"You don't achieve harmony by everyone singing the same note" - Doug Loyd

Monday, August 20, 2012

Board Members Have a Duty to Protect the Communities Best Interests

When owners elect board members they are placing their faith and trust into them.  We trust that they will not just focus on one area of the community.  That they will benefit the masses not just themselves.  We are trusting that these people will take more than a few seconds to consider if something should be done or not.  Just because the law gives the board members an out if they rely upon the advice of a professional.  Does not mean that the court will allow this as a viable reasoning if board members did not use common sense. 

Board members still have to take into consideration who the information is coming from.  It doesn't matter if it's a law firm, landscaper, utility company, the city, or builder.  Every company even if it's an individual is in business to turn a profit.  Therefore, everyone at the company is nothing more than a salesman.  For the company to get the contract the person you are talking to must make you like them and make you comfortable.  Hence, they must sell themselves. 

To do so they must act as if they are your friend and are giving you some really good deal.  Then they turn on the charm to get you to trust them and remember them.  It's the same as interviewing for a job.  Because that is what they are doing after all. 

In the creative process board members will and should allow the contractor to point out possible problems and make suggestions.  However, keep in mind they are in business to make money.  So, some suggestions are going to be viable and great ideas and some are not.  When dealing with something that is charged by the square feet the larger the area the lower the price per sq ft becomes. 

For instance, if you have a community with 200,000 sq feet of grass that is maintained and the goal is lower water usage.  The contractor may suggest converting small areas to a desert landscape to save water.  The area they may suggest could be only 300 sq ft or 600 sq ft. and cost $15,000.00 or $25.00 per sq ft. to remove and redesign and plant.  This is when you have to pull out the thinking cap.

Let's say the current water bill runs $40,000.00 a year and the cost to mow is $60,000 a year.  If we use 600 sq ft and figure out the percentage it is of 200,000 sq ft.  We get .003 or .3% of the total sq ft.  Of the total 200,000 sq ft only .3% would be converted.  Now .3% of the yearly water consumption comes to $120.00 per year and of the mowing costs is only $180.00.  Meaning the 600 sq ft costs $300.00 annually to maintain.  The cost to convert 600 sq ft is $15,000.00 meaning it would take 50 years for the money saved in water and mowing before any savings would be seen. 

Common sense tells us that 600 sq ft is an insignificant amount of area to convert when there is 200,000 sq ft to maintain.  Common sense also tells us that the only person or persons benefiting from such a project is the contractor.  This project is not in the best interest of the community. 

The community is better off just shutting off the sprinklers and stop maintaining it the area than to pay someone to dig it up.  Because even if you get a bid that is for $5,000.00 it will still not be in the best interest of the community.  Your better off just letting the grass die off by its self and covering it with rock. 

Board members need to use common sense and logic.  Business is business and those in business are in it to turn a profit.  Nobody is in business to lose money!  Not even an HOA.

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