OPPORTUNITY TO MEET THE CANDIDATES!!!

CORRECTIONS TO CANDIDATES NAMES!

I stated in the last blog the names of the candidates running for a position with the HOA board.  While I apologized in advance for any errors made with names and their correct spelling, I wanted to correct the names I had incorrect last time.  Here are the candidates one more time:

David Kanter

Paul Rutkowski

Abbey Lehner

Don Hays

Alethea Arnold

Chris Martinez

Linda Killman

Shawna Klein

 

CANDIDATE FORUM OPPORTUNITY:  The opportunity exists for the current board to provide a candidate forum where any and all candidates could attend and allow property owners the opportunity to ask questions about them, learn more about them and get to know those candidates they may not know already.  If the board sets it up there won’t be a charge to use the facilities.  And, one of the candidates, Paul Rutkowski, has indicated he would be willing to organize and set up the opportunities.

Can we get a green light from the board to use the park without having to pay a rental fee, etc. and make it happen?

The Clubhouse and/or pavilion could be used, 2 -3 opportunities could be set up on differing days of the week and differing time slots to allow as many interested Timberwood Park Property owners to be able to meet the candidates and here more about them.  Further, property owners would have an opportunity to ask questions of any candidate they wished and get answers to learn more about the candidate positions for what matters to the property owner.

In this upcoming election, property owners will be replacing up to three incumbents if Mr. Martinez is unsuccessful in his bid for re-election, and otherwise 2 new members will be joining the board.  This is an important election and meeting the candidates allows for assisting in making informed voting decisions.

Let’s get these forums set up sooner rather than later…especially since proxies and the other absentee ballot methods to cast your vote will be underway in the near future.  Remember, your vote matters!!