Resignation of CFO
After almost 10 years of service, CFO Greg Snellings has resigned his position with MVF and will work through the end of the month. Greg has been a valued member of the senior management team and is credited with many important improvements to financial management over the years. He implemented new financial policies and procedures and controls, revamped the budget process, orchestrated the approval of the Capital Contribution Fee (CCF) and set in place a new collections policy and system, which has helped reduce delinquent accounts. In addition, after bringing his recommendation to the Board for approval, Greg implemented formation of a new Investment Committee, along with a revised Reserve Fund Investment Policy and guidelines, which enabled diversification of MVF’s Reserve portfolio.
A recruitment process is already underway to find a new CFO, and the job requirements are included on page 19 of this issue and on the MVF website.
Goshen Road widening
The county council’s Transportation and Environment Committee (T&E) continued its review of the FY19-24 Capital Improvement Plan that provides funding for major infrastructure projects in the county. Goshen Road has been a long-standing project and has been heavily funded. However, it appears that because of shifting priorities by the council, the Goshen Road project will be delayed and may never be built as per the current design.
In a memo sent to the T&E Committee before the meeting, Deputy County Council Staff Director Glenn Orlin recommended that the T&E Committee delete this long-standing project from the CIP. He noted that traffic has not increased on this road as projected, and that the project does not bring any direct sizable economic benefits to the county.
One councilmember indicated that he had not heard from constituents about the need for this road improvement, but he had heard from church leaders about the impact to their properties from the planned widening. Many concerns have been aired from residents over the years, but there was consensus that the project was needed to improve the area traffic. MVF has been advocating for this project for years! DOT has had meetings over the years to explain the project to Montgomery Village residents, including a meeting over a year ago to discuss the need for sound walls. They noted that the last step was some minor right of way acquisition and utility work, but the project would get done. We expected delays for a big project, but never a proposal to delete the project.
I am pleased that the T&E Committee did not agree with deleting this project, but I am concerned that the project will be delayed and probably never built as designed. The council has spent over $10,000,000 on design work, and we have nothing to show for it. The T&E Committee agreed with DOT staff to include $300,000 in the CIP for 2019 to look at the scope of the project. I appreciate Glenn’s suggestions for spot improvements, but this is not going to afford all the benefits for traffic congestion relief in the original project. The full council will take this up later in March, but it is likely that this project will be further studied and incur further delays.
State Legislature Update
The 2018 Legislative Session will wind up in early April. Here are brief notes on the status of several bills we have been monitoring this session:
• Manager Licensing/HOA Registration
o HB1158 - Manager Licensing - MVF General Counsel Christopher Hitchens testified on this year’s bill on February 27
in the House’s Transportation and Environment Committee, noting several reasons that warrant MVF’s being exempted from the bill. An amendment to exempt MVF was added to the bill, but the bill has not been voted on in committee.
o SB1209 - Manager Licensing - In the Senate, this cross-filed version of HB1158 has not received a vote from the Judicial Proceedings committee. If the bill moves forward, MVF will request an amendment to be exempted, as we did in the House.
• HOA Boards of Directors, Voting Meetings, Recordation, Rules
o HB1007 / SB0883 - In these bills, numerous procedures affecting HOA boards of directors, voting procedures, meetings and adoption of rules will be standardized for all associations state-wide. MVF testified in opposition on most of the changes, advocating that individual associations be permitted to follow procedures set out in their own documents to avoid unintended consequences and confusion. In particular, MVF opposes the new requirements for notifying members of meetings, which would require individual notification to each association member. As an unusually large HOA, this new notice requirement would add significant cost and effort to our practice of notification through the Village News, which has been effective for decades. MVF staff have been working with both bill sponsors to exempt MVF and other homes corporations from the bill.
• Other Bills Affecting HOAs and COAs
o SB0095 - Condominiums and HOAs - Voting, Records and Conflicts of Interest - MVF EVP Dave Humpton testified before the Senate Judicial Proceedings Committee on March 1, in opposition to this bill, which would create statutory operating procedures for many aspects of HOA and COA operation that are already governed by association documents and other Maryland statutes. In MVF’s view, the bill appeared to be an unnecessary statewide legislative reaction to incidents in one or more associations, which could be resolved through applications of current Maryland law regarding fiduciary duties of directors and Maryland Criminal law covering misappropriation of association funds. No committee vote has been taken.
o SB0931 / HB1097 - These bills impose a state-wide procedure requiring a board of directors to hear a multitude of disputes. MVF testified in opposition to HB 1097 because of the impractical concept of involving a board in so many disputes, and the accompanying aspect of conducting a closed hearing on each of these disputes (these disputes are not currently listed among the statutory reasons that boards can meet in Executive Session). Neither bill has been voted out of committee.
o SB222 – Foreclosed Property Registry - Updated information - Notice to Local governments - This bill makes improvements to the Foreclosed Property Registration data base, which MVF supports as a tool for requiring that owners of foreclosed properties maintain them. The bill passed in the Senate and has been sent to the House Committee on Transportation and Environment. No vote has been taken.
• Bills focused on Condominiums
o HB0575 - Condominiums - Suspension of Use of Common Elements - The bill sets out a state-wide standard for denying use of parking and recreational common elements to persons who are more than 60 days delinquent. The bill passed in the House and is pending in the Senate (still in the Judicial proceedings committee).
o HB0179 – Condominiums- Amendment of Declarations - This bill would allow a condominium declaration to be amended by 60% approval of the owners. This would be a reduction from the standard in current law, which is 80%. The bill has not received a vote in the House Transportation and Environment Committee.