From Barbara Blackmer, OA Board Member
Comcast
I am very happy to report that this morning, the bankruptcy judge approved the assignment of the Comcast bulk services agreement to the OA. This means that residents will continue to get cable TV and high-speed internet service at the low rate given in the OA's 2009 budget ($35/month). By contrast, Comcast met with us a few months ago, informed us that they had no intention of honoring the current contract and would strenuously oppose our efforts to have the contract assigned to us, and then offered the OA a new contract at nearly double that rate -- so being able to assume the current contract represents a great savings for SunCrest residents. Unlike some of our past dealings with Comcast, this morning's legal proceeding was amicable and agreeable, with no objections being offered to any of the proceedings. Tod Bean was present, to testify that the OA could indeed meet any financial obligations to Comcast. Barbara Blackmer was in attendance representing the homeowners, also Scott Blackmer was present as an observer. A representative of Zions indicated that Zions itself would be taking no position on the issue.
Yesterday, we met with the Trustee for the bankruptcy estate and representatives from Comcast in what was essentially an auction for the current contract. We had initially offered $10,000 to the estate, which was immediately countered by Comcast with an offer of $15,000. However, we offered $16,000 yesterday. Comcast then conceded, informed the Trustee that they would no longer oppose the assignment of the contract to the OA, and volunteered that they would continue to honor the contract. While this $16,000 may seem a substantial sum to offer in an auction, compare it to the original contract we were offered by Comcast, which would have cost us at least an additional $26,700 per month going forward indefinitely (if we had accepted their initial offer and not pursued our legal right to assume the contract). Our offer today does include payment for any unpaid past services provided by Comcast, as long as they can substantially verify this in a detailed statement. As the OA has carefully preserved all funds collected for that purpose, we can readily pay our bills, and pay the Trustee the auction amount. Even though the work of pursuing this contract took many months, there will be no special assessment to residents required in connection with this negotiation and litigation.
Under the terms of the contract, SunCrest OA is guaranteed “most-favored customer” status, a cap on annual rate increases, and essentially unlimited renewability. Residents remain free to purchase additional services from Comcast, of course, or to purchase alternative services from other providers. Doing so has no impact on your monthly dues to the OA.
After comparing this extremely favorable rate with other alternatives for high-speed internet and basic cable, we feel confident that we got the best possible deal for SunCrest residents. Tod Bean is to be commended for his hard work and perseverance in pursuing this contract; despite Comcast's initial reluctance to deal with us, discouragements and setbacks, we held to the vision that this contract should and could be assigned to the OA and provide long-term benefits to all owners within SunCrest. This morning, a federal judge agreed with us and so ordered.
Another feature of the contract for which we fought long and hard is the ability to suspend service to those residents who do not pay their OA assessments. This corrects the problem that those of us who pay our fees have been forced to subsidize TV and internet for the minority who do not. Importantly, we also got Comcast and the court to agree to a proviso in the court order specifying that residents cannot be charged more for service than Comcast is actually charging per household. As many of you know, in the past SunCrest LLC charged us roughly 40% more than it was actually paying Comcast. This proviso should protect us from any such conduct by a new developer.
Lastly, today's proceedings included the release of all claims from the bankruptcy estate, the now-defunct SunCrest LLC, Comcast, and the SunCrest OA. SunCrest LLC had entered a claim against SunCrest OA for a larger amount than that actually owed to Comcast (the 40% increase), and that claim is now formally released. We are no longer liable or potentially liable for any actions or amounts involved in the bankruptcy.
In a world of almost constant bad news and bleak financial outlook, I see this as a bright spot. Receiving high-speed internet and basic cable for less than half of what most folks pay can only add to the value of each home and the overall value of this community.
-- Barbara Blackmer
19 comments:
this is wonderful news!! thank you thank you to all who made this possible!
A big THANK YOU to everyone involved.
Thank so much. So will the excess funds on deposit be credited back to the homeowners now?
Robin
Thank all of you so much for your hard work. I can't wait to shut those free loaders off!
Amy
Regarding the refunding of any "excess funds" -- this hasn't been done when other OA expenses occasionally turn out to be lower than budgeted; we just try to adjust the budget going forward to cover the OA's expenses and establish adequate reserves. Sometimes expenses are higher than budgeted; by keeping some money in the bank we have been able to avoid special assessments to homeowners. We established the dues for 2009 based on an assumption that we could keep the Comcast payments to $35 per household, which we have achieved with this settlement. There is no easily defined and individually attributable "excess" in the OA's bank account, because (a) not all property owners paid their dues every month and (b) some of the OA's other expenses, particularly for snow removal last winter, were higher than budgeted. If we were to try to calculate a portion to refund fairly to individual owners, residents, and builders, we would spend a lot of time and money determining exactly who was eligible during each month of the relevant period and whether they paid all of their monthly dues on time during that period. Working all this out would entail paying overtime or hiring additional help to document who was eligible and for what amounts as well as the cost of administering any refunds.
Here's an alternate suggestion -- to the extent that we come out ahead at the end of 2009, the OA could set aside a healthy portion of any remaining money into reserves (thus helping to ensure that funds are available when needed to make repairs, for example). Or we could consider investing in something of benefit and interest to all residents -- something such as tree replacement, repair of the bathrooms in the Village Green, or maybe additional picnic tables, etc. Please remember that final decisions are made by the OA Board, and four of the five Board members are appointed by Zions Bank. I am, however, interested in your proposals.
Joe-
Your inappropriate comment has been removed. There is no place for personal attacks on our community blog.
Then remove Amy Baird's comments calling those that refuse to pay an HOA due that has been based upon fraud by SunCrest LLC and Suncrest OA's previous President Ed Grampp freeloaders. SunCrest is a failure because of fraud committed at EVERY aspect since inception. Those funds that were stolen from homeowners should be refunded and punative damages in the millions should be awarded. Certainly the OA has an insurance policy that covers crimes and fraud committed by past and present directors. Since Ed Grampp, a member of the Utah Bar, served as president of both boards it would be impossible to say the the OA had no knowledge that fraud was committed. Ed signed the Comcast contract on behalf of SunCrest LLC. In 2007 a letter was sent out on behalf of SunCrest OA claiming that HOA dues needed a substantial increase due to an increase in cable costs. This was clearly a lie and fraud committed by SunCrest OA. While SunCrest LLC is protected under federal bankruptcy laws, SunCrest OA is not and should be held responsible and liable for actions of it present and past board members.
Joe,
You are certainly entitled to your own opinion, and Amy is entitled to hers. You are not, however, entitled to personally insult people on our community blog.
You have some of your facts confused above regarding SunCrest OA and SunCrest LLC and the limitations of what the OA can and can't do.
Please stop making personal attacks on this blog or you will not be allowed to participate.
I am sorry, did you not know when you moved in here that part of your dues paid your comcast service. In a real world when you don't pay your utility bill your service is SHUT OFF. Yeah so what if we were charged more, it made up for all the free loaders that didn't pay. So now going forward everyone pays the correct amount or your shut off! If you don't think we are getting a deal then move somewhere else.
The news about the assignment of the contract is great, but I would concur with Milton. It may be inconvenient and a hassel to determine who overpaid when and who is due what. But is it any less so than the accounting work that Todd/Mary have already done? How is this different? The CCMC folks have worked hard to get all owner payment records up to date, so much of this information is likely already available and just needs to be organized to represent the lone budget line item of Comcast. If the intent is to shut off service to those who have not/are not paying, the OA should already know who has paid what amounts and when. This is simply a function of identifying those of us who paid more than we should have for Comcast post-bankruptcy and issuing either a refund or future credit (minus the allocation payment, split amongst all owners). Not that complex at all, and you have people willing to do the legwork for you at no cost. If the OA is not willing to be transparent on this issue, what else are we left to presume you're hiding? Do the Zions OA board members have input here? I doubt they would want to be complicit in any sort of fraud or mis-handling of funds, and it does not shine well on their business practices to have questionable accounting activies going on here. Please do the right thing, take the time to get the books right, and THEN we can all move forward.
Thanks Ryan.
I described the Comcast settlement in my April 8 post, which I also emailed to the OA’s Voting Members. CCMC is currently configuring a financial statement to determine if a refund is feasible, and will verify amounts submitted by Comcast for payment. If the budget audit is reviewed by each line item (as suggested by some), then there could be refunds on Comcast. However, if the audit is performed as a line-by-line audit, rather than an all-inclusive budget, this will also mean any shortages on other line-items will result in Special Assessments. As you all know, last year's snow season was extremely heavy. The SunCrest OA Board of November 2007 (which consisted entirely of employees of SunCrest LLC) approved a 2008 budget that included only $5000 for snow removal. Our snow removal expenses last year were over $106,000 – leaving us with a $95,000 deficiency. Some have argued that savings on Comcast have nothing to do with costs of snow removal, but it all comes out of the same bank account. To me, it doesn't make sense to spend OA money – your money – on printing, mailing, and collecting Special Assessments if that can be avoided. Certainly, the accounting must be done, and information provided to residents. And I would like to involve residents in consideration of how any overage might most wisely be allocated, but ultimately those decisions rest with the Board of Directors, and four of the five represent Zions Bank.
Voting Members, and the SunCrestResidents blog, provide our best forum for discussion and input. I'd like to suggest, however, that it is an inappropriate venue for mud-slinging, intemperate name-calling, and loose and unsubstantiated accusations of everything from fraud to conspiracy. Let's try to keep to the facts and have a civil, mature discussion.
We also have to take into consideration that a bulk service agreement with Comcast requires us to pay the bill in full each month, regardless of whether individual members pay their dues or not. There have been 45 foreclosures since 2007, a loss to the OA of over $64,000 (not including any legal fees spent towards these collections). There are also 77 residents that owe over $1000 – together they owe nearly $170,000. That adds up to a loss of $234,000. The charges for Comcast are over $400,000 annually, which has to be paid in full regardless of shortages caused by residents that have not paid. It seems pretty obvious that there will not be much of an “overage” for Comcast after looking at all of the numbers as a whole. I am concerned that refunded sums, however small individually, could leave the OA short in meeting other expenses and reserve requirements. In 2007, the OA hired accountants to perform a Reserve Study, anticipating OA expenses over 30 years including repair and replacement. We are not yet at levels that will protect homeowners from future Special Assessments. (Can you tell that I hate the idea of having to levy Special Assessments?)
Ryan and Robin have made some good points regarding accounting and information. The CCMC people have indeed done a good job of establishing and maintaining good financial records. However, anything that covers more than 13,000 separate entries is NOT a simple job (that's the approximate number of households multiplied by payment records over 12 months). Of course transparency is a good thing, and members deserve a full accounting. According to the By-Laws of the OA, members are guaranteed access to records. Let me quote, however, from the By-Laws Section 7.2: ”The Members' inspection privileges do not apply to the personnel records of the employees of the Master Association and the records of the Master Association relating to another Member.” This clearly guarantees the privacy of individual records, and means that no one community member (however qualified) may access payment records to do their own estimates of Comcast overages.
CCMC will also prepare a statement indicating how much the OA will have left in the bank after paying Comcast, the bankruptcy estate, and the OA’s legal counsel, once we have all the bills. All of this must occur, obviously, before we take any proposal to the OA Board about what to do with OA funds. We can certainly discuss budget policies and proposals, and the financial statements such as the budget are available to all members, but remember that final decisions rest with the majority of the Board. Once we get the final figures, let's talk about what makes the most sense.
I don't know how anyone in SunCrest can honestly think that there will ever be a real surplus to refund to anyone. Just reading through these posts would give anyone with half a brain reason to believe that having a reserve is a good idea. Every other day, someone is maligning the good that is being done in our community. The majority of us who don't buy the minority's conspiracy theories would be wise to support keeping any "excess" monies in the OA coffers for potential legal fees. There are just enough antagonists here to warrant that measure.
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