With its increasing delinquent membership, increasing costs for
payroll and job benefits packages, and lack of a collections policy
for delinquent accounts, the WIA membership should be fighting mad.
But, it isn't. Why not? Because the Board doesn't routinely mail
its annual report to the membership with election materials in
September. Although members receive the "auditor's financial
statement" with election materials, the more sophisticated member
knows this statement isn't the "real beef". Sending the "real beef" -
the annual report - along with election materials would perhaps
wake-up too many WIA members.


One of WIA's biggest secrets is its assessments (annual dues, payable
by March 31st each year). Only 2/3 of Waterwood lot owners pay their
annual dues. For the past decade, the two-thirds of Waterwood's lot
owners who faithfully pay their annual dues to WIA has remained
stable around 1,400 with approximately 700 lot owners not paying
their dues. At the members meeting held in October 2000, John Agee
announced that the number of eligible voters (lot owners who pay
their dues) was 1,404. At the members meeting held last year, Jack
Zimmermann announced that the number of eligible voters was 1,403.
These 1,400 voters contribute approximately $198,800 to WIA's
operational budget. This is the budget that pays for our EMS
contract, Joe Moore's and Lisa Hayman's salaries, the maintenance
crew's salary, and the security personnel. As of April 30th this
year, however, 121 formerly faithful dues-paying lot owners suddenly
stopped paying their WIA dues. This year, the number of eligible
voters could be as few as 1,280. Financially, this means WIA's
operational budget this year from members' dues may be $17,182 less
than the previous year.

Although the loss of dues is partially related to undeveloped lots
being bought-out by Jacinto Investments/CEM and being donated to a
land trust, WIA's annual report has never fully explained its policy
or procedure for collecting unpaid assessments or for writing off
uncollectible assessments. No explanation has been given as to how
uncollectible assessments from undeveloped subdivisions are written-
off and why a different practice is in place for writing-off
uncollectible assessments from developed subdivisions.

Data from WIA indicates that two years ago, 249 lot owners of
developed subdivisions hadn't paid their dues for several years.
With interest, their bill now totals over $200,000. Liens have not
been filed against the majority of them. Here's the break-down:
Greentree Village, 31 lot owners with past-due accounts totaling
$56,150.58.
Whispering Pines I and II, 72 lot owners with past-due accounts
totaling $45,944.18.
Country Club Estates subdivisions, 49 lot owners with past-due
accounts totaling $40,103.88.
Park Forest, 46 lot owners with past-due accounts totaling $24,960.68.
Bay Hill, 20 lot owners with past-due accounts totaling $13,010.20
Lakeview Estates, 12 lot owners with past-due accounts totaling
$7,507.00.
Fairway I, three owners with past-due accounts totaling $1,407.94.
Bass Boat Village, 11 lot owners with past-due accounts totaling
$1,169.23.
The Beach, five lot owners with past-due accounts totaling $632.97.

What can a homeowners association do about collecting past-due
assessments? Ideally, when a lot or house will be sold, the
association's administrators should have a strategy in place to
automatically obtain notice of the prospective sale. If assessments
are delinquent, the association should immediately file a lien on the
lot to be sold and make every effort to collect the balance due from
the seller prior to the sale. No such strategy, however, is in place
at WIA.

Another strategy is to ensure the statutes or legal documents
governing the association contain provisions for collecting unpaid
assessments. For example, one association includes a bylaw that
states Board of Directors "shall initiate actions to collect unpaid
assessments against owners personally obligated to pay same and to
enforce and file liens against delinquent units of unit owners."
Another association's bylaws include this provision -- "Any unpaid
assessments with accrued interest may, at the option of the
Association, be collected out of the sale of the unit. Unpaid
assessments shall become a Lien against the Unit." No such bylaw,
however, is included in WIA's governing documents. Nor does it seem
likely that 5% of the membership will propose to the full membership
to amend the bylaws with such a provision.

Some associations and local governing bodies, like San Jacinto
County, publish the names of delinquent property owners in a
newsletter or newspaper. Last month, San Jacinto County published
the names of its largest delinquent tax payers in a local newspaper.
Such a practice may violate the Fair Debt Collection Practices Act,
and obviously WIA's counsel would need to be consulted prior to
publishing the names in its newsletter. But the pressure to pay that
results from posting names may prove effective.

If you'd like to read a copy of WIA's annual report as you make
decisions to vote for directors next month, contact WIA at
wia@... -- or better yet, write to Board members and request them
to mail a copy of the annual report along with the
traditional "auditor's financial statement". To email individual
Board members, see WIA's website at http://people.txucom.net/wia/

END