OPINION: Why Is the OVA Membership Upset With the Board for Withholding Cost Models?

At yesterday’s meeting of the OVA Board of Directors, and in recent chatter on Nextdoor, a rift was evident between the OVA Board and the OVA membership. Members accused the Board of a serious lack of transparency, because the cost models for envisioned capital improvement projects, which were delivered two or three months ago to the Board by contractor ArchiLOGIX, have so far been withheld from the membership. Even directors, who were elected last year on platforms that included fiscal prudence and transparency, defended the decision to withhold the cost models until they are able to study them further and to produce a report that makes sense of them.

So why are people upset?

First, common sense says that OVA should consider how much the membership is willing to pay before or at the same time as evaluating our wants and needs. Simply put, this has been missing from Oakmont 2030 from its beginning.

The Oakmont 2030 activities of the past several years have solicited opinions from OVA members on what they think they need from OVA and have responded to those inputs by generating, through a contract with ArchiLOGIX, a number of concepts for a major redeveloping of Oakmont’s central area, presented to us last summer. Throughout this period, cost considerations have been downplayed, even as many OVA members tried to insist that they should be a primary consideration from the start. We were shocked that the ArchiLOGIX conceptual plans presented last summer did not include even ballpark cost estimates, and about a third of the responses insisted that we could not decide on how much we did or did not like any concept if it had no estimated cost attached. Such an insistence on cost estimates was not solicited or suggested, so it is notable that so many respondents insisted on cost estimates. But the LRPC claimed that those asking for cost estimates were a minority that could be ignored, and proceeded to ignore us!

Second, the OVA membership has no current right to veto a major Board action that does not have the support of the community. A Board, made up of seven people elected for 2-year terms, might authorize a large building project that would dramatically raise the cost of living in Oakmont and/or obligate OVA for loan payments for many years. And under our current Bylaws, as long as they are able to avoid raising dues by more than 20% per year, failure to ask approval from the membership is perfectly legal.

The 2018-2019 Bylaws Revision Committee report to the OVA Board proposed the following Bylaws provision: “A membership vote is required prior to Board approval of a Capital Improvement, the total cost of which is over 20% of the average of the Association’s audited, total operating expenses for the past three fiscal years.” The California Real Estate Code, in a section entitled “Reasonable Arrangements-Governing Body Powers and Limitations” (Section 2792.21), recommends that HOA Bylaws should prohibit “Incurring aggregate expenditures for capital improvements to the common area in any fiscal year in excess of 5% of the budgeted gross expenses of the Association for that fiscal year”, except with the consent of Association members by a direct vote. And, in a Nextdoor poll (admittedly too small for statistical significance) asking “do you believe that it is ethical and democratic for the OVA Board to commit to expensive new construction projects without receiving OVA membership approval through a direct vote?”, 70% of respondents answered “Absolutely not”.

I addressed these issues more fully last February and March in my Oakmont Observer articles entitled Democracy in Oakmont: The Roles of Membership Surveys and Votes and OPINION: Who Should the OVA Board Serve?

Since 2018 when the Builder faction was first elected to the OVA Board, suggestions, requests and demands for giving the OVA membership the final say on large projects have been ignored or outright denied, claiming that they would be violations of the fiduciary duty of the Board. If this were to change, and the Board fully supported the right of the membership to veto large projects, then the current membership concern about unknown costs of the Board’s long range plans would be largely alleviated.

Finally, by use of a large loan, an OVA Board could legally finance a huge project without having to get the approval of the OVA membership — and the membership is smart enough to realize this.

Matt Oliver, in the most recent OVA Board meeting, claimed that the OVA membership would have to vote to approve any large project before it could be initiated by the Board. Sorry, Matt, but you are mistaken. Once the current $5M loan is retired (which will free up over $11/member/month), or perhaps sooner, a Board could use a large loan to finance a major project and still remain within the limits on assessments enforced by law. Unlike a special assessment, which would be limited to less than $400k unless authorized by a membership vote, the payments for a loan would be distributed over the term of the loan.

As an example, for a $10M loan at 7%, realistic in today’s market, and a 15-year term, the monthly payments would be about $90,000. Divide this by 4600 dues-paying members and we get a needed dues increase of $19.57/member/month, or about a 15% increase over this year’s dues amount. Once the current large loan is retired, over $11 of this $19.57/member/month would be available with no dues increase, so the remaining $8.24 would amount to only a 6.4% increase in dues. Even adding another 4% for normal inflation to the larger amount, there would still be no requirement to get approval from the OVA membership.

Is this likely to happen? Not until the current loan is retired, because such a large increase would create a political backlash against the Board that did it, probably including a recall campaign. But the threat is there and legal, and it is a wedge between OVA members and their Board.

Conclusion

This combination — failure to consider costs as an integral part of long range planning, lack of any constraint in our Bylaws that would require a membership vote before committing to a very large project, and the real possibility that, through loan financing, an OVA Board could initiate such a project — has created a major rift between the OVA Board and the OVA membership. Ways for the Board to close this rift include:

• Release the raw cost modeling report from ArchiLOGIX to the OVA membership immediately. If it is as complex as some directors claim, then most OVA members won’t be able to make sense out of it. But what harm will come of being open and honest with the membership? The only downside I can think of is dependent on the Board’s already having decided that major projects are needed and, therefore, that they have to sell some combination of the proposals to the members, over their natural objections. This is not an acceptable reason for withholding the information.
• Voice support, and direct the Governing Documents Committee, to amend our Bylaws to include a requirement for approval by membership vote, before authorizing very large projects or loans. Note that, in the Oakmont Observer candidate survey recently published, four of the seven candidates (Williams, Turner, Nelson and DeGroot) agreed with assertion C, that our Bylaws should include such a requirement.

If you are an OVA member who is eligible to vote in the coming election, and you are concerned about these or other Oakmont issues, then you should review what the candidates said at Candidates Night, either by viewing the video here (https://oakmontvillage.com/article/video-2-19-25-candidates-night/), or by reading the 2025 Candidates Night Summary published in The Oakmont Observer. You might also want to review The Oakmont Observer OVA Board Candidate Survey 2025 and attend one or more of the meet & greets. Then vote your conscience when you receive your ballot in early March!

---