Questions for the BOD after the assessment meeting Dec. 19, 2022 from Brian Voorheis

 Dear Anita,

Thank you to the BOD for hosting the zoom meeting last week to explain to the community why they believe both a special assessment and also an increase in the monthly HOA fee are needed. I was particularly impressed with the preparation and professional demeanor displayed by our new Treasurer, Alexis Ortiz Heaney. The meeting did leave me with some questions, and I was pleased that on numerous occasions during the presentation we were encouraged to submit questions and that replies to all questions would be forthcoming from the BOD.

 My questions:

1. The 2022 Budget included $475,000 for "One-time Maintenance Projects". They were Security System/FOBS ($25,000), Stairs to the Beach ($280,000), Beach Maintenance/Boundaries ($70,000), Common Area Maintenance near Maintenance facility ($100,000). Of these I believe the only one completed was the Security System/FOBS This would leave $450,000. Shouldn't we be using that previously budgeted money before having yet another special assessment? Is that money gone? Did we spend it on something else? If so, what did we spend it on?

2. It appears there was an expense of $100,000 for the delay in the elevator repair. Specifically, what was this expense for and what company did we issue checks to for $100,000?

3. In the 2022 budget, beach stair repair was $280,000. Now it looks like the new cost is $140,000. What happened to lower the cost by half? Do we have actual quotes or are these just guesses?

4. Do we have contracts for the stair repair and the bridge to the elevator repair? Are permits required? If so, have we applied for them? Since we closed the elevator in mid-October for the purpose of getting started on the bridge repair and to date no work has been completed, what is the BOD confidence level that the bridge and elevator will be available this Spring?

5. The special assessment indicates we need $50,000 for "survey". What do we need to survey? The waterfront has been surveyed a few times over the past three years. Did we get a quote from a surveying company to come up with the $50,000 figure?

6. After we took down the white vinyl beach fence it was saved and put in storage. Last Summer it was actually brought back to the beach and stored on the shale bed behind our sand beach. That fence is not that old. There was a question about it on the zoom call, however the reply seemed insufficient. Why must we purchase another fence?

Thank you again for the presentation and for taking questions. I look forward to your reply.

Brian Voorheis

Capital Project Question about Community Approval - Dave Godshall

 As we plan for future projects and possible/likely assessments to fund them, I think it’s imperative that the board articulates which, if any, of these capital projects require approval from the community, and which do not, and why.

November Balance Sheet shows $800,000 in money market

 The November balance sheet shows over $800,000 in AAB - Money Market.  What interest rate will we be earning on this money?

Submitted to Kenrick on Dec. 21 by Bill Neidel

Comments and Questions for BHVA Board of Directors December 20, 2022 from Amy Luersen

 Comments and Questions for BHVA Board of Directors December 20, 2022 

Amy Luersen, 5549 Lakewood Trail

Regarding the Board’s 2023 Special Assessment Letter, I have a number of comments and questions but first wanted to say that I greatly appreciate having the new Website. That is very helpful for community members, and I thank the Board for making that happen this year.

I.Concern: Raising the Monthly HOA fees by 20% to $456 annually and requiring a Special Assessment of $1700 all in one year totals $2156 for each household. This increase, on top of an increase of monthly HOA fees in 2022 ($360 annually) and 2021-2022 Special Assessment of $2900 for a total of $3260, is burdensome for all.

My thoughts are that we phase both the proposed improvements and the monthly HOA fees. I’m sure the Board has considered phasing so would appreciate an explanation of why all the increases are necessary in one year, especially on top of the recent significant payments in 2022.

II. Infrastructure Maintenance and Capital Improvements: In 2018, BHVA contracted for a Full Reserve Study to evaluate the infrastructure for the community. I was pleased to hear that the Board is updating this study. This was a good step toward a Capital Improvement Plan (CIP). I think it would be helpful for a full CIP to be developed that includes projects, anticipated costs, and timeframe for completion. A CIP would provide current and future Boards with a roadmap that would help ensure that critical projects are completed in a timely manner as well as allow us as a community to appropriately budget for these expenses.

2021-2022 Special Assessment- During the 12/19/2022 meeting an explanation of expenses related to previous Special Assessments included $241,985 for the Maintenance Barn/Facility as coming from the Capital Reserve Fund. However, at the Special Assessment meeting held on 9/21/2021, Will Kim stated “Maintenance Facility - $245,000. The rent that was paid to the Cooks will help pay for this facility.” A question from Barb Hunt – “Why are we not financing the maintenance facility?” Will Kim – “We have the cash”. (Minutes from Special Assessment Meeting 9.21.2021).

While the new Maintenance Facility was a Capital expenditure, the community was told that we had the funds, prior to the Special Assessments be implemented. It does not seem right now to allocate the expense of the Maintenance Facility to the Capital Reserve funds that were accumulated by the 2021- 2022 Special Assessment. It seems those funds should still be available for needed Capital Projects.

Potential Phasing of Projects:

I think most people in the community would agree that there are some critical investments needed to maintain and improve BHVA’s infrastructure. Given the scope of potential projects, I suggest that the improvements be phased and suggest the following:

1

Top Priority - Safety issues to address in 2023: From the list provided in the letter, I would include the Pedestrian Bridge ($253,400); the Cliffside Drive Bridge engineering and replacement ($125,000); Beach Stairs Repair ($140,000). Total $518,400

Infrastructure Maintenance to address in 2023: Asphalt Crack repair and sealing ($25,000); Unsure what is included in Facilities Phase 2, but could that be deferred until 2024? Total either $25,000 or $50,000

Other Projects to Defer

New Lock Gate ($15,000); Beach Fence ($15,000); Amending the Declaration ($50,000) Survey ($50,000)

Total Deferred: $130,000 (or $155,000 if Facilities added)

It is unclear in the letter what the Engineering Expense ($50,000) is related to so unclear where that falls in the priority.

III. Monthly HOA Fees: Since 2020, monthly HOA Fees have risen significantly:

• 2020- $148 to $160 – 8% increase

• 2021- $160 to $190- 19% increase

• 2022- $190 to $228 – 20% increase

Total of 54% increase over three years that translates to an increase of $80 a month or $960 annually for every household.

To provide some stability for the community, allowing people time to budget and plan, as well as providing guidance for the Board on budgetary limitations, I would suggest phasing the proposed increase over at least two years.

Also, since the stated intent of the increase in HOA Fees is to “accumulate reserve funds to prevent BHVA from falling into a state of disrepair” ( BHVA 12/17/2022 letter to community), I would suggest that any increase in HOA fees be allocated to the Capital Reserve Fund so that we clearly accumulate Capital Reserve Funds to address capital projects.

IV. Transparency and Accountability:

It is noted in the letter that the Board met on November 21, 2022, and “after much deliberation” approved a budget that resulted in a 20% increase in monthly HOA fees. I searched the website for minutes of this Board meeting to better understand the issues and discovered that the Board has not published minutes for this or ANY Board meetings in 2022. However, in earlier years, Board meetings minutes were published. Community meeting minutes are provided but the critical decision-making meetings that the Board is holding are not transparent to the members of BHVA. This is not how a Homeowners Association should be operated. Please include minutes for all Board meetings, obviously redacted for Executive Sessions related to any litigation. This would be very helpful to the community in understanding the issues the Board is addressing on our behalf.

Thank you very much and I look forward to your reply.

 2

Follow-up questions/comments after the BHVA zoom meeting on 12/19/22 from Dave Godshall

 Follow -up comments and questions after the BHVA zoom meeting on 12/19

General comments

• Thank you to our new treasurer, Alexis Healey, for coming to this meeting well prepared

with understandable, detailed information! We have not seen this in the past three years. It was mentioned that the presentation info will be made available shortly; I hope that is the case.

• Zoom logistics were clumsy and led to a loss of 15 minutes or so of meeting time. This needs to be corrected before next meeting.

• Last night was an encouraging start regarding the sharing of financial information; but based on the number of questions, we need a lot more ‘face time’ with the board on this matter. I am doubtful that one more meeting of 1 1⁄2 hours will accommodate all the pent-up questions people have.

Financial questions

• In past years, budgets were created such that some amount of money could be peeled

off and put into the maintenance reserves pot. Based on prior years’ reports, here are the amounts that were taken from the operating budgets and placed into reserves:

a. 2019: $236,821

b. 2020: $208,843

c. 2021: unclear ($195,555 is reported, but most/all is likely from the assessments) d. 2022 (YTD): $79,821

e. so, in addition to the $540K going into the maintenance reserves from the 2021-

22 special assessment, the above $525,485+ should be accounted for and reported on in the next meeting when discussions regarding maintenance reserves and project spending continue.

• Ongoing, what financial information will be shared with the community? The current balance sheet and income/expense reports are useful, but we also need to understand how our reserve monies are being used, and whether projects are over/under budget. No surprises!

• Regarding the 20% increase “proposed” for the monthly HOA fee for 2023:

a. What budget categories are driving this increase?

b. Monthly, how much are you planning to draw out of the operating budget to

place into maintenance reserves for future projects?

c. Is there any plan to draw monies out of the operating budget to bolster legal

reserves?

• Down the road, what is the expectation for monthly fee increases and special

assessments? The long-term cost spreadsheet showed roughly $5M in expenses. How do you envision funding that amount of work, and over what time horizon?

Questions submitted to Kenrick prior to the Dec. 19, 2022 Special Assessment Meeting

 2021 assessment - $800

1)      What was the money intended to be used for?

2)      How much was collected in the 2021 special assessment?

3)      How much of the money collected for the 2021 special assessment remains and in what account?

4)      How was the money collected for the 2021 special assessment spent – details please?

2022 assessment - $1450 For capital and $1450 or legal

1)      What was the money intended to be used for?

2)      How much was collected in the 2022 special assessment?

3)      How much of the money collected for the 2022 special assessment remains and in what accounts?

4)      How was the money collected for the 2022 special assessment spent – details please?

At the last BHVA open meeting in November 2022 we were told by Tony Rupp that BHVA has not paid a penny to his firm.  If that is the case where is the assessment money for legal fees going?

Questions for the Special Assessment meeting on Dec. 19, 2022 by Lindsey Rodriguez

A few questions we should be asking tonight and a few things that stick out in the communication that was sent out regarding the special assessment. 1. The board mentioned multiple times their “need to defend BHVA’s rights and property (legal costs). Currently we are $335,000 in legal liability (debt). Paying that off alone is 50% of the special assessment. Are we going to continue to levy yearly special assessments NOT for improvements, but continued legal battles?? 2. Our professional expenses have doubled while community amenities dollars for the beach and landscaping are at 1% of year budget. Why is this, the board talks about improving our community, but soaks significant budget dollars into legal instead for the amenities they keep speaking about improving. 3. We set aside the money for the stairs from the last special assessment. Were did that money go? 4. We have already started the pedestrian bridge project, has the project stalled because of $0 reserves? We paid for the engineering reports on the stairs, bridge and pedestrian bridge per prior communications. What is the 50k for “engineering expenses?” 5. The board has with the last special assessments used the money on things other then discussed when the special assessment is levied. How will we know the money will be spent were you say it will be spent this time around. They clearly stated in the communication that they can spend the money when they feel it’s needed, something they have done in the past. Will you separate the special assessment dollars and and provide a separate financial report for the spend of these dollars? 6. The board keeps talking about improving out community and focusing on the large capital improvements that are essential to our community (I do agree all of these items need focus and repair). However more then half the money is being spent on legal fees. When do we say enough is enough.  

7. What amendments to the declaration (at a cost of 50k) are they looking to make?