English Transcription summary of the april 21th meeting
Publicado: Mié May 02, 2012 11:03 pm
Initial spanish transcription summary provided by Mr.Terani Simons.
The original audio recording of the meeting was provided by Mr.Leslie Liuerance
Transcription Summary of the meeting on Saturday, 21 April 2012
Attendants from the Administration: Domingo Batista Vistamares Manager, Engineer Naar, Lic. Publio De Gracia (Lawyer) from Grupo Melo and Accountant Victor De La Cruz, Manager of Finance.
Meeting began at 10: 10 am in the Club of Los Altos de Cerro Azul with the following Agenda:
1. Report on the approval of the Manual de Propietarios
2. Current situation of the Administration
a. Report on Income and Expenses in 2011
b. Report o Income and Expenses of the 1st. quarter of 2012
c. Operational Budget for 2012
d. Report on Delinquent fees action plan for 2012
3. TSM increase
4. Various topics
Lic. Publio recalled that the ANAM´s Manual de Propietarios (Owner's Manual) that was previously presented by the Administration for review at the Club in two previous sessions, was duly approved by the ANAM and published in the Gazeta Oficial no. 26986 of the 8th of March 2012. He also told the participants of the meeting that anyone who wishes to make comments or ask questions during the outcome of this meeting will be monitored to facilitate a well conducted meeting.
Naomi Farinoni:
Requested all participants to conduct themselves with a peaceful and respectful dialogue, and to have the patience and behavior to listen to what everyone says and contribute to the meeting, and to please not fall into conflict, as has been the case in previous meetings.
Owner 42 Fortaleza:
Requests to be informed on if there have been any substantial changes from previous versions of the Manual.
Lic. Publio explains that the main issue proposed by the ANAM consists primarily in regulating authorizations or permits to cut trees, to perform road end entry land movements and also to regulate the type of housing that are to be built in Los Altos de Cerro Azul. He also notes that both the Administration and the ANAM will be available to address questions on the implementation of this manual.
Bill Adsett, El Torreón 142:
Expresses his concerns with the implementation of some of the provisions of the Manual, for example, referring to the approval of new house designs and also on reporting abuses that may be committed by owners, gardeners or workers. He points out that reporting these abuses can be a problem regarding who is to be notified, the administration or the ANAM. Lic. Publio answers that ANAM is currently investigating and mediating complaints that were reported, and that any new complaints or allegations that has to do further violations of the Manual, should be channeled through the offices of the Administrator, however, it´s required to submit them directly to ANAM.
Iris De Simons, El Frente 89:
Insists that complaints should be made known to the Administration on account that it responds directly to the owners, independently of the fact that it should also be presented to ANAM; and especially because the Administration is close to the area to witness the alleged fact. Lic. Publio agrees with this comment.
Fadul, El Guardian:
Is of the opinion that Administration´s employee are very often the eyewitnesses of abuses and/or violations of the Manual, either by owners, gardeners or worker in the area, and that they must be oriented so that they may also report to the administration of these abuses and violations. Lic. Publio also nods in agreement, and for the purpose and for that purpose he points out that Mr. Saavedra, Chief of aqueducts, is temporarily in charge of the of the administration´s office, and that these complaints may channel through him. Lic. Publio then announces that the subject of Manual has been fully addressed and introduces Lic. Victor De La Cruz, Accountant Finance Manager of Vistamares, who will be addressing item no. 2 entitled "Current situation of the Administration."
Accountant De La Cruz presents the Income and Expense Report for year 2011 as follows:
Administering the Altos de Cerro Azul, S.A. - details of Income and Expenses – as of December 2010
(Deferral accounting or accrued accounting)
Surplus (Loss) as of and up to December 31, 2010 ……………………… (63,196.34)
Income year 2011Income by TSM above-mentioned..…………………. 431,443.83
Other IPA income. Int. ………………..…………………………...…....……….. 39,406.08
Total of income …………….……………………………………….……….......... 407,653.57
Costs of operations:
Entry/security control services ………………………………………………...... 86,088.53
Administration/office expenses fixed …………………………………..…….. 66,582.27
Maintenance and repair of machinery………………………………………..... 86,355.72
Costs of cleaning, gardening and ornamental ornament/payroll…….. 73,370.42
Costs of vehicles and machinery ……………………………….……………..... 46,625.04
Expenditure taxes............................................…………………... 440.00
Bank charges …………………………………………………..……………..........…… 4,825.87
Other expenses ………………………..……………………………………........... 106,854.75
Total expenditure operations …………………..………………….………....… 471,142.60
Surplus (Loss) operational….…………………….........……………………….. (63,489.03)
Accountant De La Cruz explains that this is a report of invoiced revenues with paid and recognized expenses to be paid, reported in the accrued accounting method as required to be submitted to the Government. This type of report shows the annual accumulated result in books with a loss of $63 thousand for year 2011. It does not correspond to what was actually collected during the year 2011, since more was collected than what appears in this report, it must be understood that part of the collected TSM belonged to the 2010 accounting period and other parts belonged to 2011. He explained that owners do not pay their accounts on time. Many paid with one or two months behind, while others paid with 3 to 6 months behind, and even some paid in full advance; so if someone is paying in January with a delay of 3 months, that payment most likely corresponds to the previous accounting year.
The next report reflects cash flow income & expenses, and this flow shows a surplus of $85 thousand, which was currently deposited in the Bank. This report reflects the actual collected TSM during 2011, and also cash expenditure that where actually paid out during the fiscal year. The report begins with a surplus balance of $11 thousand of the previous year 2010.
Administering the Altos de Cerro Azul - inflows and outflows – as of and up to the month of December 2010
(Flow of cash or cash flow, cash flow)
Opening balance ………………………………. ……………………. 11,795.61
Income collected…..…………………………………………………. 530,986.13
Available Balance…………………………………………………….. 542,781.74
Expenses paid:
Account paid …………………..……………………………………… 318,333,52
Cash payments ……………………………………………………….. 139,446.02
Total Expenses paid ……………………………………………….. 457,779.54
Ending Balance (Bank balance)………………………….….…… 85,002.20
Troitiño:
Would like to know what amount was really collected during 2011 and how much was really spent of the amount collected. The Accountant De La Cruz answers that during 2011 the TSM amount collected was $516 thousand, and that represents the cash income. He also points out that this last report has the total amount that was paid out during 2011, and reflects a surplus of $85 thousand in the cash flow, and that this is the amount that was in the bank account at the end of year 2011. Answering the question concerning the other income for $39 thousand in the accrued accounting report, he responds that it is an income received for services performed by the Administration´s employees to the other Melo´s Group activities in the area..
Steve Luce, El Fortin 122:
Wants to know why the Club expenses are not included in the financial reports presented. The Accountant De La Cruz explains that the monthly membership was dropped two or three year ago, and all owners that are currently non delinquent with their TSM dues, are free to use the Club installations.
Manager Batista, Vistamares:
Explains that Vistamares has 3 businesses in Cerro Azul, which are the land selling operation (lotificadora), the water and aqueduct service and the Club. Each business has its own accounting books carried separately. He adds that what we are looking at now, is income and expenses of the administration of the project. He also adds that they are making an enormous effort to collect the high delinquency rate of TSM bad debts, which belongs to a group of owners who do not pay their TSM, or pay less than the current TSM.
Bill Adsett, El Torreón:
Ask for a more detailed and extended information of the breakdown of the TSM payments by the owners. Manager Batista presents the following chart of TSM payments accordingly
Delinquency TSM….. empty lots only…. lots with houses…Total owners…….Debt outstanding (thousands)
Current month debt…..…..706…………….....…564…….………..….1,270………......….8.9 thousand
30 to 59 days debt….…....…26………………....…18…………………......44……….…..... 4.4
60 to 89 days…………....…...16…………….....….…3…….…..…………...19………....…...2.4
90 up to 180 days……..…...148…………...…...…33……...………….….181......…………57.7
SubTotals…………….….......896……………....….618…………...……..1,514…..…....…..73.4
Not paying…………….....….329………………………….........…………..…329…….....…..376.4 thousand
Court cases………………........9……………………………………….........…..9………......…..2.6
Sub Total bad debts……...338………………………………………...........338……….......379.0
Gran Totals………….....….1234……............…618…….….....………1852….....……..452.4 thousand dollars
Manager Batista goes on to point out that there are 1852 lot owners, of which 638 have built houses, and of the total owners, 1514 are considered as paying their TSM with a certain time-frame delay delinquency, referring to the first part of the TSM paying chart shown. He also cites that there are 338 owners that are classified as very bad accounts and whose debt amounts to more than 379 thousand.
With regard to these bad accounts, he said that the administration has developed a work collection scheme using phone calls, sending e-mail statements and also personal approaches to achieve delinquent debt payment arrangements. He goes on to say that, administrative restrictions are applied to these bad accounts owners, such as not allow visitors to their property and restriction of the Club.
Dr. Moreno, El Guardian:
Has some suggestions to facilitate the collection of delinquent debt sought by the administration.
Troitiño, owner:
Questions other expenses for $106,854.75, pointing out that this expenditure is the greatest of them all, and that the owners have the right to know in detail the composition of this particular expense bundled up. It must be clarified for the audience. The Accountant De La Cruz begins a series of explanations of the different categories that make up this figure, but the audience interrupts him, stating that they will not accept this way of presenting the breakdown and request the Administration to submit the details in writing to owners. The Accountant De La Cruz agrees the request, but continues giving out figures that nobody wants to hear.
More owners requested the microphone to demand that the details must be submitted in an orderly written form and with more clarity, and at this point, the Manager Batista interrupts Accountant De La Cruz, by pointing out that the Administration has all the details and if the owners so wish, they will send it to everybody. The owners agree with what was offered.
Reyna, El Guardian:
Request that the report of present situation of Administration must be specifically shown with more details about each one of the items and that the Administration must review it before sending it to the owners. The Accountant De La Cruz agrees that such a request is within the scope of the administration doings and they will comply by such request.
Adsett Esther, El Torreon:
She refers to the 3 business operating in Los Altos Cerro Azul described by Manager Batista and describes the history of how Club began; pointing out that for some time the administration where charging her $2.00 monthly for the use of the Club, without any approval by the owners. Manager Batista replies by saying that the Club is exclusive property of Altos de Vistamares and in its early days it had an entry membership fee of $900.00 and a monthly maintenance fee of $35.00 for all members admitted, however Vistamares took the decision in 2009 to allow its use to all owners regardless of membership, with the only condition that they should be current with their TSM payments, clarifying that no fee is charged to any owner. He also said that the accounting books of the Club service are available anyone wanting to review this. He also added that the administration is working very and with much effort and warned that if they do not manage the project, then probably the value of the properties would suffer a rapid deterioration.
He added that the majority of foreigners, almost 95% of them, have bought their properties from former lot owners and not from Melo, its mostly Panamanian owners who sold their lots. He ended by saying that soon Vistamares have to leave Cerro Azul, in account of the very few lots left to sell, and that if the management business is not profitable for the Melo Group, they will probably have to leave the management of the project.
Antonio Latorre, La Fortaleza:
Wants to know what is being done with those owners who do not pay their TSM, and also with those owners who are paying less than the current $25.00 TSM maintenance fee, specially including those owners who are speaking out and criticizing issues in these meetings. Manager Batista responds that these owners are restricted from inviting visits to the project, are restricted from using the Club´s facilities and also the administration is prying them for payment arrangements to solve these bad debts. He gave some examples of arrangements with new buyers of lots and/or home with former delinquency in TSM and water. He also noted that the Administration keeps track of these bad accounts and that even if they cannot keep those accounts within their accounting books, according to the law; they make sure to keep external records and continues to make efforts to collect these bad accounts. He gave the figure of $24,691.05 as what has been recovered as of April 8, 2012.
Unidentified owner, El Vigía:
Proposes that the Administration should publish the list of defaulters in local newspapers and asks the Administration to provide more information and transparency in the financial reporting, in addition to providing them with more frequency. Manager Batista tells that has 34 years with the company and that in the past two years, it´s the first time that they are informing the owners with clear accounts, and that for the first time they are introducing the report this way.
Manager Batista also says that he agrees to further clarifying the expenses, especially "other expenses" must be broken down in explicit details, and undertakes the promise to present it in the next meeting, pointing to the Accountant De La Cruz to undertake such commitment for the administration.
Reina, El Guardian:
Requests further clarification on what the negative balance of $63 thousand means in the first report and what does the $85 thousand balance means in the second report. He also points out that he, like the all other owners, have invested and continue investing in Cerro Azul, and do not understand how these bad debts owners can get away with it, and proposes that collection agencies are usually used to help decrease these bad debts ($379 thousand). The Accountant De La Cruz answers that it is possible with the new law of Horizontal Property recently approved this issue of late payments can be taken up and solved. Lic. Publio then intervenes and reinforces what was said by the Accountant, adding that the Home Owners Association must take place, and that they may take into account the matter of arrears debts on the basis of the new law.
Manager Batista adds that Vistamares promptly pays their TSM of all lots which still own.
Dr. Moreno, El guardian 57:
Explains to the Administration that those owners who are today present at this meeting, are the most interested ones ready to solve this problem of bad debts and late payments and proposes as an example; that if the administration offers to those with outstanding bad debts a solution such as the cancellation of part of the debt with a serious commitment to continue paying the current quota; or outsource to a collection agency the total delinquent bad debts (the $379 thousand) for a certain fee, it might work; to publish in local newspapers the list of owners with serious bad debt delinquent accounts, etc.
Terani Simons, El Frente 89:
Thanks the administration for the information provided and request that they should also provide a complete Financial Statement of Account to the owners, in order to know if we have any outstanding debts and also if we owns any assets, based on the following arguments: In the total income accounts there is a "Other income" source for the amount of $39 thousand dollars with the Accountant´s explanation that this income belongs to services rendered by employees of the administration to other Vistamares business in the Cerro Azul area. This issue clearly implies the existence of employees under the Administration, and therefore there must be accounting debts due to them such as accumulated vacation pay, severance notice reserves, social security insurance to be paid, educational tax insurance reserve and other such liabilities. They must also be accounts payable to suppliers for materials needed to carry out the street maintenance, new purchases of equipment and such other account payables; such accounts payable are part of the Liabilities of a Financial Statement of Accounts. With regard to income, we were told that $431 thousand correspond to the annual billing of the TSM fee, and this means that there are accounts receivable from owners who did not pay on time during 2011, and are outstanding collection debts. Such accounts receivable is part of the Assets of the same Financial Statement of Accounts. There must therefore be a status report with assets and liabilities and this exactly what is requested. The Manager Batista made a statement to clarify that the owners do not have any legal responsibility the Administration debts; they are the sole responsibility of administering Los Altos de Cerro Azul. He continues by pointing out that currently existing Home Owners Associations are not working and both owners and administration will have to do something about this.
Esther Adsett, El Torreón:
Tells the audience that there are 7 home owners associations dully registered with the Ministry of Government and other 2 partially registered; all of them with the Grupo Melo as dignitaries, directors and members of the Board of Directors except for one of them. She states that this situation is well known by the administration and being a very sensitive issue to the owners, we all see that it is necessary to clarity this, and is also necessary to find the most appropriate solution; and that as owners, we expect to see how they are going to handle this problem. The Manager Batista intervenes to point out that Grupo Melo could eventually withdraw from the project and points out that both the Administration and the owners should work together to avoid what happened to the administration of other projects such as El Pinar in Cerro Azul and El Gaital in el Valle de Anton. Mrs. Esther clearly points out to the Administration that if they take care in showing their financial statements such as other property administrators in Panama do, with complete details and in a timely manner all reports requested by the owners, there would not be any questioning about continuing as administrators.
Owner, La Fortaleza 42:
Asks whether the Administration uses professional services for the management of their accounts in such a manner that these monthly reports could provide to the owners on a monthly basis along with the water and TSM bills sent every month through e-mail and other means. She also adds that it was a big surprise to find out about the existence of 9 associations and wonders about the contract agreement of the administration with which one of the 9 associations. She repeats her request to receive monthly financial reports of the project.
Manager Batista clearly states that the Administration does not have any difficulty in sending this information on a monthly basis to the owners. As a separate issue, he tells the audience of the developments going on around the 24th of December town down road from Cerro Azul. He also points out that the Melo Group owns 8 thousand hectares, several processing plants, e hydroelectric stations and even some of their Board of Directors have houses in Cerro Azul, this being an indication that Melo Group has roots in the area and will probably endure much more in this area, in addition to striving to maintain these values at their most. (authors insert “This statement definitely contradicts former ones about abandoning the project)
Finally, Manager Batista asks the Lic.Publio to explain about the Home Owners Associations and why aren't they working, recalling that in previous meetings on the ANAM´s Manual, they had specifically indicated that as soon as they were done with those issues, they would be addressing the Home Owners Associations.
Iris De Simons, El Frente 89:
Ask why they are bypassing the Agenda, as there are several sub-points still pending before reaching the issue of the associations. The Manager Batista Manager answers that the order of the topics is decided by the owners, but that he would like it to enter the issue of the associations in view that we are talking about the same issue, and then turns over the microphone to Lic. Publio
Lic.Publio starts accounting step-by-step how the associations began as the different urbanizations where being built, initially fully owned by the Melo Group and that explains the Board of Directors. He also noted that a couple of years ago, the Administration was in the hands of the owners, but was recovered by the Melo Grupo on account of poor handling. At this date, he said, the associations do not currently work and they should be properly transferred to the owners pursuant to which Grupo Melo is no longer the greater project owner; the owners are.
Lic.Publio adds that to dissolve the current associations, 95% of the owners vote is needed and that the management is unable to do that; so he proposes that owners are the ones who must dissolve the old associations and also create the new overall association needed to comply with the coming law. As for the administration, they will continue to manage up to where they are allowed.
Lic.Publio also refers that the Melo Group owns more than 10 thousand hectareas, of which 8 hectareas lie within the Chagres National Park cataloged under the absolute protection scheme; which means that nothing can be touched and this means that there will be no more building going on.
Lic.Publio proposes that the owners of the different urbanization must meet to change the current board of directors and that the new President elected (legal representative) of every one of the nine 9 associations, should be them be the representative member of a new overall association, in such a way that each urbanization will be have a representation in the new partnership. This is a task that has to be done by the owners and adds that this cost will have to be paid the owners themselves.
Terani Simons, El Frente 89:
Says to the audience an initial difficulty for the owners to proceed to change the Board of Directors of the associations, and what makes it more difficult is that for the owner to convoke a general assembly, a signed petition of not less than 30% of the owners is required by the current By-Laws of the associations. On the other hand, article 50 empowers the administrator to recommend to the Board, the convening of the general Assembly. Being said the former, he request that the administration proceed to notify the current Board and conveying the general assembly of all of the 9 associations. Lic.Publio points out that the Administration could actually do so, however they will be required to incur in expenses to perform this task. Nevertheless, they indicated that they are willing to cooperate in everything, but they cannot do everything and would have to look for alternatives to meetings, to approvals for subsequent notarial records, etc.
Mr. Simons adds to the request must indicate in the summons the hour of the meeting and if the necessary quorum is not meet at that time, the second meeting should be credited an hour later in accordance with the indications referred to in article 28 of the current associations By-Laws, stating that the required quorum will be met with the present owners at that second meeting.
Esther Adsett, El Torreón:
Clarifies that we all agree with what Mr. Simons said, as the Administration has the power to cite everyone, in as much as they have the necessary information on the owners, used to send billing invoices of water and TSM accounts monthly. Manager Batista answers that for the Administration that does not represent any problem, and they will gladly do the convening calls; however he considers that it should be more convenient to have the meetings in downtown Panama, in account of the large number of owners living in the city. Nevertheless, is a matter for the audience to choose where the meetings will take place?
Lic.Publio concludes that the Administration will make the calls, but the success of the meetings will exclusively depend on assistance from the owners.
Unidentified owner, El Torreón 24:
Expresses his concerned that it might be difficult to convene so many owners, then convince them of the need to form the Association, least to vote on topics such as policy change, creation of a new association, etc. He questions what guarantees there will be able to reach agreement on any point at that meeting; and in addition, he sees difficulty as many boards of directors in the different associations try to agree to a single representative in a single Association.
Lic.Publio clarifies that the meetings to be convened by the Administration, will be to change the current board of directors and also to establish specific functions to form the new Association, and he points out this, because Vistamares is thinking of pulling out from the project and he clarifies that the owners should to meet to define the future of the associations.
Dr.Moreno, El Guardian:
Says that it is desirable that these meetings convened by the Administration, will choose representatives from each association and then these representatives meet accordingly to set up the new association. He proposes that they choose here and now the liaison representatives in order to coordinate the tasks that will come with the future meetings & decisions on associations issues. Manager Batista clarifies that the Melo Group has three separate businesses with three separate accounting here in Cerro Azul, and that while the currents associations are not modified, the company will maintain its commitment to continue managing the project and also won't do anything to create any situation that might endanger the project.
Unidentified Owner:
Suggests that a list of those presently attending this meeting must be compiled because these are the owners who are most interested in solving these problems, and also, the Administration should provide a of all owners listed according to the urbanization where their property is located, in order to help to notify all of them about the conveying that the administration will be doing. Lic. Publio indicates that it is a very good idea. She continuous saying that Administration should establish networks and also use more technology to inform all owners, such as forums, Facebook, Twitter, etc.
Different named Antonio, El Castillo 139:
Gave all of us vision of his life project, and how wonderful it is to live in Los Altos de Cerro Azul, and begs to do everything possible thing to keep it as it is.
Antonio Latorre:
Points out that He has always being concerned to meet and know who are his neighbors, taking notes of their phones, lots and even signed affidavit to represent them at these meetings, in such a way that He then goes to inform them about the topics covered by the Administration in these meetings.
Dr. Moreno, El Guardian:
Insists again that we should proceed to choose or designate owners that will serve as a liaison with other owners of the same urbanization.
Steve Luce, El Fortín:
Begins by saying that he is a member of PACAR, pointing out to the room we now have a forum with e-mail where owners who register, can get to see several types of documents, some officials and some private, concerning the project, get information on outstanding activities taking place in Cerro Azul, and even get hold of the climate readings. This forum is completely free and voluntary and members of PACAR have made available to all users of the Forum, several official documents of the Government that relate with Altos de Cerro Azul. With regard to what was proposed by the Administration, insofar as that the owners are the ones who must solve the problem of associations, he points out that the real problem is an information dilemma, and if the administrations could share information of the owners mails with PACAR e-mails list. Also if the administration could provide the documents relevant to El Fortín, and any other documents concerning El Torreón, then PACAR could publish these documents just as PACAR published the other Associations documents, along with the assembly meeting dates on a regular repeating process to remind all users to attend those fore coming meetings. Eng. Naar replied that the administration e-mails can be shared and that they will try to provide him with the documents of these two associations for publishing in the forum.
Lic.Publio indicated to the audience that the Administration will prepare a timetable for the meetings of associations and possibly schedule two meetings per day, one in the morning and another in the afternoon; but that these calls will possibly begin within 2 months from now.
Dr. Moreno, El Guardian:
Insists with the choosing of liaison representatives for spreading the word among non-assisting owners, in order to help with the coming general assembly meetings. Lic.Publio suggests that at the end of the meeting, the owners of each urbanization could meet, and among them choose the liaison representative.
Terani Simons, El Frente 89:
Explains to the participants that one of the concerns of PACAR is the possibility that we would have pay a fine with surcharges for not having registered with the Ministry of Housing (MIVIOT) in accordance with the provisions contained in the new law of Horizontal Property Law no. 31 of June 18, 2010. This law is currently being regulated for paragraphs 3 and 6 of article 2 that incorporates private closed estates within the scope of the law. He states that this law requires that both the promoter of the project and the owners, will have to pay a rate of 0.25% (a quarter of one per cent) of the value of the property at the time of registration, and not to do so in a timely manner, will generate a surcharge of 10% and a fine of 1% per delinquent month.
He therefore requests from the Administration to help us with the associations as quickly as possible, so that we do may not have to late when the regulation of that article is finished.
Unidentified Owner:
Request more information on some details of the PACAR´s Forum, such as privacy, registration, use and others issues.
Esther Adsett, El Torreón:
Answering the last person´s question, recounts that it is more than one year ago that heterogeneous group of owners got together, concerned about the Manual de Propietarios that was being pushed forward without Cerro Azul owners knowledge, decided to create a group devoted to investigating all legal aspects concerning this project. With the amount of information found, the group them decided to share it with all owners through the internet; and so were born the PACAR group and the Forum. In addition to this, PACAR decided to organize a series of lectures concerning Cerro Azul ambient, such information on birds of the area, how to buy, plant and care of orchids plants, snakes and scorpions that live amongst us, and an informative chats about the Chagres National Park. This forum is entirely voluntary and all who register can access it, read the documents available, make comments on any issues posted, share and even propose topics and situations that may affect the area.
Steve Luce, El Fortín:
Just to clarify the record with the Forum, anybody who wants to join the Forum, have only have to give their email, lot number and urbanization to gain access to the Forum on the internet.
Unidentified owner:
Expresses his concern about taxes that could the Government might charge with the new law just mentioned by Mr. Simons. Lic.Publio makes it clear the incorporation of the project into the new law is in the hands of the owners, as well as the setting of the TSM, and that these are issues are the ones that should be discussed in the new Association of Home Owners. To do so, He continues to say, that the Administration shall convene the owners accordingly by urbanization, but it must be precisely the owners will have to take the initiative.
Esther Adsett, El Torreón:
Asks the Administration to clarify whether it is going to provide the details requested earlier by Mr. Steve Luce and when will they do so. She also says that it is the sole responsibility of the promoter of the project to create the corresponding association to be turned over to the owners. Also it must also be their responsibility to register the other two associations also to be turned over to owners. Lic. Publio points out that what is needed it to register one of these missing two associations at the Ministry of Government and Justice.
However, regarding the other missing association, this will require a neighborhood meeting of owners to create the associations, and that spending must be paid by those owners. He emphasizes that the Melo Group can’t register this missing association. Because it is no longer the sole owner as occurred at the beginning of the project.
Lic.Publio goes on to say that will they will propose a timetable for convening the different associations, and that Melo Group will appoint a temporary Board of Directors (ad-hoc) to preside those meetings, where the new Board must be elected, appoint representatives representatives and set criteria for the new single associations to be created. According to Lic.Publio, this process will be long and complicated, but the owners should be aware that they will have the support of the administration.
Unidentified Owner:
Points out that there must be a neighborhood commission (per urbanization) to carry out the required changes and proposes that each association renew the existing directive and names representatives to a new single Association. Lic.Publio explains that the current board of directors is composed from Melo´s group, and it is required to be changed in these coming meetings, and suggests to the participants that they must meet according to the associations to which their urbanization belongs and to choose the owners that will serve as a liaison to carry out these tasks. Dr. Moreno, El Guardían endorsed this suggestion and made clear some additional details.
Ana Inés Lechat, El Frente:
States that as she understands it, that we are bound by the new Law 31 to form a single Association on account of having a single private entrance to the project, and also a security boom. Lic.Publio and Mr. Simons agree. This ends questions & comments on the subject of the Associations.
Administration now passes the floor to Eng. Naar with instructions to issue the coming increase of the TSM.
Eng. Naar:
Explains to audience that the Administration faces a problem of costs increases in management, and to support their points, presents a view on the screen listing several of the increases experienced accordingly, such as minimum wages, fuel, asphalt, garbage services and others. Based on these increases already being paid by the Administration, he proposes an increase of $10.00 of the TSM fee, in such a way that it will amount to $35.00 monthly.
Esther Adsett, El Torreón:
She remembers the Administration that before we talk of increasing the rate of the TSM, we must receive all the issues that the administration has promised during this meeting, such as detailed financial statements, owners e-mails for mailing information, missing associations documents and a prompt schedule of convening calls for the associations meetings, as well as meet other things here committed to deliver. This is going to delay the entry into force of this proposed increase.
Reyma El Guardian:
Points out that this amount represents an increase of 40 per cent of the current TSM fee.
Unidentified Owner:
States that is a bit confusing this increase request regarding the accounting surplus of $85 thousand pointed out by the administration at the beginning of this meeting, and wants to know that it means having a surplus and then call for a TSM increase. The Accountant De La Cruz answers that that $85 thousand surplus only represents the money deposited in the bank at the end of year 2011, and that they were still outstanding accrued accounting chart showed that the deficit was $63 thousand for that year.
Terani Simons, El Frente 89:
Points out to the Administration that among those presently attending, there are many who are business owners and are aware of these factors, so the audience can truly understand the grounds on which requesting this increase of the TSM is justified. However, I would like to ask that while the administration wants the owners to accept this increase, then the Administration must commit itself to comply with the following task as where discuss formerly in this meeting, such as:
First: meet to deliver date of the detailed financial statements requested by the owners, i.e. assets and liabilities, income and expenses, with the requested details.
Second: seriously help in solving the current associations dilemma, and
Third: Submit to the owners an aggressive plan for the recovery of bad debts.
Quid pro Quo!
On this last theme, Mr. Simons said that he was concerned with what will happen when with this TSM increase, more owners will not accept it and proceed to stop paying this fee, or fall back to paying their contract stated fee of $5.00, $8.00, or $10.00 TSM. If this situation is not resolved, he fears that we all will fall into a vicious circle of future TSM increases linked to higher rates of delinquent bad debts.
Mr. Simons proposes to increase the pressure on the defaulters, such which as managers of condominiums in the city of Panama do, such as. identify bad debts owners names in local newspapers, publish a list of defaulters in the main gate, sue mayor bad debt owners, offer discount for settling outstanding bad debts and negotiate with a collecting agency the $376 thousand deb. This must be a serious and permanent commitment of the Administration and not resign itself to only keeping records of these debts, and also the administration must act firmly with these TSM delinquent owners.
On an another issue, Mr. Simons calls on the Administration to stop allowing the building of shack wood and zinc house in the project, as shanty quarters, given that currently they are two existing shanty houses in Los Altos de Cerro Azul and administration knows about this problem. He is also concerned about issues as when other lot owners divide their property and proceed to sell part of it to former gardeners or house keeper (there are more than 40 families of house keepers in Cerro Azul). This situation violates article 3.1 of the Manual del Propietarios, and this practice should be stopped by the administration.
Mr. Simons ends his intervention saying that he is also concerned about several business functioning in Cerro Azul which are expressly prohibited in the Manual de Propietarios, such as commercial, industrial, religious, or similar as stated in article 3.1, including some of these businesses that do not pay taxes. This is especially disturbing to all of us owners with business that must pay taxes to the Government. However, we would like to point out that those businesses installed before the approval or the Manual of Propietarios, have the right to keep operating, yet they must please comply with paying their taxes. If any person establishes himself in any one of these countries of these established owners, surely this person would have to pay that country business taxes. The same goes for our country. So please comply with this.
Lic.Publio
States that no owner can divide his lot and that if this has happened, then it must be denounced both to the Administration and the ANAM for proper attention.
Fadul, El Guardian:
Questions why can’t the Administration buy the land lots of those owners who abandon their lots, or those who have not paid never neither water nor TSM since purchasing their lots.
Reina, El Guardian:
Questions why the Administration cannot be stronger with these cases mentioned by Mr. Simons (lack of cleaning, division of lots, shanty houses, garbage burning, etc.)
Antonio Latorre:
Shares some history about what the Administration has done in the past, and what more should be done for the conservation of the project. Lic. Publio answers to these last comments by pointing out that the Administration will be much more attentive to these situations set forth by the owners.
Trutte, El Torreón:
Requests why the administration has not cleaned the waterways of the street near her residence and also those adjacent to it on both sides. She also presents her case of the TSM that she is paying, on account of having sold part of her second lot, is still obliged to pay the TSM for both lots. The Manager Batista answers that he is surprised of how this meeting has developed in a such a respectful way, and for the first time since these meeting have taken place, that he is totally surprised, However with respect of Ms. Trutte personal problems, these should not be brought to these meetings, they need to be dealt personally with the administrator of the project.
The Manager Batista recognizes than never before there has been so much interest shown as this audience has, and as this has caught his attention, He dares to ask the present owners that we work together for solutions to these problems; suggesting that we must organize ourselves to put order in the area. He mentions that there is a very organized group here in Cerro Azul that acts in favor of the project and that also has done some interested things in Los Altos de Cerro Azul, and that He welcomes that, however the law prevents him from talking to only one group of owners, which is why the Administration believes in talking and meeting with all of the owners. He continues answering the repurchase of abandoned lots asked by Mr. Fadul and explains that it is a very difficult task and that the Administration does not have much interest in pursuing this task, adding that a society with a foreign Realtor is about to exploit these tasks with other land projects which the Melo Group has in Panama. The company is called United Country.
Fadul, El Guardian:
Ask the Administration when they will begin charging the new TSM. Manager Batista tells that this is a point of discussion with the current participants in this meeting. Mr. Fadul replies saying that failure to resolve the issue of the delinquencies will just continue to become even more serious.
Esther Adsett, El Torreón:
Explains to the Administration that in her purchase contract wording, is written that her TSM is $10.00 per month, yet they pay the current fee of $25.00 per month; however there are many owners who do not pay the current rate, claiming that their contracts specify another amount and it says nothing about subsequent increases and she asks, what will be done about this issue with the new increase? Lic.Publio answers that the new associations must deal with this issue, as many owners are not aware of this situation and adhere to paying the amount stated in their contract, insisting with their $3.00, $5.00 or $10.00 monthly payments, the administration must resolve all existing problems and even pave repaired streets.
Unidentified Owner:
States her opinion to the audience, saying that we who pay the current TSM monthly $25.00 are the stupid owners, and those that do not pay, or pay less conceive themselves as the “smart” owners. She asks what the administration will do about this.
Iris de Simons, El Frente 89:
States that the new law deals with this problem, setting fines and legal actions for the administration to act upon, and also that if by the time frame of the legal inception of our association, our By-Laws are out of sync with those stated in the new Law, then our will be outlawed and we will have to abide by what the new Law sets down for the Home Owners Associations By-Laws.
Having no further saying on the subjects, Lic. Publio declared the end of the meeting.
The original audio recording of the meeting was provided by Mr.Leslie Liuerance
Transcription Summary of the meeting on Saturday, 21 April 2012
Attendants from the Administration: Domingo Batista Vistamares Manager, Engineer Naar, Lic. Publio De Gracia (Lawyer) from Grupo Melo and Accountant Victor De La Cruz, Manager of Finance.
Meeting began at 10: 10 am in the Club of Los Altos de Cerro Azul with the following Agenda:
1. Report on the approval of the Manual de Propietarios
2. Current situation of the Administration
a. Report on Income and Expenses in 2011
b. Report o Income and Expenses of the 1st. quarter of 2012
c. Operational Budget for 2012
d. Report on Delinquent fees action plan for 2012
3. TSM increase
4. Various topics
Lic. Publio recalled that the ANAM´s Manual de Propietarios (Owner's Manual) that was previously presented by the Administration for review at the Club in two previous sessions, was duly approved by the ANAM and published in the Gazeta Oficial no. 26986 of the 8th of March 2012. He also told the participants of the meeting that anyone who wishes to make comments or ask questions during the outcome of this meeting will be monitored to facilitate a well conducted meeting.
Naomi Farinoni:
Requested all participants to conduct themselves with a peaceful and respectful dialogue, and to have the patience and behavior to listen to what everyone says and contribute to the meeting, and to please not fall into conflict, as has been the case in previous meetings.
Owner 42 Fortaleza:
Requests to be informed on if there have been any substantial changes from previous versions of the Manual.
Lic. Publio explains that the main issue proposed by the ANAM consists primarily in regulating authorizations or permits to cut trees, to perform road end entry land movements and also to regulate the type of housing that are to be built in Los Altos de Cerro Azul. He also notes that both the Administration and the ANAM will be available to address questions on the implementation of this manual.
Bill Adsett, El Torreón 142:
Expresses his concerns with the implementation of some of the provisions of the Manual, for example, referring to the approval of new house designs and also on reporting abuses that may be committed by owners, gardeners or workers. He points out that reporting these abuses can be a problem regarding who is to be notified, the administration or the ANAM. Lic. Publio answers that ANAM is currently investigating and mediating complaints that were reported, and that any new complaints or allegations that has to do further violations of the Manual, should be channeled through the offices of the Administrator, however, it´s required to submit them directly to ANAM.
Iris De Simons, El Frente 89:
Insists that complaints should be made known to the Administration on account that it responds directly to the owners, independently of the fact that it should also be presented to ANAM; and especially because the Administration is close to the area to witness the alleged fact. Lic. Publio agrees with this comment.
Fadul, El Guardian:
Is of the opinion that Administration´s employee are very often the eyewitnesses of abuses and/or violations of the Manual, either by owners, gardeners or worker in the area, and that they must be oriented so that they may also report to the administration of these abuses and violations. Lic. Publio also nods in agreement, and for the purpose and for that purpose he points out that Mr. Saavedra, Chief of aqueducts, is temporarily in charge of the of the administration´s office, and that these complaints may channel through him. Lic. Publio then announces that the subject of Manual has been fully addressed and introduces Lic. Victor De La Cruz, Accountant Finance Manager of Vistamares, who will be addressing item no. 2 entitled "Current situation of the Administration."
Accountant De La Cruz presents the Income and Expense Report for year 2011 as follows:
Administering the Altos de Cerro Azul, S.A. - details of Income and Expenses – as of December 2010
(Deferral accounting or accrued accounting)
Surplus (Loss) as of and up to December 31, 2010 ……………………… (63,196.34)
Income year 2011Income by TSM above-mentioned..…………………. 431,443.83
Other IPA income. Int. ………………..…………………………...…....……….. 39,406.08
Total of income …………….……………………………………….……….......... 407,653.57
Costs of operations:
Entry/security control services ………………………………………………...... 86,088.53
Administration/office expenses fixed …………………………………..…….. 66,582.27
Maintenance and repair of machinery………………………………………..... 86,355.72
Costs of cleaning, gardening and ornamental ornament/payroll…….. 73,370.42
Costs of vehicles and machinery ……………………………….……………..... 46,625.04
Expenditure taxes............................................…………………... 440.00
Bank charges …………………………………………………..……………..........…… 4,825.87
Other expenses ………………………..……………………………………........... 106,854.75
Total expenditure operations …………………..………………….………....… 471,142.60
Surplus (Loss) operational….…………………….........……………………….. (63,489.03)
Accountant De La Cruz explains that this is a report of invoiced revenues with paid and recognized expenses to be paid, reported in the accrued accounting method as required to be submitted to the Government. This type of report shows the annual accumulated result in books with a loss of $63 thousand for year 2011. It does not correspond to what was actually collected during the year 2011, since more was collected than what appears in this report, it must be understood that part of the collected TSM belonged to the 2010 accounting period and other parts belonged to 2011. He explained that owners do not pay their accounts on time. Many paid with one or two months behind, while others paid with 3 to 6 months behind, and even some paid in full advance; so if someone is paying in January with a delay of 3 months, that payment most likely corresponds to the previous accounting year.
The next report reflects cash flow income & expenses, and this flow shows a surplus of $85 thousand, which was currently deposited in the Bank. This report reflects the actual collected TSM during 2011, and also cash expenditure that where actually paid out during the fiscal year. The report begins with a surplus balance of $11 thousand of the previous year 2010.
Administering the Altos de Cerro Azul - inflows and outflows – as of and up to the month of December 2010
(Flow of cash or cash flow, cash flow)
Opening balance ………………………………. ……………………. 11,795.61
Income collected…..…………………………………………………. 530,986.13
Available Balance…………………………………………………….. 542,781.74
Expenses paid:
Account paid …………………..……………………………………… 318,333,52
Cash payments ……………………………………………………….. 139,446.02
Total Expenses paid ……………………………………………….. 457,779.54
Ending Balance (Bank balance)………………………….….…… 85,002.20
Troitiño:
Would like to know what amount was really collected during 2011 and how much was really spent of the amount collected. The Accountant De La Cruz answers that during 2011 the TSM amount collected was $516 thousand, and that represents the cash income. He also points out that this last report has the total amount that was paid out during 2011, and reflects a surplus of $85 thousand in the cash flow, and that this is the amount that was in the bank account at the end of year 2011. Answering the question concerning the other income for $39 thousand in the accrued accounting report, he responds that it is an income received for services performed by the Administration´s employees to the other Melo´s Group activities in the area..
Steve Luce, El Fortin 122:
Wants to know why the Club expenses are not included in the financial reports presented. The Accountant De La Cruz explains that the monthly membership was dropped two or three year ago, and all owners that are currently non delinquent with their TSM dues, are free to use the Club installations.
Manager Batista, Vistamares:
Explains that Vistamares has 3 businesses in Cerro Azul, which are the land selling operation (lotificadora), the water and aqueduct service and the Club. Each business has its own accounting books carried separately. He adds that what we are looking at now, is income and expenses of the administration of the project. He also adds that they are making an enormous effort to collect the high delinquency rate of TSM bad debts, which belongs to a group of owners who do not pay their TSM, or pay less than the current TSM.
Bill Adsett, El Torreón:
Ask for a more detailed and extended information of the breakdown of the TSM payments by the owners. Manager Batista presents the following chart of TSM payments accordingly
Delinquency TSM….. empty lots only…. lots with houses…Total owners…….Debt outstanding (thousands)
Current month debt…..…..706…………….....…564…….………..….1,270………......….8.9 thousand
30 to 59 days debt….…....…26………………....…18…………………......44……….…..... 4.4
60 to 89 days…………....…...16…………….....….…3…….…..…………...19………....…...2.4
90 up to 180 days……..…...148…………...…...…33……...………….….181......…………57.7
SubTotals…………….….......896……………....….618…………...……..1,514…..…....…..73.4
Not paying…………….....….329………………………….........…………..…329…….....…..376.4 thousand
Court cases………………........9……………………………………….........…..9………......…..2.6
Sub Total bad debts……...338………………………………………...........338……….......379.0
Gran Totals………….....….1234……............…618…….….....………1852….....……..452.4 thousand dollars
Manager Batista goes on to point out that there are 1852 lot owners, of which 638 have built houses, and of the total owners, 1514 are considered as paying their TSM with a certain time-frame delay delinquency, referring to the first part of the TSM paying chart shown. He also cites that there are 338 owners that are classified as very bad accounts and whose debt amounts to more than 379 thousand.
With regard to these bad accounts, he said that the administration has developed a work collection scheme using phone calls, sending e-mail statements and also personal approaches to achieve delinquent debt payment arrangements. He goes on to say that, administrative restrictions are applied to these bad accounts owners, such as not allow visitors to their property and restriction of the Club.
Dr. Moreno, El Guardian:
Has some suggestions to facilitate the collection of delinquent debt sought by the administration.
Troitiño, owner:
Questions other expenses for $106,854.75, pointing out that this expenditure is the greatest of them all, and that the owners have the right to know in detail the composition of this particular expense bundled up. It must be clarified for the audience. The Accountant De La Cruz begins a series of explanations of the different categories that make up this figure, but the audience interrupts him, stating that they will not accept this way of presenting the breakdown and request the Administration to submit the details in writing to owners. The Accountant De La Cruz agrees the request, but continues giving out figures that nobody wants to hear.
More owners requested the microphone to demand that the details must be submitted in an orderly written form and with more clarity, and at this point, the Manager Batista interrupts Accountant De La Cruz, by pointing out that the Administration has all the details and if the owners so wish, they will send it to everybody. The owners agree with what was offered.
Reyna, El Guardian:
Request that the report of present situation of Administration must be specifically shown with more details about each one of the items and that the Administration must review it before sending it to the owners. The Accountant De La Cruz agrees that such a request is within the scope of the administration doings and they will comply by such request.
Adsett Esther, El Torreon:
She refers to the 3 business operating in Los Altos Cerro Azul described by Manager Batista and describes the history of how Club began; pointing out that for some time the administration where charging her $2.00 monthly for the use of the Club, without any approval by the owners. Manager Batista replies by saying that the Club is exclusive property of Altos de Vistamares and in its early days it had an entry membership fee of $900.00 and a monthly maintenance fee of $35.00 for all members admitted, however Vistamares took the decision in 2009 to allow its use to all owners regardless of membership, with the only condition that they should be current with their TSM payments, clarifying that no fee is charged to any owner. He also said that the accounting books of the Club service are available anyone wanting to review this. He also added that the administration is working very and with much effort and warned that if they do not manage the project, then probably the value of the properties would suffer a rapid deterioration.
He added that the majority of foreigners, almost 95% of them, have bought their properties from former lot owners and not from Melo, its mostly Panamanian owners who sold their lots. He ended by saying that soon Vistamares have to leave Cerro Azul, in account of the very few lots left to sell, and that if the management business is not profitable for the Melo Group, they will probably have to leave the management of the project.
Antonio Latorre, La Fortaleza:
Wants to know what is being done with those owners who do not pay their TSM, and also with those owners who are paying less than the current $25.00 TSM maintenance fee, specially including those owners who are speaking out and criticizing issues in these meetings. Manager Batista responds that these owners are restricted from inviting visits to the project, are restricted from using the Club´s facilities and also the administration is prying them for payment arrangements to solve these bad debts. He gave some examples of arrangements with new buyers of lots and/or home with former delinquency in TSM and water. He also noted that the Administration keeps track of these bad accounts and that even if they cannot keep those accounts within their accounting books, according to the law; they make sure to keep external records and continues to make efforts to collect these bad accounts. He gave the figure of $24,691.05 as what has been recovered as of April 8, 2012.
Unidentified owner, El Vigía:
Proposes that the Administration should publish the list of defaulters in local newspapers and asks the Administration to provide more information and transparency in the financial reporting, in addition to providing them with more frequency. Manager Batista tells that has 34 years with the company and that in the past two years, it´s the first time that they are informing the owners with clear accounts, and that for the first time they are introducing the report this way.
Manager Batista also says that he agrees to further clarifying the expenses, especially "other expenses" must be broken down in explicit details, and undertakes the promise to present it in the next meeting, pointing to the Accountant De La Cruz to undertake such commitment for the administration.
Reina, El Guardian:
Requests further clarification on what the negative balance of $63 thousand means in the first report and what does the $85 thousand balance means in the second report. He also points out that he, like the all other owners, have invested and continue investing in Cerro Azul, and do not understand how these bad debts owners can get away with it, and proposes that collection agencies are usually used to help decrease these bad debts ($379 thousand). The Accountant De La Cruz answers that it is possible with the new law of Horizontal Property recently approved this issue of late payments can be taken up and solved. Lic. Publio then intervenes and reinforces what was said by the Accountant, adding that the Home Owners Association must take place, and that they may take into account the matter of arrears debts on the basis of the new law.
Manager Batista adds that Vistamares promptly pays their TSM of all lots which still own.
Dr. Moreno, El guardian 57:
Explains to the Administration that those owners who are today present at this meeting, are the most interested ones ready to solve this problem of bad debts and late payments and proposes as an example; that if the administration offers to those with outstanding bad debts a solution such as the cancellation of part of the debt with a serious commitment to continue paying the current quota; or outsource to a collection agency the total delinquent bad debts (the $379 thousand) for a certain fee, it might work; to publish in local newspapers the list of owners with serious bad debt delinquent accounts, etc.
Terani Simons, El Frente 89:
Thanks the administration for the information provided and request that they should also provide a complete Financial Statement of Account to the owners, in order to know if we have any outstanding debts and also if we owns any assets, based on the following arguments: In the total income accounts there is a "Other income" source for the amount of $39 thousand dollars with the Accountant´s explanation that this income belongs to services rendered by employees of the administration to other Vistamares business in the Cerro Azul area. This issue clearly implies the existence of employees under the Administration, and therefore there must be accounting debts due to them such as accumulated vacation pay, severance notice reserves, social security insurance to be paid, educational tax insurance reserve and other such liabilities. They must also be accounts payable to suppliers for materials needed to carry out the street maintenance, new purchases of equipment and such other account payables; such accounts payable are part of the Liabilities of a Financial Statement of Accounts. With regard to income, we were told that $431 thousand correspond to the annual billing of the TSM fee, and this means that there are accounts receivable from owners who did not pay on time during 2011, and are outstanding collection debts. Such accounts receivable is part of the Assets of the same Financial Statement of Accounts. There must therefore be a status report with assets and liabilities and this exactly what is requested. The Manager Batista made a statement to clarify that the owners do not have any legal responsibility the Administration debts; they are the sole responsibility of administering Los Altos de Cerro Azul. He continues by pointing out that currently existing Home Owners Associations are not working and both owners and administration will have to do something about this.
Esther Adsett, El Torreón:
Tells the audience that there are 7 home owners associations dully registered with the Ministry of Government and other 2 partially registered; all of them with the Grupo Melo as dignitaries, directors and members of the Board of Directors except for one of them. She states that this situation is well known by the administration and being a very sensitive issue to the owners, we all see that it is necessary to clarity this, and is also necessary to find the most appropriate solution; and that as owners, we expect to see how they are going to handle this problem. The Manager Batista intervenes to point out that Grupo Melo could eventually withdraw from the project and points out that both the Administration and the owners should work together to avoid what happened to the administration of other projects such as El Pinar in Cerro Azul and El Gaital in el Valle de Anton. Mrs. Esther clearly points out to the Administration that if they take care in showing their financial statements such as other property administrators in Panama do, with complete details and in a timely manner all reports requested by the owners, there would not be any questioning about continuing as administrators.
Owner, La Fortaleza 42:
Asks whether the Administration uses professional services for the management of their accounts in such a manner that these monthly reports could provide to the owners on a monthly basis along with the water and TSM bills sent every month through e-mail and other means. She also adds that it was a big surprise to find out about the existence of 9 associations and wonders about the contract agreement of the administration with which one of the 9 associations. She repeats her request to receive monthly financial reports of the project.
Manager Batista clearly states that the Administration does not have any difficulty in sending this information on a monthly basis to the owners. As a separate issue, he tells the audience of the developments going on around the 24th of December town down road from Cerro Azul. He also points out that the Melo Group owns 8 thousand hectares, several processing plants, e hydroelectric stations and even some of their Board of Directors have houses in Cerro Azul, this being an indication that Melo Group has roots in the area and will probably endure much more in this area, in addition to striving to maintain these values at their most. (authors insert “This statement definitely contradicts former ones about abandoning the project)
Finally, Manager Batista asks the Lic.Publio to explain about the Home Owners Associations and why aren't they working, recalling that in previous meetings on the ANAM´s Manual, they had specifically indicated that as soon as they were done with those issues, they would be addressing the Home Owners Associations.
Iris De Simons, El Frente 89:
Ask why they are bypassing the Agenda, as there are several sub-points still pending before reaching the issue of the associations. The Manager Batista Manager answers that the order of the topics is decided by the owners, but that he would like it to enter the issue of the associations in view that we are talking about the same issue, and then turns over the microphone to Lic. Publio
Lic.Publio starts accounting step-by-step how the associations began as the different urbanizations where being built, initially fully owned by the Melo Group and that explains the Board of Directors. He also noted that a couple of years ago, the Administration was in the hands of the owners, but was recovered by the Melo Grupo on account of poor handling. At this date, he said, the associations do not currently work and they should be properly transferred to the owners pursuant to which Grupo Melo is no longer the greater project owner; the owners are.
Lic.Publio adds that to dissolve the current associations, 95% of the owners vote is needed and that the management is unable to do that; so he proposes that owners are the ones who must dissolve the old associations and also create the new overall association needed to comply with the coming law. As for the administration, they will continue to manage up to where they are allowed.
Lic.Publio also refers that the Melo Group owns more than 10 thousand hectareas, of which 8 hectareas lie within the Chagres National Park cataloged under the absolute protection scheme; which means that nothing can be touched and this means that there will be no more building going on.
Lic.Publio proposes that the owners of the different urbanization must meet to change the current board of directors and that the new President elected (legal representative) of every one of the nine 9 associations, should be them be the representative member of a new overall association, in such a way that each urbanization will be have a representation in the new partnership. This is a task that has to be done by the owners and adds that this cost will have to be paid the owners themselves.
Terani Simons, El Frente 89:
Says to the audience an initial difficulty for the owners to proceed to change the Board of Directors of the associations, and what makes it more difficult is that for the owner to convoke a general assembly, a signed petition of not less than 30% of the owners is required by the current By-Laws of the associations. On the other hand, article 50 empowers the administrator to recommend to the Board, the convening of the general Assembly. Being said the former, he request that the administration proceed to notify the current Board and conveying the general assembly of all of the 9 associations. Lic.Publio points out that the Administration could actually do so, however they will be required to incur in expenses to perform this task. Nevertheless, they indicated that they are willing to cooperate in everything, but they cannot do everything and would have to look for alternatives to meetings, to approvals for subsequent notarial records, etc.
Mr. Simons adds to the request must indicate in the summons the hour of the meeting and if the necessary quorum is not meet at that time, the second meeting should be credited an hour later in accordance with the indications referred to in article 28 of the current associations By-Laws, stating that the required quorum will be met with the present owners at that second meeting.
Esther Adsett, El Torreón:
Clarifies that we all agree with what Mr. Simons said, as the Administration has the power to cite everyone, in as much as they have the necessary information on the owners, used to send billing invoices of water and TSM accounts monthly. Manager Batista answers that for the Administration that does not represent any problem, and they will gladly do the convening calls; however he considers that it should be more convenient to have the meetings in downtown Panama, in account of the large number of owners living in the city. Nevertheless, is a matter for the audience to choose where the meetings will take place?
Lic.Publio concludes that the Administration will make the calls, but the success of the meetings will exclusively depend on assistance from the owners.
Unidentified owner, El Torreón 24:
Expresses his concerned that it might be difficult to convene so many owners, then convince them of the need to form the Association, least to vote on topics such as policy change, creation of a new association, etc. He questions what guarantees there will be able to reach agreement on any point at that meeting; and in addition, he sees difficulty as many boards of directors in the different associations try to agree to a single representative in a single Association.
Lic.Publio clarifies that the meetings to be convened by the Administration, will be to change the current board of directors and also to establish specific functions to form the new Association, and he points out this, because Vistamares is thinking of pulling out from the project and he clarifies that the owners should to meet to define the future of the associations.
Dr.Moreno, El Guardian:
Says that it is desirable that these meetings convened by the Administration, will choose representatives from each association and then these representatives meet accordingly to set up the new association. He proposes that they choose here and now the liaison representatives in order to coordinate the tasks that will come with the future meetings & decisions on associations issues. Manager Batista clarifies that the Melo Group has three separate businesses with three separate accounting here in Cerro Azul, and that while the currents associations are not modified, the company will maintain its commitment to continue managing the project and also won't do anything to create any situation that might endanger the project.
Unidentified Owner:
Suggests that a list of those presently attending this meeting must be compiled because these are the owners who are most interested in solving these problems, and also, the Administration should provide a of all owners listed according to the urbanization where their property is located, in order to help to notify all of them about the conveying that the administration will be doing. Lic. Publio indicates that it is a very good idea. She continuous saying that Administration should establish networks and also use more technology to inform all owners, such as forums, Facebook, Twitter, etc.
Different named Antonio, El Castillo 139:
Gave all of us vision of his life project, and how wonderful it is to live in Los Altos de Cerro Azul, and begs to do everything possible thing to keep it as it is.
Antonio Latorre:
Points out that He has always being concerned to meet and know who are his neighbors, taking notes of their phones, lots and even signed affidavit to represent them at these meetings, in such a way that He then goes to inform them about the topics covered by the Administration in these meetings.
Dr. Moreno, El Guardian:
Insists again that we should proceed to choose or designate owners that will serve as a liaison with other owners of the same urbanization.
Steve Luce, El Fortín:
Begins by saying that he is a member of PACAR, pointing out to the room we now have a forum with e-mail where owners who register, can get to see several types of documents, some officials and some private, concerning the project, get information on outstanding activities taking place in Cerro Azul, and even get hold of the climate readings. This forum is completely free and voluntary and members of PACAR have made available to all users of the Forum, several official documents of the Government that relate with Altos de Cerro Azul. With regard to what was proposed by the Administration, insofar as that the owners are the ones who must solve the problem of associations, he points out that the real problem is an information dilemma, and if the administrations could share information of the owners mails with PACAR e-mails list. Also if the administration could provide the documents relevant to El Fortín, and any other documents concerning El Torreón, then PACAR could publish these documents just as PACAR published the other Associations documents, along with the assembly meeting dates on a regular repeating process to remind all users to attend those fore coming meetings. Eng. Naar replied that the administration e-mails can be shared and that they will try to provide him with the documents of these two associations for publishing in the forum.
Lic.Publio indicated to the audience that the Administration will prepare a timetable for the meetings of associations and possibly schedule two meetings per day, one in the morning and another in the afternoon; but that these calls will possibly begin within 2 months from now.
Dr. Moreno, El Guardian:
Insists with the choosing of liaison representatives for spreading the word among non-assisting owners, in order to help with the coming general assembly meetings. Lic.Publio suggests that at the end of the meeting, the owners of each urbanization could meet, and among them choose the liaison representative.
Terani Simons, El Frente 89:
Explains to the participants that one of the concerns of PACAR is the possibility that we would have pay a fine with surcharges for not having registered with the Ministry of Housing (MIVIOT) in accordance with the provisions contained in the new law of Horizontal Property Law no. 31 of June 18, 2010. This law is currently being regulated for paragraphs 3 and 6 of article 2 that incorporates private closed estates within the scope of the law. He states that this law requires that both the promoter of the project and the owners, will have to pay a rate of 0.25% (a quarter of one per cent) of the value of the property at the time of registration, and not to do so in a timely manner, will generate a surcharge of 10% and a fine of 1% per delinquent month.
He therefore requests from the Administration to help us with the associations as quickly as possible, so that we do may not have to late when the regulation of that article is finished.
Unidentified Owner:
Request more information on some details of the PACAR´s Forum, such as privacy, registration, use and others issues.
Esther Adsett, El Torreón:
Answering the last person´s question, recounts that it is more than one year ago that heterogeneous group of owners got together, concerned about the Manual de Propietarios that was being pushed forward without Cerro Azul owners knowledge, decided to create a group devoted to investigating all legal aspects concerning this project. With the amount of information found, the group them decided to share it with all owners through the internet; and so were born the PACAR group and the Forum. In addition to this, PACAR decided to organize a series of lectures concerning Cerro Azul ambient, such information on birds of the area, how to buy, plant and care of orchids plants, snakes and scorpions that live amongst us, and an informative chats about the Chagres National Park. This forum is entirely voluntary and all who register can access it, read the documents available, make comments on any issues posted, share and even propose topics and situations that may affect the area.
Steve Luce, El Fortín:
Just to clarify the record with the Forum, anybody who wants to join the Forum, have only have to give their email, lot number and urbanization to gain access to the Forum on the internet.
Unidentified owner:
Expresses his concern about taxes that could the Government might charge with the new law just mentioned by Mr. Simons. Lic.Publio makes it clear the incorporation of the project into the new law is in the hands of the owners, as well as the setting of the TSM, and that these are issues are the ones that should be discussed in the new Association of Home Owners. To do so, He continues to say, that the Administration shall convene the owners accordingly by urbanization, but it must be precisely the owners will have to take the initiative.
Esther Adsett, El Torreón:
Asks the Administration to clarify whether it is going to provide the details requested earlier by Mr. Steve Luce and when will they do so. She also says that it is the sole responsibility of the promoter of the project to create the corresponding association to be turned over to the owners. Also it must also be their responsibility to register the other two associations also to be turned over to owners. Lic. Publio points out that what is needed it to register one of these missing two associations at the Ministry of Government and Justice.
However, regarding the other missing association, this will require a neighborhood meeting of owners to create the associations, and that spending must be paid by those owners. He emphasizes that the Melo Group can’t register this missing association. Because it is no longer the sole owner as occurred at the beginning of the project.
Lic.Publio goes on to say that will they will propose a timetable for convening the different associations, and that Melo Group will appoint a temporary Board of Directors (ad-hoc) to preside those meetings, where the new Board must be elected, appoint representatives representatives and set criteria for the new single associations to be created. According to Lic.Publio, this process will be long and complicated, but the owners should be aware that they will have the support of the administration.
Unidentified Owner:
Points out that there must be a neighborhood commission (per urbanization) to carry out the required changes and proposes that each association renew the existing directive and names representatives to a new single Association. Lic.Publio explains that the current board of directors is composed from Melo´s group, and it is required to be changed in these coming meetings, and suggests to the participants that they must meet according to the associations to which their urbanization belongs and to choose the owners that will serve as a liaison to carry out these tasks. Dr. Moreno, El Guardían endorsed this suggestion and made clear some additional details.
Ana Inés Lechat, El Frente:
States that as she understands it, that we are bound by the new Law 31 to form a single Association on account of having a single private entrance to the project, and also a security boom. Lic.Publio and Mr. Simons agree. This ends questions & comments on the subject of the Associations.
Administration now passes the floor to Eng. Naar with instructions to issue the coming increase of the TSM.
Eng. Naar:
Explains to audience that the Administration faces a problem of costs increases in management, and to support their points, presents a view on the screen listing several of the increases experienced accordingly, such as minimum wages, fuel, asphalt, garbage services and others. Based on these increases already being paid by the Administration, he proposes an increase of $10.00 of the TSM fee, in such a way that it will amount to $35.00 monthly.
Esther Adsett, El Torreón:
She remembers the Administration that before we talk of increasing the rate of the TSM, we must receive all the issues that the administration has promised during this meeting, such as detailed financial statements, owners e-mails for mailing information, missing associations documents and a prompt schedule of convening calls for the associations meetings, as well as meet other things here committed to deliver. This is going to delay the entry into force of this proposed increase.
Reyma El Guardian:
Points out that this amount represents an increase of 40 per cent of the current TSM fee.
Unidentified Owner:
States that is a bit confusing this increase request regarding the accounting surplus of $85 thousand pointed out by the administration at the beginning of this meeting, and wants to know that it means having a surplus and then call for a TSM increase. The Accountant De La Cruz answers that that $85 thousand surplus only represents the money deposited in the bank at the end of year 2011, and that they were still outstanding accrued accounting chart showed that the deficit was $63 thousand for that year.
Terani Simons, El Frente 89:
Points out to the Administration that among those presently attending, there are many who are business owners and are aware of these factors, so the audience can truly understand the grounds on which requesting this increase of the TSM is justified. However, I would like to ask that while the administration wants the owners to accept this increase, then the Administration must commit itself to comply with the following task as where discuss formerly in this meeting, such as:
First: meet to deliver date of the detailed financial statements requested by the owners, i.e. assets and liabilities, income and expenses, with the requested details.
Second: seriously help in solving the current associations dilemma, and
Third: Submit to the owners an aggressive plan for the recovery of bad debts.
Quid pro Quo!
On this last theme, Mr. Simons said that he was concerned with what will happen when with this TSM increase, more owners will not accept it and proceed to stop paying this fee, or fall back to paying their contract stated fee of $5.00, $8.00, or $10.00 TSM. If this situation is not resolved, he fears that we all will fall into a vicious circle of future TSM increases linked to higher rates of delinquent bad debts.
Mr. Simons proposes to increase the pressure on the defaulters, such which as managers of condominiums in the city of Panama do, such as. identify bad debts owners names in local newspapers, publish a list of defaulters in the main gate, sue mayor bad debt owners, offer discount for settling outstanding bad debts and negotiate with a collecting agency the $376 thousand deb. This must be a serious and permanent commitment of the Administration and not resign itself to only keeping records of these debts, and also the administration must act firmly with these TSM delinquent owners.
On an another issue, Mr. Simons calls on the Administration to stop allowing the building of shack wood and zinc house in the project, as shanty quarters, given that currently they are two existing shanty houses in Los Altos de Cerro Azul and administration knows about this problem. He is also concerned about issues as when other lot owners divide their property and proceed to sell part of it to former gardeners or house keeper (there are more than 40 families of house keepers in Cerro Azul). This situation violates article 3.1 of the Manual del Propietarios, and this practice should be stopped by the administration.
Mr. Simons ends his intervention saying that he is also concerned about several business functioning in Cerro Azul which are expressly prohibited in the Manual de Propietarios, such as commercial, industrial, religious, or similar as stated in article 3.1, including some of these businesses that do not pay taxes. This is especially disturbing to all of us owners with business that must pay taxes to the Government. However, we would like to point out that those businesses installed before the approval or the Manual of Propietarios, have the right to keep operating, yet they must please comply with paying their taxes. If any person establishes himself in any one of these countries of these established owners, surely this person would have to pay that country business taxes. The same goes for our country. So please comply with this.
Lic.Publio
States that no owner can divide his lot and that if this has happened, then it must be denounced both to the Administration and the ANAM for proper attention.
Fadul, El Guardian:
Questions why can’t the Administration buy the land lots of those owners who abandon their lots, or those who have not paid never neither water nor TSM since purchasing their lots.
Reina, El Guardian:
Questions why the Administration cannot be stronger with these cases mentioned by Mr. Simons (lack of cleaning, division of lots, shanty houses, garbage burning, etc.)
Antonio Latorre:
Shares some history about what the Administration has done in the past, and what more should be done for the conservation of the project. Lic. Publio answers to these last comments by pointing out that the Administration will be much more attentive to these situations set forth by the owners.
Trutte, El Torreón:
Requests why the administration has not cleaned the waterways of the street near her residence and also those adjacent to it on both sides. She also presents her case of the TSM that she is paying, on account of having sold part of her second lot, is still obliged to pay the TSM for both lots. The Manager Batista answers that he is surprised of how this meeting has developed in a such a respectful way, and for the first time since these meeting have taken place, that he is totally surprised, However with respect of Ms. Trutte personal problems, these should not be brought to these meetings, they need to be dealt personally with the administrator of the project.
The Manager Batista recognizes than never before there has been so much interest shown as this audience has, and as this has caught his attention, He dares to ask the present owners that we work together for solutions to these problems; suggesting that we must organize ourselves to put order in the area. He mentions that there is a very organized group here in Cerro Azul that acts in favor of the project and that also has done some interested things in Los Altos de Cerro Azul, and that He welcomes that, however the law prevents him from talking to only one group of owners, which is why the Administration believes in talking and meeting with all of the owners. He continues answering the repurchase of abandoned lots asked by Mr. Fadul and explains that it is a very difficult task and that the Administration does not have much interest in pursuing this task, adding that a society with a foreign Realtor is about to exploit these tasks with other land projects which the Melo Group has in Panama. The company is called United Country.
Fadul, El Guardian:
Ask the Administration when they will begin charging the new TSM. Manager Batista tells that this is a point of discussion with the current participants in this meeting. Mr. Fadul replies saying that failure to resolve the issue of the delinquencies will just continue to become even more serious.
Esther Adsett, El Torreón:
Explains to the Administration that in her purchase contract wording, is written that her TSM is $10.00 per month, yet they pay the current fee of $25.00 per month; however there are many owners who do not pay the current rate, claiming that their contracts specify another amount and it says nothing about subsequent increases and she asks, what will be done about this issue with the new increase? Lic.Publio answers that the new associations must deal with this issue, as many owners are not aware of this situation and adhere to paying the amount stated in their contract, insisting with their $3.00, $5.00 or $10.00 monthly payments, the administration must resolve all existing problems and even pave repaired streets.
Unidentified Owner:
States her opinion to the audience, saying that we who pay the current TSM monthly $25.00 are the stupid owners, and those that do not pay, or pay less conceive themselves as the “smart” owners. She asks what the administration will do about this.
Iris de Simons, El Frente 89:
States that the new law deals with this problem, setting fines and legal actions for the administration to act upon, and also that if by the time frame of the legal inception of our association, our By-Laws are out of sync with those stated in the new Law, then our will be outlawed and we will have to abide by what the new Law sets down for the Home Owners Associations By-Laws.
Having no further saying on the subjects, Lic. Publio declared the end of the meeting.
