Vicki’s Candidate Statement

 The major responsibility of the Board of Directors is to protect and maintain the best interests of the Association at all times.  This includes some tough decisions regarding CC&R enforcement, budgets, and operational issues. 

In our current housing market, all homes have lost value, and several homes in our association are in, or near, being foreclosed upon.  We will be losing dues payments from many of these homes, so it is more important than ever that we closely monitor our budgets, avoid any unnecessary expenses, and exercise sound fiscal management. 

My focus as a Director includes:

• Continuing to improve communication between the members and Board.
• Monitoring the financial reports to minimize expenses, and maximize income.
• Avoiding approval of any expenses that cannot be justified with off-setting benefits.

Experience:

• Resident since 1978
• Lake Forest II Board – Vice President 2007-08
• Founding member of LFII Dolphins Swim Team (1985 – 2002)
• Tract Chair (1997 – 2003)
• Election Committee (2001 – 2004)
• Lake Forest Keys Board of Directors 2005 – 2007
• Strategic Planning Committee 2006

Education :

Bachelor’s degree – Cal State Fullerton – Business – Marketing

Master’s degree – USC- Business – Finance

 

Budget Review and Management

Review and approval of the annual budget is an important responsibility of the Board of Directors, but monitoring the income and expenses throughout the year is equally important. 

The 2008 budget that kept dues at the same level as the budget of 2007 was approved in November.   This was based on the hope that the $30,000 excess from 2007 budget could offset any 2008 expenses that were projected to be higher than the previous year. 

We already know that the costs of utilities is continuing to increase, as well as postage rates.  The cost of maintaining the lake ran about $43,000 over budget last year due to the cost of water to fill the lake and the Master Association is responsible for half of that budget overrun!  Additionally, there are many homeowners in foreclosure today who are behind on their dues payments along with their mortgage payments.  If those properties are foreclosed, the foreclosing lender has no obligation to catch up the late dues, so they will just be written off at a loss.  (Once the foreclosure is complete, the bank is responsible to pay the dues until the next buyer closes escrow.)

I am very concerned about the financial health of our association at this time, so I am very careful to review the financial statements each month and to recommend delays or reductions in expenditures when ever possible.

 

CC&R Revisions

Our CC&Rs were created over 35 years ago, and many are now inadequate, difficult to enforce, or obsolete.  In order to change them, an election to approve the changes is required by law.  Some of our CC&Rs require a 50%  (1718 votes cast) quorum, and others require a 66.7% (2291votes cast) quorum to successfully implement the changes.  (In the last 5 out of 6 Board elections, our association has failed to meet reduced quorum requirements of even 25%, so meeting these quorum requirements will not be an easy task!) 

We have appointed a new committee to review and recommend the changes that should be made to our CC&Rs.  This will be an important project that will likely take several years to complete.  They will have to thoroughly review all the current CC&Rs, recommend the deletions, additions or rewording, and then have to make recommendations of how to get the legally required number of ballots collected to meet the quorum requirements.  We are lucky to have 2 committee volunteers with legal expertise in this area, so it is myhope that the legal review by our own HOA attorney will be minimal.  Since HOAs in California are now required to conduct all elections by secret ballot, the cost of revising the CC&Rs will be substantial.  Each ballot will have to be printed and mailed with 2 return envelopes, and probably several pages of instructions and explanations.  The printing and mailing of these will be substantial (my guess would be at least $2/homeowner), so it is important that it be done properly and with a high probability of being able to get the required quorum returned and to succeed by being approved.

 

Enforcing the CC&Rs

Enforcement of the CC&Rs and Architectural standards are important to maintaining the physical looks of properties in the Lake Forest II Association, and help to maintain the values of all homes within the Association. 

We have a department dedicated to regular review of all of the neighborhoods, and the homes within them.  When properties are identified as not meeting the standards, the enforcement process begins.  Unfortunately, because of privacy issues, it may not be evident that anything is being done to improve the looks of any particular property.  The process begins with a friendly “door hanger,” then may progress to formal letters, certified letters, requests to appear before the Hearing Board (which is often ignored), monetary fines (which may or may not be collected), arbitration, filing of liens and eventually litigation.  This process may take a long time, due to legally mandated notification periods before getting to arbitration, and there seems to be no time limit at all to the delays that may occur when litigating.  

Most homeowners respond to the earlier stages of CC&R enforcement, but those who choose to ignore, or outright defy the attempts at enforecement can delay remediation almost indefinetly – and at substantial cost to the association. 

As a prior member of another Board, I witnessed the successful litigation against a homeowner who fought it every step of the way, and appealed every decision made by the courts.  After 5 years, and approximately $500,000 spent in legal and court fees, the Association was awarded a significant amount in damages.  The homeowner declared bankruptcy, and in the end, the Association recovered about $65,000 of the $500,000 spent!  The only winner of this process was the law firm that was paid for all the eventually unproductive work!

As a member of The Board of Directors, I fully support our efforts to enforce the CC&Rs, but want to be very certain that we have exhausted all other means of enforcement before we take the expensive steps toward litigation.