Chapter 5 - HOA Activism
With the lawsuit of 1986 and the subsequent Settlement Agreement of 1987 representing the first significant occasion when the Homeowner’s Association (HOA) publicly opposed both the POA Board and the Company, the year 1996 witnessed the second and third such occasions.
A major water service disruption occurred early the morning of January 1. Distribution system equipment failed during extremely cold weather affecting a large portion of the western part of Big Canoe. Much of the involved area experienced a total outage measured in days, and some of the area was without water service for most of the month.
The HOA Board began an investigation and fairly quickly determined that the water distribution system equipment had been poorly maintained and was in bad operating condition. The HOA also learned that certain major components of the system were apparently in worse condition than they were at the time water became an issue as part of the 1987 Settlement Agreement. Not only had a major improvement mandated by the Settlement Agreement not been completed after ten years, but an Operations and Maintenance Manual that was prepared specifically for the Big Canoe water system by the civil engineering firm of Jordan, Jones, and Goulding dated October 1986 had essentially not been followed. This manual had been mandated for use both by the Settlement Agreement and by the Georgia Department of Natural Resources.
The HOA retained the same law firm (Rogers and Hardin) that had represented the HOA and the Legal Defense Fund in 1986/87 to provide advice and counsel on this matter. In the process, the HOA learned of the existence of a Trust Deed dated November 29, 1984 between the Developer (Southeast Holding Company) as Grantor, and the POA as Trustee. The Trust Deed was a requirement of the state of Georgia for all privately owned water systems, and provided for the Trustee to act in behalf of the water system customers if the system failed to provide acceptable quality or quantity of water. Specifically, if the Company failed to keep the system in “good order and repair” to the point that it was service affecting, the POA, as Trustee, could provide written notice to the Company asking that such failures be corrected. If the condition of the distribution system had not been effectively corrected within sixty days, the Trustee was authorized to take immediate possession of the system and to own and operate the system ongoing.
The HOA’s law firm provided a written opinion dated March 19, 1996 stating that the POA had the right, and perhaps the obligation, to take the prescribed Trustee action. The HOA Board gave a copy of the opinion letter to the POA Elected Directors (who had the sole right to represent the POA in this issue due to a conflict of interest on the part of the Developer Directors) and began to request that the Elected Directors take such action in behalf of the POA. Two of the three POA Elected Directors opposed taking the action (Emory Williams agreed with the HOA) and continued to do so over a three-month period. In June 1996 the HOA abandoned its campaign because of improvements to the system that had been made and were being made. It was believed that a sixty day waiting period from that point would no longer find the system still in need of major improvements. Even though the POA did not wind up with the water and sewer system, which would have been a major benefit, some advantages were still realized. Foremost among these were the facts that the Company did hire a professional water system management firm to take over daily operations of the system, and the existence of the Trust Deed as well as the Elected Directors responsibility as Trustee became widely known.
The third occasion of HOA activism arose in October 1996 when the HOA learned that the same two Elected Directors (Emory Williams again dissenting) were prepared to vote with the Developer Directors to remove one of the major restrictions on the Company when accessing the Amenity Reserve Fund. Using the 1990 Amendment to the Amenity Agreement as an argument, the Company asked that henceforth, when the Company exercised its unilateral right to obligate funds from the Amenity Reserve Fund, the POA be required to secure loans and cover interest for the project. The Company was seeking to avoid having to pay in full for a project, cover interest, not be repaid until the completed project was turned over to the POA, and then be repaid once annually only as much as the Amenity Reserve Fund could afford at that time. The Company had a package of amenities in mind at the time that they proposed this change in the Amenity Agreement.
The HOA objected to this proposed action on the basis that it would increase the POA’s debt unnecessarily, decrease the POA’s borrowing power, and could allow the Company to more easily undertake projects designed more for the Company’s marketing benefit than for property owner usage benefit, and do so with no financial exposure. The HOA mounted a public education program on this issue, stated its reasons for opposing, and asked property owners to write or call their POA Elected Directors to give their opinions. At the November 1996 Board meeting, the two Elected Directors who had previously supported the change withdrew their support, and the issue died. This was a very important event in setting the stage for the 1999 Amendment to the Amenity Agreement that will be discussed later.
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About This Site
This site is presented as a resource for use by Big Canoe property owners. Information found on this site will often differ from that which is presented by the POA Board, the current administration, and some of the committees. Much of what you will see here is opinion, but the opinions will be formed from the best available information.
As property owners and users of this site, you are urged to bring attention to the good things you see as well as the bad. You are particularity urged to bring attention to acts by our employees when those actions exceed your expectations.
Property owners have strongly held views and they are encouraged to express their views on this forum. Please refrain from name-calling or attacking individuals. Keep in mind that the goal is to effect change, not create enemies. -
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Recent Comments
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