Minutes for August 28, 2006
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DRAFT
Board of Trustees
Workshop Meeting concerning Deed of Restriction Enforcement
Monday, August 28, 2006
1:00 p.m. – Building D&E
Madame Chairman Wilma Weglein called the meeting to order at 1:00 p.m.
Ms. Weglein requested prayers for our servicemen all over the world and that the hurricane be mild or go away entirely. Amen
Ms. Weglein led the Pledge.
Mr. Torpy said the purpose of the workshop is to discuss enforcement of the Deed of Restrictions specifically as it relates to those individual property owners that have not brought their property into compliance following the hurricanes in 2004. Mr. Torpy presented a history of what previous Boards had done and why. He commented that 2,000 homes were damaged and no longer in compliance with the DOR. The Board knew in the fall of 2004 the residents would not be able to rapidly bring their homes back into compliance with the DOR. Resolution 2005-1 was adopted in February 2005 establishing that the residents would be given 18 months from January 2005 in order to bring their properties back into compliance with the DOR. The DOR itself does not provide for catastrophic events. The Board of Trustees has a legal obligation to continue to push for an enforcement of the DOR. FEMA allowed 18 months of temporary housing. The resolution was not adopted to not enforce the DOR. The Board decided to withhold enforcement because at that point compliance was impossible. The 18 months would have run its course by June 2006. The Board realized that would not be enough time and extended the compliance date to September 30, 2006. A letter was drafted February 8, 2005, signed by Chairman Bolon, informing the residents of the Board’s actions. It is now 2 years post hurricanes. The law does not allow Barefoot Bay not to enforce the DOR. There are currently about 150-200 homes in Barefoot Bay not in compliance as a result of 2004 hurricane damage. Some of these property owners were victimized: they paid money to contractors who absconded. The discussion Mr. Torpy wants to have is “What is the Board going to do about it?” Resolution
2006-1 was adopted earlier this year to solidify the District’s code enforcement process. Mr. Torpy presented three options:
Option 1, do nothing. This option is against the law unless the DOR is amended by referendum.
Option 2, is another forbearance period. The purpose of bonding was to ferret out those who had the financial wherewithal to perform the repairs but were legitimately waiting on contractors versus those who were in the unfortunate situation that they simply couldn’t afford it or for some reason were defiant. Mr. Torpy said if the Board is considering another forbearance period, he was aware two of the Bay’s legitimate contractors are looking for work because the backlog is cleared. Ms. McCahan asked if there could be a forbearance period for residents who have a signed contract but the contractor has not performed the work yet. Mr. Torpy commented the Board had that conversation a year ago. His problem, as the Bay’s attorney, is with how the Board knows who is who. The burden should be on the individual to come to the Board with a current contract and prove themselves legitimate. Mr. Torpy does not personally believe there were very many people “out there” who have not fixed these problems because they tried. Either they didn’t have the finances or they were defiant. The overwhelming majority throughout the State of Florida who wanted to get the work done got it done. Barefoot Bay residents can come to the Board on a case by case basis. Code Enforcement has taken on a broader scope, and not just regarding 2004 storm damage. The Board abated the suggestion of the bond; therefore, Mr. Austin does not have a case to make until after September 1, 2006. Ms. McCahan asked if some of the people weren’t covered by the regular code violations already. Mr. Austin commented that the ones showing up at the Violations Committee hearings are the ones who refuse to even get a permit, the defiant ones. Some of them avoid the issue by getting a contract at the last minute, pull a permit, then let it lapse and cancel the contract. A few contractors will notify Code Enforcement whether a contract is still in place or not. Some contractors allow a contract with no money down, and this circumvents action by the Violations Committee.
Mr. Torpy commented Code Enforcement often works on a complaint basis. Barefoot Bay is more proactive than most. If the complaints were storm related, the Board had granted those folks until September 1, 2006 to comply. Mr. Torpy commented the idea of “abating” the DOR was made up as a common sense measure because of unique circumstances. Those circumstances do not exist now. The cold hard reality in deed restricted communities is there are people who move out because they can’t afford to, or don’t choose to, abide by the regulations. The Board is susceptible to property owners in compliance who are forcing the Board to enforce the DOR.
Option 3 makes people come into compliance with the Deed of Restrictions. Resolution 2006-1 makes clearer the Bay’s Deed of Restrictions enforcement process. This process falls short because it does not allow the Board to force someone to rebuild something under court order. It creates a fining process. If the people don’t have the money to do the work, what good is fining them? Aggressive enforcement will resolve about 65% of the problem. Mr. Torpy stated in the last 5 years his office has handled 132 litigation matters for the Bay. Litigation recovered $96,000 from closed cases. An additional $47,000 was recovered from another category. Barefoot Bay has had to absorb less than $10,000. 56 of the cases went to litigation (lawsuits). The average cost of a litigation case is [just shy] of $3,000. The folks who responded to the demand letter by coming into compliance or making arrangements to pay with the District, cost an average of $612. The message is that folks need to come into compliance and not force Barefoot Bay to take legal action. With 150 cases at approximately $1,500 per case, the District will pay 3 or 4 hundred thousand dollars, upfront, in litigation costs to make these people come into compliance. Statistically, [you] will get that back from them, but perhaps not for another 2 to 5 years. Historically, the money recovered so far was from assessments in arrears or code enforcement fines.
A year ago, Mr. Torpy suggested the Bay do the work and then get the money back, but he is not advocating that stance now. There are too many homes to be repaired, and no guarantee the Bay would get the money back even if [you] lien the house. Many residents will have existing liens on their homes, and many homes will pass through an estate. Historically, heirs do not want the property and just let it sit until the mortgage company forecloses.
Mr. Torpy concluded with an admonition to the Board: we are again in hurricane season. It would be ludicrous for anyone to begin building a carport, screened enclosure, or anything between now and mid-October. This does not require another forbearance period.
Mr. Smith asked Mr. Austin how many people had said they had bad contracts. Mr. Austin responded that list is at the back of the bound book. Mr. Smith said he had this experience with AB Wayne, which is now Primo. The County permitting office informed Mr. Smith the number for the license is wrong. There is supposed to be a “T” in front of the “C” on the license indicating the license is only Temporary. Contractors come from other states and get and get out. Mr. Torpy acknowledged the problem but said that is not a Barefoot Bay issue.
Ms. Richards asked Mr. Torpy if he had a specific timeline in mind when he mentioned “a current contract.” Mr. Torpy responded that contracts a year old likely have no start or finish dates on them. Residents who have paid and the work is not done should talk with their contractors about a start date, and report their intentions to the code enforcement office. Ms. McCahan asked if it would be feasible for the code office to notify those residents under discussion of the deadline and possible consequences. Mr. Torpy replied this would set up another level of performance for the code office. Residents have a duty to respond appropriately to a notice of violation. Shift the burden of responsibility to the residents; don’t give the code office another difficult tracking job to do. Mr. Austin has zero authority legally to do anything but bring these people to the Violations Committee and let the Committee decide whether they are in violation or not. Mr. Torpy’s suggestion is to let violations go to the Committee and let the Committee sort it out. Do not put your Code Enforcement office in the position of picking and choosing who gets leniency and who doesn’t.
Ms. Weglein pointed out the September 1st deadline would come and go before the Board could vote since this is a workshop. The first date the Board can vote is September 8th. Mr. Torpy commented the dates were intentional to give the Board a chance to decide either to give Mr. Austin the go ahead to write violations, or to again abate the process. Mr. Austin said the Violations Committee has a “capacity” of 3 or 4 hour sessions to hear cases. The Code Enforcement office attempts to schedule no more than 30 cases a month. There are about 40 cases that still need to be initiated. Initially there is a notice of violation. If not complied in 30 days, a statement of violation is sent that notifies the resident they will be scheduled for the violations committee. The hurricane properties have been allowed 90 days because permits and contractors are involved. The Violations Committee, after finding in violation, allows 3 weeks to comply before the fines begin to accrue. Ms. Howard asked how the Code Enforcement office handles permits that have expired. Mr. Austin said 877 Pecan had gone to the Violations Committee in June. 819 Sequoia had a permit expired. Mr. Austin said that one is scheduled to go to the Violations Committee in September. There were others still in the process of being scheduled to go to the Violations Committee. Ms. Donahue asked how many residents hadn’t bothered to talk to the Code Office at all about their violations. Mr. Austin acknowledged that some people don’t pay attention when they receive notices, but sooner or later they show up at the office. Ms. Donahue wants to ensure the forms and letters are in lay persons terms to they can be clearly understood. Mr. Torpy commented the forms in use indicate specifically what the violation is and what the person is doing wrong. More than one violation can appear on a notice, and some people don’t bother to read it. It is still the resident’s responsibility to go to the Code Office, or telephone the Code Office, to get an explanation. No matter what kind of form is used, if someone is determined not to come into compliance, any kind of form can be used as an excuse for not doing so.
Mr. Torpy commented specifically regarding the dates of compliance for hurricane damage the citizens of Barefoot Bay have been put on notice for 2 years. Mr. Torpy commented the Board does not need to give the hurricane damaged property owners 90 days. Those folks can be given 30 days as a practical matter. Move them into the process. The Violations Committee is not going to help people who don’t have the money to fix their homes. The cold hard fact of that is the District will have to sue these people to make them come into compliance, or they’ll have to move. Mr. Torpy explained that when he took “the hard line” in January 2005 he hoped to catch the time period when residents were processing their insurance claims and had the money to make decisions. They might not have enough money to fix up their homes, but they’d have enough money to move if they needed to. Most of those folks have taken the insurance money and done what they could to fix their homes, but they’re still not in compliance. A fine will look good on paper, but it will still not bring about a compliant home. Mr. Torpy said an aggressive policy at this time will cull out those folks who really can’t do it, and then the Board will have another tough call to make.
Mr. Torpy commented if the Trustees Board authorizes him to appear before the Violations Committee as its representative, the discussion will center around what the fine schedule should be. There are some fines out there that are so large that it forces people into failure. Mr. Torpy urged the Board to authorize Mr. Austin to send out notices of violation to everyone who is not in compliance with the DOR from the hurricanes of 2004. Give them 30 days to come into compliance or send them to the Violations Committee. Perhaps the Violations Committee has to meet more than once a month to get through these cases.
Ms. McCahan asked if Code Enforcement knew how many cases there might be that fell into the storm category. Mr. Austin replied the list the Board was given is 99% correct. Ms. McCahan asked Mr. Austin if this meant there might be some cases that have not come to the notice of the Code Enforcement office “in any way shape or fashion, or had any complaints made.” Mr. Austin replied not that he was aware of. Some cases have been to the Violations Committee, and some will have to go again.
Ms. Howard asked Mr. Austin what was being done about the FEMA trailers that were still in Barefoot Bay. Mr. Austin replied there were two that he was aware of: one was to be removed at the end of September. The other one is on property where a new house is being moved onto the lot.
Ms. Weglein commented on the 50 or so cases that deal with “default contractors”. Mr. Austin responded those property owners “should get another contractor”. Ms. Weglein asked about homesteaded properties. Mr. Torpy responded homesteading creates other legal issues, but those properties still have to comply with the DOR. Mr. Torpy clarified that the Board has no legal right to allow property owners who must deal with default contractors not to come into compliance with the DOR or the Board risks potential lawsuits from the residents who do comply.
Mr. Keegan asked about how the injunction process is used in cases of no compliance. Mr. Torpy said there were two separate and distinct processes. The Violations Committee is first because 60 to 70% of the cases come into compliance without litigation. If not, the District seeks injunctive relief, meaning a court order which tells them they must come into compliance with the Deed of Restrictions. The District already has the authority to perform the work on the delinquent properties; however, Mr. Torpy is concerned with the potential volume and the dollars involved. Mr. Torpy recommends getting a court order first because of issues like the homestead exemption. Mr. Torpy pointed out previous boards have foreclosed on liens just to get things moving and to open the way for a productive property owner. By the first of the year, most of the properties will have come into compliance, have a productive fine running, or the Board will have authorized Mr. Torpy to begin litigation.
Ms. Howard asked at what point the property owner could ask for the kind of help from the District that has been discussed. Mr. Torpy responded that never in the history of the Board of Trustees has “this level” of work been contemplated, i.e., placing a lien on someone’s property and expecting payment. With the exception of lot mows, which do represent an historical lien system. If the Board goes in the direction of bringing properties into compliance, the Board will have to develop a policy. Payment arrangements usually involve a fine after the people have come into compliance, and are handled through the legal office and the District’s accounts payable office for up to 24 months.
Mr. Torpy respectfully requested the Board refuse to allow residents to re-plead their cases in front of the Board of Trustees. By resolution, that is what the Violations Committee does. The DOR must be altered by referendum. Experience shows that the stricter the Board gets, the more people come forward to say why it shouldn’t. Mr. Torpy does not want the Board to engage in citizen debates regarding compliance with the DOR. If the Board feels compelled to engage in those conversations, the Boards needs to rescind all the policies it has adopted in the last year. While the Board could do this, it would be against Mr. Torpy’s strong negative recommendations.
Mr. Keegan proposed that Mr. Austin, in conjunction with the Violations Committee, come up with some input prior to September 8th that the Trustees can put into a motion a scenario [Mr. Torpy] could work with and the Violations Committee could handle. The Board concurred unanimously with Mr. Keegan’s proposal.
Loretta Lynch asked Mr. Torpy if Board resolutions have to be filed with the County? Mr. Torpy replied “No.” A resolution is a way of specifically memorializing actions the Board has taken. If the Board took action that changed recorded documents, the Board would have to record those changes.
Don McIntee explained he used Hardi siding on his house after the 2004 hurricanes, and has been cited by Code Enforcement. Mr. McIntee has been to the ARCC and been denied. Ms. Donahue commented it doesn’t sound right to her if other houses have been granted a variance under “other approved materials” and Mr. McIntee’s got a violation. Ms. McCahan pointed out the Hardi board had been approved for skirting only. Mr. McIntee commented stucco had been approved, and that is not vinyl or aluminum. Ms. Richards commented the “variations” on houses are usually people who do not come to the ARCC to get permits, and the District has not authorized litigation to make these people come into compliance. There is also a problem if the houses in question were designed that way and allowed into the Bay. However, since they exist, Mr. McIntee feels he should be able to have his house the way he needs to have it, too, as long as the house looks nice. Ms. Weglein suggested Mr. McIntee confer with Mr. Carillion.
Stephen Rice commented the ARCC makes code enforcement much more difficult when it allows “variations” that are not included in the DOR. Mr. Rice continued in this vein until Ms. Richards asked if the 3 minutes rule was in effect. Ms. Weglein thanked Mr. Rice for his time.
Mr. Hunt pointed out, relative to the conversation that had been taking place for the last five or ten minutes, that overall the ARCC has handled literally several ten thousands of issues since the hurricanes [of 2004] and what we’re talking about is probably less than a hundred cases where mistakes have been made and things have been misinterpreted, so we have to keep that in perspective. “I realize people are trying to make political hay out of it, but let’s keep it in perspective and look at the whole picture.”
Ms. Weglein replied, “Let’s stop with the ‘political hay’. There is no ‘political hay’. That is not this forum. This is not a forum for ‘political hay’. As [you] stated, and I was not making a political statement.”
Mr. Hunt said, “I was not referring to you.”
Ms. Weglein entertained a motion to adjourn. Mr. Smith made the motion. Second Ms. Donahue. The meeting adjourned at 2:40 p.m.
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