Park River Oak Estates Homeowner's Association

Meeting Minutes

June 25, 2006 MINUTES
Park River Oak Estates
Homeowners’ Association Annual Membership Meeting

The meeting was called to order at approximately 5:05 p.m.  A quorum of 27 people was established.  Marguerite Elia welcomed everyone.  Marguerite hoped this meeting would be educational as possible and proceeded to explain the importance of understanding, as homeowners/residents in this community, what the Board’s purpose is in general, and some of our obligations as homeowners. 

Marguerite explained that Park River Oak Estates (PROE) is legally defined as a mutual-benefit non-profit corporation and is legally incorporated by the Secretary of State, California.  Although we are a non-profit organization, we can pay Federal, State, and City taxes because we are not a traditional non-profit.  PROE also pays annual property taxes even when we don’t specifically own property.

County and city inspectors who have visited our property routinely advise us on our obligations to commercial-grade standards on maintenance - as opposed to residential.  Residential vendors in almost every area of repairs have demonstrated a lower quality and much less critical knowledge.  Country clubs or single-family dwellings (even within a gated community) can “save money” by going with inferior vendors, but we have consistently had expensive problems with residential-licensed vendors.  On Park River Oak Estates, residential vendors failed to meet industry and government requirements for our multi-unit complex, in every area.

Commercial vendors have more regulations and more rigorous standards.  When it comes to work and procedures, we absolutely cannot improvise, we must go by industry regulations and laws.  The Davis-Stirling Act is the main body of laws that we (PROE) are bound to follow, but we are also obligated to meet Federal, City, and County laws.  For example, the County completes a mandatory 40-point inspection on our pool every single year.  There is no wiggle room on the commerical standards they enforce.   We end up with a higher quality property.  For example, our swimming pool is held to safer and cleaner standards by the County than for residential pools.

Marguerite shared an article from “Sacramento Magazine” entitled, “Hate Thy Neighbor” which consisted of case examples where HOAs have turned to the City Code Enforcement Office to enforce things such as noise violations, curfews and visual blight on properties like our own.  The Park River Oak CC&R’s and Bylaws have similar guidelines on noise, curfews, and external appearances that are also enforced by the City.  The City has steeper fines and stronger measures. 

PROE is a Planned Unit Development, also known as a PUD.  An interesting aspect of being a PUD is that individual homeowners own the parcel of land that their house is built on and that individual owns everything that sits on the parcel, inside and out.  This is opposed to a condominium, which have “exclusive-use common areas,” such as private balconies, shared hallways, etc.  However, as a PUD, there is no exclusive-use common areas on individual homes.  All the property on the premises (PROE) is either common area, such as the clubhouse, pool, sidewalks and roads, OR private property, which is your home.  In a condominium, there is some shared burden or shared obligations for some repairs.  However, in a Planned Unit Development (PUD), our homes (inside and out) are private property, and repairs and maintenance obligations belong to the homeowner.  Especially internal maintenance and repairs are the responsibility of private homeowners.

Our Homeowner’s Association (HOA) has chosen to maintain certain parts of the exterior of the buildings because we are conjoined and what happens to some aspects of the exterior may impact our neighbors.  We have chosen to do exterior maintenance and repairs, however our CC&Rs places the financial burden on the private property’s owner.  Sometimes, massive repairs must be done by the HOA.  We also try to make sure that all repairs are completed at commercial-grade high standards.  Our CC&R’s currently has a few “mixed messages” for a PUD.   Our CC&R’s does require the HOA to carry insurance on the external portion of the buildings, so some external repairs are under the auspices of insurance coverage.

Our CC&R’s and Bylaws are partially inaccurate because they do use the term “exclusive-use common area” because our CC&R’s were written imprecisely 13 years ago.  We have started the process of having the CC&R’s & Bylaws re-written.

We have a legal obligation to enforce certain standards for external appearances and quality, and to enforce fire and safety hazard prevention for each home, externally.  That is why a recent newsletter stated that if you have a charcoal barbecue set on your balcony, it is a fire hazard.  It not only impacts you, but also your neighbors.  We have the obligation to intervene on such matters.

Most of the laws are backed with fines or worse.  For example, every time a certain standard is not met at the pool, we are faced with a fine. Last week, the County came out to inspect the pool and somebody had removed a weir door from the skimmer basket.  This happens every year and one missing weir door is a $156.00 fine with seven days to have it replaced.  There are other fines that we have been threatened with, including when the sewers overflowed.  The City mandated an immediate clean up and threatened us with fines.

There are also federal laws such as the Fair Housing and Employment Act that we must also abide. Their fines are up to $50,000.  We simply cannot afford to not follow the laws.  We are also bound by corporate and business laws, and more.  When residents want to do things, it must become a reflex to check with the laws and rules, first.  Everyone is encouraged to read the laws.

Many of you may be wondering why we changed our property manager.  The biggest issue is that we are held legally responsible no matter what actions taken by the Property Manager.  Whether the Board is aware of something or not, whether we are involved or not, we are often held legally liable for the behavior of the property manager.

Al Frei’s Property Management Company used commingled funds in violation of most restrictions placed by the Davis-Stirling Act.  Out of a total of 4 property managers in the history of Park River Oak Estates, 3 of them spent money from our reserve account without our vote.  We stopped Frei’s manager at the last minute, with somewhat of a battle. This is explicitly illegal as specified in the Davis-Stirling Act.  Furthermore, a legal vote of the Board must be recorded in the minutes and posted on our Bulletin Board informing the homeowners prior to spending the Reserves’ money. There are four conditions that must be met by law, before we may dip into the reserve account and none involve the property manager, except to facilitate the Board’s vote if desired.

The reason the Board has chosen a property manager in Utah is that the Board believes Ginger Meadows seems to have ethical standards similar to ours.  Ginger Meadows will complete quarterly visits on our site.

Our first obligation as a Board member is to become educated on the specific laws, procedures, and technical issues of everything and anything regarding maintenance and management of our PUD property.  Laws change every year in January or July.  It is in the best interest of our property for those able to participate, especially Board members,  to attend attorney-led seminars.

If we all become active participants in our community, we increase our ability to keep costs down.  We must keep our eyes and ears open in order to prevent unnecessary expenses that result when repairs are neglected or are done unprofessionally.  There is rarely a week or month without pro-active repairs somewhere on the common areas.  We have to have enough dues to do them.

The two issues not included in the newsletter that amount to higher expenses include landscaping and security.  Due to an increase in units from 18 to 82, with 2 units not annexed into the association, our current landscapers have been unable to keep up.  Landscapers are expensive and the vegetation on our property has suffered greatly.  We have mold on our trees, MANY plants have died, and we have several faulty sprinklers.  We are planning on replacing our landscapers with another that is able to maintain our property, but at an unavoidably much higher cost.

An interest in patrols and cameras came directly from homeowners.  We are researching the costs of patrol guards and whether or not having security cameras would be helpful, but the expenses surpass our current budget capabilities.  We cannot legally go “into the red” like private individuals are able to do.

Open Discussion:

The July 4th celebration at Garcia Bend Park was canceled this year due to reports of crowd control problems.  Also, there are new codes for fire display/explosives.

Homeowners present at the meeting raised concerns about children under the age of 14 years old wandering the property, specifically the swimming pool area, without adult supervision.  There was a report from a resident that 5 boys (some on bicycles) were seen jumping over the fence, into the pool area.  One boy was directly spotted pulling out the weir door for which there is a $156.00 fine from the County.  Anti-vortex covers have also been removed.  The pool is a huge liability on the property for every homeowner, if an injury occurs.

The front gate is mainly left open during business hours of the week for accommodating repairs and incoming vendors.  People with experience with commercial vendors understand that many vendors need such an accommodation or the work will not get done, which is a serious concern.  Please be cautious to whom you give out the gate code.

Homeowners discussed security cameras and whether they would be helpful versus not so effective. At this time, the cost is very prohibitive and it’s not within our budget to purchase security cameras.  A recent estimate was that an effective security camera would cost a minimum of $12,000.00 each.  They are also vulnerable to damage.

It was discussed whether or not we were going to have our dues raised.  Legally, we are not able to vote on this matter until October of this year.  The Board is able to raise the dues 20% annually and any amount over 20% must be taken to the membership.  When it is decided, the increase would be effective January 2007.

There was a discussion regarding the unexpected but necessary high expense to have the entire sewer system jetted.  Also, it was addressed that the reason for a dues increase is not directly related to concerns regarding the pool.

A comment about confrontation was addressed by saying that a simple, calm, cautionary word to children in danger is often more effective in actually impacting bad behavior than security cameras, fines, letters, or anything else, by past experience.  Addressing problems later is almost always answered by many denials.  It is most helpful to speak at the time of a problem.

As a courtesy from the postal service, four lock boxes were made available in our mail area for packages.  It was reported that 2 of the 4 keys were not returned.  Signs will be posted to return the missing keys and to not take them in the first place.

Elections:

The nominating committee consisted of Marian Wong, Gary Hardesty and Jocelin Luistro.  There are two openings for Board members as the positions for Marguerite Elia and Mark Grisby are up for re-election at this time.

Marguerite opened nominations to the floor.  There were no additional nominations from the floor. The members proposed by the nominating committee were Marguerite Elia, Mark Grisby, and Gary Hardesty.

Gary Hardesty gave his background information and expressed his interest in becoming a Board member. Marguerite said a few words regarding his contributions to the Board.

Nancy Ly spoke on behalf of her fiancé, Mark Grisby who was unable to be present, as he was studying abroad in Asia.  Nancy Ly provided background information on Mark and addressed his interest on continuing with the Board.  Marguerite also said a few words regarding Mark’s strong attention to details and his contributions to the Board.

Gold Mainville and Jocelin Luistro prepared a statement on the importance of Marguerite Elia continuing with the Board.

Marguerite Elia provided the members with her background information and expressed her interest in continuing with the Board.

Five minutes break

Golda collected the ballots, one vote per eligible homeowner/lot (those not delinquent in dues).

Marian Wong presented the 2005 PROE financial review.  Marian reviewed the current finances and explained the operating fund versus the replacement fund.

Marguerite explained the necessity for an adequate reserve fund level and that it is required by law. We complete a Reserve study every 3 years.  Our Reserve study is currently being updated and should be completed by September this year.  Our financial obligation to the Reserve account is ongoing and permanent.  The Reserve study is for long-term maintenance and repairs.  Currently, our Reserves are 1/8th of what it should be.  Bob Browning will present our Reserve study to a board meeting in fall 2006.  He is an expert and came highly recommended.

Marian Wong explained our significant savings from volunteer work from the Board members.  These savings have kept our dues artificially low.  Marguerite has provided a bulk of the volunteer labor and has saved the Board thousands of dollars every year.  Marguerite has many years of  knowledge on the full gamut of HOA maintenance repairs and knows specific details which save us much money.  Marguerite also writes all correspondence (including some legal), knows bookkeeping very well and has caught many errors, which also has saved thousands of dollars from inaccurate invoices and mistakes by past bookkeepers.  Golda has donated paper products and envelopes, and has made copies free of charge.  Marian does mailings and walks the property stuffing envelopes in doors, as to not pay for postage.  Jocelin, Mark, Greg Watanabe and Marguerite provided security and patrolled during last year’s July 3rd celebration as the hired security company did not show up, which saved us about $300.

Gary addressed the residents encouraging everyone to attend Board meetings and although they may not vote, their input is of great importance.  Most importantly, they would know what was going on.

Marguerite encouraged everyone to attend as well and also requested volunteers.  Marguerite reported that we are obligated by the County to test the chlorine and phosphate levels of the pool daily. Marguerite trained Brian Lippman this past year.  However, he has decided to step down and a new volunteer is needed.

Marguerite addressed concerns with the landscaping.  We have lost 9 Azaleas bushes, a Crape Myrtle, and almost 30 of our trees have mold problems.  The cost to remove the mold on the trees with a fungicide could run about $150.00 each.  The fungus may also be washed off with dish-washing soap and water.  Marguerite asked for volunteers.

Golda announced that Marguerite and Gary won the election.

Marguerite thanked everyone for their attendance.  The general membership meeting was adjourned at 6:50pm.   The Board members met briefly to establish the future schedule of Board meetings.

Respectfully submitted, Jocelin Luistro