Minutes located below.

Dear Mesa Oaks Residents. I’m elated to say that the HOA has been rebuilt from the ground up to be more efficient, significantly more cost effective, and with a mindset of more freedom, liberty, and transparency than ever before. We’ve proven that the HOA can be operated independently with minimal manpower. And, this is only the beginning. It’s only our first year being independent and in the coming years there will be greater transparency, efficiency, cost control, and direct access to the Board.

Changes were needed because of many issues with our management company. These problems have been occurring for years but not adequately managed by the Board. It’s vitally important that Board members understand they are entrusted to observe every aspect of the operation with expertise, not just to find ways to spend other peoples’ money. They absolutely must be knowledgeable of the fine print, contracts, laws, basic business, and they must make an effort to be hands on with all aspects of the HOA, otherwise contractors and lawyers will deceive us again for their own self-serving purposes. Please do not allow Boards to spend more money merely for their “convenience”. In just one year, it’s now proven that self-managing is far superior to every other experience we’ve had with outsourced management.

With critical issues happening just 2 months before the management contract was to renew, time was critical and continuing on with this contractor, particularly with a contract that indemnifies them, would not have been a responsible act of fiduciary duty. Our last management company, as bad as they were, was “the best one”. Please understand that management companies are not here for us. Management companies are part of an “ecosystem of middlemen” whose goal is to raise their profits, at our expense.

By the way, did you know that management companies normally have “indemnity clauses” (“hold harmless”) in their contracts where we cannot hold them liable for their mistakes (e.g. forgetting to pay our storage unit bill then getting our Christmas decorations trashed, forgetting to pay our insurance, forgetting to maintain an entire easement for a decade, etc.)? How and why did Mesa Oaks ever sign a such a bad contract? Did anyone read the fine print? Did the Board willingly sign a terrible contract with an “indemnity clause”? Being a businessman myself, I never sign contracts that indemnify (legally protect) a contractor that works for me. I also don’t sign contracts with “arbitration agreements” since that also takes away our right to be heard in court. Therefore, I saw it as my fiduciary responsibility to end our HOA’s bad business practices by not renewing the contract.

After the management company, we’ve had some spectacular successes even in our first year. Even with our reduced annual HOA dues of $200, we still have a 37% cost reduction in our approved 2024-2025 budget, including extra funding for contingencies. Our expenses today, even with increased landscaping services in 2025 are still $7,641 LESS than our last available 2017 budget!  With record inflation and an inevitable recession brewing in the USA, combined with a global move away from the US petro-Dollar as the global reserve currency (e.g. BRICS, etc.), saving every penny is important for homeowners. Not every homeowner is wealthy and some people live paycheck to paycheck, on fixed incomes, or have been foreclosed on.  Saving money to focus on our core mission of maintaining common areas becomes imperative.

During my first year I fought many efforts by the management company to maneuver our HOA into higher dues. I also fought attempts by a lawyer and the management company to pass new policies that are severely anti-homeowner, including:

• Kicking you out of meetings if the Board wishes it,
• Getting you to pay the management company’s/HOA’s legal costs,
• Controlling your right to display religious objects on your private property (undermining the protections of Texas law), and
• Controlling your use of personal security cameras.

Much of this was done through significant acts of insubordination and deception including the use of thinly veiled threats such as “to be compliance with the law”, when in reality the law prescribed no such restrictions.  In fact, in the case of the display of religious items, the law did the exact opposite of what they told us.

In the year prior to canceling our management contract, we were already the management company’s least profitable HOA so they needed to raise our dues. Your 2022-2023 dues didn’t increase only because I did not accepting the management company’s arbitrary and unsubstantiated cost increases.

To give you an idea of how bad 3^rd party management companies can be, our last management company bill totaled just over $15,000 with fees. That recovered money has since been used to begin fixing many large scale problems they neglected for years. Please don’t be deceived into thinking that management companies offer beneficial bundled services because they usually don’t. All management company functions cost money. Every letter you get in the mail costs us a fortune in fees. Every time a lawyer was involved, we got charged an hourly fee. Our last management company spent our money on lawyer costs to draft up policies against homeowners that the Board never asked for. I discovered this while auditing our financials and once I started digging, the lack of transparency began. Furthermore, for all the money spent collecting on non-payers through lawyers writing nothing more than scary sound letters, they hardly collected on anything. On the other hand, I was able to reach settlements with various non-payers just by asking them, which cost us nothing except for a few certified mailings. If we need legal services (and we really don’t), it’s still significantly cheaper to contact lawyers nearby directly.

Management companies are incredibly expensive. We were already too unprofitable for the management company at $15,000+. Just imagine how much it would cost to get a management company now with today’s inflation and corporate profiteering. Mind you, our 2025 greensacping (landscaping) is $15,000, with all its increased services. Is the overhead of a management company worth more than our landscaping? No management company will ever excel beyond what a homeowner operated HOA can do because these large corporations only devote a tiny percentage of their resources amongst dozens of other HOAs. For example, we went through numerous “community managers” who didn’t answer questions, didn’t respond, and certainly didn’t know anything about our HOA (e.g. the easement we own that they didn’t know about). Every time we got a new community manager, they dropped the ball from a lack of continuity, which meant that we paid the price as they learn from making mistakes. The mega-corporation was running their operation as thin as possible because they have a huge overhead cost to pay their CEO millions and to keep huge costly corporate offices around the country. Meanwhile, a single employee ran many different communities, with ours being the least important since we’re so small compared to other HOAs. For example, they “forgot” to pay our insurance and storage unit bills, they neglected the irrigation system with numerous underground leaks, and neglected an entire easement full of trees and brush for a decade or more, they slow-rolled things like ACC requests, which in one case exceed 1 year before we even found out about it. There were literally hundreds of tasks they failed to deliver on.

When I started this job, I came in with a narrow mission but this quickly expanded when I saw the magnitude and breadth of issues that had not been addressed. For example, the irrigation system has been leaking in various places for many years as you can see from the water bills in the meeting minutes. The Board outsourced this responsibility to the management company, which in turn outsourced this responsibility to the contractor, who didn’t notice the leaks since they don’t live here to inspect the system on a daily basis. But, the real problem is the complacency of the Board who outsourced their responsibility. In the military, we outsourced tasks but never responsibility.  The HOA has had many systemic problems for a very long time. But, we’ve fixed almost all systemic problems and we’re on a trajectory for great future success.  But we must learn from the past mistakes of delegating responsibility to management companies merely for the convenience of Board members.

Over time, expect even more transparency. We’re an HOA, not a military and everything the HOA does is your business. Except for homeowner private information, there’s really nothing that every homeowner can’t have access to.  We need to continue what we started where we have our own information technology systems so that we maintain records which can be made available to all homeowners.  At this point, full transparency is merely a function of volunteers under NDA to redact private homeowner information.  This was not possible with a management company because of two reasons:

1. Their record keeping was grossly negligent,
2. They don’t have an interest in letting homeowners know everything (it’s bad for business).

As we get more people enrolled into e-Notifications, we don’t have to limit ourselves to yearly or quarterly meetings. Your Board can be just a text message away like I have been through our Signal chat group, phone call, by email, or meeting down the street during a walk. Also, I created our website which is a super-valuable tool for the HOA to make everything available to you. This makes our level of transparency greater than ever before, and definitely unparalleled by any management company.  Not to mention, a management company would charge a fortune for a website of such capability whereas we get it for $120 a year being self-managed.

Are there still things to be done? Of course. But none of it is an “unknown quantity”. For example, we still have to act on an entire easement of trees that has caused damage to homeowners and has been neglected by management companies and Boards for perhaps a decade. But, through competitive bidding that I instituted (against the wishes of the management company), even this can be done at a significantly lower cost and within our existing resources. I was able to negotiate a deal with a contractor to cut all the trees, and to leave only grass, for $12,000. That would end this problem once and for all time, and it would be like our other easements. Even with this large expenditure, I still don’t see any reason to have to raise dues since we have the funding for it. Compare this $12,000 necessary cost to the unnecessary cost of hiring a management company which in no way would ever be cheaper than the $15,000 we last paid.

The only things we should contract out are things like:

• Greenscaping (landscaping),
• Tree maintenance,
• Building big structures like walls,
• The occasional legal affairs, and
• Maybe using a $350/year CPA if absolutely needed provided they do not use third party accounting systems.

Everything else can be done easily ourselves. All core systems are online in just one year.

We can also improve our financial management using open source / free accounting software called GNU Cash which is free forever and has the ultimate in privacy and security since it is not owned by a corporation and your data never leaves the HOA.  Everything else we do is already at no-cost since I restarted our HOA with open-source software such as Linux, LibreOffice, WordPress, iRedMail, and so on.  So, with free options like GNU Cash that will never cost us anything, there’s simply no reason to accept less, particularly since all the 3^rd party contractors will sell our private data for their profit. Here’s an example of what we have to look forward to using a third party such as Intuit (the company that sells Quicken and QuickBooks): https://straussborrelli.com/2024/04/18/intuit-data-breach-investigation/  I re-iterate, if we allow the HOA to provide our private data to third parties, it’s not a question of “if”, but “when” each of us gets victimized from data breaches.  And when that happens, we can’t hold the third party liable in any meaningful way.

Incidentally, I highly encourage you to demand that your information not be sold or shared with third parties in any way whatsoever.

If you don’t think this threat is real, here is a letter I received on July 9th, 2024.  This was only the most recent one, as I have been a victim of data breaches and identity theft a few times.  

Data breaches are the HOA’s biggest threat, and the litigation from homeowners to the HOA could easily end the HOA.  (click to download PDF)

Lastly, please remember that the HOA corporation is only for the worship of money, which you can’t take with you in the end.  By being self-managed, we’ve removed the corporate 3^rd party management “profit motive” letting us do things for reasons of greater servitude to homeowners.  Please continue to take care of your neighbors and be in servitude of each other.  The HOA can disappear tomorrow but we’ll all still be here as neighbors.

If you have any questions, please don’t hesitate to contact me at hernan@strider21.com and I will be happy to tell you the truth. I’m also on our HOA Signal chat. Even though I’m not on the Board anymore, I will continue to help out doing lots of volunteer work with HOA and I encourage you to as well.  You don’t need to be on the Board to make a difference.  With the elimination of the corporate beauroacracy, we are closer than ever to every voice being important.

Your neighbor,

Hernan