2010 10 28 Thursday
Almost all Crane Island Association members had responded to the invoices I sent out in late August with September 30th due dates. I was now the association Treasurer, having succeeded Mike Shimasaki, our occasional neighbor two lots down. I had returned bills and checks from all but three of the members; I had corresponded with two and was confident they would pay soon.
Only one hadn’t responded and I heard from her son-in-law that she was under water with her construction loan. She had built two years ago – actually, not built, but brought in a manufactured house by barge that was lifted onto the foundation by crane. The house was complete and she used it from time to time but was unable to secure a permanent mortgage and had been paying 8% on the construction loan. The 2008 crash had dried up all the credit sources she had expected to use.
With real estate down 10% to 15% from fall 2008 prices, she was now upside down on with her loan; it was higher than the current market value of the house. She couldn’t make payments on the high interest construction loan and she couldn’t work out alternative financing. She would probably walk away from the property – and her down payment. Dreams disappointed. Would she be able to pay her Crane dues and fees? Should the association put a lien on the property?
Crane has a community water system with six wells and a 35,000 gallon concrete water tank, a community dock and parking lot on nearby Orcas Island, a community dock and parking area on Crane, a concrete barge ramp, a grass landing strip, a community building, a pumper fire truck, an emergency rescue vehicle, and about three miles of single lane roads that provide access to each lot. Every bit of this infrastructure requires regular maintenance at varying intervals and all is likely to require major repair or replacement at some point. Because the entire island is private the county is not required, expected, nor invited to play any role in our infrastructure other than regulate it, in the case of water quality, for instance.
Members are billed in two categories: dues and fees for use. Each member is assessed $700 per lot per year (some members have more than one lot) and those with water access (and water meters) $100 each year for the water connection. Dues are billed in advance, for the coming fiscal year (August through July) and usage fees in arrears (that is, after the usage has taken place and been reported). Fees for water, dock moorage, ramp use, vehicle use, and various kinds of storage are all due after the end of the year in which they occurred. Our bill totaled $3135.47, no small amount.
Last year the collection process dragged on until January. I didn’t want that so I got the bills out early, creating a billing list in Excel and using it as a source to merge into a billing form created with Word. I mailed paper copies to all members and sent an email with a PDF copy of their billing form attached for those who hadn’t paid by the due date. I had made only one reminder call. The process had worked pretty well.
The annual bills contain amounts for annual dues, water connection, and gallons used. Members are expected to fill in the other amounts, for instance the fees they owe for having moored their boats at a Crane Community dock. They’re expected to report accurately and honestly and that presents an opportunity for Board level philosophical differences to arise. One school holds that member self-reports should be challenged when suspected of being inaccurate. Members should follow the rules, the rules should be enforced, and the association should get all the revenue due it. Another school believes that members will report honestly and to challenge them on the chance that they might have under-reported could cause ill-feeling and actually encourage more under-reporting.
Last year a Board member who thought he had evidence of under-reporting succeeded in getting the treasurer to challenge a number of members on their reporting. The effort turned out badly. They had reported accurately, at least they had good reasons for how they reported and they grumbled a bit at having been challenged. I didn’t want to go down that road so this year my challenges were limited to arithmetic errors on the bills – bills that literally didn’t add up – where the check sent didn’t represent the sum of the detail the member had written on the bill. There were a few and once I politely pointed out the error to the member, they were a bit embarrassed and paid the difference promptly.
Many homeowner associations across the country have fewer responsibilities – are not responsible for their own water and roads. We are our own local government in a sense and many of the issues relating to government show up in our microcosm. What fee structure is fair? How much should we spend on the water system? What improvements should we make? How much money do we need to hold in reserve for major improvements or repairs (like docks – which can cost $200 a lineal foot)? How strictly should we try to enforce policy and association covenants? How can we develop a culture of cooperation – since we depend on lots of volunteer effort and life on the island is nicer when people have a good feeling about the association and one another. What about free riders – people who take advantage of the benefits of the community without contributing any effort? What about people who have lots of money and are happy to spend it to use a disproportionate share of island resources, like water.
What kind of a life do we want on the island – larger and larger houses with private docks and big boats – or a low key, smaller footprint environment. Are we a community at all really or just a group of property owners who want to serve our own self-interest even if that’s at the expense of others? The association is supposed to operate as something like a representative democracy, with an elected Board of nine, with three year terms, and an annual meeting of all members to approve the budget by majority vote. Is a formal majority vote the point or should the Board seek consensus at Board meetings and with the association as a whole? These questions aren’t theoretical about someone else or a government that we can’t have much influence on. They’re very real and practical. We can’t blame anyone else if things don’t work right. It’s not about someone else. It’s us. Bracing, exciting, challenging.
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