President's Letter to Residents - August 4, 2020
Kingsgate 3&4 Residents
Here is a copy of the letter to residents from our President Mike Nelson that was mailed to every resident this week. We will also be hosting multiple community feedback sessions over the next 2 weeks, You will find the details on the homepage under the upcoming events section.
Hello Kingsgate!
I hope that this letter finds you well and enjoying summer! Last week, I wrote a blog post on our neighborhood website (www.kingsgate3and4.com) informing that community that the Board is considering hiring a professional HOA management company to help our neighborhood. The blog post has had over 300 unique visitors and over 390 total page views at the time of this letter but to make sure we inform as many homeowners as possible we decided to send this letter that you are now holding in your hand!
Let me start with the question that I imagine you are asking yourself. What is an HOA management company and do we need one? Since HOA boards consist of community members that perform their duties on a volunteer basis, many HOAs turn to a professional third-party management firm to help cover their large scope of responsibilities. In a broad sense, HOA managers guide and consult with the board to fulfill their duties, execute the decisions, directives, and policies approved by the Board, and document transactions, activities, and records of the association. Briefly, with an HOA management company the Board is in charge of decision making and the HOA managers fulfill the actual dues collection, maintenance, vendor payment, and enforcement.
To ensure that we are providing the best service to Kingsgate homeowners, the Board voted unanimously to authorize an Exploratory Committee to study professional HOA management. The goal of this committee is to determine the pros and cons of an HOA management company and make a recommendation to the board on how to proceed. Since that time, the Committee chaired by Chris Dwyer and staffed by myself, Derek Tucci, and Chris Adams has been hard at work evaluating professional HOA management. To date, the Committee has interviewed (10) separate HOA management companies, received proposals from (8) companies, invited (6) companies to participate in an RFP, and is now focused on (3) companies to give presentations to the complete Board. Following these presentations the Board will vote in the August 18, 2020 meeting to select one of these firms for either financial management, full-management, or to continue without the assistance of a professional HOA management company.
Before this vote, the Board needs your feedback! We will be hosting a series of virtual Town Halls via WebEx the weeks of August 3rd and August 10th to explain the details behind this concept to you and solicit your feedback. Please attend one of those sessions if possible! Also - Please comment on the website, send an e-mail to the Board (KG34.Board@gmail.com), or call a board member with your comments.
Since our initial blog post, we have received lots of feedback and questions that we will address below. We will also share an updated schedule of events. Note that the topical summary regarding professional HOA management is unchanged from the July 29th President’s Blog on the website.
Finally, I want to make it clear that we are considering this option to improve and not to change the neighborhood’s culture. Our people drive the culture of our neighborhood. Our people are generally open and accepting. Professional HOA management will not increase exclusivity but it will introduce more consistency. In general, I believe you will see an improvement in our facilities and our common areas. The Board believes you will see an increase in community involvement because the day-to-day, non-value-added minutia that most community members try to avoid will be managed by a professional organization. This will allow room for people who have great based ideas to participate without undue burdens on their time. Lastly, the Board has a fiduciary responsibility under our governing documents to act in the best interest of the HOA and will vote with that in mind.
If the answers to the common questions I have provided here don’t address your questions, please contact the Board or attend one of the meetings. Thanks!
Best,
Mike
Responses to Recent Homeowner Questions:
Process and Community Feedback:
Whether to implement a professional HOA management company will be voted on by the Board of Trustees. The vote will occur during the August 18, 2020 meeting. After we have heard community feedback on the subject, The Board members will vote for one of three things:
1) Implement Full Management; or
2) Implement Financial Only Management; or
3) Do nothing.
Timeline of Events:
August 5th, August 6th, August 11th, and August 14 th – all at 6:30 PM: Overview Presentations to community members. Same 15 to 20 minute presentation on professional management and question and answer period. These meetings will be hosted on WebEx and access information will be on our website (www.kingsgate3and4.com), the audio only portion of the meetings can be accessed at 415-655-001, with meeting number: 1269345531#, and meeting password 97378482#.
August 18th: Final discussion, community feedback and Board vote on motions.
Professional HOA Management Topical Summary (unchanged from July 29th President’s Blog)
BOARD RESPONSIBILITY: The Board needs to be strategic in nature, setting the tone for the refurbishment of our assets and common areas while establishing a plan to keep Kingsgate 3 & 4 viable in the future. Unfortunately, the Board is completely task-saturated solving the immediate problems in our community and maintaining what we have. Often are Board members spend tremendous amounts of time searching for bids from vendors, researching HOA laws, and performing other non-value-added tasks. Our neighborhood suffers because of this model. Boards with great intentions, limited time, and moderate motivation is acceptable, but it is not the best we can do. Allowing a professional manager with vendor relationships and deep HOA expertise handle the day-to-day will allow the Board to plan strategically to ensure great facilities, proper maintenance, and expanded opportunities for our community.
COST AND ECONOMICS: The community’s bookkeeper has recently announce their resignation. Graciously, they have agreed to stay with us until October 1st so we can find a replacement. Professional management companies provide full bookkeeping as part of their services. This can be part of a “full-management” contract or part of a “financial only” contract. Currently the Board pays our Bookkeeper $1,330 monthly. Financial management from a HOA management firm has been quoted to the Board for between $800 and $1500 monthly. In addition to the services we currently get from our bookkeeper, a management company includes services we do not get today or non-value added things that our Treasurer does such as financial statement creation, online dues payment, matching receipts, etc. In addition to likely being able to replace our bookkeeping for an amount comparable to what we spend today, full management services have been quoted to the Board for between $2300 and $3000 monthly. This goes beyond financial help and includes services that I believe would allow the Board to provide much better service to the community. Additionally, we think that we can do this without raising dues since a professional HOA management company should help us avoid certain costs. See below.
HOA BEST PRACTICES DECLARATIONS, and BY-LAWS:
Our Declarations and By-laws were written in the mid to late 1960s and ratified when the HOA came into existence in 1968. They were written with a template that was acceptable at the time. There have been small amendments and changes over the years – but they have not been continually evaluated for legality and compliance with HOA best practices. While they serve us currently – they do not do it very well. Similarly, much of how the HOA and the Board operates is dictated by tradition (sometimes not even in writing) and unfortunately, often only changes to respond to a problem that has arisen. HOA management is a professional field with third party accreditation to its members and required continuing education. The right HOA management company will help guide the Board using current best practices adopted by the industry. Additionally, they can help the Board bring Declarations and By-Laws into alignment with best practices while respecting the rules for modification of the Declarations and By-Laws written in the documents themselves.
ENFORCEMENT:
A majority of the community feedback that I get concerns Covenant and By-Law enforcement. The complaints range from poor and/or non-existent yard maintenance, to incomplete home projects, to parking issues to name a few. Frankly, this is just the tip of the iceberg – I could fill 10 pages with the amount of enforcement related complaints the Board gets. Sadly, our enforcement has become complaint based in the last 10 to 15 years. This means that enforcement activity only happens when neighbors complain. This type of code enforcement is inconsistent and puts the HOA on a downward slope towards more and more properties out of compliance. Frankly, given the time that maintaining the community takes and a lack of volunteers, this is the best we can currently do. I will also mention that I believe that enforcement is the worst part about being on the Board. No one wants to do it because put puts neighbors in direct conflict with each other. Professional HOA management companies have enforcement personnel who will provide consistent enforcement of our rules on a monthly basis. Should an HOA management company be selected, the Board will aggressively monitor implementation in this area to avoid upsetting the community. The Board is not interested in sending our mass amounts of violations about frivolous things. We simply wish to enforce the rules fairly and maintain the value of our community.