The Colonies Finances: Incompetently 'Managed'

Happy Autumn!

The morning of Wednesday, August 29, 2012, I received an email with a copy of the following announcement attached (to be the first of three meetings):

Never in the history of The Colonies could co-owners owning units back to as early as 1980 recall this practice EVER being done. A pro-active co-owner took the initiative to notify co-owners via The Colonies Connection Google Group forum then numerous emails followed. Some (obvious) factors to consider about this 'sudden' change of practice and statements sent are as follows:

- One Day notice of the first meeting to co-owners was hardly enough time to get anyone who had wished to attend be made aware of the meeting, particularly Colonies investor owners who live locally

- Holding the first meeting the night before a holiday weekend commenced ensured for the esteemed Colonies Finance & Insurance (F&I) Committee and Management an even lower co-owner attendance turnout

- One Co-Owner queried to me 'Board should be directing management' and not the reverse as appears evident here; Management giving the F&I Committee the numbers to 'run with' seems the logical route

- One person stated since there had been a slight change in Board Members in recent years including the addition of an Attorney could be the reason the notice was posted

- e-Mail message from Colonies Board of Directors President Brown to 80-member The Colonies Town Hall Google Group forum

From: coloniesboard@gmail.com
To: the-colonies-townhall@googlegroups.com
Sent: 8/29/2012 4:17:18 P.M. Eastern Daylight Time
Subj: 2013 Budget Preparation

Hi All,

There seems to be some confusion over a scheduled meeting of the
budget committee tomorrow night, with at least one resident urging
others to attend to provide input and share their views. Tomorrow
night's meeting is for the budget committee to begin work in putting
together a draft budget. Although as with all committee meetings it
must be open to residents, this is a working meeting to start
preparing the budget.

There WILL NOT will be an opportunity for observers to comment or
provide input. If you have comments that you wish to share with the
committee, please put them in writing and send them to the office to
the attention of committee chairman Bruce Freitas for consideration.
In keeping with Virginia law, we will hold an open budget meeting
where resident comments are solicited and welcome. We will advertise
this meeting well in advance so that owners can make plans to attend.
Only after input from the residents will the board make a final
decision on the budget.

Best wishes & please have a happy and safe Labor Day Weekend!

Carol B. Brown
President

President Brown sending this message to the 80-member forum vs. also including the 177 member The Colonies Connection Google Group forum is priceless (so much for 'transparency' and communication the Board purports to be a priority). The Colonies Crier Newsletter for the months of June, July, August and September did not mention the 2013 budget preparation being in progress let alone submitting input. It is refreshing reading The Rotonda Rostrum as they actually list the names of the committee members for each of their committees whereas The Colonies does not (only exception is the Nominating and the Elections but that is done at the last minute). What is the fear of telling the co-owners who the members of the F&I Committee are (these people are after all the ones deciding on 'our financial future')?

Based on his demeanor at previous years' Annual Budget Hearing Meetings and the recent 'budget committee working meetings', F&I Chairman Freitas (Colonies co-owner since 1989 and ALSO a co-owner at The Rotonda since December 2009) is an angry man (his retort at the October 2010 Annual Budget Hearing to co-owner complaints at the $20 monthly condo assessment increase was that $100 was proposed).

Highlights of these 'working budget committee' meetings held Thursday, August 30, 2012 and Thursday, September 6, 2012 include:

- Topic of standard of living level The Colonies community is at presently was raised; esteemed Chairman Bruce Freitas gave the analogy of a car and said he thought The Colonies to be a mid-sized sedan

- 3% pay raise for staff; outrageous amount because the average civilian increase for the 12-month period ending June 30 per the Bureau of Labor Statistics was 1.7% (the salary increase for the 2012 Colonies budget was 2%)

http://www.bls.gov/news.release/eci.nr0.htm

- Move-In base fee to be increased to $150 (a 50% increase from the current $100 rate); increasing the fees to $125 for move-in's occurring during the week and $200 for Saturday move-in's would be more reasonable/practical

- No Eagle Security personnel were present at the meeting deemed surprising by some co-owners present given they are present at EVERY Board Meeting, Annual Meeting and Budget Hearing (2012 budgeted amount for Contracted Security was $318,000)

- The Uniform Rental contract expenses was actually discussed (2012 budgeted amount was $14,000); a consideration to reduce this gross expense is to have the employees wear Dickies style pants and polo shirts with The Colonies logo would be far less expensive (it should be noted a co-owner raised the issue of the high cost of uniforms at the October 2011 Budget Hearing) and one female member of the F&I Committee proclaimed ‘Colonies employees may quit if they not have their uniforms’. Scary thought if we have someone like her having a say on how our money is being spent but then we live in a community where our Treasurer works in the Office Part Time and that is a conflict of interest!!
http://www.amazon.com/Dickies-Mens-Relaxed-Straight-Cargo/dp/B008HF8NL8/ref=pd_sbs_a_23

- Those participating in the meeting came unprepared, notably Property Manager McCracken

- The third meeting, scheduled for Tuesday, October 2, 2012 is a mere 15 days before the Annual Budget Hearing Meeting scheduled for Wednesday, October 17, 2012. The subsequent Annual Budget Hearing letter sent to all co-owners will hardly be received by many with truly ample notice to make arrangements to attend (yes, the date was listed in the October edition of The Colonies Crier but some's decision to attend the Budget Hearing may be contingent upon the content of the 2013 budget and/or the 2013 monthly condo fee).

Fellow co-owners, reality is going to bite us all when the Annual Budget Hearing Notice letter is sent announcing the Budget Hearing and the 2013 monthly condo fee rate. The 2013 'increase' could be one or possibly a combination of the following:

- Nominal monthly increase of $5 or $15 to raise co-owner confidence after last year’s increase (funnily enough, the F&I Members had to be set straight as to the amount of last year’s $30/month increase by co-owners present at the second meeting)

- Hefty increase in monthly condo assessment fees (current rate is $510/month and the increase was $30/month from the previous year)

- Special Assessment charged; per Article IX (Fiscal Management) Section 5 of The Colonies Bylaws, The Board of Directors may levy in any assessment year - a special assessment or assessments, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of a described capital improvement located upon the Condominium, including the necessary fixtures and personal property related thereto, or for such other purpose as the Board of Directors may consider appropriate, provided that any such assessment which is designed for the purpose of new construction or expanding or enlarging any existing capital improvement shall first have the approval in writing of not less than a majority of the co-owners entitled to cast votes. A special assessment shall become effective and it shall be due after thirty (30) days’ notice in such manner as the Board of Directors may direct.

It is time for us as co-owners to band together and stop lining the pockets of Management! We should live in a community where the Board of Directors directs Management (the Smoking Petition co-owners were forced to circulate speaks for itself). Board President Brown sent the following email to The Colonies Town Hall Google Group Forum members as a way to further justify the 3% pay raises (they are doing their job) and the timing is to coincide with the Budget Hearing Notice Letter we co-owners will all be receiving soon:

From: coloniesboard@gmail.com
To: the-colonies-townhall@googlegroups.com
Sent: 9/11/2012 5:11:54 P.M. Eastern Daylight Time
Subj: Kudos to our staff

Kudos to the Colonies staff, particularly groundskeeper Julio and this
team, who through their own ingenuity and hard work, recently saved
the co-owners thousands of dollars. During the last board of
directors meeting we discussed a couple of bids for about $8,000 from
companies proposing to remove the unsightly tree stumps from our
property. We decided to postpone a decision to seek alternative and
less costly solutions.

When Julio returned from his leave a few weeks ago, he and his team
immediately set out to cut back much of the overgrowth of weeds that
threatened to take over. After making great strides in cleaning up
the property, Julio rented equipment that allowed them to drill out 19
stumps in two days. Then they seeded the stump areas and covered them
with straw. Since these are our staff groundskeepers, the only
additional costs were approximately $2,000 for the equipment and
materials.

Thanks guys! We appreciate your hard work and efforts to help us cut
costs.

Carol B. Brown
President

The holiday season will soon be upon us. Today is Saturday, September 29, 2012;

- Hannukkah starts Saturday, December 8, 2012 - 70 days away

- Christmas: Tuesday, December 25, 2012 - 87 days remaining

All I want for the holidays are those Board Member and Management/Administration resignations!