Rock Springs Ridge HOA Treasurer resigns

Article Courtesy of  The Apopka Voice

Published October 6, 2021


Jerry Schafrath, the Rock Springs Ridge Homeowners Association Treasurer since 2009, announced his resignation on the eve of the vote by RSR homeowners to approve or disapprove the sale of the gopher tortoise conservation area – otherwise known as the 51-acre parcel on 624 West Kelly Park Road.

Schafrath released the following statement to The Apopka Voice. It is entitled “An open letter to Homeowners in Rock Springs Ridge and the City of Apopka”

“My name is Jerry Schafrath and I am a current board member of the Rock Springs Ridge Homeowners Association. I was elected to the board in 2009 and have held the Treasurer position for the entire time. First, I want to thank the homeowners for electing me over the years to represent them. I’ve served with many board administrations and participated in many negotiations on behalf of the RSR HOA during my time.

However, I am hereby resigning my position effective immediately.

I’ve always felt that the board administrations in the past always had the best interests of the entire community in their dealings and were always mindful of their fiduciary responsibilities. Even when there wasn’t complete agreement among members on certain topics, there was always respect for the process and the outcome.

I can’t say that about the current Board.

I have been slandered and bullied by certain Board members since they’ve been on the Board and have had a very difficult time performing my role as Treasurer (and Secretary). Since the Board members came on in 2020, changes were made in the method of votes, payments, and contract approvals that did not conform to past procedures, good business practices, state statutes, or open discussions among Board members at an official meeting.

There has been no fiduciary accountability among the three members and apparently, there is a belief that all they have to do is increase dues or call for assessments for anything they want after they’ve exhausted the reserves that took over a decade to build up. There are many instances where payment approvals were given to the management company to pay certain invoices without any Board or public discussion other than an email that said “yes” or “approved”.

For example, we originally debated and approved $30,000 for a limited scope legal engagement with an attorney to investigate what could be done about the defunct golf course situation. One Board member went well over the scope and what was approved without any further Board discussion for months.

In a short period of time, they have spent nearly $200,000 and the scope expanded without any full Board discussion or formal vote. Additionally, they’ve spent over $58,000 in legal expenses this year to our regular HOA attorney for services that in some cases were duplicative efforts of the land use attorney because the Board kept asking both of them for similar services.

So, in total, they’ve spent over $250,000 or nearly one-half of our entire annual budget on legal expenses in less than 11 months that have resulted in no agreements on the former golf course property. Instead, there is suddenly pressure to sell the property to give the Board more money to keep spending on legal fees.

While on the Board as Treasurer, I participated with other Board members to focus on staying within our budget and helped develop reserve funds for landscape and irrigation improvements as well as having a “bad debt” reserve to avoid having to come to members for assessments. I was able to do this through all of the years of the Great Recession with no major increases to dues or assessments and was able to build up combined reserves and equity over that time of over $550,000 while we were also able to do major property improvements like installing the fence and columns, lighting and landscaping along Rock Springs Road, major improvements to the boulevard including multiple trees (palms and magnolias), shrubs along the entranceway and along the 2nd island bend, improvements to the roundabout, and other major maintenance items with our drainage ponds.

Since late last year, the current Board has spent approximately $275,000 of those reserves on legal expenses and PR firms to “inform” residents of how great the deals are that they are working on. In fact, last month, the HOA had to move $75,000 out of the cash reserves to the operating accounts to cover all of the expenses.

I’ve personally witnessed other homeowners and Board members (current and former) being belittled and bullied, both in private and in public by certain members of the Board. I’m sure that this letter will even gain a similar response from those Board members. I debated a long time whether to run again for the Board this past Spring and was encouraged by a number of homeowners and former Board members to stay involved and run again to try to hold some level of accountability.

I am the only Board member that has a regular job and has a regular schedule to keep. During the last year, many Board meetings were called on short notice and during normal working hours making it very difficult for me to attend and participate. In fact, there were meetings that I wasn’t even informed that were going to take place. Meetings are arranged via emergency emails and no phone calls to follow up if Board members are able to make it or not.

I’ve instructed the management company to post our previous year’s financials and our draft financial statements for 2020 on the website for months, but they still haven’t. Our auditor requested me to sign a representation letter (like every other year) that included a declaration by me as Treasurer that we had proper internal controls and there weren’t opportunities for fraud. I was unable to sign this year (for the first time) since I know that expenditures were made without proper approvals by the Board, authority given by the proper position of authority to do so by statute, or by common HOA business practices. This led to the auditor giving us a disclaimed opinion for 2020 (for the first time ever).

I informed the Board that I was resigning from the Treasurer position last month due to my work limitations. Also, it was due to the danger to my CPA license and professional reputation being at risk for continuing to be the Treasurer by providing a level of credibility to suspect expenditures. Since no other Board members wanted the role, they have assigned the role to a person at the management company. Since then, there have been expenses coded to questionable cost codes that do not properly describe the expenses. For example, the costs of the PR firm hired to “SELL” the members on the reason to sell the Gopher Tortoise preserve area are buried in several expense lines making it difficult to calculate the entire amount of the expense.

Considering most of the Board members don’t understand or read the financial statements, I would expect increases in annual dues soon due to the lack of fiscal responsibility shown by the Board.

I have been involved with RSR since before I moved here in 2002. I worked for one of the homebuilders that were building in RSR back in 2000 and was watching and waiting on phase 3 to be developed in order to buy a lot on Sand Wedge Loop (one of the 12 lots now being threatened by the sale of the land behind it).

I DO NOT support what the current Board is pushing about selling the Gopher Tortoise preserve (and YES it was sold to those of us on the Loop as a preservation area in perpetuity regardless of zoning as we were told the community design was already at its maximum and the original buyers (me included) even paid premiums for those lots – just like those on the original golf course lots).

My job has now taken me out of town for extended periods of time. I was told that the management company would make accommodations for me to participate in Board meetings; however, no accommodation was set up for me for the last Board meeting. I do not trust this Board to do what is best in the interests of ALL homeowners of the community.

At this time, I don’t believe that I can be effective in any role on this Board and am hereby resigning effective immediately. Thank you to all who supported me and ALL of our community and membership. I wish you all the best.”