In the end, Timber Ridge HOA President Dan Ziegler did the right thing.
But it would have been nice if he’d done the right thing three years ago, or even last week.
This is the kind of situation that should serve as a warning whenever a member of an HOA board has a clear conflict of interest in regards to the business dealings of their association. In this case, Ziegler is an executive for Personal Touch – the landscaping company that services the Timber Ridge community.
Multiple residents of Timber Ridge reached out to the Gateway Sun last week to complain about the situation. The current landscaping contract was set to expire August 31, 2016 but the HOA board had not lifted a finger to put the contract up for bid. The current contract allows for the terms of the deal to continue on in to perpetuity, until one of the parties cancels with 30 days notice.
Apparently, keeping the contract going as-is was what the HOA board had planned. But some angry residents had other ideas.
So a small group of residents and I went to work.
The research that was performed on behalf of the residents led to a bizarre revelation. You see, Ziegler was not the HOA President when the original contract between Personal Touch and the HOA was signed. At that time, the HOA’s President was Rob Eisner, who owns Personal Touch.
So Eisner somehow arranged to have the contract awarded to himself a number of years ago.
And when Eisner moved out of Timber Ridge, Ziegler (who, remember, works for Eisner) became the next HOA President. I was gobsmacked.
Going back in time, the previous landscaping contract was set to expire on August 31, 2013. But rather than put it up for bid three years ago, Ziegler stated that since there were no complaints about his company’s performance he was just going to give Personal Touch a new three-year contract. The board approved.
Two things caught my eye in this statement from Timber Ridge meeting minutes from 2013: The landscape company came back with a bid $10,000 less than the previous contract. There have been no complaints regarding the landscape company reported to the board or the management company. The contract was approved on a motion by Dan Ziegler, seconded by Tonya Gerdt with unanimous vote.
That fact an HOA President would make a motion to award his own company such a large contract without even putting it up for bid was a mistake. And it’s a bad look for the board to go along. But Ziegler was obviously in an awkward spot since I’m sure he didn’t want to risk losing the contract and upsetting his boss.
(NOTE: Ziegler wrote something in an email to the Sun that seemed to suggest he may have only started working for Personal Touch “last year” … however residents identified Ziegler in a Personal Touch staff photo from 2011. I pointed out to Ziegler that residents said he was in 2011 photo, and Ziegler did not deny it.).
And second … $10,000 less?
Who does that? I immediately became suspicious.
I reached out to the Community Association Manager, Neal Sokolow, with Sterling Properties to ask for a copy of the 2016 bid packet for the landscaping contract. But really I was just trying to confirm if what the residents were telling me was true that they had not begun the bidding process.
Sokolow said the HOA was going to form a landscaping committee who would then prepare a request for proposals. Then I assume they would solicit and evaluate bids, and select the lowest responsive bidder.
But all of that in 45 days? Not possible in the world of HOAs.
I formed the belief that the plan was indeed to allow the contract to quietly continue, as per the terms of the 2013 deal. I also believed that Sokolow was caught off guard by the question and responded as best he could. But if they were truly going to put it out for bid and have someone selected by September 1, 2016 they would already be far along in the process. They haven’t even started.
That’s when I cast lines in the water all over Gateway to obtain as much recent landscaping contract information as I could. All information I got back was either from 2015 or 2016.
I shared the results with Ziegler, Eisner and Sokolow and pressed them to commit to putting the Timber Ridge contract up for bid. They would not.
For those who are curious, on the low end of the cost scale you have Silverlakes and Stoneybrook. Silverlakes pays $12.51 per home, per month for landscaping services, while Stoneybrook is a little over $13.
On the upper end you have Gateway Greens, but that’s no surprise. Gateway Greens has huge common areas, many long roads, etc. There should be no community in Gateway that needs more money for landscaping than Gateway Greens, and they came in at $24.30 per month per home.
The closest comparable community to Timber Ridge would be Cypress Cay who has 147 homes, while Timber Ridge has 145. Cypress Cay pays around $20 per month. The reason for the “around” is because they pay $18.14 to their landscaper, but the Cypress Cay HOA buys mulch at Lowe’s themselves – whereas all the figures above have mulch provided by their landscaper.
So with all communities ranging between $12.51 to $24.30 (and again in my opinion there should be no community that pays more than Gateway Greens) I was pretty surprised when Timber Ridge came in at $36.67.
As I said, I waved the numbers in front of the faces of Ziegler, Eisner and Sokolow and practically demanded they put the contract up for bid. Sokolow wrote back and told me that the HOA is under no legal obligation to put the contract up for bid, and that every community is different – making them impossible to compare to each other.
Silverlakes to Timber Ridge is apples to oranges, is the gist of what I was told.
When I explained to the upset residents that the HOA was unmoved at the cost comparison data, they began exploring a recall of the entire HOA board. At that point, who could blame them?
But Sokolow was right. Only Timber Ridge is Timber Ridge, and it does have this one huge patch of lawn where it looks like homes could be built in the future. The only way to know for sure if the contract was bloated was to compare apples to apples. I would need to get bids for Timber Ridge itself from licensed landscapers.
So I did. I arranged to have two landscapers give me bids.
I am masking the figures by providing a range in the event those landscapers want to bid. One landscaper said they will bid a figure that will be between $21 to $24 per resident per month. A huge savings over the current $36.67 contract in Timber Ridge and within range of the rest of the communities in Gateway.
Once I told the HOA that a landscaper had agreed to do Timber Ridge’s landscaping for a third less, Ziegler emailed me back the same day to say they would put the contract up for bid. (The second landscaping company had not gotten back to me at the time of publishing.)
Full credit to Ziegler for doing the right thing.
Now in my opinion the HOA board should have recognized the obvious conflict of interest and put the contract up for bid in 2013 and again in 2016.
When your HOA President is your landscaper, you go over and above to be transparent.
Also in my opinion, we should give Ziegler and the HOA board a pass for the apparently high value on the current Timber Ridge deal. It had been so many years since it was put up for bid that they could not know how much it was worth. Maybe that was fair value back then, we just don’t know.
Personal Touch did offer a $10,000 reduction three years ago, when it appears didn’t have to because they could have got the contract renewed regardless. So there’s that, which also should be looked upon favorably.
Had Ziegler not agreed to put the contract up for bid (which it looked for a week as though he would not) then this would have been a very different story. One of possible corruption. But he did agree, so he’s doing the right thing for the residents.
I give Ziegler and Eisner the benefit of the doubt. Not to repeat myself, but there’s a lot of time involved here. Fuel was more expensive back then. And several residents have spoken so highly of Zieger that he must be a good person.
We can’t go back and change the past. But in the future, if you’re on an HOA board and you want to make money off your HOA then you should remove yourself from involvement in the decision-making process and place a bid just like any other competitor.
I go to Timber Ridge a lot and the landscaping looks great. They have this really nice bridge you cross as soon as you enter the community. It’s a great feature and unique in Gateway.
Now that there will be a bidding process on the landscaping contract, the residents of Timber Ridge will know they’re paying a fair price to keep the entrance and the rest of their community looking good.
And as long as Ziegler plays no part in the voting or bid evaluations, there will be no more conflict of interest.