Dissolving POA nearly impossible
Action requires two-thirds approval, but issues would remain
It’s an idea that comes up regularly, but despite yard signs and Facebook posts, the Bella Vista Property Owners Association is not going away.
In fact, while it’s technically possible to dissolve the corporation, it would be very difficult, Doug McCash, the POA’s attorney, said recently.
The Declaration, the document that formed the POA, must be consulted about dissolving it. While there is no clear procedure, dissolving the POA is the same as changing the declaration, McCash explains, so it requires the affirmative vote of two-thirds of the owners of lots or living units. No POA election in recent years has reached that level of participation.
“Of the approximately 33,000 lot owners in good standing, in order to dissolve the POA, approximately 22,000 lot owners would all have to vote in favor to dissolve the POA,” General Manager Tom Judson said. “Since some lot owners would inherently not agree with the proposal and vote against it, effectively you would have to have almost every single property owner take part in such a vote. Keep in mind it is a monumental feat just to get 50 percent of the lot owners to participate in a vote, let alone get almost 100 percent to vote, plus have approximately 22,000 vote
in favor of the proposal. In other words, you would have better odds winning the lottery than passing a proposal to dissolve the POA.”
An attempt to change the Declaration was on the May 2016 ballot, along with the board election. About one third of the 32,204 ballots were returned. There’s no quorum needed for the board elections, so three board members were elected — but the Declaration change failed.
In May 2010, 23,000 ballots concerning a Declaration change were mailed, but fewer than 1,000 were returned. Since that election was designed to be open ended, a second mailing went out in September of that year, with similar results. Eventually the board gave up and that effort failed.
If the POA was dissolved, it’s not clear what would happen to the amenities, McCash said. The amenities would have to be addressed in the same ballot that dissolves the corporation, he said.
There’s no reason to assume the city would take the amenities over. It’s not clear that the city would even want them since they are expensive to operate. If the city did take over the amenities, it would probably mean a tax increase, McCash said.
Mayor Peter Christie said he hasn’t thought a lot about the POA amenities because he understands that the POA can’t be easily dissolved. But a resident who did some research last year came up with an estimate of the millage the city would need to operate the POA amenities. Taxes could go up by 24 mils, he said.
“That’s just not going to work,” Christie said.
Although the city would benefit from commercial development, he’s not sure it’s feasible to develop the land that makes up the golf courses along U.S. Highway 71. Because the land is subject to flooding, it might cost too much to develop.
When the city incorporated in 2007 it took over the police and fire departments within the first few months,
former Mayor Frank Anderson recalled. The POA transferred most of the emergency equipment to the city as a donation, he said, because the POA no longer had a use for the equipment. At first the city leased the buildings that housed emergency services.
Most of the streets went to the city as part of incorporation, although the POA still maintains some streets that are inside POA boundaries, but outside city limits. But the city didn’t immediately take over street maintenance. Instead, the city contracted with the POA to continue maintenance.
When the city was ready to take over street maintenance in 2012, the POA did not donate that equipment, Anderson said. The city bought a few trucks from the POA at a surplus equipment auction and purchased other equipment elsewhere.
When the city was incorporated, the three buildings that housed police and fire were common property, just like the golf courses and lakes. The POA sold the buildings to the city after a vote by members approved the sale in May 2013. Cooper Communities Inc., the developer of Bella Vista Village, also voted for the sale using their “Class B” ballots. CCI has a say in any sale of common property. Because a sale must be approved by both classes of voters, they have a virtual veto on a sale.
The POA owns the amenities, McCash said. There is no reversion clause that gives the amenities back to CCI if an amenity closes — as some residents believe. CCI owns easements around all the property the company originally owned, according to Article 4, Section 1 of the Declaration. So selling a large piece of property might be complicated because the new owner might not be able to access it, McCash said.
“At this time the Board of Directors is not considering closing or selling any of our golf courses,” Judson said.
But the POA can change an amenity, which is a board decision. Branchwood, a nine-hole golf course, was flooded in 2013 and did not reopen, Instead, an ad hoc committee recommended the area become a multi-use park with a concrete walking trail, an outdoor amphitheater, a picnic pavilion and playground. The first phase of the Branchwood renovation was completed a few months ago.
The POA owns the Bella Vista water utility and that probably won’t change, even if the city develops a water system of its own, McCash said.
“In speaking with Mayor Christie, their goal is to be able to provide water service to areas the POA is legally prohibited from supplying water to,” Judson said in a recent email. “The POA can only provide water service to areas within the boundaries of the POA. If the city were to develop a water system, they could provide service to areas outside the boundaries of the POA. Based upon our current understanding of the situation, we feel there will either be no impact or limited impact to the POA if the city develops its own water system.”