Will tax sale of two lakes for $1,800 convince owners to create HOA?

Is the city of Champaign using hostile buyer of stormwater lakes to pressure homeowners to form HOA? By Deborah Goonan, Independent American Communities

Sometimes I read a report of local government shenanigans and conclude that I smell a rat. This is one of those times.

The facts reported in this article by The News-Gazette are bizarre, outrageous, and downright suspicious.

Before you read the article, here are the bullet points:

• A Champaign, Illinois subdivision, was built in the mid 1990s, adjacent to two lakes.
• The lakes are nothing more than storm water drainage basins that serve as retention ponds.
• The lakes have been owned by a special district, the Fountain Head Drainage District, and taxes assessed at $3 per year for the pair of lakes.
• The adjacent subdivision of Timberline Valley South does not have a homeowners association, and was never required to form one. 2003-2007 bills were mailed to and paid by some unknown person, in the name of the nonexistent HOA. A homeowner by the name of Charles Miller paid tax bills in 2008 and 2009.
• A few homeowners tried to start a homeowners association, but most of the owners wanted no part of it, being aware of common HOA horror stories.
• Miller stopped paying taxes on the lakes after that.
• Other than collecting a small amount of taxes, Fountain Head Drainage District has never maintained the two lakes.
• When tax delinquency reached $300, Champaign County began its collection process, putting the lakes up for auction with a minimum bid of $648. Nasty Joe’s LLC purchased the lakes at auction for $1,800. The shell corporation was formed about 9 months ago.
• The new owner of the lakes has proposed some objectionable uses for the lakes, and has warned Timberline Valley South owners not to trespass on his property. He has proposed selling the lakes to the owners for $100,000 – $200,000.
• County Treasurer Dan Welch and Neighborhood Services Coordinator John Ruffin, City of Champaign,  have both gone on record saying that the homeowners need to establish their own HOA to make this problem go away.
• However, Timberline Valley South resident Debby Borg astutely points out that homeowners would be stuck with many financial liabilities if they were to take ownership of drainage lakes that have not been properly maintained for 16 years.

 

Troubled waters in northwest Champaign

Sun, 05/21/2017 – 7:00am | Debra Pressey

CHAMPAIGN — Since they bought their home in northwest Champaign’s Timberline Valley South, Oscar Gamble and his family have enjoyed lakefront living, with access to fishing and kayaking on one of the subdivision’s two lakes from their own backyard.

Those days may be over for the Gambles — along with their neighbors with waterfront homes — who have all been left to wonder what to do next after something unprecedented happened in Champaign subdivision history.

Both subdivision lakes were sold recently to the successful bidder in a county surplus property auction.

A representative for the corporation that bought them has since thrown out possible ideas about using the lakes for a catfish farm and a fraternity’s houseboat. He’s also warned residents not to trespass on the lake properties.

Gamble, who has lived in his home 12 years, wonders if the new owner is going to start charging him and his neighbors a fee to use the lake by his home — or if they’ll be able to use it at all.

Read more:

http://www.news-gazette.com/news/local/2017-05-21/troubled-waters-northwest-champaign.html

 

Notice how City and County leaders insinuate that formation of a homeowners association is the only solution to the problem of who should own and maintain two stormwater drainage lakes.

But homeowners need to realize that HOAs are not the best solution to proper long-term maintenance of storm water facilities, especially ponds and lakes. This is nothing more than an attempt to shift the cost of repair and maintenance from either the County or the City to a few homeowners within one small subdivision. And isn’t it convenient that the cost-shifting is occurring at a time when the lakes need to be dredged because of backyard flooding?

It is true that local governments have routinely engaged in this cost-shifting scheme for the past several decades. And the end result has not been good for homeowners or taxpayers.

You can check out numerous examples of stormwater liabilities faced by owners in association-governed communities on this website here, under a keyword search of “stormwater.”

Why should homeowners be manipulated into accepting a liability and a mandatory HOA, simply because the City and County just came to realize that they somehow overlooked requiring a mandatory HOA from the developer in 1996?

Doing a little digging, it appears that Timberline Valley sudivision was constructed in phases, and that somehow the southern portion – Timberline Valley South – was not required to establish its own HOA. See this archived newsletter from 2014. Notice the intentional use of language comparing one portion of the subdivision as HOA protected vs. not HOA protected. Were properties pictured on page 2 cherry picked to maximize the constrast between the HOA vs. non-HOA?

While some homeowners think it is valuable to ensure maximium curb appeal, other homeowners intentionally seek to avoid HOA obsessions with maintaining the perfect, show-ready property. No doubt, buyers in Timerline Valley South found the lack of HOA a desirable selling point.

Homeowners should stand firm on their opposition to forming an HOA and for assuming financial responsibility for lakes that have always been owned and taxed by a public entity – a Drainage District formed by the County Government. The cost to maintain these drainage lakes – and others in the County or City that may be “vlunerable” to hostile buyers or deferred maintenance – should be shared by the general public, instead of attempting to tax small groups of homeowners for each individual lake or drainage system in a piecemeal fashion.

Homeowners need to demand transparency from the Champaign County and the Fountain Head Drainage District. And they need to hold their elected officials accountable to serving the public interest, rather than allowing them to abandon their duties to their taxpaying constituents.

And, of course, if there are not already reasonable restrictions upon use of stormwater lakes in City zoning and building codes, those need to be established and enforced. Stormwater lakes are not suitable for catfish farms or houseboats for college fraternities. Use some common sense.

These scare tactics are not unlike the block busting activities during White Flight in Chicago in the 1960s. Except that, in this case, Nasty Joe’s LLC seems to be pushing homeowners into paying a ransom for “their” lakes, against their better judgment.

 

Reference:

White flight, red lining, block busting and panic peddling (Architectural Digest, reprint of article from 1977.)