Michaywé POA

January 1, 2013

Welcome and Home Page

2008 May 26
Last update: 2009 Nov 30. Click History for a list of changes and updates.

__New Information — The following are recent changes in organization and content of this weblog that may be of interest.

2009 Nov 30 — added Label (Category) for Dues and Assessments in right column under Labels.
2009 Jun 01 — added Listing of "Major Posts" in right column
2009 Jun 01 — added Listing of "Important Posts" in right column, including "Recent Posts" and "Recent Updates".

__This weblog is focused on the Michaywé Owners Association. An internet post may emphasize identification of information in the right column. To locate information of interest, please use the "SEARCH BLOG" at the very top bar.

__This weblog is not password protected as is another one with the same title, Michaywe POA. If you are a MOA member, please contact the writer at Email me! for the name and password. Please include your name and the street address or property unit number of your Michaywé property so I can verify your membership in MOA.

__A discussion forum, Michaywé Members (Non-Official Forum For Discussion of Michaywé Issues and Information) is also available. At the forum, click on the "Getting Started" forum to register and become a member of the Forum.

__It is my view that MOA members are not receiving full and accurate information in the MOA Business Reviews and Notices of various members' meetings. All of these internet website/weblogs are intended to provide additional sources of information and opportunities for members to comment.

__Accuracy is of prime importance. Please advise of any concerns regarding any information presented.

___I also maintain several other weblogs in addition to the password-protected website described above.

Don Nordeen
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Update Summaries — Current Year

Year 2010
Last update: 2010 Jan 01. Click History for a list of changes and updates.

__This post provides short summaries of recent updates in reverse chronological order. The full introduction and body for each post are available by clicking on the post title. The update summaries for the previous year are also included.

__See Recent Updates Explanation for an explanation of the content. Click Continue for the listing of recent posts with brief summaries.

__New posts will not be shown on this post, but will be listed under POST SUMMARIES in the left column, and in a separate post, "Post Summaries — Year."

Don Nordeen
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Post Summaries — Current Year

Year 2010
Last update: 2010 Jan 01. Click History for a list of changes and updates.

__This post provides short summaries of recent posts in reverse chronological order. The full introduction and body for each post are available by clicking on the post title. The summaries for the previous year are also included.

__See Recent Posts for an explanation of the content. Click Continue for the listing of recent posts with brief summaries.

Don Nordeen
==========
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Updated Replacement Fund and Restricted Assets Tabulation

2009 December 30
Last update: 2009 Dec 31. Click on History for changes and updates.

__During and following the 2009 Dec 29 Town Hall Meeting, several of the members had an extensive discussion of the shortfall in the Replacement Fund / Restricted Assets accounts. This was covered in my 2009 Oct 13 letter to the Board re Preservation (Replacement) Fund & Restricted Assets. No action was taken by the Board concerning the 2009 Oct 13 letter.

__The continuation of this post is my 2009 Dec 30 email to the Board re the subject title of this post.

Don Nordeen
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Key Words: Accounting Practices - MOA, Financial Information - 2007 General, Financial Information - 2008 General, Financial Information - 2009 General, MOA Board of Directors, MOA Operations - General/Total, Reserves for Capital Repair [Preservation Fund], accounting, AICPA Audit & Accounting Guide for Common Interest Reality Associations, AICPA Audit & Accounting Guide, AICPA, audit, board of directors, CIRA, preservation fund, preservation, replacement fund, replacement, reserve fund, reserve

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Voting Results on $100 Dues Increase Plus COLA

2009 December 19
Click on History for changes and updates.

__The results of the voting at the 2009 Dec 19 Special Members' Meeting on the Board's Proposal for a $100 increase in the Dues Cap plus COLA are the following as reported by the elections committee:

• Eligible Voters = 1,743
• Quorum = 175
• Ballots Cast = 1,292
• Valid Ballots = 1,245
• Invalid Ballots = 47
• "Yes" Votes = 431
• "No" Votes = 814

This represents a 35% to 65% defeat of the Board's proposal. These numbers are slightly different from those announced at the Special Members' Meeting, and are the corrected numbers published in an email from MOA.

__When time permits, I may add some of the members' comments in the continuation of this post.

Don Nordeen
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Key Words: Accounting Practices - MOA, Business Reviews - 2009, Financial Information - 2009, MOA Board of Directors, MOA Members & Members' Rights, abuse, access to records, accounting standard, accounting, balanced budget, budget, civility, closed meeting, closed session, Covenants Conditions and Restrictions, dues, duty of obedience, executive session, GAAP for community associations, GAAP for homeowners associations, GAAP for property owners associations, governance, governing documents, members' rights, replacement fund, reserve fund, special meeting, user fees, vote

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Further Thoughts and Information on the Dues Increase Proposal

2009 November 30
Click History for a list of changes and updates.

__As the title suggests, the continuation of this post is my email to MOA Members and provides further thoughts on the Board's proposal for a $100 increase in the dues cap plus COLA. Exchanges of email communications have occurred. As in any good debate, there are different points of view. Any disagreements should lead to a better understanding. The unfortunate part concerning this proposal is that the board did not facilitate a members' debate prior to developing the proposal for a vote.

__My Summary View on MOA's Challenges — I would like to see more emphasis on reaching out to one another and focusing on the common interests to bring the members together to operate, maintain and preserve the recreational facilities in a manner that considers the interests of all the members and is as fair as possible to all members. Reference: my 2007 Jun 13 email to MOA Members titled, We are all in this Michaywe boat together.

Memo: Some of the links including the one above in this post are to my password-protected weblog. If you are a MOA member, please refer to the Welcome & Home page for information on access.

Don Nordeen
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Please be advised that the writer is not an attorney, and this is not legal
advice. The information is based on research on information available
in the public domain.
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Key Words:_ Accounting Practices (MOA), Business Reviews, Dues and Assessments, Financial Information (2009), MOA Board of Directors, MOA Operations (General/Total), abuse, access to records, accounting standard, accounting, balanced budget, budget, civility, closed meeting, closed session, Covenants Conditions and Restrictions, dues, duty of obedience, executive session, GAAP for community associations, GAAP for homeowners associations, GAAP for property owners associations, governance, governing documents, members' rights, replacement fund, reserve fund, special meeting, user fees, vote

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Proposal for $100 Dues Increase Plus COLA

2009 November 24
Last update: 2009 Dec 01. Click on History for changes and updates.

__The continuation of this post is my email to MOA members concerning the Board's Proposed Vote on a $100 Dues Increase Plus COLA. Members are obviously polarized on this issue. Accordingly, this email attempts to provide information and discussion to help in the decision.

__I have received comments from some members. Those are added with permission at the end of this post. Please send me comments you would like to share or add your comments in the Comment section at the end of this post.

__(added 2009 Dec 01) In 2006, I recorded a post, Should MOA Annual Dues be Indexed for Inflation?. This post makes the same pro and con arguments now being made. The post also includes a graph showing the cost of living and MOA dues through 2006, which shows that the MOA dues trend is well in excess of the Consumer Price Index.

Memo: Some of the links including the one above in this post are to my password-protected weblog. If you are a MOA member, please refer to the Welcome & Home page for information on access.

Don Nordeen
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Key Words: Accounting Practices - MOA, Business Reviews - 2009, Financial Information - 2009 General, MOA Board of Directors, MOA Members & Members' Rights, MOA Members' Letters, abuse, access to records, accounting standard, accounting, balanced budget, budget, civility, closed meeting, closed session, Covenants Conditions and Restrictions, dues, duty of obedience, executive session, GAAP for community associations, GAAP for homeowners associations, GAAP for property owners associations, governance, governing documents, members' rights, replacement fund, reserve fund, special meeting, user fees, vote

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Email to MOA Board Re Notice for Dues Increase is Defective

2009 November 23
Click History for a list of changes and updates.

__Not only was the 2009 Nov 29 dues increase proposal a surprise to most MOA members, the notice is defective likely because everything was done at the eleventh hour. Haste makes waste. Because of the defects in the notice, an affirmative vote for the dues increase is likely not enforceable, in my opinion. MOA has enough problems without that cloud having over an "approved" dues increase.

__Since the proposal that was put forward was likely done in good faith, the positive action is for the board to acknowledge the defects, take corrective action by issuing a new notice that can still be voted on in December.

__The continuation of this post is my email to the board providing the specific defects and recommending specific corrective action. Anyone who agrees with this approach should immediately send an email to the board so recommending. The new notice will have to be in the mail by Dec 01 for a vote on Dec 30.

Don Nordeen
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Key Words:_ Financial Information - 2009 General, MOA Board of Directors, MOA Members & Members' Rights, balanced budget, budget, Covenants Conditions and Restrictions, duty of obedience, fiduciary duty, governing documents

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2008 Audit Report for Michaywe Owners Association

2009 June 23
Last edit: 2010 Feb 17. Click History for a list of changes and updates.

__The continuation of this post is my email to Mr. David Myler of the CPA firm conducting the 2008 audit concerning the report made by a staff member of this firm at the 2008 MOA Annual Meeting. The email supports and explains my comments and questions at the Annual Meeting.

__I did recommend this firm because it focuses on reviews and audits for owners associations and has the knowledge of the accounting standards applicable to owners associations.

__The results have been disappointing. The content and format for the audit reports have changed each year. Many of the requirements in the applicable audit and accounting guide for owners associations do not appear to have been applied.

__ The lack of consolidated financial statements, however, is the responsibility of the MOA Board which did not authorize their preparation even though required as part of GAAP.

Don Nordeen
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Key Words:_ • Accounting Practices, MOA; • Financial Information, 2008 General; • MOA Operations, General/Total; • Reserves for Capital Repair; accounting principles; AICPA Audit & Accounting Guide for Common Interest Reality Associations; AICPA Audit & Accounting Guide; audit; CIRA; Common Interest Realty Association; consolidated financial statement; preservation fund; transparency

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Comments on the 2007 Audit Reports

2009 May 18

Last edit: 2010 Feb 17. Click on History for changes and updates.

__MOA has had two different auditors (CPAs) in the years since 2000. Significant changes were made in the format and content in the review/audit reports by the CPA from 2000 to 2005. A major restatement of MOA's 2000-2004 income statement and other accounts was made in 2005 to correct the handling of the losses in the Pines Club Corporation. Beginning in 2006, a new CPA firm was engaged, who made further changes in both format and content. The new CPA used a different method for entering PCC's losses into MOA's accounting.

__MOA members are rightfully confused. No one on the board has explained what has happened and why. Without intervention by someone, the same errors and discrepancies are likely to be carried over into the audit reports for 2008.

__The continuation of this post is my email to MOA's CPA commenting on the 2007 audit reports which contain the possible errors and discrepancies.

Don Nordeen
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Key Words:_ Accounting Practices (MOA), Financial Information (2007), Financial Information (2008), MOA Operations (General/Total), Preservation Fund, accounting principles; AICPA Audit & Accounting Guide for Common Interest Reality Associations; AICPA Audit & Accounting Guide; audit; CIRA; Common Interest Realty Association; consolidated financial statement; preservation fund; transparency

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Accounting Discrepancies — MOA vs. CPA

2009 April 27
Click History for a list of changes and updates.
__The continuation is my email to the board on this subject. There are a number of discrepancies between MOA's account (that provided in Business Reviews and usually available at the MOA website) and the CPA's accounting in the audit reports. Except for year-end adjustments, these should be the same.

__The email describes and discusses five major discrepancies between MOA's accounting and the CPA's. The accounting should be based on Generally Accepted Accounting Principles. MOA's accounting does not appear to conform to GAAP.

Don Nordeen
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Key Words:_ Accounting, Business Reviews, Financial Information (2008 General), MOA Operations (General/Total), Preservation Fund

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Dues Collection Small Claims Lawsuits

2009 April 06
Last edit: 2009 May 04. Click History for a list of changes and updates.

__The continuation of this post discusses implications of the decisions and actions of MOA’s board of directors to pursue collection of unpaid dues and special assessments as personal debts of the owner. I believe the Board has the obligation to determine the validity of the collection as personal debt under the law and governing documents before proceeding. Part of this obligation is to examine the likely arguments against validity and to determine that the likely arguments are not valid. This post discusses (at least some of) those likely arguments.

__Under the Declaration of Covenants, Conditions and Restrictions, DMCCR (sometimes called deed restrictions), liens can be filed against the property unit (lot) for unpaid or delinquent dues and assessments. There are no provisions in the DMCCR making the unpaid dues and assessments a personal debt of the owner.

__Owners were certainly informed in a number of ways that ownership includes an obligation to timely pay dues and special assessments. They were also advised that the means for MOA to collect unpaid dues and assessments is to file a lien and then foreclose that lien.

__Since the DMCCR does not state that unpaid dues and assessments are personal debt of the owner, action by the board of directors to file a lawsuit in small claims court is likely invalid under the law and governing documents. Before proceeding, the MOA Board should have determined such lawsuits in small claims court are unquestionably valid under the law and governing documents.

__(edited 2009 May 04) If the money is owed, it should be paid and/or collected. None of the angst related to liens and potential lawsuits would occur if the owners just made timely payment of dues and assessments. But MOA's collection means should be limited to those authorized under the law and the governing documents. An unauthorized collection action is a violation of the rights of the owners/members — a rights issue. While we may not have sympathy for those who have not made timely payments of dues and assessments, they are entitled to the same protections under the law and governing documents as any other owner/member. The classic rights issue in USA is ACLU’s defense of the right of a Nazi group to march in Skokie, Illinois. (end edit)

__Other information may be available on the internet with the following Google searches:

Michaywe OR Michaywé dues OR assessments "owners association" "personal debt"
debt "small claims" site:http://www.hoatalk.com/
Michaywe OR Michaywé "owners association" dues OR assessments "personal debt"

Copy the text in the bullets into the Google search window. Obviously, the search terms in the third bullet focus on Michaywé.

__Correctness and good explanation are a high priority in this post. If there are questions concerning the correctness and explanations, please call to discuss. Thanks.

Don Nordeen
(989) 939-8240
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Please be advised that the writer is not an attorney, and this is not legal advice. The information is based on research on information available in the public domain.
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Key Words:_ Attorney Issues; Governance; Governing Documents; Members' Rights; dues, assessments, unpaid, delinquent, late fee

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Why is the Preservation [Reserve] Fund Important?

2009 March 27
Click History for a list of changes and updates.

__This subject was included in the post, 2008 MOA&PCC Financial Results. Because of its importance concerning keeping MOA a viable organization, a separate post is created for further discussion and comments on Reserve Fund — more descriptively the Preservation Fund. The continuation of this post provides that additional discussion and will be updated with any new information concerning this important concept.

Don Nordeen
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Key Words:_ Accounting Principles and Issues; Financial Information, General; MOA Operations, General/Total; Reserves for Capital Repair [Preservation Fund]

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MOA Financial Information Re Dues Increase Vote

2009 March 25
Last update: 2009 Apr 30. Click History for a list of changes and updates.

__(added 2009 Apr 30) According the my notes taken at the meeting, the voting results on the proposal to increase the dues cap (annual fees) from $400 to $475 beginning in 2010 are as follows:

total votes cast: 1238
not in good standing: 33
invalid: 45
yes: 497 (43% of valid votes)
no: 663 (57% of valid votes)

__The most critical information concerning a proposed dues increase is the financial information, operating plan, and budget. The financial information provided by the board in the 2008Q4 Business Review has significant discrepancies and omission relative to the financial information in CPA's audit reports which include the financial statements. Further, the board states in the Business Review that the CPA's audit report for 2008 will not be available before the vote.

__The board has not provided an operating plan, but described some broad generalities which are not quantified.

__The published budget for 2009 is balanced likely for two reasons: (1) the numbers are not realistic; and (2) not all expenditures and obligations are included in the budget.

__The continuation of this post is my 2005 Mar 25 email to MOA members with a copy to the board of directors on this subject. Financial parameters based on the CPA's methodology are developed. Alternatives for comprehensive structural reform are described. The two recommendations are to vote NO on the proposed dues increase and to write to the board requesting a comprehensive plan for a New Bargain — structural reform of MOA's model, management, and operation with the dues increase required with the New Bargain — in time for a vote to implement the reform if approved or to cut operating to live within MOA's means.

Don Nordeen
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Key Words:_ Business Reviews; Financial Information (2008 General); Members' Rights, MOA Operations (General/Total); Preservation Fund

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2008 MOA and PCC Financial Results

2009 March 24
Last update: 2009 Mar 30. Click History for a list of changes and updates.

__The continuation of this post discusses three aspects of financial reports: importance of high-quality financial information, explanation of the Preservation (reserve of replacement) Fund, and explanation of the Preservation (reserve for replacement) Fund, and Estimated financial parameters for the end of 2008.

Don Nordeen
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Key Words:_ Business Reviews, 2008; Financial Information, 2008 General; MOA Operations, General/Total; Reserves for Capital Repair; Working Capital

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Comments Concerning MOA's 2008Q4 Business Review

2009 March 21
Last edit: 2009 Mar 22. Click History for a list of changes and updates.

__The 2008Q4 Business Review is significantly better than prior ones. It includes serious letters from the board and the general manager. We should also thank the board for these improvements.

__A saying attributed to former Senator Moynihan is that everyone is entitled to his/her own opinion but not to his/her own facts. Where members question or have concerns about what is represented as "facts" in the Business Review, we should speak out and ask for clarification, further investigation, and correction where appropriate.

__The continuation of this post speaks out and asks for clarification, further investigation, and correction where appropriate for selected items. If any of my "speaking out" is not correct, please advise.

Don Nordeen
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Key Words:_ Accounting Practices, MOA, Business Reviews, 2008, Financial Information, 2008 General, MOA Board of Directors, MOA Members & Members' Rights, MOA Operations, General/Total, Reserves for Capital Repair

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2008 Year-End Financial Statements

2009 March 20
Click on History for changes and updates.

__ The continuation of this post is my email to Todd Chwatun, general manager of MOA, concerning the 2008 year-end financial statements published by MOA to the members. The following areas for improvements are discussed:

Need to conform to GAAP and the AICPA Audit and Accounting Guide for Common Interest Realty Associations. The MOA Board adopted a policy to conform to GAAP and specifically to the AICPA Audit and Accounting Guide for Common Interest Realty Associations.
Need to compare MOA accounting financial statements with those from the CPA to identify accounting practice changes for MOA to implement.
Need for MOA's accounting to always include comparisons to prior year and to budget.
Need to correct the shortfall in unrestricted cash of $80,000+ as indicated by the CPA's 2007 audit report.
Need to reduce the dues revenue in the income statement by the amount placed in the Preservation Fund (approximately $48,000) as required by GAAP. The effect is to increase the operating loss from about $250,000 reported in MOA's accounting to about $300,000 which is expected to be reported by the CPA.

These are all serious accounting errors. Use of accounting information with such error misleads everyone. Recommendations are included in the email. Please advise if you find any errors in the analysis.

Don Nordeen
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Key Words: • Accounting Practices, MOA; • Accounting Principles and Issues; • Financial Information, 2008 General; • General Manager; • MOA Operations, General/Total; • Reserves for Capital Repair; accounting principles; audit; CIRA; Common Interest Realty Association; CPA; financial statement; preservation fund; preservation; reserve fund; reserve

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Accounting for the Reserve [Preservation] Fund

2009 March 11
Click History for a list of changes and updates.__

__This post including graphics is available as a PDF file at Accounting Preservation Fund.pdf.

__The continuation of this post is my 2008 Dec 13 email to Vice President Kirk Yodzevicis concerning an incorrect accounting of $80,000 from the preservation fund (reserve for repair, replacement and renovation) which occurred in 2007. This shortfall of deposits into the preservation fund is reported in the 2007 audit report as described in the email. After three months, there is still no reply.

__ The effect of the incorrect accounting affects all financial results reported in 2008. The restricted cash (cash plus certificates of deposit) for the preservation fund has a shortfall of $80,000. The unrestricted cash is therefore reported with the $80,000 excess which gives a misleading statement of MOA's cash position. I have added graphics of the pages from the 2007 audit report that show this shortfall.

__This is more that just an accounting issue. The $80,000 cash does not exist. It has been spent on operations and not replaced.

__ I raised this question on several Open Forums at board meetings. The response was that neither the board more the general manager had time to look into the possible discrepancy. After the 2008 Dec 13 board meeting, I discussed the matter with Vice President Kirk Yodzevicis, who agreed to investigate the matter if I would send him the necessary information. The email provides that information.

__ Pardon me, but $80,000 of someone else's money for which the board and general manager have stewardship responsibility should seek to be a high priority. One must conclude that mishandling of $80,000 is unimportant to this board, whose members are Vicky Rigney (President), Kirk Yodzevicis (Vice President), Tad Latuszek (treasurer), Carolyn Study (secretary), Richard Gaubatz, Jay Welter, and Brenda Durant. $80,000 is not important to this board, particularly if it results in less favorable financial results.

__ Yet this same board is about to ask MOA members to approve an increase in dues which would provide more money for their stewardship.

__ I will gladly remove this post with an answer to the question with appropriate action.

Don Nordeen
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Key Words:__Financial Information, 2007 General; Financial Information, 2008 General; MOA Operations, General/Total; accounting; financial statements; preservation fund; reserve fund

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Board's Proposal for Dues Increase and Discussion Forum for MOA Members

2009 February 14
Click History for a list of changes and updates.

__The continuation of this post is my email to MOA members on the stated subjects.
Don Nordeen
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Key Words:_ Accounting Practices (MOA), Financial Information (2009 General), Governing Documents, Members' Rights, MOA Board of Directors, MOA Operations (General/Total), accounting, balanced budget, budget, duty of obedience, GAAP for property owners associations, governing documents, replacement fund, reserve fund

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Discussion Forum for MOA Members

2009 February 02
Last Update: 2009 Feb 09. Click on History for changes and updates.

__Given the serious financial issues, the management and governance issues and the limited opportunities that MOA members have to communicate with one another, it is time to take advantage of the discussion opportunities available with the internet.

__The software and practices are well established. The liability issues are settled. The provider of the discussion forum is not liable with appropriate terms of service.

__Several years ago, I explored the possibility of using the discussion forum software for organizing comments on recommendations concerning possible amendments to bylaws. That Discussion Forum is available at [http://www.atfreeforum.com/michaywepoa/index.php?mforum=michaywepoa].

__The continuation of this post provides explanation for registering and using the discussion form which is "password" protected for use by MOA members only.

Don Nordeen
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Read the Continuation of this Post and any Comments.

Key Words: • Michaywe Owners Association; • MOA Board of Directors; • MOA Governance; • MOA Members & Members' Rights; access; open meetings; transparency

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Are delinquent dues & assessments a personal debt?

2009 January 20
Click History for a list of changes and updates.

__The analysis indicates that the answer is NO. The consequence of this conclusion is that, since the unpaid dues and assessments are not personal, there is no personal debt that can be collected in the courts. The unpaid dues and assessments are a lien against the property and can be collected by foreclosure.
__The continuation of this post provides an analysis of the considerations related to the question.

Don Nordeen
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Click Continue for Post Continuation plus Comments.

Key Words:xx• Attorney Issues, • Governing Documents, General, • MOA Members & Members' Rights

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Update Summaries — 2009

Year 2009
Last update: 2009 Dec 31. Click History for a list of changes and updates.

__This post provides short summaries of recent updates in reverse chronological order. The full introduction and body for each post are available by clicking on the post title. The update summaries for the previous year are also included.

__See Recent Updates Explanation for an explanation of the content. Click Continue for the listing of recent posts with brief summaries.

__New posts will not be shown on this post, but will be listed under POST SUMMARIES in the left column, and in a separate post, "Post Summaries — Year."

Don Nordeen
===========
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Post Summaries — 2009

Year 2009
Last update: 2009 Dec 31. Click History for a list of changes and updates.

__This post provides short summaries of recent posts in reverse chronological order. The full introduction and body for each post are available by clicking on the post title. The summaries for the previous year are also included.

__See Recent Posts for an explanation of the content. Click Continue for the listing of recent posts with brief summaries.

Don Nordeen
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Formal Protest — Proposed Amendment to DMCCR Concerning Venue

2008 December 30 Last Update: 2009 Apr 09. Click History for a list of changes and updates.

__The continuation of this post is my formal protest of the proposed amendment to the Declaration of Master Covenants, Conditions and Restrictions for the Michaywé Planned Unit Development concerning venue.

__Owners/members were provided no information on the validity of the proposed amendment nor were they provided the opportunity to review what analysis, if any, was done by an attorney. The board meeting minutes do not state any approval of a motion by the board of the Michaywé Owners Association to authorize such an analysis.

__When I asked board member Jay Welter for a copy of any legal analysis, he advised that such was privileged to the board. Nonsense! Owners/members paid for any analysis and the analysis potentially affects their rights.

__Since owners/members had no opportunity to discuss, debate, learn and understand the ramifications of this proposed amendment, the protest letter below will be revised to include questions directed to this concerned owner/member. See History below for additions and revisions to date.

__A related post, Are delinquent dues & assessments a personal debt?, analysis this question and concludes that delinquent dues and assessments are not a personal debt, and therefore cannot be collected in court as such.

__(added 2009 Feb 20) Collections Policy — Click Dues Collections Policy for MOA's policy posted on its website.

Don Nordeen
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Continue reading Formal Protest — Proposed Amendment to DMCCR Concerning Venue.

Key Words:xx Attorney Issues, Governance, Governing Documents, Members' Rights, Michaywé, Amendment, Abuse

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Estimate of Operating Loss for 2008

2008 December 28
Last Edit: 2009 Feb 14. Click on History for changes and updates.

__Making an ongoing estimate of the projected year-end financial results is one of the primary obligations of the board of directors. The budget is annual; so the primary checking point on financial status should be the projected results against that budget.

__One of my ongoing questions at Open Forums is asking for financial results — particularly compared to prior year results. In general, the board is not prepared to answer the question even though the board has just approved filing of the financial report for the prior month.

__The continuation of this post contains further discussion and my estimate of the operating loss for 2008 which is in the range of $200,000 loss (most optimistic) to $280,000 loss. Mr. Todd Chwatun, general manager, was unequivocal during the Dec 13 meeting that the operating loss would be the optimistic number — $200,000 loss. For 2008, the board approved a balanced budget, meaning that the performance to budget is an unfavorable $200,000 at best.

__The Line of Credit and Accounts Payable are also unfavorable to 2007. In 2007, the board used $80,000 from the reserve fund for operations. These three accounts are a short-term debt of $566,000 which is about 65% of the annual dues billing.

__But maybe members aren't interested in receiving correct and competent financial information since they voted to not have an independent audit committee that could provide trustworthy financial reports.

Don Nordeen
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Click Continue for Post Continuation and any Comments.

Key Words: MOA Financial, Working Capital, budget

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Accounting for the Reserve [Preservation] Fund

2008 December 13
Posted: 2009 Mar 11.
Click History for a list of changes and updates.

__This post including graphics is available as a PDF file at Accounting Preservation Fund.pdf.

__This post is my 2008 Dec 13 email to Vice President Kirk Yodzevicis concerning an incorrect accounting of $80,000 from the preservation fund (reserve for repair, replacement and renovation) which occurred in 2007. This was posted on 2009 Mar 11 as Accounting for the Reserve [Preservation] Fund. This post is included to place the email in correct time perspective in this weblog.

Don Nordeen
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Key Words:xxFinancial Information, 2007 General; Financial Information, 2008 General; MOA Operations, General/Total; accounting; financial statements; preservation fund; reserve fund

December 8, 2008

Vote "NO" on Proposed Amendment to Michaywé Deed Restrictions Regarding Venue

2008 December 08
Last update: 2008 Dec 12. Click History for a list of changes and updates.

___The continuation of this post is an email to MOA members recommending a "NO" vote on the proposed amendment to the Michaywé Deed Restrictions to add a venue provision.

___Are you satisfied that the board has provided full and accurate information on:

the financial status quarter by quarter?
the financial status year by year?
progress toward a balanced budget?
not achieving a balanced budget?

___Has the board established trust with you as an owner/member?

___If the answers are "NO" to these questions, do you believe that the board has provided full and accurate information about the proposed amendment?

___If the last answer is "NO", then why would you vote for the proposed amendment based on the information provided?

Don Nordeen
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Key Words:xx • Attorney Issues, • Governing Documents - General, • MOA Governance, • MOA Members & Members' Rights, CC&Rs, Declaration of Master Covenants, Conditions and Restrictions, duty of obedience, law, members' rights, POA members' rights, restrictive covenant, vote

Click Continue for Post Continuation plus Comments. Or Click Show All for Above plus Post Continuation and Comments.

Venue and Michigan Case Law on Amendment of CC&Rs

2008 November 23
Initial post: 2009 Apr 07. Click History for a list of changes and updates.

__The continuation of this post is an email to MOA Board Director Jay Welter concerning the board's proposal to seek an amendment to the Declaration of Covenants, Conditions and Restrictions ("DMCCR") defining venue for all purposes to be the courts in Otsego County. The reason for considering the amendment is a companion decision of the board to pursue collection of unpaid dues and special assessments in small claims court in Otsego County.

__Two significant questions are involved: (1) the requirements for amending the DMCCR for a new provision; and (2) whether or not third parties can change a resident's right of Michigan law that the venue for lawsuits is the county of the defendant (owner) for personal debt. Consequently, the amendment would affect venue only for owners of restricted property in Michaywé who are residents of another county or state. The effect of the amendment is to transfer the inconvenience of which court from MOA to the individual non-Otsego County resident.

__The analysis indicates that unanimous approval for such an amendment would likely be required to effect a redefinition of venue for litigation against an individual owner. To respect the rights of owners/members, the board should ensure that the proposed action is unquestionably valid under the law and governing documents.

Don Nordeen
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Please be advised that the writer is not an attorney, and this is not legal advice. The information is based on research on information available in the public domain. ------------------------------------------------------------------------------------------------------

Key Words:_ Attorney Issues; Governing Documents,; Members' Rights venue; amendment; governing documents; CC and Rs; Covenants Conditions and Restrictions; restrictive covenants

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Dismissal of Nordeen v MOA Lawsuit

2008 September 19
Last update: 2008 Sep 21. Click History for a list of changes and updates.

___The continuation of this post is an email to MOA Members concerning the dismissal of the Nordeen v MOA Lawsuit. Included is a discussion of the rule of law and democratic issues involved with governance of owners associations.

___The court order not only dismissed the lawsuit, but also created the possibility of significant personal liability if I proceeded with an appeal. The Opinion and Order creates a number of claims of reversible error including a major one of using an incorrect Standard of Review upon which the Opinion and Order is based. Had I won the lottery in August, I would have appealed the Court's decision in a heartbeat.

___Your comments are invited and are welcome. Thanks. I am available for discussion and to answer any questions.

Don Nordeen
==========

Key Words:xx• Attorney Issues, • Governing Documents (General), • MOA Board of Directors, • MOA Governance, • MOA Members & Members' Rights, • Nordeen v Michaywé Owners Association, attorney, board of directors, breach of fiduciary duty, business judgment rule, bylaws, CC&Rs, Covenants Conditions and Restrictions, Declaration of Master Covenants, Conditions and Restrictions, dues, duties, duty of care, duty of loyalty, duty of obedience, duty to act, duty, fiduciary duties, fiduciary duty, fiduciary, governance, governing documents, governing, law, laws, lawsuit, members' rights, POA Board of Directors issues, POA governance, POA members' rights, restrictive covenant

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2007 Audit Financial Statements

2008 August 29
Last update: 2008 Sep 13. Click History for a list of changes and updates.

___The audit reports for 2007 are finally available. They should have been available and summarized in the notice of the annual meeting.

___The continuation of this post is a summary of the results reported. Roughly, the results for 2007 are about $100,000 worse than for 2006, which were unfavorable as have been prior years. The cash flow for 2007 was negative (meaning unsustainable).

___If my review of the the 2007 audit report is incorrect, or if you have concerns about the findings from the review, please post a comment.

Don Nordeen
===========
Click Continue for Post Continuation plus Comments.

Key Words: Financial Information, 2007 General; MOA Operations, General/Total; accounting; financial statements; preservation fund; reserve fund

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Which attorney should be believed?

2008 July 28
Click History for a list of changes and updates.

__Maybe a more appropriate title is "Should any attorney for MOA be believed?" Or, what actions should a board take to ensure that any opinion of an attorney is likely to be valid under the law and governing documents?

__Part of the broader question is "Who does the attorney represent?" or "Who is the client?"

__The continuation of this post discusses these questions in the context of Article IX of the bylaws for which MOA has conflicting opinions from two different attorneys on whether or not the board of directors has the authority to amend the bylaws.

Don Nordeen
===========
Click Continue for Post Continuation plus Comments.

Key Words:_ • Attorney Issues, • Community Association • Governing Documents (General), •Members' Rights, • Michaywé Owners Association, attorney, board of directors, engagement letter, governing documents, lawyer, organization as client, property owners association, transparency

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Document From MOA Board Re Nordeen v MOA

2008 July 27

Click History for a list of changes and updates.

__A one-page undated yellow insert entitled, Re: Nordeen v MOA, was included with the 2008 May Business Review on the Nordeen v MOA lawsuit. "Signed" by the board or directors, it doesn't even have many of the counts properly described. The Complaint in the lawsuit speaks for itself. The document is available on the

__This is another example of the board not providing full and accurate information to the members. Providing full and accurate information requires an understanding of the issues.

__The continuation of this post provides my discussion of the lawsuit followed by the text from the Board's yellow paper with my comments added. Please call for a confidential discussion.

Don Nordeen
(989) 939-8240
===========

Click Continue for Post Continuation plus Comments.

Key Words:_ access; access to records; accounting; Accounting Principles; accounting standards; AICPA; AICPA Audit & Accounting Guide; AICPA Audit & Accounting Guide for Common Interest Reality Associations; Attorney Issues; breach of fiduciary duty; business judgment rule; case law; CC&Rs; CI/DR Dues; closed session; complaint; consolidated financial statement; Covenants Conditions and Restrictions; duty of care; duty of loyalty; duty of obedience; duty to act; executive session; fiduciary duty; lawsuit; Members' Motion; members' rights; Michaywé; Michaywe; Michaywé Owners Association; Michaywe Owners Association; open meetings; organization as client; planned unit development; prudent person; PUD; restrictive covenant; roles and responsibilities

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Preservation of MOA's Assets

2008 July 24
Posted: 2008 Sep 05. Click History for a list of changes and updates.

___One of the major obligations of MOA through its board of directors is the preservation of MOA's assets. The quality and appearance of the assets provides an important indication of the well being of the Association. Wear and tear are inevitable. Assets in need of restoration are an obvious indicator of the financial health of the Association and poor management by the board of directors.

___The continuation of this post provides the parts of the 2005 preservation study for the items identified for RRR in the 2006-2010 time frame. It seems clear that the current board has decided not to take any action on preserving the assets, even though the board made a report in 2006 stating that the estimates were on the low side, items were omitted from the study, and the preservation fund had a major shortfall.

Don Nordeen
==========
Continue reading "Preservation of MOA's Assets".

Key Words:_ access to records; accounting; annual meeting; arbitrary; arbitrary and capricious; Balanced Budget; Business Reviews, 2007; consolidated financial statement; depreciation; Fiduciary Duty; Financial Information, 2007 General; Financial Information, Capital Projects; Financial Information, General; preservation; preservation fund; reserve; reserve fund; Reserves for Capital Repair; transparency;

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Q and A for Article IX of the MOA Bylaws

2008 May 25
Click History for a list of changes and updates.

_____Not much information has been provided concerning the advantages and disadvantages to members for Article IX of the MOA Bylaws. Article IX established two committees (Audit and Governing Documents) of the membership with election of two co-chairs serving two-year staggered terms.

_____The continuation this post provides questions and answers for the known questions. If you have another question or have a comment, please add by clicking on "Post a Comment" at the end of this post. Questions and Answers are below.

Don Nordeen
===========
Continue reading Q and A for Article IX of the MOA Bylaws.

Key Words:_ access; access to records; accounting; Accounting Principles; accounting standards; annual meeting; bylaws; governing documents; meeting; members' meeting; Michaywe Owners Association; MOA Operations, General/Total; nonprofit corporation; nonprofit corporation act; nonprofit GAAP; planned unit development; POA; preservation fund; property owners association; reserve fund; Reserves for Capital Repair

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Letter to MOA Board re Nordeen v MOA

2008 April 05
Click History for a list of changes and updates.

__The continuation of this post is a letter to the MOA Board of Directors Re Nordeen v MOA and Related Issues. The letter includes three attachments: A. Overview of why this lawsuit; B. Roles of Board and Attorney; and C. Fiduciary Duty. Posted for members' information. Comments are welcome. Please scroll down to the end of this post after the attachments.

__A PDF file of this letter with its three attachments can be downloaded at 2008 Apr 05 Letter to the Board.

__The Complaint in Nordeen v MOA is available at Complaint, MOA Governing Documents.

__Some of the links in this post are to the password-restricted website. See the Welcome page to gain access.

Don Nordeen
==========
Click Continue for Post Continuation plus Comments.

Key Words:xxKeyWords

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Competitive Fees for all Services and Benefits

2007 June 14
Last update: 2009 Jun 27. Click History for a list of changes and updates.

__The continuation of this post is work in progress on this subject. It is posted in its incomplete form to provide the internet links to user fee schedules used by other property owners associations. Otherwise it only provides a few notes from my internet research.

Don Nordeen
==========
Continue reading Competitive Fees for all Services and Benefits.

Key Words:_ Community Association, Governance, Michaywé, MOA Operations (General/Total), Recreational Facilities, User Fees; Governing Documents; amenities; fee schedule; golf; members' rights; meeting rooms; recreational facilities; tennis; storage; swimming; user fees

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Board Action to Assess a Late Fee of $25 for Nonpayment of Dues

2007 June 12
Last update: 2009 Apr 02 which is the initial post. Click History for a list of changes and updates.

__ The continuation of this post is an email on the above subject. References to prior correspondence are included. The Fair Debt Collection Practices Act may apply to collection of delinquent dues and assessments.

__ Some of the internet links in the post are to a password-protected weblog. If you are a MOA member, please refer to the Welcome and Home Page for information on how to access that weblog.

Don Nordeen
==========

Continue reading Board Action to Assess a Late Fee of $25 for Nonpayment of Dues.

Key Words:__ Financial Information, General; Governing Documents, 2005-6 Amendment Initiative; Governing Documents, General; MOA Board of Directors; MOA Governance; MOA Members & Members' Rights; late fees; delinquent dues; assessment

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Audit Considerations for 2006

2007 May 07
Last edit: 2010 Feb 16. Click History for a list of changes and updates.

__ The continuation of this post is an email to the board summarizing the accounting and audit concerns regarding MOA's financial accounting and reports. Fourteen subject areas are covered, which is an indication of the magnitude of the opportunities for improvement. My goal is to help make the accounting and accounting practices so well founded that even over a beer after a round of golf the members comment that they have no quarrels with the accounting. With solid credibility in the accounting, the members can better spend their efforts on helping to make the necessary improvements.

__ Please post your comments.

Don Nordeen
==========
Continue reading Audit Considerations for 2006.

Key Words:_ Financial Information, 2006 General; Financial Information, 2005 General; Financial Information, General; MOA Accounting Practices; MOA Board of Directors; MOA Operations, General/Total

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January 1, 2013

January 2, 2010

January 1, 2010

December 30, 2009

December 19, 2009

November 30, 2009

November 24, 2009

November 23, 2009

June 23, 2009

May 18, 2009

April 27, 2009

April 6, 2009

March 27, 2009

March 25, 2009

March 24, 2009

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March 20, 2009

March 11, 2009

February 14, 2009

February 2, 2009

January 20, 2009

January 1, 2009

December 31, 2008

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December 13, 2008

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November 23, 2008

September 19, 2008

August 29, 2008

July 28, 2008

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December 31, 2007

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