Debate over Palermo budget and reserves

Positively Palermo has received numerous e-mails with details and questions about Monday's HOA meeting, in addition to comments already posted here. We will over the next days review some of the topics discussed. The first up is the 2011 budget and a possible dues increase. You may recall that in the fall of 2010 the board approved a $28 a month increase in a meeting that few knew about that was held over the phone. Back then, there was a lot of after-the-fact discussion here about that unknown meeting and the purpose of the dues hike. At one point, there was a dispute about whether the meeting even happened, but later minutes posted on the DRM Web site verified that the meeting did take place with four of the five members on the phone. It's hoped that the board can do a better job at openness this time around. According to the e-mails we have received, there was discussion Monday night about the previous budgets being off base. One e-mail said there was board discussion that the spending in 2010 was more than $70,000 over what was budgeted for that year. History may repeat because the 2011 budget is on track to be at least $40,000 over budgeted expenses. It is important to note that these numbers only discuss what the board and DRM budgeted as our expenses and what we really paid out, and don't include the revenue side of the equation. Basically, actual spending in 2010 and 2011 have been at the same levels but the budgets for those years were off base and didn't reflect reality. As one e-mail pointed out, "The dues for 2012 should at least bring in enough cash for covering operating costs without stealing from our reserves. That's just basic good management." One concern is why the board last year adopted a 2011 budget that was lower than the real spending in 2010, and how this pretty much meant no money would go to reserves and in fact money might have to be taken from reserves just for basic operating expenses. One post here also pointed out: "I listened in to the Board meeting last night. While I love being a homeowner at Palermo I have deep concerns about the financial viablity of our community in its current state. The Board will be putting together the budget for approval in October and it does look like dues will need to be raised (I think $312 was the initial figure) just to meet our expenses. What is very scary is that this does not solve the problem of our reserves being fully funded (which currently they are not)! ... There was a great suggestion last night to survey the community - I really think that is a great idea. The homeowners should decide whether we want the clubhouse to be open everyday, two pools working, etc as these are all expenses that are making our budget difficult to balance." Miss Penny Lane says: She loves participating in surveys. Just tell her when and where.

Cell phone service question

Positively Palermo received this e-mail: "Hi Miss Penny, I'm so happy that I will finally be moving to Palermo full time! I'm planning on getting a new cell phone and I'm wondering if anyone has suggestions on which is the best provider for the area. Thanks!" Can anyone help with advice? Miss Penny Lane says: No matter what service you get, your phone will be ringing off the hook with congratulations on becoming full-time member of our jolly crew of good spirits at Palermo Palm Springs.

Delays at Indian Canyon and the 10

Expect more delays at Indian Canyon and the 10. The paper says: "Major closures on Interstate 10 at Indian Canyon Drive are expected this weekend into September as work continues on the Coachella Valley's major thoroughfare. Lee Haven, business development manager for Granite Construction Company, said that starting at 9 p.m. Sunday two eastbound lanes will be closed as well as the eastbound off ramp for Indian Canyon Drive/I-10 interchange for eight hours. During that time, one eastbound lane and all westbound lanes will be open, but the work will slow down traffic, Haven said. On Monday, the two westbound lanes and the westbound off ramp at the interchange will then close from 9 p.m. to 5 a.m. Again, one westbound lane will be open, but traffic delays are expected. All lanes will be open during the Labor Day holiday weekend. Full closures of I-10 are expected Sept. 6 through Sept. 8 from 9 p.m. to 5 a.m. and again Sept. 10 from midnight to 5 a.m. on Interstate 10, to erect girders. The girders are steel beams that must be set to complete the roadway as workers build the second half of the overcrossing. Motorists will be detoured to Indian Canyon Drive on and off ramps to get around the work, but significant traffic delays are anticipated. The interchange work is part of a $148 million valleywide project aimed at improving traffic for six exits along Interstate 10. The Indian Canyon Drive/I-10 interchange project is expected to be completed in the Spring of 2012." Miss Penny Lane says: She's heading to the Dairy Queen today in advance so she doesn't have to put up with any delays.

Palermo's palo verde trees

On April 10, 2010, Positively Palermo discussed the palo verde tree, known as the Desert Museum variety, that we have here at Palermo Palm Springs. The above picture is from the Palermo landscaping plan. See the April 10 posting for more information. Now, the LA Times has an article on the tree. It states in part: "A tree whose name translates from Spanish to 'green stick' has performed a remarkable feat. Native to ranges in Southwestern deserts and once thought here as appropriate only for Phoenix or perhaps Palm Springs, the palo verde tree has become a favorite choice of Los Angeles landscape architects. After considering the most commonly available palo verde species, Cal Poly Pomona professor emeritus and author Robert Perry selected four as suitable for the Southland: Mexican, blue, foothill and Sonoran. All offer drought tolerance, stunning spring blooms, sex appeal for bees, leaves like filigree, branches in a luminous green and dimensions suitable for patios. Yet it was a palo verde hybrid called Desert Museum that Perry singled out as special. It is named for Arizona-Sonora Desert Museum in Tucson, where three decades ago the director of natural history, Mark Dimmitt, identified a thornless seedling that would not just flower in the spring, but would keep blooming throughout the summer. As cuttings were propagated, Dimmitt and museum staff began seeing the new hybrid around Tucson, then Phoenix, then Las Vegas. By 2005, Southern California’s leading horticulturist, Bart O’Brien of Rancho Santa Ana Botanic Garden, was describing it as a plant that combined the best features of its parents. By 2011 it was the key courtyard tree at the new Valley Performing Arts Center in Northridge. Faintly taken aback that his discovery is now making it big in Los Angeles, Dimmitt kindly talked about palo verdes in general and Desert Museum in particular. Question: Where do you find palo verde trees most commonly in the desert? Answer: The first-generation natural hybrid, between Mexican and foothill palo verdes, is found mostly in disturbed areas around Tucson and other desert cities. This is because Mexican palo verde is introduced to Arizona and is rarely found in natural desert.
 When you started working with crosses of palo verdes in the 1970s, what did you see in terms of height, thorns, flowers? How many crosses did you go through to arrive at Desert Museum? Desert Museum was a discovery, not the result of a breeding program. In 1979, I collected a few dozen seeds from a first-generation hybrid and grew them. All except one seedling were uninteresting. The one seedling grew into a superior tree. Genetic and phenotypic analysis revealed that the hybrid had been pollinated by a blue palo verde. I named it Desert Museum with the expectation that Arizona-Sonora Desert Museum would patent the tree and make some money from it. Oh, how they wish they had now!

" The rest of the article is at this Web link. Miss Penny Lane says: These trees when flowering make her smile.

Clubhouse rules?

Positively Palermo received this e-mail: "Penny, Who is having that big party in the clubhouse??? Was it approved and fee paid??? Lots of car coming and going. People spilling out of the doors. Noise. Did the HOA allow this and isn't there any notification??" Miss Penny Lane says: She loves a good party, but does anyone have the answers to this resident's questions?

Palermo? Or Greece?

There has been talk of the paint fading on our buildings, but do you remember when Palermo Palm Springs looked more like Greece? (This is a picture previously published and sent in by an owner.) Miss Penny Lane says: Greece or not, everyday at Palermo is like a vacation.

Trees and landscaping

More problems with the landscaping it seems. Positively Palermo received this e-mail: "Why isn't the landscape service taking care of the trees? The lower portions need trimming so they don't hit your car when you drive by, and some have branches are so low you have to duck down when walking under them. Someone else also posted about this but IT IS STILL a problem." Miss Penny Lane says: She was in her friend's pink convertible this weekend and while driving under a Palermo tree it gave her a nice scalp massage.

Cicada season

What's the buzz? The morning paper reports on that sound we've been hearing: "It's a bug opera emanating from trees and bushes pretty much anywhere in the Coachella Valley, this noise that sounds like the hum of a florescent light bulb magnified by a thousand. Longtime desert residents and transplants from the Midwest or South recognize the call of the male Apache cicada, an insect that spends most of its life feeding on plant roots underground, before emerging one summer to mate, then die. The dusky gray cicadas have outsize eyes, large veined transparent wings and can be up to 2 inches in length. That buzzing is the mating call of the male cicada, and natural selection works against people who just want the bugs to shut up. Cicada populations and noise levels can vary widely between neighborhoods, and often increase in newly developed areas once the landscaping is mature enough to offer a good food source for the cicada larvae. The males roost in bushes and trees, and if they have better luck or smarts they pick one that's not blocked by a building, so their voice travels even farther. After they mate, the female lays the eggs on a branch, and they hatch a few days later, with the larvae dropping to the dirt below and tunneling in to live among the plant roots. Some cicada species can take 13 to 17 years to resurface, but the desert's Apache cicadas do in about three to six years, depending on how many tree roots there are to feed on. The larvae rarely do enough damage to kill a tree, so the mating call is the only trait that could make them qualify as a pest. And the buzzing can be surprisingly easy to stop, at least temporarily. If you disturb them, they stop right away." Miss Penny Lane says: She doesn't mind a cicada concert in her yard. Sometimes she even signs along with them.

Phase 2

Positively Palermo a while ago received this picture of Phase 2 with this email message: "I hope the place ends up looking kinda the way it was planned. Except maybe for the retail." Miss Penny Lane says: She loves going down memory lane.

Bidder pulls out?

Positively Palermo has received important news. The e-mail says: "Penny, A board member told me that the bidder for the Enterprise (now bank owned) 34 condos and undeveloped land has pulled out, and now the bank has accepted another offer from a 'development company.' So I guess Strata Equity will no longer be the new player at Palermo. Please let people know. It looks like things will be the same for awhile as the new winning bidder goes through the process." Miss Penny Lane says: With fingers crossed, she's off to buy a lotto ticket and will eagerly snap up all of our lovely Palermo if she wins big.

Developer bonds on unfinished projects?

Positively Palermo received this e-mail: "Penny, thank you for everything. Could you post this article from today's newspaper about bonds. We were told that the Palermo developer posted a public works bond but they maybe the city gave it back." Here is the article:

Cities across the Coachella Valley are cashing in hundreds of thousands of dollars in bonds from companies that go under before finishing promised streets, sewers and other public services. Developers must post the bonds before cities can approve a project. Rancho Mirage has gotten $321,000 after settling a lawsuit earlier this month with Arch Insurance.
Arch issued the bond ensuring Vista Del Sol Rancho Mirage Inc. would pay for improvements at a four-house subdivision on Vista Del Sol north of Country Club Drive. The developer went out of business after only moving some dirt around on its five acres. City Attorney Steve Quintanilla said the city then tried to get the bond money from Arch for the project that included extending the road and putting in sewers and gutters.
The city filed a lawsuit last year after Arch said it wasn't responsible for the costs. Arch's general legal counsel couldn't be reached for comment. The city will refund whatever isn't needed to finish the work or cover legal fees, Quintanilla said.
“The city's intention was never to make a profit on this case — just to get Arch to fulfill their legal obligations so the street can get built,” he said.
Rancho Mirage won $483,000 in 2008 in a similar case for putting utilities underground and finishing landscaping along the sidewalks and medians near Dinah Shore and DaVall drives.
La Quinta City Attorney Kathy Jenson said that city is still trying to get the $47,000 bond to finish the grading at Casa La Quinta near the historic downtown. Other similar cases have been resolved in the city's favor.
To avoid this situation, the city has given developers more time to break ground on a project before facing the risk of losing zoning. “If the developer is struggling, making them go forward doesn't make sense,” she said. Indio is trying to reach a settlement with a bond company over a slightly different issue, City Attorney Omar Sandoval said. The city claims a now-defunct builder left a faulty retention basin behind in the Shadow Hills subdivision, and is going after the bonding company for money to fix it.


Miss Penny Lane says: She doesn't know anything about developer bonds, but loves the neighborly bonds that unite the jolly crew of good spirits at Palermo.

HOA meeting at 6 Monday

Positively Palermo received this e-mail: "Penny, The HOA board will be meeting at 6 Monday in the clubhouse. The agenda is posted at the clubhouse. The 2011 budget is on it, and you all might remember that our board held a surprise meeting (one few knew about) and once it was publicized that they pulled off all the financial agenda items so thee basically was no reason to meet." Miss Penny Lane says: Thanks for the heads up. She's off to a late brunch!

Wasps still a problem?

Wasps it appears may be continuing to be a problem for people and their pets at Palermo Palm Springs. Positively Palermo received a copy of this e-mail sent to the HOA board: "We are very disappointed regarding the effort on removing the wasp problem this week. It was our understanding that ALL yards would be inspected, not just the ones with gates that are not locked. Per Brandi's e-mail below, she is saying it's a liability issue. Can someone please explain what that means? We thought the letter that went out to all owners would eliminate liability issues. The painters climbed over fences using ladders, why can't the exterminator do this. We can't believe we are STILL stuck on yard access to eliminate this health and safety issue. This has been said OVER and OVER again, but if all nests are not removed all at once we will continue to have this issues. Why can't the HOA understand this simple fact. All B and C units and some A and D units do not have gates so over half the yards were not inspected and half the nests are still there. Not to mention the money we spent on this inspection is completely lost since it will have to be done again. Wasps are buzzing in our yard this morning and in our pool. Actually, it's the same volume as when we were here 3 weeks ago. THIS HAS GOT TO BE RESOLVED!!! We will not stop pursing this until it is. You have no idea how frustrated, upset and shocked we are by this failed attempt to resolve this issue. The inspection MUST be done again in ALL areas, including yards. Please let us know when this will occur. Penny, Please post." Miss Penny Lane says: This stings.

More from the newsletter: pool and spa heaters

Positively Palermo has learned that the HOA newsletter also had this item: "The heat to the two pools have been shut off for the summer. Further, the spa at the small pool has been shut off in order to save money on utilities. The main pool will resume the normal heating schedule in October or when the temperature begins to cool down." A resident asks if this is correct because the back spa was to have the heat turned off but the jets working. Miss Penny Lane says: All this talk of the pools makes her want to take a dip tonight. Want to join her?

Not a good day to be a wasp

The HOA newsletter says today there will be an inspection of the common and private areas for wasp nests. Have the wasps been a problem for you? Miss Penny Lane says: Palermo is always buzzing with some kind of news.

Newsletter update

Here is a reader post regarding what was in the Palermo Palm Springs newsletter: "I received the newsletter in US mail today. Brief summary: There will be a community wide removal of wasp nests on Wed Aug 10. There's an item about parking and the new security company who will enforce parking rules (Maxwell Security 760-778-7469) - if yo're not sure of the rules you can get them at www.palermocommunityassociation.com . The pool and spa heaters have been turned off for the summer to save utility $. Community Association meeting Mon Aug 15 at 6pm in the club house." Miss Penny Pale says: Thank you.

Newsletter?

Positively Palermo received this e-mail: "Hi Penny, I ran into someone at the pool who said there is a new Palermo newsletter out but there's nothing posted on the bulletin board and as a renter I don't get the newsletter even though it has info I could use - as I too like you love it here. Do you know what is in it?" We don't have one, does anything out there have one they could e-mail? Miss Penny Lane says: Her lovely Palermo morning started with a stroll around the community and now she's off for a day at the outlets. Wish for good luck.

Let there be light: No longer going to the dark side

Positively Palermo received this e-mail with welcome news: "Penny, new lights have been put in the dark area of the Quiet Side parking lot area. The developer should have put in more lights back there in the first pace. Everyone should thank the board members who took a lead on this and got it done. Thank you." Miss Penny Lane says: She loves it when good news shines at Palermo Palm Springs.

Water flowing in Phase 2?

Positively Palermo received this e-mail: "Hello Miss Penny, I'm not sure if anyone else noticed the broken water pipe in the undeveloped section, but it has been pouring water out for the past few days ... Anyone know who to call?" Miss Penny Lane says: Does anyone know the answer?

In praise of the pool service

Positively Palermo received this e-mail: "Miss Penny, I wanted to take a moment to praise the new pool service. The pools and spas are very clean, even when the winds were here they were tidy except for the leaves that fell in between pool service's cleaning day. The tiles are looking good, where the last guy didn't seem to me to clean them. The pool equipment area is clean where prior service tossed boxes. I'm so glad we have this new service, and how the heck did we get the last service. Thanks for all you do for us here, renters and owners!" Miss Penny Lane says: Well, thank you, and now she wants to go take a dip.

Good news for Palermo's Canadian owners as more nonstop flights added

The Canadian homeowners at Palermo Palm Springs — an ever-growing number of our population — will have another nonstop service to the Palm Springs airport. WestJet is adding a nonstop flight from Winnipeg and will also add a second nonstop from Calgary during the peak season. Here's the report from the newspaper: "WestJet will begin additional service to Palm Springs International Airport from Winnipeg, Canada, as part of its 2011-2012 flight schedule. The flights by the Calgary-based airline will operate twice weekly on Thursdays and Sundays through the season on Boeing Next-Generation 737-700 aircraft. Expansion to Winnipeg will be WestJet's fifth nonstop route in and out of Palm Springs. WestJet already serves the Palm Springs market from Calgary, Edmonton, Vancouver and Toronto. Hugh Dunleavy, WestJet executive vice president of strategy and planning, said in a statement the winter schedule reflects growth in key areas within WestJet's transborder and international networks. In the Palm Springs market alone, WestJet has seen the number of passengers it carries triple from 57,945 passengers in 2006 to 176,222 in 2010. In the first six months of 2011, the count was 120,505, Palm Springs airport statistics show. Canada is an important element of the Coachella Valley's resident and visitor base. Service from Winnipeg, with fares starting at $219, will begin Dec. 15. Service from Toronto will resume Jan. 11 and operate on Wednesdays and Saturdays. Flights to WestJet's hub in Calgary already taking place year-round will be increased to two daily round-trips during the peak tourist season, city officials said. Nonstop flights also will fly daily from Vancouver, British Columbia, and Edmonton, Alberta." Miss Penny Lane says: She remembers when Palermo used to be known as Little Chicago because of all the owners from the Windy City but now maybe Little Canada is more apt, eh.

Palermo's original developer makes Chicago news over keeping earnest money

Here's story from a Crain's Chicago Business publication about the original developers of Palermo Palm Springs. The developer wants to keep earnest money even though the Chicago condo project in question mostly now is being rented out. “They're not getting the luxury, exclusive condo; they are buying into a rental building," says the would-be buyers' attorney.
 The story:
 The developers of a luxury Gold Coast condominium project may have given up on selling units in the building, but they're not letting go of the earnest-money deposits from would-be buyers. Ronald Shipka Sr. and Richard Stein gave up control of the Walton on the Park project in March to a venture controlled by the owners of Dart Container Corp., which is now aiming to rent the 160 unsold condos in the 189-unit project at 2 W. Delaware St.
 But buyers who never closed on their condos may have to do more than just politely ask Shipka and Stein for their earnest-money back: Recent lawsuits over the deposits suggest that the developers plan to keep the money, one way for them to salvage a losing investment in a depressed condo market.
 In the most recent case, brothers Milan and Dan Kesic are suing a venture led by the two developers to collect $58,900 in earnest money they paid in February 2007, plus damages in excess of $50,000.
 In another case, buyer Gretchen E. Green seeks to collect a $100,000 deposit she put down for a $1-million unit in the project in July 2007. Both buyers allege that the venture breached their purchase agreements by not completing their units on time and by converting the building to rentals.
 “They're not getting the luxury, exclusive condo; they are buying into a rental building,” says Donald C. Battaglia, a lawyer representing the Kesics. “The buyers aren't getting what they bargained for.”
 The Dart family bailed out the Shipka/Stein venture in March, when it paid off an $82-million construction loan on the development. But the venture retained the rights to the earnest money, says a Dart executive.
  It's unclear exactly how much earnest money is at stake, or how many condos still have outstanding deposits, but the dollar amount could easily reach into the millions. As of the end of 2010, 26 units in the project were under contract but hadn't closed, according to Appraisal Research Counselors, a Chicago-based consulting firm. In the third quarter, 77 units were under contract but not yet closed.
 In at least one case, the Stein-Shipka venture argues it is entitled to the earnest money, saying in a filing that there was “no promise or agreement” in the contract to complete the project by spring 2010.
 It was an “estimate and nothing more,” according to a motion to dismiss Ms. Green's complaint.
 The developers' lawyer, Glenn Udell, a partner in Chicago-based Udell Pomerantz & Delrahim Ltd., did not return messages. Mr. Shipka, chairman of Chicago-based Enterprise Cos., also did not return phone calls.
 Miss Penny Lane says: She's earnest in saying she loves Palermo.