Skip to main content

Termination of Management Agreement

HGMD has hired HGA as a property management company to run the day-to-day operations of the District properties. HGA is a homeowners' association. It is charged with maintaining and repairing the residential buildings and the parking structures. All other HG property is owned by the metropolitan district.

Management Agreement August 23, 2018.pdf

The management agreement states that HGMD designates HGA as agent for HGMD, subject to the District's Board of Directors' policies, budgeting, finances, and oversight..." However, HGA has failed to honor HGMD's assertion of any oversight. HGA has entered into contracts in violation of District policy. It repeatedly continued to meet with Comcast and Darkhorse regarding the installation of fiberoptic cable, security cameras, and key card access sytems at significant cost to the District, despite written notice directly and through its attorney that HGMD would not authorize nor pay for any such project that it was not involved in.

HGA continued to pursue the project without HGMD input. HGMD notified HGA that its plans to secure the clubhouse, and have people "state their business before being buzzed in" as stated by CEO Jon Rea at the May 18, 2023, regular board meeting, could jeoprodize the District's funding. This was not a misstatement by the CEO. HGA President Jill Bacon stated at a Clubhouse Committee meeting that HGA wanted to secure the building because the ladies at the front counter were afraid a shooter might come in. She reiterated her intent at our Dec. 9th open forum stating they wanted to "limit access" to the clubhouse.

HGMD sold bonds to fund the building of the clubhouse facilities stating that it was open to the public and for public purposes. I don't think having to be buzzed in will increase our restaurant sales. The issue is that HGA felt it could trump HGMD's authority.

HGA employees have signed vendor proposals for work well over any spending authority HGA management ever had, and this has been done since our election.

RM Contstruction Signature Page.pdf

 Last year HGA signed a contract with Comcast to install fiberoptic to the RV lot. This contract spanned multiple years making it void under the law. When HGMD informed Comcast that the District owned the RV lot and had not agreed to any installation, Comcast threatened to proceed anyway, causing us time and attorney fees to cancel the contract. HGA recently approved the Comcast and Darkhorse proposals for the parking structures. When asked about ongoing costs, HGA Director Greg Winslow said there were none. That this was a one-time cost. That is not true. The Comcast cost is for the fiberoptic installation only. It doesn't even cover internet access, which of course is required for the darkhorse cameras to work.  Darkhorse also has a monthly monitoring fee.

Employee Accounting:

Most importantly, during the budget workshop, the HGA CEO and CFO became confused about the number of full-time employees it was billing the District for. They said they'd work on it overnight and address it in the morning.  The following day, the numbers still just did not add up.  Based upon that and other issues with the budget, HGMD asked for an accounting for the $1.2 million dollars HGA billed HGMD for wages and benefits for 2023. HGA has refused to account for the expenditure of those funds, based upon confidentiality of their employees. The propriety and reasonableness of the expenditure of public funds is a higher concern.

23.09.09-OrgChart (1).pdf

HGMD requested an organizational chart from HGA in September when HGA suggested that HGMD directly hire the cost center employees. This is the first chart received. When the HGA CEO and CFO stated that this organization chart was incorrect, HR Manager Holly Shearer uploaded a revised organizational chart to the HGA website. It's attached below.

Org Chart 10-1-2023.pdf

HGA has also ceased performing most of the administrative tasks that it once performed. Their failure to account for or provide financial information violates the management agreement and prohibits the District from functioning efficiently.

Based upon these and other reasons, and HGA's failure to negotiate, accept any of our proposals, or offer any proposals in return, the District voted to terminate the management agreement at the end of 2024. This means that there will be no agreement in effect at that time. This firmly places the ball in HGA's court. If it wants to continue managing HGMD properties, it will have to reach an agreement with the District.