Financial woes spark revolt at Hopkins condo

Earlier this year, residents of the Meadow Creek Condominiums in Hopkins got alarming news: Their condo association, the state's largest with 536 units, was in deep financial trouble.

A new management company arrived in May to find shutoff notices for natural gas and electricity because of unpaid bills. Cost overruns on a new $831,000 swimming pool and other expenses had drained the association's reserves to zero.

Since then, according to property manager David Stendal, staff reductions and other cutbacks have put the association back on its feet, and he says a dues increase isn't necessary. Yet there's an uprising at Meadow Creek, and it's directed at the association's board president, John Ward, who owns 45 units but doesn't live there.

At a raucous board meeting Nov. 3, resident Mel Pittel presented a petition with 236 signatures calling for Ward's ouster. Then Pittel stood up, pointed his finger at Ward and pronounced it a "Donald Trump" moment: "You're fired," he declared.

Ward said he won't step down unless his opponents follow the process laid out in the bylaws, or if someone steps forward who he's confident will protect his investment.

As a board member for 20 years, Ward admits that he should have been more vigilant about the association's spending, but he said he's part of the solution, not the problem.

"The last thing I'd like to do is see the board slip into the hands of single-issue people," he said.

"A lot of people want to see some change in the way things are run around here," said nine-year resident Kathy Brazil. "We're just as responsible for not taking an active role all these years."

The Meadow Creek Condos sprawl over nearly 50 acres south of downtown Hopkins. Built as rental housing in the early 1970s, the rows of long two-story buildings went condo in 1983. More than 1,100 people call the units home.

Troubles with the pool

The origins of the current unrest date to 2006, when the association renovated the pool. Members were assessed a total of $480,000 for the project, but the cost nearly doubled, partly because of the discovery of a sewer line beneath the pool.

Doug Strandness, whose company managed the condos for 20 years, said he kept the association board fully apprised of the spending, and said he was "unaware of any problems with day-to-day operations."

Stendal broke the bad news in July. Previous financial statements, he informed residents, may have been misleading because managers counted the pool as an asset, not an expense. As a result, the association had a deficit of $236,000 at the end of 2009, not the reported surplus of $851,000. No money was left in the reserve fund, potentially a violation of state law. Shutoff notices for electricity for the common areas and gas for the whole complex, including individual units, arrived in May.

While utility bills were paid and reserves are being replenished, Stendal predicted a "long road back to financial strength" that required cutting expenses, including eliminating three positions.

Everything seemed fine

Some residents were shocked. "Everything seemed to be going well, the financials looked fantastic, and then all of a sudden, here's financial problems, here's a management switch, without much explanation, and then we're weeks away from getting our power shut off," said Todd Bacon, a four-year resident.

Pittel and others focused their frustration on Ward, who many see as the real power on the board, even before he became president this year. While more than a third of the units are rental properties, many were irked that the board was led by Meadow Creek's largest landlord, not a resident.

Said Brazil: "The board at some level contributed to this chaotic situation."

Pittel and others went door to door at Meadow Creek, gathering signatures to remove Ward "based on refusal to give forthright answers to ANY issues requested by members of the Association at any board meeting." The association's bylaws allow for the removal of a board member with or without cause if a majority of owners requests it.

Ward said he thinks many people signed the petition just to make Pittel and other disgruntled owners go away. Still, the insurgents brought their petitions to the Nov. 3 board meeting in the community room. Supporters of Ward also showed up, and the meeting immediately turned into a nasty exchange of shouting and finger-pointing over bylaw interpretation and whether Pittel could record the meeting on video. The board gave up trying to do business in public and reconvened later that night when the crowd was gone.

The association's lawyer has advised that a board member can be removed only at a members' meeting, and only if at least 25 percent of the unit owners sign a petition demanding it. Pittel said he's still pushing for that meeting.

Ward said he'd leave the board if he could trust his replacement to protect his investment. In the meantime, "I can't understand why they can't come to us in a civil manner," he said.