December 1, 2008
Valle Escondido HOA Elections 2008
A homeowner and the developer have requested a public forum in which to discuss the issues on this ballot. In lieu of providing them with a list of everyone's email address, we have again opened the election blog that was started last year. Please feel free to view the elected committees positions on this issue and post your own questions, comments and concerns.
Issue 1 - Proposed 50% Increase in Annual Dues
As most of you are aware, the water distribution system here in Valle Escondido is not adequate year-round. We have explored a number of alternatives to improving the system and have decided to move forward with what appears to be an adequate solution. It is also the least expensive solution that we have found. This project, estimated to cost up to about $30,000 needs to be funded.
Additionally, it is becoming quite evident that road repairs are needed in may locations within Valle Escondido. Such repairs are quite costly and also need to be funded. We do not have a full cost estimate for the project, but as a frame of reference there were several potholes that were repaired a year ago. The cost for that (apparently small and simple) work was $750. Clearly, the cost for work of the magnitude that is needed here will be very substantial.
There are also two projects that have been proposed to increase our security. One potential project is to repair and enhance the fence line that runs from the security gate to the top of the property behind the 12-plex. This area has had numerous attempts of unauthorized entry. The second potential project would be to add motion detector alarms and several cameras to better protect our front entrance during nighttime hours. In the long run, this should be more cost effective than adding additional manpower.
And, as everyone can appreciate, there will be more maintenance project needs that arise as time goes on. Each of these needs to be funded.
Therefore, Ballot Issue #1 is a proposal to increase the annual fee for each owner by 50%, bringing the annual fee to $1,350 from $900. (For reference, this $450 annual increase amounts to $37.50 per month). With a 2/3 majority vote of those owners voting, we can proceed with the necessary maintenance projects in a timely manner.
We did consider – as an alternative – proposing a one-time special assessment. We ultimately rejected that proposal for several reasons. We believe the annual fee increase is a better approach because we will be able to avoid having special elections every time that a project needs to be undertaken. Also, the expense, delays and processing costs associated with special collections are troublesome, rather than simply changing the amount of the annual fee. An additional advantage of the annual fee approach will be to allow a financial reserve to be developed over time to accommodate unforeseen expenses (e.g., landslide cleanup).
We therefore strongly urge your approval of this ballot measure.
Additionally, it is becoming quite evident that road repairs are needed in may locations within Valle Escondido. Such repairs are quite costly and also need to be funded. We do not have a full cost estimate for the project, but as a frame of reference there were several potholes that were repaired a year ago. The cost for that (apparently small and simple) work was $750. Clearly, the cost for work of the magnitude that is needed here will be very substantial.
There are also two projects that have been proposed to increase our security. One potential project is to repair and enhance the fence line that runs from the security gate to the top of the property behind the 12-plex. This area has had numerous attempts of unauthorized entry. The second potential project would be to add motion detector alarms and several cameras to better protect our front entrance during nighttime hours. In the long run, this should be more cost effective than adding additional manpower.
And, as everyone can appreciate, there will be more maintenance project needs that arise as time goes on. Each of these needs to be funded.
Therefore, Ballot Issue #1 is a proposal to increase the annual fee for each owner by 50%, bringing the annual fee to $1,350 from $900. (For reference, this $450 annual increase amounts to $37.50 per month). With a 2/3 majority vote of those owners voting, we can proceed with the necessary maintenance projects in a timely manner.
We did consider – as an alternative – proposing a one-time special assessment. We ultimately rejected that proposal for several reasons. We believe the annual fee increase is a better approach because we will be able to avoid having special elections every time that a project needs to be undertaken. Also, the expense, delays and processing costs associated with special collections are troublesome, rather than simply changing the amount of the annual fee. An additional advantage of the annual fee approach will be to allow a financial reserve to be developed over time to accommodate unforeseen expenses (e.g., landslide cleanup).
We therefore strongly urge your approval of this ballot measure.
Issue 2 - Change the Legal Structure of the Association
Upon commencing work early this year, the committee wanted to be assured that all actions taken on behalf of homeowners would be correct and legal. As such, we initiated a review of the legal standing of the Association as well as all legal actions previously taken. What we discovered was not encouraging.
The very short version of what we found was that (as many of you know from reading the CC&Rs) this association was formed by Lecheria, not by the homeowners (of which there were very few at the time of formation). Additionally, we discovered that a number of legal filings presumably made on behalf of the Association by prior counsel were, in fact, not accomplished. Also, some time ago, Lecheria divested itself of the actual Valle Escondido property, so there remains no reason that the Association should be under its legal auspices. Additionally, counsel has just now informed us that with the recent $1.354 million judgment by the Supreme Court in a lawsuit against Lecheria, there is a remote, but potential, risk that the plaintiff could pursue the funds of the Association in the event Lecheria does not pay the ordered settlement. That possibility exits because the existing association was formed by Lecheria. So, potentially there is some legal risk to the Association’s assets due to actions taken by Lecheria in the past or future.
We know that there are many things that need to be addressed, corrected and updated in the CC&Rs. This can be done regardless, but we believe that the correct way to do this is to first create a new, legal association and close the old one. Moving on from there, all actions and activities will be on firm ground and the Association will truly be one that the homeowners have formed and will control.
All this will take some time to do because of the Panamanian legal structure and processes. It is not, however, particularly expensive. The exact cost is unknown, but there is little legal (attorney) work to be done. The majority of the actual expense will simply be notary and filing fees. Those are estimated not to exceed two or three thousand dollars and hopefully will only be in the hundreds. This will take a number of months (or more) to accomplish, simply because of all the governmental “processing” time. This ballot item is simply to bring to a vote by the homeowners the authorization for the committee to begin the changeover process.
However, in order to proceed with this action we need a very large majority to vote for approval of this initiative. Per the bylaws of the existing association, a favorable vote of 75% OF ALL OWNERS (not just of those voting) is required. So please, cast your vote!
We obviously and strongly urge your approval of this ballot measure. If not passed, our Association will continue to be the one formed by and under the auspices of one of the developer’s companies.
The very short version of what we found was that (as many of you know from reading the CC&Rs) this association was formed by Lecheria, not by the homeowners (of which there were very few at the time of formation). Additionally, we discovered that a number of legal filings presumably made on behalf of the Association by prior counsel were, in fact, not accomplished. Also, some time ago, Lecheria divested itself of the actual Valle Escondido property, so there remains no reason that the Association should be under its legal auspices. Additionally, counsel has just now informed us that with the recent $1.354 million judgment by the Supreme Court in a lawsuit against Lecheria, there is a remote, but potential, risk that the plaintiff could pursue the funds of the Association in the event Lecheria does not pay the ordered settlement. That possibility exits because the existing association was formed by Lecheria. So, potentially there is some legal risk to the Association’s assets due to actions taken by Lecheria in the past or future.
We know that there are many things that need to be addressed, corrected and updated in the CC&Rs. This can be done regardless, but we believe that the correct way to do this is to first create a new, legal association and close the old one. Moving on from there, all actions and activities will be on firm ground and the Association will truly be one that the homeowners have formed and will control.
All this will take some time to do because of the Panamanian legal structure and processes. It is not, however, particularly expensive. The exact cost is unknown, but there is little legal (attorney) work to be done. The majority of the actual expense will simply be notary and filing fees. Those are estimated not to exceed two or three thousand dollars and hopefully will only be in the hundreds. This will take a number of months (or more) to accomplish, simply because of all the governmental “processing” time. This ballot item is simply to bring to a vote by the homeowners the authorization for the committee to begin the changeover process.
However, in order to proceed with this action we need a very large majority to vote for approval of this initiative. Per the bylaws of the existing association, a favorable vote of 75% OF ALL OWNERS (not just of those voting) is required. So please, cast your vote!
We obviously and strongly urge your approval of this ballot measure. If not passed, our Association will continue to be the one formed by and under the auspices of one of the developer’s companies.
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