CZ Master Association Budget Compromise Not Realistic Under Current Environment

CZ Master Association Budget Compromise Not Realistic Under Current Environment

“If you cannot be diligent in the small things, how can you expect to be diligent in the big ones”?

October 3, 2007

Prior to and after the announced resignation of Jerry Mezger from the CZ Master Association board of directors, former director Joseph Morabito has been making an argument for a more sensible approach to the management of the association affairs. Such argument has been mostly met with what we refer to the “volunteer fallacy”, which goes something like this: Hey, as long as volunteers are making the decisions for the association, everything they do is just fine. In fact, instead of kicking them in the shin for mismanaging the association finances, go ahead and tell them Good Job – Keep it up!

In attempts to justify his proposal(s) Mr. Morabito writes:

“I identified about a million dollars in potential new revenues that could come from various user fees. Even if that number was reduced to $500,000 a year, all of it could go to landscaping renovation projects over a five year period to get the initial job done without another dues increase for this purpose. However, that will not entirely solve the problem because landscaping renovation is a forever process given that many plants seem to have a 10 – 15 year plant life after which they look pretty bad. There is no Reserve line item to deal with landscaping renovation. It is not part of the regular Reserve study; but it should be included as a Reserve line item because this size expense cannot be dealt with using normal operating funds alone unless there are big cuts in other expenditures and/or regular dues increases. Where else is the money going to come from? My guess from our past work is that there is probably about $3,000,000 of landscaping renovation that needs to be done now in the older parts of CZ. That number will just continue to grow if nothing is done to deal with this problem. It can only get worse.

In reality, each district should be indicated in the Reserve Fund for a complete plant make over about every 12 years with the exception of leaving trees in place. And, or it might be that if we go more natural as was the case in Canyon Estates and some other newer areas that we can do it once and then just let the slopes become part of the natural canyon environment which could just require periodic trimming for fuel modification to meet fire department requirements. However, on that basis since there is nothing in Reserves to cover landscaping renovation and we don’t have the money to do it in our operating budget, the question remains how do we address this problem? My guess is that it will have to be through some combination of charging higher user fees, dues increases and reducing other expenses so that the pain is fairly and more evenly distributed. Also, raising dues too high is not good for property values so that should not be the only approach used. Higher dues also are a greater burden on young families and seniors and those living in smaller homes, which again brings up the fairness issue

It is my contention that we both need to fund the landscaping renovation work that needs to be done now, probably over a five year period under some strategic plan and we need to start building a Reserve line to cover the work in the future and forever going forward. If we go natural, it may be that we can go out longer and/or the amount of work we may need to do could be reduced; but one way or another we need a plan that is the long term approach. We started down that road during the Glisson/Rose years; but we were not there long enough to finish the work. Ignoring the problem, will not make it go away. I for one will not be critical of a balanced approach to raise these funds; however, dealing with subsidies would have to be part of the plan”

It is our contention that Mr. Morabito continues to make excellent suggestions for responsible use of the CZ associations’ money – the only counter proposals come in the form of ad hominem and ridicule. What is clearly needed is a compromise that assures no association increases. In budget discussions with Mezger on a CZ board, a compromise is impossible. On a board without Varo/Mezger a compromise is realistic.

Consider the California budget where $145 billion spending plan was approved only after a compromise was reached, ending the longest stalemate in 30 years! – but only after legislators agreed to address “myriad’s of concerns” – yet the same time the legislation continues to enact frivolous legislation such as SB-528

Several global Taiwanese companies are in the habit of not throwing away paper that has been printed on one side. Instead, they cut them up, glue them together and use them as a poor man’s Post It™ notes. Not because they save that much money. In fact, it may just be more efficient to throw the used paper away and buy Post It™ notes! – The main reason for this practice is to show employees the value of stewardship, embodied in the old adage: “if you cannot be diligent in the small things, how can you expect to be diligent in the big ones”? – Hence our continued argument against subsidies as small as they may be.

The question is whether the Zipeprman/Yocham board can exert the leadership required to reach a compromise or whether it will outsource the work to Keystone, much like the Marina Hills board has managed Keystone. Unfortunately, our money is on the latter – after all, remember the volunteer fallacy!



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