Pot-Nets Lakeside, LLC.
Lakeside Comm. Homeowners Assoc., Inc. Pot-Nets Lakeside Salaries & Wages 07/01/14-06/30/15 07/01/15 -06/30/16 Increase Pot-Nets Lakeside Repair & Maintenance 07/01/14-06/30/15 07/01/15 -06/30/16 Increase Pot-Nets Lakeside Salaries & Wages 07/01/14-06/30/15 07/01/15 -06/30/16 Increase 07/01/14-06/30/15 07/01/15 -06/30/16 Increase
S. Eng, Esquire Community Legal Aid Society, Inc.
Michael P. Morton, Esquire Nicole M. Faries, Esquire David C.
Zerbato, Esquire Michael P. Morton, P.A.
Scott Bradley Judge
my decision on Appellant Pot-Nets Lakeside, LLC's appeal
of Arbitrator Ronald L. Stoner's decision that the
Appellant had not proven that it was entitled to a rent
increase of $33.74 per month based on a $64, 791 increase in
salaries and wages and a $108, 389 increase in repair and
maintenance for the fiscal year ended June 30, 2016, at the
manufactured home community known as Pot-Nets Lakeside,
located in Long Neck, Delaware. Appellee Lakeside Community
Homeowners Association, Inc. is the homeowners association
for those manufactured home owners who lease lots from the
Appellant in Pot-Nets Lakeside. Appellant provides all of the
property management infrastructure and services which support
the operation and maintenance of Pot-Nets Lakeside. Tenants
in Pot-Nets Lakeside have access to a number of on-site
amenities, including a community center, gazebo and
pavilions, a swimming pool, conservation areas and nature
trails, a fresh water lake and other recreational amenities.
Tenants in Pot-Nets Lakeside have unrestricted access to
facilities located in five other Pot-Nets communities,
including additional swimming pools, boating facilities and
beach access. Tunnell Companies, L.P. employs the workers
that do the work in the six Pot-Nets communities. The cost of
work done is "charged" to each community based on
the actual amount of work done in that community.
wanted to increase the 2017 monthly lot rent because it had
experienced an increase in operating and maintenance expenses
in the 2016 fiscal year compared to the 2015 fiscal year.
Appellant sent out the required notice of the rent increase
to all affected tenants on October 4, 2016. Appellee filed a
petition for arbitration on October 27, 2016. The Delaware
Manufactured Home Relocation Authority appointed Ronald L.
Stoner as the Arbitrator. The arbitration hearing was held on
January 23, 2017. The Arbitrator issued his written decision
on March 11, 2017. The Appellant then filed this appeal.
witnesses testified at the arbitration hearing - Robert W.
Tunnell, III, Cameron Marcelle, Carol Hastings, CPA, David
Doane, CPA, and Elisabeth Greenwalt. Tunnell, Marcelle,
Hastings and Doane testified for the Appellant. Greenwalt
testified for the Appellee. Tunnell is part owner of the
entity that owns Pot-Nets Lakeside. Marcelle is a certified
arborist for Tunnell Companies, L.P. Hastings is the
Controller for Tunnell Companies, L.P. Doane is the senior
partner of Jefferson, Urian, Doane & Sterner, P.A., a
certified public accounting firm. Tunnell Companies, L.P. is
one of Doane's clients. Greenwalt is the immediate past
president of Appellee.
following is a breakdown of the increases for Salaries &
Wages and Repair & Maintenance and the testimony offered
by the witnesses in support of them.
Pot-Nets Lakeside Salaries &
Salaries & Wages
*$64, 791 after CPI Adjustment.
W. Tunnell, III
A-73 The cost of removing the pool furniture from the boxes
and placing them round the pool is included in Salaries &
A-78 Landscaping is cutting the grass, pulling weeds,
planting annual flowers, tree maintenance. It is anything to
do with maintaining any of the landscaping.
A-96 Salaries & Wages would include Salaries & Wages
of our employees doing repairs and maintenance and the person
planting the flowers, salaries and wages of the person
cutting a tree or doing power washing or cleaning, etc.
A-98 A significant portion of the Salaries & Wages
category was caused by tree maintenance. There were a large
number of tree requests and hazards that we saw during this
four-month period when compared to the prior 12 months.
A-107 There were 71 entries on the tree log for 7/1/14 -
There were 419 entries on the tree log for 7/1/15 - 6/30/16.
A-109 Work detail reports and timesheets are turned in weekly
to the accounting department and are used to determine the
costs of the tree work.
A-140 The largest part of the increase in Salaries &
Wages was $38, 000 in landscaping, and a lot of that was done
because of the tree work.
A-140 The security increase in Salaries & Wages was
because of pay raises given to the security staff. We did a
pay raise for patrol people and gate guards because of the
surrounding labor market. The security department got higher
increases than other departments.
A-141 The administration and operations departments were
increased as well. Operations - some of that was dealing with
the pool and some of the pool furniture, labor to dispose of
A-152 We also added an additional security patrol on our
schedule as well. That and increased wages were the two
factors responsible for the security Salaries & Wages
A-158 We incurred extra Salaries & Wages for replacing
the lights in the community center with LED lights.
A-170 Keeps logs of tree work done in each Tunnell community.
A-171 71 log entries in July 2014 - 2015.
A-171 All tree work done was necessary.
A-172 419 entries for the next year.
A-173 Tenant requests for tree work have gone up.
A-180 Cameron Marcelle prioritizes the work in the
communities - extreme priority, priority work and routine
A-181 Did more tree work in 2015 - 2016 than the prior year,
partly because the tree program started in 2010 on the other
end of Long Neck and we've been moving up Long Neck ever
A-185 Makes sure that Salaries & Wages and expenses have
been categorized correctly and assigned to the proper
A-190 Does not analyze whether Salaries & Wages increases
reflect an increase of employees and/or wages.
A-191 Increase in Salaries & Wages for Lakeside was due
to a combination of more employees (working there) and an
increase in wages.
A-196-200 Verified accuracy of Salaries & Wages and
Repair & Maintenance as to them being in the proper
category and amount.
A-326 The Appellant submitted a letter from Doane stating
that he had compared the expenses recorded for Salaries &
Wages and Maintenance for Lakeside and that they had
increased as follows:
Salaries & Wages
A-328 The Appellant submitted an exhibit stating that
Salaries & Wages includes Maintenance & Operations,
Landscaping, Administration, Security, Salaries & Wages
A-209 Attended the rent justification meeting on October 4.
A-212 Said that the Tunnells did not give details about the
increases at the meeting and that they don't give much
A-218 Believes that the information should have been broken
down into categories.
A-222 Wanted more information about increases to compare it
to amounts they are already paying as part of the rent.
Pot-Nets Lakeside Repair &
Repair & Maintenance
*$107, 303 after CPI Adjustment.
W. Tunnell, III
A-75 A subcontractor painted the roof of the Lakeside
Community Center. This was an increase in Repair &
A-96 Repair & Maintenance would be building, painting,
changing a light bulb, power washing, cleaning, etc.
A-97 Repair & Maintenance included for most of the
painting the two different subcontractors we hired to do
A-115 The types of work done under Repair & Maintenance
were, for example, painting of the buildings, HVAC issues,
A-125 There is ongoing routine painting in the community.
A-157 We replaced a major motor in one of the fountains. It
was like $2, 700.
A-158 We replaced all the light bulbs in the Community Center
with LED lights for $2, 800.
A-158 We did a large amount of painting. We painted railings
and the bridges on the lake, as well as the roof of the
Community Center and then some other buildings.
A-158 We had some HVAC issues in the Community Center. That
was $7, 000 of the increase. The rest was materials.
A-160 We spent $43, 000 on painting. It was the total done in
2015-2016. Robert Tunnell did not know what was spent on
painting the prior year.
A-116 Discussed some major Repair & Maintenance items for
7/1/15 to 6/30/16 using the following exhibit that was only
used for the arbitration hearing.
Pot-Nets Lakeside Major R&M Items 7/1/15 to 6/30/16
1. Replaced 1 fountain motor - 10/5/15 cost of $2, 741.
2. Community Center - Replacement of all light bulbs with LED
lights - 10/15 $2, 804.
3. Painting - Gazebo and bridges summer of 2015, remainder of
buildings spring 2016 $43, 385 in total.
4. Community Center - HVAC Issues 10 & 11/15, 4/16 $7,
053 in total.
Repair & Maintenance includes but is not limited to the
* Community Center
Fire Protection Service
* Roads/Parking Lots
Catch Basin Repairs
Annual Flowers $3, 148