A spirited debate on the proposed contract to outsource landscape maintenance dominated the Monday, February 14 Work Session of the Seven Lakes Landowners Association [SLLA] Board.
Opening the table to discussion, Zielsdorf said he welcomed discussion and understood the concern over the proposed $146,000 annual cost of the maintenance contract -- but, he added, the proposed expenditure was within the current budget.
“There is not one Board member here that would vote for something that would cause a dues increase,” Zielsdorf said.
But that appeared to be the only point that the entire Board could agree on when it came to outsourcing landscape maintenance.
Finance unanimously opposed to outsourcing
“I want to emphasize that we are not talking about just $146,000." Treasurer Denny Galford said, "We are talking about a maintenance department with a total expenditure of $347,000, which is 25 percent of the income we receive each year.”
“This is not a revenue or cost neutral thing," Galford continued. "We’re not talking spending the same amount for outsourcing or [maintaining] an in-house plan.”
Using a comparison spreadsheet and poker chips and tennis balls as props to illustrate the differences in costs and percentage of work hours between the two plans, Galford explained that the Association would actually be losing $59,000 worth of labor by outsourcing landscape maintenance. In addition, he noted, by maintaining the department in-house the Association has more opportunity to adjust costs as needed.
“Talis recommends outsourcing based on monetary and non-monetary reasons," Galford said, "but I don’t believe they have reviewed everything."
According to the Treasurer, an independent review by each member of the Finance Committee of all pertinent documents had yielded the same verdict: in-house staffing is less costly than outsourcing. Specific documents reviewed included the Talis Management Group contract; various cost studies and maintenance department analysis prepared by Don Truesdell, Bob Darr, and Bud Shaver; and bids for outsourced mowing solicited in 2009.
Number of employees needed?
Director Bud Shaver, who oversaw the now defunct Maintenance Committee and currently chairs the Infrastructure Committee, said he objected to the term landscape contract.
“It is nothing more than a mowing contract,” he countered.
His argument centered on a key bone of contention that came up repeatedly during Monday's discussion: How many maintenance workers does the Association need, particularly during the heavy mowing season?
A strong advocate for maintaining the in-house option, Shaver noted that, from January 1 to February 10, which represents 20 workdays, 187 work orders were generated for the Association's maintenance staff. He argued that only 40 percent of those same work orders could have been completed if the staff were reduced to two employees, as proposed under the outsourcing option.
Galford and the Finance Committee agreed with former Maintenance Supervisor Bob Darr’s staffing recommendation of four employees and one supervisor. However, Director Kent Droppers pointed out that payroll history indicated staffing of up to nine employees, including seasonal part-timers, in previous years.
“If we run with four and one, the bulk of time from May to September is spent mowing. Who’s left to fill the various work orders that come up?” challenged Zielsdorf.
Galford responded that the supervisor would be responsible to appropriately schedule tasks so that adequate time was available each day to handle projects other than mowing.
Performance issues raised
Moving from staffing levels to staff performance, Zielsdorf indicated that there could well be personnel changes in the maintenance department whether or not the Association decides to outsource landscaping.
Galford agreed, “We have some employees that are not performing to a level expected and that is not satisfactory. We have personnel problems that need to be addressed.”
Later in the meeting, Shaver picked up on the same point, arguing that poor performance in the department in the last year was the fault of the Community Manager for failing to provide safety training and on-site supervision.
Zielsdorf said he was also concerned that the in-house maintenance staff is tasked with projects beyond their skill set. Specific examples he cited included a steel maintenance building that staff were unable to construct as planned, unanticipated extra time necessary to construct the modular playground at Northside Park, and crack sealing along interior roadways that took months to complete -- and at a much higher cost than projected.
“I am not blaming the employees, but management and the Board for assigning tasks beyond their skill level,” Zielsdorf said.
He noted that a recent roofing project at the stables was outsourced, and defended that decision. “Our guys are not roofers, so why would the Board or good management expose our employees to additional risk?" he asked. "Roofing is a physically demanding task.”
Responding to Zielsdorf’s recommendation that the Board should consider outsourcing all major projects, Director Bruce Keyser, Jr. said, as a professional builder, he agreed. “If you have five [maintenance] employees and task them to do something else, you are taking them away from the job they are responsible for," Keyser said. "When you look at outsourcing, they have a specific job -- they come in and do it no matter what. Mowing outsourced leaves other employees to do other things.”
Talis strongly recommends outsourcing
Attempting to clarify the proposal, Community Manager Alina Cochran reminded the Board that mowing was not the only service included in the contract. “We’re talking about service to provide mowing during the growing season, as well as service year round," she said. "They will be mowing, picking up pine cones and trash, trimming bushes and shrubs. This is a year round contract not just a summer job.”
Defending criticism that bids were not solicited from Moore County sources, Cochran said a call to a local company was not returned and that the other contractors were selected based on proven, successful track records with Talis Management Group properties.
Addressing the number of employees required to perform regular operations, Cochran said in reviewing two-week periods, hours ranged from 444 to 624 hours in 2009, and 217 to 444 hours in 2010. During the past year the department functioned with a work order system managed from the office but no day-to-day supervisor, as in 2009.
Cochran also offered a lengthy financial comparison of amortized versus out of pocket expenditures for major capital equipment replacement and repairs, as well as the considerable cost associated with potential employee turnover.
“To bring in a qualified contractor who is properly certified and licensed is a plus to the Association," she said. They offer proper training of personnel and a transfer of liability. They bring in their own equipment and the Association does not need to worry about replacement costs.”
A call for a decision
“As a woman, I look at this from an aesthetic position,” said Director Melinda Scott. "This has been building to a point that I can’t continue to believe that, even with a supervisor, we can make a noticeable improvement to compete with other gated communities.”
Scott said she supported moving to a different model for landscape maintenance.“It’s a start," she said. "We need to start taking the initiative to improve curb appeal. If we continue with what we are doing we will never see changes.”
Galford countered that it is a roll of the dice whether outsourcing or hiring a maintenance supervisor would achieve the desired results.
Scott responded that Talis had not picked a name out of a phonebook but had, rather, recommended a contractor with an established reputation.
The discussion period concluded with no action; a formal vote on the proposed contract will be called at the Open Meeting on Wednesday, February 23.
Zielsdorf responds to criticism of Talis
Calling the Board together for what he termed a "Come to Jesus Meeting," President Randy Zielsdorf challenged the complaint sometimes voiced by a few Association members that Talis Management Group is looking out for their own best interest rather than the community's best interest.
“That couldn’t be farther than the truth,” he stated. “You look good by making the customer look good. We are their customer.”
Zielsdorf said one reason, in particular, that he favored moving toward professional management after Dalton Fulcher’s retirement was that a management company would be more up-to-speed on state and federal regulations.
“It came to my attention that we have been disregarding OSHA procedures for decades,” he reported. “There is this idea that big bad Talis was prohibiting staff from getting work done to protect themselves.”
He said Cochran is responsible, as community manager, for proper training and supervision -- and that all is now in order.
“I’m not worried now about OSHA penalties," Zielsdorf added, "but we did have to have multiple violations corrected.”
ARB appeal process
While most committees function in an advisory role to the Board, both the Judicial Committee and the Architectural Review Board [ARB] have authority to make independent decisions. During Monday's Work Session, ARB Director Melinda Scott recommended developing a formal process for the appeal of ARB decisions.
“We were unclear if the Covenants would allow for an appeal, since they say the ARB has final authority,” Scott explained. After a legal interpretation determined that the Board did in fact have the authority to overrule an ARB decision, Scott said her committee began the process of drafting timelines and requirements.
In the proposed appeal process that they recommended to the Board, only the homeowner or lot owner whose request is denied may submit an appeal, which must be in writing, within thirty days of the rejection notification. The appeal request must include all specified materials and components for consideration. All denied requests will include instructions on the appeal process. The homeowner or lot owner may request an open or closed hearing. At least five Board members must participate in the appeal and the owner will be notified within ten days of the decision.
Approval of the proposed appeal process will be on the agenda of the February 23 Open Meeting.
Other Business
Additional action items that will be heard by the Board at the February 23 meeting include:
• A motion to approve hosting the NC Open Water Swim June 4 & 5 on Lake Echo. This annual competitive event draws hundreds of swimmers from across the state.
• A motion to approve a proposed yard site debris removal contract with Brooks Grading and Gravel. Manager Cochran noted that the contract includes a lower price for loads with debris under 6” in diameter. Since the contractor will determine load size, Droppers recommended periodic checks to ensure accurate pricing.
In other business on Monday, February 14, the SLLA Board:
• Heard from Cochran that an account delinquent for ten years, totaling $9,300, was paid in full after a lien was placed on the property.
• Heard from Cochran that Talis corporate staff will offer input on the SLLA collection policy at the March Work Session and that a Closed Meeting may be called to discuss sensitive items.
• Early in the meeting President Zielsdorf postponed the public comment portion of the agenda; however, after lengthy discussions and a late start due to the Special Open Meeting, the Board never made it back around to allowing comments from the public.
• The attendees at Monday's Work Session included the full slate of candidates running for the next Board term, including incumbent directors Zielsdorf and Bruce Keyser, Jr., and candidates Bob Darr, Bob Racine, Don Fentzlaff, and Conrad Meyer.
