New condo fee formula causes meltdown at meeting

SOUTH PASADENA — Several hundred raucous, often angry Bay Island residents failed Thursday to resolve their dispute over allocation of maintenance costs.

At issue was a new formula approved by the association's board of directors that changes the way maintenance fees are charged. Beginning in January, unit owners will be billed equally, or "by door," instead of by unit size, a calculation that favored smaller-unit owners.

Thursday, the standing-room-only gathering appeared sharply split over whether the maintenance fee formula is fair.

Many owners of small units objected because their fees will go up, while owners of larger units defended the new allocation — some even demanding that past "overcharged" fees be reimbursed.

Ronnie Dubs, who owns a one-bedroom unit, was particularly critical of the new fees.

When he called the change a "criminal conspiracy," he said his microphone was turned off and he was threatened with ejection from the meeting.

"By the end of the meeting people were standing and yelling at each other," Dubs said.

Another resident, Maria Hallas, described the meeting as "explosive," with residents arguing and even shoving one another.

"There are two sides to this. We are split on what is a fair share of the costs of running Bay Island," said Lou Ippolito, president of the Sun Island Association board of directors.

For more than 30 years, maintenance and operating costs were billed according to the size of each unit, with larger units paying more and smaller units paying less.

Ippolito said the new fee structure raises monthly maintenance fees for 327 units and lowers fees for 386 units. Most fee changes are less than $100. About 100 units will see increases or decreases of $100 or more. Only 12 units will see significant decreases in fees — up to about $300, he said.

As a result of the tumult at the meeting, Ippolito said the board would vote this week on whether to "revoke" the resolution imposing the flat fee allocation of operating costs.

He predicted that whatever the board decides to do, the association will be sued — either by the small-unit owners or the large-unit owners.

Ippolito is also upset about accusations that he pushed for the resolution setting the new allocation formula for personal gain.

Ippolito, who has lived at Bay Island for about 20 years, owns a two-bedroom condo and said he would actually see a $12.97 increase in his maintenance fees under the new formula.

"I'm stuck in the middle, and I am trying to do what is fair. This issue really does need to be decided by a court," he said.

The complex's original documents seem to be contradictory about how maintenance fees should be charged.

"The last thing I want to see happen is to see the association be engaged with litigation with unit owners. But unless the resolution is revoked, it leaves the small-unit owners with little recourse," said Marie Dahm, who owns three units and is organizing residents to fight the new fee structure.

Jonathan Damonte, an attorney hired by Dahm and other unit owners, wrote to the condominium association threatening a class-action lawsuit if the fee structure is not rescinded in the next month.

"Failure to do so will result in our client filing a class-action lawsuit against the association," he said.

One likely witness in that potential lawsuit will be Jerry Coone, the original developer of the Bay Island complex.

Coone, in an affidavit he sent to Dahm and Damonte, said the developers intended for common maintenance costs to be allocated to condo owners based on their "percentage of ownership," the size of their units.

"I have been a developer for nearly 50 years and have always developed condominium communities using the square footage of a unit as its basis for determining the percentage of ownership," Coone wrote in his affidavit. "I believe it to be the only fair and equitable method of allocating the maintenance fees to all unit owners within a community."