Cities can’t deny it: privatized HOA infrastructure not holding up as planned

Putting developers, homeowners in charge of paying for and maintaining private roads and storm water drainage has multiple unintended consequences
By Deborah Goonan, Independent American Communities

Leland Town Council has their hands full with persistent flooding, for the past several years, in Magnolia Greens subdivision.

Magnolia Greens is a well-established golf course community near Wilmington, NC. According to a 2017 Star Online article, the streets in Magnolia Greens subdivision are owned by the town of Leland. But the storm water drainage system is owned and managed by the Magnolia Greens Homeowners’ Association.

The subdivision consists of townhouses, patio homes, and estate homes, currently priced between $185,000 – $500,000. The HOA also owns and manages two clubhouses with swimming pools.

George Steelberg, president of the Magnolia Greens Home Owners Association (HOA), says that the HOA notified the Town of Leland of street flooding beginning in 2013.

Leland’s town manager, David Hollis, acknowledges the problem. He says that, according to a study conducted by Cape Fear Engineering (CFE), and paid for by the Town of Leland, the normal water level in a Magnolia Greens’ retention pond is too high — by more than 2 feet in elevation. The weir (or dam) of the pond was designed to maintain a water elevation of 21 feet, but the most recent elevation observed in the pond was 23.35 feet.


( free image)

Because the water elevation is being maintained higher than planned by design, there isn’t enough room in the pond to accumulate rain water. As a result, rather than retaining excess water in the basin, the weir releases a great volume of water from the pond during heavy rain, .

That, in turn, causes street flooding. Repeated flooding has led to ‘alligator cracking’ of road surfaces. Therefore the public roads now require expensive repairs.

The engineer’s report blames the HOA for failing to adequately maintain the pond and the weir.

However, the HOA points out that CFE is the very same engineering firm that originally designed Magnolia Greens’ storm water system, circa 1999, when the first homes of the subdivision were completed.

Is it a surprise that CFE shifts blame to the HOA? Would CFE be likely to blame the flooding on a design flaw?

Leland Town Council did not request bids from other engineering firms. The Council simply paid CFE more than $42,000 to perform its evaluation of Magnolia Greens’ storm water system.

Isn’t that a conflict of interest, the HOA asks? Town Manager Hollis says, no, not in his opinion.

For its part, Magnolia Greens HOA paid Norris and Tunstall Consulting Engineers for a second opinion on the condition of the weir, resulting in a recommendation to modify the weir by a few inches, so it will begin releasing water at a lower elevation, making more room for storm water when heavy rains fall.

Now the question is, what will be done, and who will pay?


Money with wings
( free image)

Leland Town Council wants Magnolia Greens homeowners to foot the bill for rebuilding the town’s (public) roads that they say were damaged by the HOA’s improperly maintained (private) storm water system.

But, let’s not forget that the Town of Leland approved these grand plans for Magnolia Greens — essentially mandating the developer to build storm water ponds and weirs, and to establish an HOA to fund ongoing maintenance.

In fact, cities and towns across the U.S. have been doing the same thing for 2 to 4 decades: shifting construction costs and maintenance liabilities to homeowners by way of the association-governed community.

Then, for many years, municipalities simply assume that developers’ and their engineers will properly design and build infrastructure, and that HOAs will dutifully maintain roads and storm water systems well into the future.

Clearly, in the case of Magnolia Greens, the plan isn’t working.

Engineering firm paid $42,400 to study its own stormwater ponds after repeated Leland flooding (NC)

Leland’s town manager said accusations of a conflict of interest are “unfounded.”

By Johanna Ferebee – August 15, 2018

Editor’s note: John Kazmarski, Leland’s infrastructure committee chairman, was initially misidentified as Leland’s Chief of Police.

LELAND — The town of Leland paid an engineering company thousands of dollars to study flooding resulting from a project that same company had engineered. It’s a potential conflict of interest that has some questioning the results of the study.

After persistent flooding issues developed around Magnolia Greens in Leland, the town paid Cape Fear Engineering $42,400 to study the effectiveness of the development’s stormwater management system.

Read more:


Secret of change build new

Meanwhile, in Holland, Michigan, another city council is negotiating a development deal with a condo developer, and trying to appease neighboring property owners.

According to a previous report detailing plans of Ace Builders to create a 46-unit duplex home condominium association, neighbors on Bellwood Drive object to a public road that would turn their cul-de-sac into a through street.

The current development proposal, still under consideration, is to create a private access road rather than a public street. But the city also wants to require sidewalks along the private road, with an easement to allow the public to use those sidewalks.

But the last sentence in the following article says it all. (My emphasis added in bold)

Sidewalk remains issue for Holland condo development (MI)

By Sydney.Smith / 616-546-4219
Posted Aug 4, 2018 at 10:01 AM
Updated Aug 8, 2018 at 3:52 PM

Editor’s note: This story has been updated to clarify that the variance is for a private road for the development rather than a public street. An access road which connects to Bellwood Drive was approved with the site plan at planning commission.

HOLLAND — More discussion is on its way regarding a proposed condo development in Holland.

This is another step in the process for the proposed 46-duplex development by Ace Builders Inc. on a 10.5-acre vacant parcel at 100 E. 40th St.

The Holland City Council is considering a variance that would allow a private road to serve the proposed development rather than a public street as required per the city’s subdivision ordinance. The council will discuss that at its study session on Aug. 8.

The session begins at 5:30 p.m. with public comment. No formal action will be take place at the meeting. The council may take action on the variance at its Aug. 15 meeting, said senior planner Jenna Elswick.

The developers have previously stated that they do not want a sidewalk, but city staff is recommending that the sidewalk be listed as a condition for the variance that would allow the street to be private.

A proposed private emergency access road would connect Bellwood Drive to the new development. Before this, neighbors on Bellwood voiced concerns about turning Bellwood, a cul-de-sac, into a proposed through street. Neighbors have said they are in favor of the private road instead, and a site plan including it was approved by the planing commission.

A city staff report states the sidewalks are needed to fulfill connectivity goals outlined in the city’s master plan.

“A sidewalk already exists on Bellwood Drive, which can appropriately be extended through the proposed fire access drive to the cul-de-sac, down the proposed private street to 40th Street where sidewalk will also be constructed by the developer and adjacent property owners to continue pedestrian circulation,” a city report said.

City staff also wants easements for the sidewalk to make it publicly accessible, and an easement for the emergency access drive so the city could maintain the road “in the event the condominium association does not.”


So, clearly, City staff does not have much confidence that the future condo association for the new duplex community will maintain a private road and sidewalk!

Yet they are prepared to create a variance for a private road, against staff’s better judgment, to satisfy existing residents on a previously developed portion of Bellwood Drive.


Both the Leland and Holland reports summarized above reveal a growing trend in residential development — municipalities are starting to acknowledge that privatization of infrastructure creates undesirable, unintended consequences, not only for affected homeowners, but also for taxpayers at large.




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