Fire on Gloucester

A fire was speedily attended by our municipal Fire Department. It is my understanding that damage was "minor". Our professional managers and the maintenance company were on site, cleaning up the damage and providing coordination.

Peculiar Situation and a Request of the Manager

This post includes the content of a letter I wrote to the Management Office.

There are peculiar things that I notice from time to time. One thing I have noticed is that as far as the newly elected members of the board of managers are concerned, I really don’t exist, and neither does this blog. (Actually, we are approaching 10 months on the board, so I really shouldn't refer to them as "newly elected").

That is a curious state of affairs. I realize that I am not publishing the official “party line” here. If you want that, all you need do is retrieve the latest copy of the “Manor Briefs” newsletter.

Of course, there will always be those who never read the newsletter. Others may only want the “good news”. “Don’t bother us with reality”, they may say. Or, “There’s sufficient bad news out there without reading about it in the newsletter”. But what about the rest of us? Isn't the primary purpose of a "newsletter", blog and website to "inform"? Or, am I to assume that the vast majority of unit owners aren't interested? Apparently, our Communications Director has made that decision. The newsletter is supposed to be an Association newsletter, produced by the entire Board of Managers. However, that is not the case, based upon conversations during association meetings. Various members of the board prepare information on their specific areas of responsibility, e.g. landscaping, finance, rules & regulations and architecture. This is passed to the Communications Director who adds that info to the newsletter. However, additional information as she sees fit is also published. This included erroneous "cost data" for the roofing project. I advised her of the error during the most recent association meeting. I have also emailed and advised a correction be printed for this and other recent omissions or errors.

As I said, I have no problem with good news and "not so good" news. Check out our municipal website and you will see that our fine city also publishes the "not so good" news.

It is my perspective that we live in an imperfect world and I can tolerate some "bad news" from time to time. My furnace will fail one of these days. That's the way it is; everything fails. Stream pumps, driveways, light bulbs, you name it! Now, I know I am not the only unit owner who is interested in the full scope of the debates and the issues which face our association. I know that because I have had discussions and received emails from other unit owners. I assure all of you that the entire board is supposed to represent us, too.

I think it is worthwhile to know reality and to be informed. I personally don't want some politician feeding me the line "it's all fine, just keep sending us the money each month; you can trust us to take care of all of the problems and to do what's right". I do want to know what’s going on in our association and, I do want to see how the various members of the board intend to spend “my” money. Of course, they are also spending YOUR money. I think you would want to know how they intend to spend your money. Sometimes the decision is made not to spend money. In April, during the board discussion about driveways in need of repairs, our professional managers were directed to prioritize driveways as not all identified driveways could be replaced with the budgeted funds available. The important thing here is, 1) the decision not to repair was made by the board; 2) funds are available, but are not currently budgeted for this purpose.

Why is this important? Well, for one thing, I have attended meetings where some of the members of the board permit unit owners to verbally attack our professional managers and to say disparaging things about the maintenance company. I suspect some of the board are passing the blame to others. This winter, when some of the driveways which should have been repaired or replaced in 2009 have a problem, I assure you that those same board members will again attempt to pass the buck.

I also think you would want to know the discussions and arguments that occur during Association meetings. There are diverse points of view among the unit owners and on the board. I think you would want to know why your driveway, which may be one which was identified as meeting the criteria for replacement, will not be replaced this year. Currently, it is not due to a shortage of funds. It is due to an allocation issue and differences on the board regarding budgeting and where that money is to be spent.

Those types of issues will re-occur. There will always be budget conflicts but we, the unit owners, are counting on all of our board members to make the right decisions and fulfill their fiduciary duties. That is why they ran for office and that is why they were elected. Their decisions will ultimately decide property values and the desirability of living in our association. I love the walks, streams and "gardens" but I really need a roof over my head, a paved driveway, and reserves for future repairs and emergencies.

So that is why I am and will continue to publish this blog. Consider it the alternative, "reality" view. You won’t get pap here. But you will get balanced information and some of it will be useful.

Letter to the Management Office

So, after months of the newly expanded version of the official newsletter, a non- functional “official” blog and a website which is apparently in operation, but has not been provided to the vast majority of us the unit owners, I decided to send a letter to our Management Office. Here is the body of text of that letter, mailed on June 19, 2009.

Dear [Professional Manager]:

I am making the following request. Please forward copies of this letter to the entire Board of Managers of Briarcliffe Lakes Manor Homes.

The Association has a newsletter, and a blog. However, the information contained is insufficient. This is in part due to the limitations of the printed medium and even though the newsletter has been expanded to eight pages, it does not contain detailed information pertaining to the operation of the Association including meeting highlights, explanations and discussions of projects, budgeting, finances, insurance, etc.

This information is very important. All unit owners, not simply the 5% of us who attend the meetings should be informed of special projects requests, etc. The members of the Board of Managers of the Association are obligated to treat all unit owners uniformly and with equal consideration. The information provided is not accomplishing that.

The official “BLMH Homeowners Association” blog at http://briarcliffe.wordpress.com/
has as it’s last entry the announcement of the February 12 Association meeting.

I request that each newsletter contain a bolded statement acknowledging the existence of the following blog at http://briarcliffelakes.blogspot.com/ and any reasonable disclaimers.

This blog, which has been ignored in the Association newsletter and any and all official communications, contains timely and informative articles and information on a wide range of subjects that would be of interest to members of the association.

It contains thorough analysis of budgets, Association meeting highlights, observations of maintenance issues, energy costs and trends, analysis and presentation of unit owner budgets similar to our association budgets, general insurance and legal matters, etc.

The goal of the blog is to inform and to educate the unit owner. The goal is to promote improved understanding of how our association operates, of what can and cannot be expected of our Board of Managers and of unit owners. It is intended to provide extensive information pertinent to the members of the Association and which cannot be readily obtained by other means.

If this is not acceptable to the Board of Managers, then I request a letter specifying why, of what specific changes I must make to the blog to make it acceptable, and specifically how and by when the association will correct the current communications deficiencies.

Very Truly Yours,

Personal Computer Recommendation

[Note: After this was published, Microsoft announced a "Pre-Release" sale on Windows 7. See the information added at the end of this post. ]

I was discussing personal computers with a unit owner who is struggling with an older PC using Microsoft’s ME (Millennium Edition) operating system. We were discussing general PC philosophy and the question was posed “Is this a good time to upgrade to a new PC”?

I do have broad experience with smaller computers and so I’m going to put my two cents here, for everyone. After reading this, if you have further questions I’m available to help with purchase decisions. The question is a topic that I have had others ask me about, and I do get involved in technology solutions.

Personal Computers are in widespread use at BLMH. I can detect five different wireless networks from my PC here at BLMH. Considering that some of these have a range of only 150 feet or so, that would indicate that there are many more I can't detect because of distance, and still others that are "hard wired" via DSL or cable routers.

PC prices have been falling and it is very possible to purchase a very good home PC for somewhere in the range of $500 to $1000. A PC in this price range will run essential productivity software, play movies and collect email and do web browsing with little effort. It may not include a printer. You can choose between a “desktop” or a “notebook” computer which is also called a “laptop” computer. Prices are currently low and there are a lot of "specials" out there. This is the doldrums for PC sales, which usually peak in the fall as students head to school and during the Christmas buying season.

There are specialty PC’s, such as “netbooks”, but these have small screens or special purposes and reduced features. I suggest you avoid them. If you are willing to spend in the high range, perhaps about $1,000 you can purchase a much faster PC which will satisfy most user’s needs and run more sophisticated games and so on. Of course, you can spend even more and purchase a PC with multiple hard drives, "clocked" CPU, liquid cooling, more RAM memory, Blue Ray DVD player, much larger screen (or screens!), etc. and so doing, run your tab up to $3,000 or even more. But for the majority of us, that is money spent unwisely and unnecessarily.

The first thing to do, is get a handle on what it is you want to do with your PC and decide the type, size of screen, etc. I suggest that anyone interested in purchasing a PC go to a PC store, and check "mainstream" offerings from manufacturer’s such as Apple, Dell, HP. You can go to a website such as PCWorld.com and do a little research, but be prepared to spend some time. They recently listed 1238 laptops in the $500 to $1,000 range and 1235 desktops in the under $800 range! I recommend a "hands on" approach so that you get a sense of the keyboard layout and of the screens. In laptops, keyboards vary quite a bit, and some are too cramped. Screen dimensions, "resolution" and characteristics do vary widely. It is true that "you get what you pay for", but there are bargains to be found, and in the $800 price range there are significant differences.

Apple PCs frequently cost more that Microsoft PCs. I won’t get into which is better or worse; I prefer not to get into “religious wars”. However, there are significant differences. Apple makes the hardware, the Operating System and many of the software applications. Other PCs are computers with a Microsoft Operating System and hardware assembled or branded by someone else (Dell, HP, etc.) and software (applications) by yet another company or companies.

Here are two links to a PCWorld website with specific information on “all purpose” laptops and Value PCs (less than $1,500).

http://www.pcworld.com/article/123678/top_allpurpose_laptops.html

http://www.pcworld.com/article/123848/top_value_desktops.html

How to Begin

Most of my comments apply to Microsoft type PCs. They are the prevalent computers for the home consumer. (Apple computers are between 7 and 8 percent of the U.S. market). Here are some things to consider.

1. Begin by deciding how you want to use your PC. That will determine the features you will be looking for, and the price.
   
2. Notebook PCs have some significant advantages as compared to a desktop PC. They are portable, and can run on AC or batteries. Having a battery means that if power is interrupted while using the PC, it will not experience a forced shutdown, but can be shutdown by the you, the user, in the manner intended.
   
3. Once you decide on an Apple or a Microsoft Windows PC, you can then determine software and connectivity issues. Or, you can check both and compare current features and your existing hardware and software.
   
4. Purchasing a new PC requires software for various tasks. Not all is included when you purchase a PC. A basic Windows PC includes sufficient software to allow you to surf the web if you have the right connections. It may include MS Works suite, but not much else. Moving existing applications from older PCs to a new Microsoft based PC may not yield the desired results, which some people call the “PC Experience”. In some cases, this may not be possible. So, in addition to the cost of the PC, it may be necessary to purchase software.
   
5. Newer PCs have fewer communications ports, or connections. Older PCs had parallel ports for printing (25-pin connector) and serial ports for external modems (9-pin or 25-pin connectors). Older notebook or desktop PCs usually included a built in modem. Newer PCs of all flavors usually include USB communications ports, which are “Universal Serial Bus”. These permit communications with printers, modems, keyboards and mouse, scanners and even cameras and memory sticks or external hard drives. So, if you are considering an upgrade to a new PC, you may not be able to readily connect your old printer and other “peripherals”. It is possible to purchase “adapters” for USB to parallel or serial conversion. However, these don’t always work with specific printers, due to issues with the software “drivers”. That is my personal experience.
   
6. Older PCs and notebooks often included an internal telephone modem, for connection to the Internet via telephone line. Newer PCs usually include an Ethernet Port and/or a Wi-Fi wireless device. These are used for high speed connection to the Internet. However, to use them requires a special device called a “cable modem” or “DSL modem” and a high speed connection. That’s all at extra cost and is purchased from AT&T, Comcast, etc. So if you are using a telephone line to access the Internet, you will need a telephone modem in your PC or notebook computer. However, a Wi-Fi wireless connection in a laptop PC can be used at many places that provide such free Internet and email “access” for customers. For example, Borders, Panera, Starbucks, to name a few.
   
7. If you are going to use the telephone system as your Internet connection (not DSL), you either must purchase a PC with a telephone modem or, purchase one without and purchase an external USB modem. Such modems cost $30 to $50. Frequently, that is the way to go with modern laptops.
   
8. Older PCs had floppy diskette drives. Newer PCs seldom include such a drive, and so copying software from floppy to the PC hard drive is not possible. However, a portable diskette drive with USB connection for 1.4MB diskettes can be purchased at extra expense. But, software on your floppies may not be compatible with Microsoft Vista operating system, nor useable on an Apple PC.
   
9. Newer PCs include DVD drives, which can be used to load software and files into the PC, and also play DVD movies and music CDs.
   
10. Newer PCs include much larger hard drives. These are necessary for the multi-media that many people use PCs for. This includes music, photos, even movies. However, if you aren’t big on storing music or video files, you can get along for a long, long time on 100GB, so a hard drive that large or larger is more than adequate for normal home use, such a word processing, email, photos and some music.
    
11. Newer PCs usually come with Microsoft’s Vista operating system (OS). That OS is scheduled for replacement later this year or early next; Microsoft has not announced a firm release date for its latest OS, “Windows 7”. However, that is currently available in pre-release form for the adventurous. A PC purchased today will have a soon to be obsolete operating system.
    
12. Microsoft’s current OS, “Vista” was initially plagued with compatibility issues with older software. “Windows 7” is supposedly better, but we won’t know until we have the opportunity to use it. If you purchase a Microsoft Vista PC today, you may be able to purchase an upgrade to Windows 7 in the future. If that is something you intend to do, then I suggest spending a bit more for more memory, faster CPU and a separate video card. Windows 7 may require better hardware.
    
13. Minimums for a PC include at least 2GB of RAM (more is better), a reasonably fast CPU (1.7 GHz or faster), separate graphics Chip (NVidia, ATI, for example).
    
14. Newer PCs include “CD Burners” which are disk drives which read and write to CDs. Many also include “DVD Burners” which are similar and can read and write DVD disks. These are useful for making backups of user files or, if your PC has the right software (usually at extra cost), you can create DVD slide shows, movies, etc. Files can be routinely copied to the CD or DVD and the disk created can be stored in a safe place, and use to save your files and information, in the event the PC fails.

Specific Recommendations

So, where does that leave us? If you are considering purchasing a PC today, first determine how much aggravation your current PC is causing you. If you decide it is time to purchase, then these are my recommendations, today (June 22, 2009):

1. Go to a store that specializes in PCs and check the laptops and desktops that are available. Decide which you prefer, and what is your price range. You can get something for $350, but you may not be very happy with it. You are probably making a purchase that you expect to provide a pleasant experience for at least four years. With PC obsolescence and rapid aging, anything beyond that is probably a pleasant surprise. Something in the range $500 to $1000 is currently realistic (June 22, 2009). Prices do fluctuate.
   
2. Look for a PC that has at least 2GB of RAM memory, and if it is a notebook, consider an Intel Core2 Duo Mobile processor or AMD Turon or AMD Mobile Sempron processor if you want to run on battery power; these processors are designed with energy efficiency features for laptop users, to extend battery life. If you are going for a desktop, look for a “dual core” processor or better. (Note: the two major manufacturers of microprocessors or "CPUs" for personal computers are Intel and AMD. Intel controls about 80% of the global microprocessor share. AMD controls about 12%).
   
3. Try the keyboards and check out the screens. As screen sizes increase, so do prices. There are a variety of screen types available. Some have a matte finish, supposedly better for text. Others have a glossy screen, supposedly better for movies. If you will have a window or bright light source behind you, you might not like the glare on a shiny screen.
   
4. If you purchase a laptop, most can use an external (full size) USB keyboard and many include a VGA port which is a small 15-pin connector, which includes a blue insert. This permits connecting much larger screens to your laptop, if you have Microsoft Vista Home Premium or better or the proper Apple PC. So you can get a beautiful, much larger screen or even use your existing one. However, each screen includes a feature called “resolution”. Older screens have coarser resolutions and don’t have those wonderful very high resolution graphics. So you might not be happy with that old screen at home.
   
5. If you purchase a PC with Microsoft Vista, consider the version called “Vista Home Premium”. It has some features that might be useful. The “Home Basic” version strips out a lot of software features and you might be disappointed. There is a version called “Vista Ultimate”, but most people don’t need all the features that it adds to the “Premium” version. For most home users there is no real benefit to adding it (at additional cost).
   
6. You can purchase a version of Microsoft Office Home and Student for as little as $100 if you catch a special sale. This normally goes for $150. It includes a good word processor (Word), a spreadsheet (Excel), presentation software (Powerpoint) and information organizer (OneNote). Or, if you have a high speed internet connection, you can download a similar product from a competitor called “OpenOffice” which is free!
   
7. Consider the standard or longer warranties. Most PCs include a 1-year warranty. Details vary. For extra cost you can purchase a longer term warranty. Some are supported by the store; if you want a repair you return the PC to them. Others are supported by the manufacturer and include either home or factory return service. Every manufacturer has different types at different costs. After the bankruptcy of Circuit City, many people are reconsidering store provided extended warranties. A typical two year warranty costs about $170 more than the one year basic warranty.
   
8. If you don’t know where to go to shop, consider Wal-mart, Costco, Sam’s Club, Fry’s, Micro Center and Best Buy when you want to look at PCs. Fry’s and Micro Center are stores that specialize in computers and entertainment. Sam’s and Costco are buying clubs which require a membership and specializes in fewer choices at lower prices. Wal-mart specializes in lower prices. Best Buy has all types of consumer electronics including PCs, TVs, etc. There are other stores, but the companies I have listed usually have a good selection of lower end as in lower cost and fewer featured PCs, which are suitable for most home users. Note: this is not a recommendation of any specific store.

If you want some help, send me an email. I can and do accompany others on technology buying trips. Click on this link: mailto:letmethinkaboutthisblog@gmail.com

Comment:
My qualifications are as follows. I have been involved in PCs and specialized computer systems for many years. I am an expert at applying technology for the purpose of empowering organizations and people. The goal is improving quality, reducing costs and improving safety. For over 30 years I have worked with computers and computer systems of various types including Unix, Microsoft, industrial proprietary systems, distributed and PC networks, etc. I write, teach and provide technology applications excellence, in which PCs and PC based systems are an integral and important component.

I am not affiliated with any PC manufacturer or retail store. I am not an employee of Apple or Microsoft, nor do I own any shares in Microsoft or Apple. However, I do own mutual funds, which do own stocks in many companies and may own Apple, Dell, HP or Microsoft shares. Nor am I compensated in any way by any software or PC manufacturer or retail store or chain.

Windows 7 Pre-Release

This info added June 29, 2009:

Microsoft announced a pre-release sale of Windows 7 to existing XP and Vista customers. According to Microsoft, "Windows 7" will be available October 22, 2009. The versions called "Premium" and "Ultimate" have a feature which will allow the user to "Run many existing Windows XP productivity applications in Windows XP Mode". For more information, go to the Microsoft website at:

http://store.microsoft.com/microsoft/Windows-Windows-7/category/102?WT.mc_id=msccomhphighlights_win7

Microsoft is also providing a free ($9.95 for shipping) upgrade to most purchasers of a new PC equipped with Windows Vista. The PC must be purchased after June 26, 2009. For more information, go to this site, or talk to your sales associate at the computer store of your choice:

http://store.microsoft.com/microsoft/Windows-Windows-Vista/category/101

My Nomination for "Resident of the Month" BLMH Newsletter Article

This was sent on June 19 in response to the newsletter request for recommendations:

Hi [Communications Director]:

This is regarding the newsletter request for candidates for the “resident of the month” piece.

With 336 unit owners, it will take 28 years to hear about each one of us. Obviously, that will never happen. For example, I will be dead by then. I don’t know what criteria you use for selecting “eligible” candidates. However, I do have several candidates that I want to recommend for extended articles.

As someone who attends various “official” and announced Association meetings; i.e. meetings which are open to all unit owners, I have seen discussions which revolve around budget and expenditure issues. However, that and other information never gets to the 95% of the unit owners who do not attend the Association meetings. Nor is there any requirement that they attend. As one who used the proxy voting techniques during the most recent election, I am sure you are very well aware of that.

So for the 95% of us who do not attend meetings, the only official and delivered source of information is the Manor Briefs newsletter.

I nominate as residents for expanded articles, our past presidents and the current members of the board. I would really like to know, in their own words, the issues and perspectives that they face or faced during their tenures.

I would like detailed statements from each of the members of the Board of Managers regarding their positions, concerns and how during their current tenure they are addressing them. I would like details about budget constraints as each member sees them and the methods they personally employ to balance fees collected with conflicting demands of unit owners for more services, complete and totally maintained buildings, grounds and streets. I’d like detailed statements about how they would each specifically reduce fee increases (you most recently voted NO to a fee increase). Would that require a 10% spending cut, or 15% or what? And if so, specifically where will each member of the board take those cuts? What budgets are to be reduced? Would this include reduced grounds maintenance, less snowplowing, more roof repairs as roofing projects are delayed, shutting down streams, etc.? If not, then how to reduce expenditures (no kidding) and maintain everything including service levels, reserve funding and operating budgets at an unchanged level. I would also like to know how members of the Board of Managers will and are balancing the demands for reduced expenditures with conflicting demands of different groups of unit owners and the needs, wants and desires of unit owners who vacillate between wanting improved and expanded services, totally maintained buildings, grounds and streets, and also want no fee increases.

That would be a good start. Perhaps you should be the first in the newsletter. As the only member of the Board of Managers who voted “NO” to an assessment increase during the most recent budget meeting, you obviously must have a plan in mind. I’m sure every unit owner would like to know specifically how you would achieve that plan.

Regards,

Can We Afford It? and Other Issues

During the most recent “official” Association meeting, which all unit owners were invited to attend, there were a number of discussions about budgeting and cost increases. As usual, this meeting was attended by about 5% of the unit owners. There have apparently been other meetings between a member or members of the Board of Managers and unit owners. However, these have not been formally announced or publicized. I state that because unit owners have been coming to Association meetings and appear to be prepared for some of the issues or topics discussed. For example, during the May meeting, when the Landscaping Director announced that he was evaluating the grounds and could use suggestions, prepared notes were passed to him from some of the unit owners attending.

As I am not invited to other, special meetings, I must limit my observations to "official" announced Association meetings, including the one of June 12, and the information provided in the official newsletter.

During the June 12 meeting, there was a continuation of discussions or statements made during previous meetings. The discussions included requests for approval of expenditures for landscaping, the expanded newsletter, block party insurance, and so on. The Treasurer advised that some of these items were not in the current budget. He advised that he will make a brief presentation during the July meeting.

During Association meetings, discussions by Board members regarding the pros and cons of expenditures, are frequently met with boos, jeers and other taunts from unit owners. This has gradually and continuously escalated. Now some unit owners have actually asked the question of the Board of Managers "What do I get for the money you spend?"; in other words, what's in it for me? It would seem some unit owners are willing to attempt to do something about this and that some board members are willing to go along.

I find some of this confusing. During the most recent Association budget and finance meeting, the board voted for an assessment fee increase. However, the Communications Director did not want to pass the measure. She attempted to abstain but finally voted “NO”. I do understand that unit owners were under pressure last year because of significant increases in gasoline and certain other commodities.

However, the arguments for a zero fee increase, for reducing and controlling expenditures through more rigorous bidding procedures, discussions about “wasting money” and attacks on some of the members of the Board of Managers (I recall one manager telling another that what he was doing or saying was “stupid”) all led me to believe that the principal goal of our newly elected board members was to reduce expenditures and substantially improved "communications".

Now that the fee increases have been passed, these measures and concerns seem to have largely abated. The term "competitive bidding" is used as a club to intimidate board members, but doesn't apply to all projects or landscaping. There have been statements about reducing costs by firing or replacing our construction maintenance company and one of the Board of Managers has apparently befriended a contractor who arrived at a unit owner meeting and made a presentation to the unit owners and announced his willingness to do the work. He dangled some carrots and implied that he would do it for less than the Childs Company.

However, an issue has now surfaced that seems to be how to spend the money that is being collected. Inflation is currently low, but it is a certainty that it will increase and electricity, natural gas and fuel and material prices will also increase, and there will again be substantial pressure on unit owner personal budgets. So why not save the money or prioritize the spending on driveways, etc. During the May meeting, it was revealed that there were insufficient reserves to do the driveways that have been identified as requiring immediate repair or replacement.

Certainly, the association can choose to spend money on an expanded newsletter, on insurance for a block party, landscaping, etc. And certainly, some unit owners will see this as a waste. I am sure some unit owners will not attend a block party and some probably never read the newsletter. That is a reasonable statement to make about a diverse group of 336 or so individuals.

So the questions are, how to create a newsletter that everyone would want to read and how to create a block party that everyone would want to attend?

Another question is, what are the priorities for expenditures of funds at BLMH? I would think a prudent individual would realize that core services come first, and reserves and emergency funds after that. However, fees collected for reserves and emergency funds cannot be ignored or spent on expanded services. There are choices to be made. But the problem seems to be in the details, and differences about what are “core” services and reasonable savings rates for reserves and emergency funds. There are brief discussion of some of these issues among the board members during Association meetings. However, the vast majority, or 95% of unit owners do not attend and are not provided with this information. Unfortunately, the official newsletter does not elaborate on the meetings and on the issues that unit owners have about budgeting and differences about how to spend the monies collected by the Association.

I’ve done what I can to provide some insights into the issues here on this blog. However, for the 95% of the unit owners who do not attend the official, announced Association meetings, their only source of information is the newsletter, which seems to have morphed into some sort of National Geographic with full page articles about the “resident of the month” and English architecture. With 336 unit owners, it will take 28 years to hear about each one of us. Obviously, that will never happen.

I would really like to know about the issues and perspectives of our past presidents. I would then like detailed statements from each of the members of the Board of Managers regarding their positions, concerns and how during their tenure they will address them. Subjects would include finance and balancing the needs, wants and desires of unit owners who vacillate between wanting improved and expanded services, totally maintained buildings, grounds and streets, and also want no fee increases. Then I would like to see similar statements from each approved candidate for the Board of Managers. I have emailed our Communications Director about this.

Inflation Update

The Consumer Price Index for Urban Consumers (CPI-U) for May of 2009 is 213.856. The annualized inflation rate computed from this number is -1.28%.

This is an indicator of deflation. In other words, the prices of good and services have fallen and in May certain consumer prices were lower than they previously were.

To put this into perspective, this is the lowest annualized rate since the -2.08% of January 1950.

June 12 Association Meeting Highlights

These are highlights of the June 12, 2009 Association meeting. The meeting ran from approximately 7:00 until 9:45 and exceeded allowed time. The meeting was attended by approximately 15 unit owners, which represented 4% of the unit owner population.

I didn't report on the May Association meeting. It has become apparent that information from the meetings will not be included in the Association Newsletter, and has been replaced by topics selected by the Communications Director and the Newsletter Committee.

I have decided to routinely present the highlights of all meetings that I attend in this blog, and I will attempt to attend each monthly Association meeting.

At the conclusion of this post I have some comments on the meeting and also some comments regarding the state of official communications in the Association.

Board of Managers discussion topics included:

1. Block Party Status, issues and concerns.
2. Treasurer Report and concerns regarding association legal and financial liability and budget overruns .
3. Landscaping Director request for approval of funds for special projects.
4. Architectural Director presentation of roofing shingles, approval of color and window types.
5. Landscaping Director and Architectural Director discussion of Bid Procedures.
6. Discussion of Budgeting. Treasurer will give update on funds spent but not budgeted. This will be presented during the July meeting.
7. Newsletter discussion including content, materials, costs.

Unit Owner Forum discussion topics included:

1. Unit owner landscaping requests and demands.
2. Unit owner discussion of newsletter printing and materials.
3. Unit owner complaints of dead and dying trees, and condition of gazebo.
4. Discussion of conflicting requirement by Unit Owners placed upon the Board, including contradictory financial demands.
5. Threat of legal action by a Unit Owner regarding current schedule for upgrading patio railings.
6. Discussion of damaged roof section by Unit Owner.
7. Request for discussion by Unit Owner regarding inconsistent bid procedures.

At the conclusion of this specific post, there are some general comments pertaining to the meeting.

Here are the meeting highlights, presented in two sections:

Board of Managers Discussion of Association Business

Report by the Communications Director to the Board regarding the status of the Block Party. She advised that the date, time and location had been determined. The board President stated that the party would be as agreed by the board, not the individual. When asked about the results of a follow-up on insurance, the Communications Director acknowledged that there were insurance company stipulations. Liquor was totally prohibited by the insurance company. During the discussion it was apparent the Board of Managers were uncomfortable with possible liability by the association. The differences between off site and on property parties were discussed. Off property location at the park across the street was discussed. All residents of BLMH will be invited and that includes renters and owners. However, it will be impossible to restrict access to unit owners only, and neighbors may choose attend even if not invited. The Landscaping Director made a statement regarding his personal experience at another location in which a party was held on public property, rather than Association property. It seems that the party will require additional insurance, at additional cost to the association, perhaps $1,500 for an insurance rider. During the discussion several unit owners repeatedly booed, jeered and expressed other forms of verbal intimidation of members of the board when they did not immediately and without question agree with the position of the Communications Director, and as the board asked questions about when, where, how and how costly this event might be.

The discussion continued and the Treasurer gave a brief summary of liability issues to the Board and to the Unit Owners who were present. The Board discussed the specific concerns regarding the Block Party. It was stated that the Association can be sued in the event of mishap or if any member attending the party did not adhere to the stipulations of the insurance company, as reported to the Board by the Communications Director. The Treasurer expressed concerns the insurance could be voided and the association would be liable for any financial consequences. He stated that “we live in a litigious society”. His statements were met with boos and jeers from some of the unit owners present. [Comment: Financial burden and responsibilities pass first to the Association, and then to the individual Unit Owners. In the event of a dispute which is not covered by insurance or if it exceeds insurance coverage or insurance is voided, judgment would collect from the Association reserves first, and if those were not adequate, then individual judgments would be made against each unit owner. These would result in a lien against the property. Until the judgment is fully paid, the unit owner would be prevented from selling his or her unit.]

Request for funds by the Landscaping Director for special projects. Apparently a bid was solicited from one contractor for a list of projects. The list was provided by unit owners who attended the May meeting and the Landscaping Director’s personal observations. About $18,000 is expected to be spent at 16 addresses. The Landscaping Director discussed this with the Board of Managers, requested approval of funds, but it did not come to motion or vote.

Discussion of the roofing project with a presentation of samples of the shingles by the Architectural Director. Shingle color was approved by the Board. The Architectural Director made a presentation of three window types. This is a deviation of the original plan, but cost would remain at $500 per window for the originally approved window type. He stated that on reflection he realized that a Unit Owner may have a preference of a different manufacturer's window, and would like to use them throughout the unit. The director researched the alternatives and decided to provide the Unit Owners with a selection of slider windows with brown (or "bronze") exterior and white interior. This was also prompted when the director discovered that the original bidder did not make a patio window. This decision permits the B unit owners to be given the opportunity to choose a window from one of three manufacturers, which could be used throughout their unit. The colors and use of three window manufactures was approved by the Board.

Discussion on bid procedures and certain aspects of the roofing project. The Landscaping Director confronted the Architectural Director about the issue of bids for adding a concrete pier under the wooden beam supporting the gazebo roof entrances or the new shed roofs. As has been discussed at several association meetings, the roofing project will include some concrete work when shed roofs are added, or support beams are repaired. This may include drainage work at the entrances and possible sidewalk entrance replacement. It has been stated that this will be determined on a building by building review. The Landscaping Director stated he could not understand why this work did not go out for competitive bids. The Architectural Director advised that the amount of concrete for the pier, for example, was less than one-half yard. He stated that there were issues of practicality. This did not satisfy the Landscaping Director.

Budgeting. The Treasurer provided his report and advised the Board that he is planning on presenting information about cost over-runs in different areas. Decisions must be made about how to modify the budget to move money to those accounts. Where will it come from? All unit owner fees for 2009 have already been assigned to budget areas. The treasurer pointed out that this is not his decision alone and that when board members decide to spend money, they need to also have a discussion of where that money will come from.

Newsletter. The Board discussed cost increases in the newsletter, and a request was made to reduce gray space and photo areas and consideration be given to non-glossy paper. The Communications Director agreed to look into this. At the mention of modifications there were boos and jeers from some unit owners. A discussion of cost increases resulted in shouts from the audience. One individual pointed out that at one time the Association paid a fee to an individual to deliver the newsletters. Volunteers now do the delivering. However, apparently the cost has doubled. We’ll know more at the July meeting when specific budget items and over-runs are discussed.

Unit Owners Forum

As usual, among the unit owners there were cheerleaders or proponents of one agenda or another. Some come prepared for the topics such as the newsletter or to pass their requests for landscaping improvements to the Landscaping Director when this topic comes up, as occurred during the May meeting. How do these people know? I assume they have had advance conversations with the Communications director or the Landscaping director. As there is no formal announcement, the vast majority of us are unawares.

There was a discussion by unit owners about how well the newsletter was received and a conversation was related with someone who thought the newsletter was “very professional” . A unit owner who stated that he was on the city's Environmental Commission stated that the newsletter was wasting paper and suggested non-glossy, less expensive stock. He also requested that the newsletter include recycling information. It was pointed out that the local Sun newspaper includes the same inserts he wanted the Association to use, and that this would be redundant.

A couple complained about a dead or dying tree and the condition of the gazebo. They were belligerent and stated "Where does all the money we give each month go? What do we get for all the money we pay to you people?" They stated they would not serve on the board, but prefer to criticize, or words to that effect.

This and other statements by unit owners about newsletter costs, gaps in the maintenance of the grounds and the complaint “what do we get for our money” resulted in a brief discussion among the board members, led by the Architectural Director and Treasurer, about attempts to hold the line on maintenance and landscaping expenditures. However, it was noted that there are conflicting demands by unit owners. In this meeting there was a discussion about $18,000 for landscaping improvements beyond the spring maintenance and so on. It was pointed out that critical repairs such as roofs take a precedent over landscaping. [Comment: It is my observation that the purpose of the unit owner outburst was to intimidate the board in an attempt to get approval of the $18,000 landscaping projects. ]

A unit owner threatened legal action to get a new style railing on his patio. Standard association policy is and has been to install a mesh over the existing railings for any unit owner who is concerned with the dimensions of the openings in the existing railings. In response to this unit owner’s complaint, mesh has been installed. However, the unit owner was still dissatisfied and pronounced the railings to be “unsafe” and also threatened to pursue this with the city. The Architectural Director and the professional manager stated that it is the policy of the association to pro-actively upgrade all of the railings to a new style, and on a rotational basis determined by the painting schedule of the balconies. This upgrade was not prompted by any threats or by city enforcement of new codes. However, the unit owner was unwilling to accept anything other than a new railing. The President stated that the entire Board would revisit this issue.

The writer advised the Architectural Director that a section of shingles was noticed as missing from a roof. I volunteered to email a photo with particulars and that was accepted.

I advised the board that I was confused. This was prompted by the interchange between the Landscaping Director and the Architectural Director. I asked for a brief explanation of the inconsistent bidding standards; for example, the Landscaping director had received a single contractor bid for an $18,000 project. But he had stated during the meeting that he could not understand why there were not competitive bids on what were small architectural projects, which the Architectural Director stated to be $500 on up. The professional manager attempted to answer, but we were out of time and he was not allowed for that reason.

General Comments:

It is only natural for unit owners to come to an association meeting with the intention of promoting their favorite project or agenda. It is also natural that each unit owner wants the opportunity to speak and to be heard. However, the meetings are frequently disrupted, and not everyone has the opportunity to express themselves. During the June meeting, the Unit Owner Forum occupied about 30 minutes. Unit owners were given as little as one minute to say whatever it was they needed to say. Some took 5 minutes, others were not given the opportunity.

The President uses a gavel to attempt to control the meetings. However, some unit owners refuse to comply. I asked several to "shush" at the last meeting and I was given verbal insults as a result. I simply want to hear what the Board of Managers is discussing. It seems that some of our Unit Owners feel they have rights and entitlements which are not for the rest of us.

The Board of Managers attempts to continue their discussions of Association Business even with the disruption of boos, jeers and other verbal assaults. I find it interesting that when the Treasurer, for example, is booed, he attempts to address the issue with the unit owner. This is a form of defense of the board. Similar events occur with the Rules and Regulations Director, the President and the Architectural Director. At such times, certain members of the Board usually sit quietly and allow this to occur. I realize that the members of the Board of Managers have their personal agendas. However verbal jeers, boos, etc. directed at any one member of the board are in actuality attacks on the entire board, and an attempt to manipulate the entire board and the association.

I would think that other board members would address their "followers" or proponents of their position and ask for silence, a return to order and decorum. We are all equals and there are oaths and laws directing the Board of Managers. However, when I am present that has never happened. In the worst case, this leads me to the opinion that certain members of the Board of Managers are using unit owners in an attempt to manipulate the remainder of the board to accomplish a specific agenda.

In recent meetings, that agenda has included a campaign to fire our professional managers and to fire or replace our maintenance company. Allegations include insults or rude behavior with unit owners, inadequate communications, cost issues, etc. If communcations needs to be improved, there are ways to achieve that without firing the management company. I have yet to see or hear any rational conversation by the members of Board of Managers who are promoting the firing, of what characteristics and services are expected of the professional managers and of how these are to be prioritized. For example, is communications more important then financial acumen? Is management and professional guidance of the Board of Managers, all volunteers with varying skills, less important than letters to unit owners? I'd like to see a comprehensive specification of what our professional manager is to provide to our association. How many hours per week? A 24 hour phone dedicated to BLMH, whatever. It is my experience that anything is achievable. But it takes time and money. We can have a dedicated 24 hour receptionist; we can have a 40 hour per week dedicated manager. But we will have to pay for it. Are we willing to pay for what we expect or demand?

It may be that promises were made prior to the most recent election. However, there are special rules under the Illinois Condominium Act that apply to our representative body, our Board of Managers. Agendas used for election purposes cannot be used once a candidate is elected. Once elected, the candidate is bound by oath and by law to represent each and every unit owner uniformly and fairly. That means campaigns waged against suppliers, contractors or other should only occur if the majority of unit owners agree with the position. Underground or covert campaigns by members of the Board of Managers inherently support the few and undermine the many. If specific members of the Board want to revise the bidding procedures, or fire certain supplier to BLMH, they should state so in writing and also state their case in such a manner that all unit owners are equally informed and represented.

That has not and is not happening. I stated my concerns about this to the board during my one minute at the May meeting. If you read the official Association Newsletter, you would have no idea of the attacks on the board, on our professional managers and of the various special agendas which are being surreptitiously promoted, but are quite visible during meetings, if one attends them regularly. Patterns are difficult to discern unless one observes for a period of time. So it is with mighty rivers, which in photograph may seem to have no current. So too it is with people who when observed over time, the character and direction of which also becomes discernible.

Communications was an issue during the most recent Association election. The official communications of the Association has improved in form, but not in substance. In fact, I allude that the communications actually obscures items of importance and in that respect, is actually a step backwards. We live in a society bombarded with information. We are being provided more to read, about our fellow unit owners, about architecture in Europe, etc. But we aren't be informed of the issues and of the various sides of the issues. Everthing at BLMH takes time, talent and money. Our Board of Managers are unpaid volunteers. They have lives to live and limited time to spend on Association business. They are a very valuable and scarce resource. We shouldn't squander their time or their talents. Money is available to be spent on needed and critical maintenance items and certainly some is available for other things. However, it requires a prioritization of budgets. Do we want roofs and driveways, or do we want enhanced landscaping? Do we want reserves for emergencies or not? You and I may have a personal preference, but it is the Board of Managers that is enacting policies and spending money. Do we really know what the priorities are for each member of the Board of Managers? They each vote on financial matters and it makes sense to me to know what each of their priorities are. But our Newsletter and other forms of "official" communications does not provide that information.

So any individual member of the Board of Managers can say at any time that they are acting "for the good of the association". But at any moment, what is that really? Will they, on an individual basis support our roofing project 100%? Will they defer the budgets for "their" areas of responsibility "for the good of the association" to complete the roofs and get our driveways resurfaced, or will they simply give lip service and attempt to move dollars from someone else's budget? The truth is, I don't know because candidates don't offer specifics of how they will run this business once elected, and neither do all of the members of the Board of Managers. Some unit owners would like a reduction or elimination of assessment and fee increases. How is the Board of Managers to prioritize spending to accomplish that? What are we as unit owners willing to give up to get such a reduction? I'd like to know where each member of the Board of Managers stands on this and what they each would specifically "give up" to achieve a reduction in the rise in assessments or fees.

As a unit owner, I think each one of us would like to really know the answers to these questions. I'd like a published, written statement from each member of the Board of Managers on this and every other important issue facing us, and with specifics of how they would go about achieving the solution. However, communications is controlled by an individual who has other interests and ideas for our association. After eight months, I know no more than I did at this time last year. In some respects, I may actually know less. That is a real failure for a group that gave us all such high hopes and expectations, and promoted an association in which "we could all be heard". I'd like to hear the Board of Managers who make the day to day decisions to run this business, our association. But noisy unit owners are opposed to that. I'd like specific answers to specific questions about how this association is to achieve the agendas before it. But the newsletter and other "official" communications does not contain that information. There are times when I read the "official" newletter and blog that I feel that I am being treated like a mushroom.

If I were to obtain that information and published it here, I must ask "what's the point"? To do so could be pointless because the "official" position of our Association and the Board of Managers is that this blog does not exist. You are directed by the Association to the "official" blog of the association, the last post on which is dated February 3 and announces the Association meeting of February 12, 2009.

Roofing Damage

The above photo was sent to our Architectural Director, with the address of the building. He tells me we have had some roofing damage this winter, or due to recent high winds. I don't believe the Association was aware of this particular section of roof, and the photo I took seems to indicate a loss of shingles in a large area.

If you are aware of any damage to you or your neighbors roof, I suggest you take a photo and alert our professional managers or the Architectural Director. They may be already aware of the problem you notice, but then again, they may not. And better safe than sorry!

Springtime Work and Special Requests are Proceeding

You may have noticed some springtime planting and mulching. This is being done on the normal rotational schedule.

However, our Landscaping Director has apparently been surreptitiously collecting special planting requests from Unit Owners. This was revealed at the Board meeting yesterday, June 12, 2009. Apparently, this planning on his part is sufficiently advanced that he has already obtained bids and this was brought to the attention of the entire Board during the meeting. Bids for anticipated work exceed $18,000.

I was not aware that such special projects were underway and that individual unit owner requests were being entertained. There has been no mention of this in our official Association Newsletter. Surprising as the Communications Director and the Landscaping Director are both members of the ROC Group here at BLMH.

I would have expected that the Communications Director would include this important information in the newsletter. But it seems that a full page article about Salisbury Cathedral, England was more important by the Communications Director. Of course, it could be that we, the unit owners are being fed pap while favoritism and special favors are maneuvered behind our backs.

I am also surprised that there seems to be no priority system for the disbursement of funds; for example, we have dead trees to be removed and we have brown patches where trees have previously been removed. A gazebo, much in need of repairs was also discussed at the meeting. I would think it would be a priority to spend funds to replace these. I have also brought to the attention of the Landscaping Director that there should be a program in place for removal and replacement of ornamental trees which have exceeded their lifespan. No program exists nor is one anticipated. I was told by the Landscaping Director, when he answered my query during the homeowner's portion of a recent board meeting that these trees "will last a long time".

Is it possible that there are politicians here at BLMH? Are we becoming like Chicago, where board members function more like aldermen who cull favors upon the few and to whom unit owners are expected to go for favors or to get results? To put this into context, special work is contemplated for about 16 addresses. The remaining 70 or so will get NOTHING. About $1,200 is being spent on each of the "special" addresses included in the bid. If each building were included, then the budget would be $90,000! That's enough for re-roofing two buildings! But "certain" owners at BLMH will get special treatment at BLMH. What do you think? Do you want certain people to get flowers, shrubs, groundcover, etc. even though dead and decaying trees are not being removed or replaced? Or would you rather have roofs redone? It's your decision and if you don't write the Association Managers about this, the foxes will make off with the chickens. I'll post more on this later in the week.

The photos in this post include only normal work, which is to say, cedar trim repairs and mulching in accordance with the rotational schedule that exists here at BLMH (this per information provided to Unit Owners during recent Association meetings.

Unit Owner Budget

I’ll be looking at the Association budget in the near future. However, to get a better grasp of the budgetary issues facing our Board of Managers, I thought it might be useful to develop a similar budget for a typical unit owner. This will provide some possibly useful information for the Unit Owner and will also reveal some aspects of the budgeting process in use by our Association. I’ll use a “B” unit in my example, which has an additional window, two baths and three bedrooms. There are a few notes at the end of this post.

It is my understanding that the correct method of budgeting is to determine the necessary expenditures and then levy the amount of fees and assessments. To do so the Board of Managers must prioritize the needs of the Association and maintain the assessments at an appropriate amount.

A unit owner personal budget can be developed in parallel to the one used by our association. Such a budget would have four components:

1. Establish a budget for day to day operational expenses.
2. Develop and save a for a Reserve budget for future maintenance and replacement needs.
3. Develop and save for an Emergency budget for unforeseen or unpredictable items.
4. Re-evaluate each of the previous three annually and adjust each budget accordingly.

Each of our Board of Managers should have the capacity to understand the concepts outlined above. If they do not, it is impossible for them to honor or to complete their fiduciary responsibilities.

Unit owners may not have such capacity nor are they required to. A Unit Owner can choose not to save, and purchase appliances or whatever on his or her credit card. That is a personal choice. However, the point made here is that the Association does not have that choice. The Board of Managers are required under law to develop reserve budgets and plans which include and satisfy all of the components described above.

Our Board of Managers is required to satisfy the four above requirements and more. Unit Owners sometimes forget that and attempt to sway the board into foregoing reserves for discretionary items, or divert fees to personal causes or for personal interests, or reduce fees to alleviate the financial pressure on the individual. That is one of the reasons why each member of our Board of Managers is prohibited under law and civil penalty from favoring individuals or groups. Extreme behavior can be rewarded with fines or jail time. There are laws that govern the operation of the Association, but we must be diligent and fully support the Board of Managers in fulfilling its fiduciary duties.

Day to day operational expenses.
In prioritizing expenses, the day to day or "Operational Expenses" come first. These are required expenses for the operation of the Association. For a unit owner, such expenses would include non-discretionary expenses such as:

1. Real Estate taxes.
2. Association fees.
3. Basic transportation (excludes performance or luxury vehicles e.g. BMW, Buick, Cadillac, Hummer, Land Rover, Lexus or Volvo, etc., etc. !).
4. Insurance for basic transportation.
5. Gasoline and annual maintenance for basic transportation.
6. Natural Gas for heating, cooking and hot water.
7. Electricity for lighting, the operation of the furnace and air conditioning system, and appliances.
8. Insurance as required for a Unit Owner.
9. Basic groceries.
10. Basic clothing.
11. Basic communications, either land line telephone or cell phone.
12. Postage and stationery.
13. Basic electronics and appliances.
14. Health Insurance.

All other expenses could be considered to be discretionary or elective, and therefor optional. Why is that? After meeting basic service needs, any remaining funds should then be allocated to growing reserves and growing or maintaining an emergency fund. Only after meeting the savings targets for base expenses (operating expenses for our Association) and Reserves (future maintenance or replacement costs and emergency funds) should any funds be spent on "discretionary" or unbudgeted items.

For the Unit Owner, such additional discretionary expenses may include better cable TV, a vacation home, a better car, large screen TV, other major electronics or appliances, appliance upgrades, HBO/ESPN to the max, vacations, etc. However, such expenses should come after the first three budget groups; Basic, Reserves, Emergency.

Personal budgets have some aspects for which the Association does not. For example, each person who is employed may save a portion of their savings in a Roth IRA retirement account. This is beyond any company pension, 401K or SEP IRA. However, while such a savings program is entirely voluntary for individuals it is nonetheless recommended by many financial planners and probably should be included in base personal expenses. According to the 2009 Retirement Confidence Survey, 25% of workers have no retirement savings and 53% report savings or retirement investments of less than $25,000, excluding their home or employer pensions. Funding for one's retirement might be a fourth budget group for a Unit Owner.

So the modified budget for a Unit Owner, modelled after the one for our Association would include:

1. Basic or Operational Expenses.
2. Reserves Budget.
3. Emergency Budget.
4. Retirement Budget.

Sources of Revenue or Income

The basic source of income for the Association is the fees and assessments paid by Unit Owners. The Association will continue to collect fees from unit owners as long as it is in existence. Unit owners, on the other hand must plan on meeting those fees and other expenses from wages while working and after retirement from other sources of income. Obviously, the unit owner must also plan an income stream sufficient to meet his or her needs in retirement. If not, then discretionary items must be eliminated followed by core items such as an automobile.

To Spend or Save?
Spending for discretionary items or saving for reserves is a choice facing the Association and each unit owner. The Board of Managers has a fiduciary duty to develop viable budgets, set the fees necessary and collect the money required by those budgets, and also control spending on day to day or “discretionary” items. A viable Unit Owner budget would do the same.

The Association can choose to improve or expand services, add park benches, expanded and glossy newsletters, web sites, purchase special insurance and fees for block parties and so on. However, in so doing the association has these choices:

1. Increase the fees collected.


2. Divert funds from the reserves.


3. Reduce services.

Reserves cannot be legally mis-allocated or depleted. So the Board of Managers has two legal choices:

1. Increase association fees.


2. Reduce services.

Unit owners face a similar dilemma in their personal budgets. However I, for example, am somewhat limited in my ability to raise fees. My personal choices are:

1. Earn more from my current job or work two jobs and increase my revenue.


2. Divert money from my “reserves” and spend the funds I should be saving for my retirement, for my “emergency fund” or for replacement of the elements in my unit for which I am responsible. This option is not available to the Association.


3. Reduce my discretionary spending. For example, keep my car long after it is paid for, or when I must replace it do so with a cheaper and more fuel efficient car, go to basic cable or no high speed Internet, do less dining at restaurants, take no or cheaper vacations, do no spending on big ticket electronics, purchase fewer clothes, etc., etc.

I have the ability to mortgage my future to live well, or better, today. That is not a choice for the Association. Nor can the Association assist me if I make poor decisions or should circumstances align against me. The Board of Managers are prohibited from acting on my behalf.

Unit Owner Reserves:
Internal maintenance of my unit or of the elements for which I am responsible, can be a financial “surprise” to a unit owner. I suggest that unit owners learn from the financial operation of the Association and build a “reserve” fund for repair or replacement of windows, furnace and air conditioner, hot water heater and major appliances, etc.

Here is an estimate of the expected life span of various elements I am responsible for in my unit. Each unit owner could have a replacement fund, which I’ll call a “reserve” fund for these. This is exactly the same approach the Association uses for planning for replacement of roofs, sidewalks, streets, street lighting and so on.

The Association is currently reviewing the reserves and conducting a reserve study. One of the purposes is to determine if the Association has a savings program in place which is adequate to address aging infrastructure. Emergency funds are described as funds required by unforeseen circumstances. However, a lack of planning is not an emergency. The goal is to develop a viable plan which can then be budgeted.

I would probably review my personal “reserve study” every few years. The purpose is to re-assess the condition of the elements for which I am responsible and to determine the current cost of these elements. Our Board of Managers is required to use historical data when making a budget. So should I when preparing my own budget.

The unit owner is also wise to consider an “emergency fund”. Emergency budgeting for a unit owner is a difficult thing to determine. However, many financial planners recommend at least 6 months wages, after taxes, be set aside for use in personal financial emergencies which could be considered as medical, loss of job, legal, property destruction, etc. For a median income family here in the U.S., such a fund would be about $25,000 using median annual income figures for the state of Illinois and deducting 20% for federal, state, social security and Medicare taxes normally with-held from wages. To go further into the need or adequacy of such a plan would require financial data specific to each unit owner’s circumstance.

Personal Reserves, excluding an Emergency Fund
Such a reserve or saving program would include a survey of the elements which are the responsibility of the Unit Owner. Here is a possible list, and this list is somewhat unrealistic. It assumes a new unit with all new appliances and appointments, and then begins aging the unit and its contents. An individual plan would require determining the age of each of the components in the unit and estimating their condition and remaining life span. From that I could then determine how much to save.

For example, when I purchased my unit it included an aging stove and refrigerator. I replaced those within a year of moving in. The refrigerator was not a choice. The stove was in poor shape, but could have made it for a year or two. However, it was an electric unit and I wanted a natural gas unit; so it was quickly replaced. Approximately 5 years later I replaced the hot water heater which was showing signs of stress and imminent failure. At about 6 years, the air conditioning compressor failed. I was fortunate that I had the remainder of the warranty for the unit installed by the previous owner. My pro-rated costs with labor were “only” $900. It is possible that I will replace the furnace in less than 10 years and before its maximum rated life.

Here is a list of replacement costs. Each item has the expected life expectancy per “experts”. In many cases this is a range in years because exact dates are the result of use and abuse, unusual wear, quality of the item and for windows and doors, the weather:

1. Aluminum Windows 15 to 20 years. I have 5 windows estimate $500 each and one patio door estimate $1500. Installation estimate $500. Total $4500. Amount to save each year =$4500/15 years = $300. (Rough estimate; see Notes).
2. Garage door 20 to 25 years. Installation estimate $500. Amount to save each year = $25.
3. Hot water heater 10 to 14 years. Price installed = $400. Amount to save each year = $400/10 years = $40.
4. Washer and Dryer 10 to 15 years. Price for mid-range dual units = $1,500. Amount to save each year = $1500/10 years = $150.
5. Furnace 15 to 20 years. Price for natural gas, mid-tier unit $5,000. Amount to save each year = $5000/ 15 years = $333.
6. Gas Range 15 years. Price for mid-tier unit $800. Amount to save each year = $800/15 years = $54.
7. Refrigerator 13 years. Price for 21 cu. ft. mid-tier unit = $1,000. Amount to save each year = $1000/ 13 years = $77.00.
8. Dishwasher 9 years. Mid Tier unit = $700. Amount to be saved each year = $700/9 years = $78.00.
9. Faucets 15 years. Replacement by plumber, mid-tier unit = $200 each or $600 for two baths and kitchen. Amount to save each year = $40.
10. Shower faucets 20 years. Replacement by plumber and removal and re-installation of tile = $400 each or $800 for two baths. Amount to save each year = $800/20 years = $40.
11. Carpeting 10 years. Prices vary with quality and total square footage. Estimate $25 per square yard for four rooms totaling 75 yards = $1,875. Amount to save each year = $188.
12. Garage Door Openers 15 to 20 years. Price installed $250. Amount to save each year = $250/15 years = $17 per year.

Summing the annual amounts above determines the total required to be saved each year by a Unit Owner as “reserves” for the replacement of the items. Using the lower lifetime for each item yields a sum of $1,342. I could use the higher, but that belongs to the "Dirty Harry" school of budgeting, where, as in the movie, the question to be asked is "Do I feel lucky"?

However, there is one complicating factor and that is inflation. The purchasing power of the dollar diminishes over time. The older I became, the more aware of this I became. My first car was an Opel and it cost me $1,800 driven out the door of the dealer including all taxes, title, etc. Today such a car would cost about $18,000.

So that needs to be taken into consideration when saving for long periods of time. Planners and economists tell me that long term inflation is usually in the range of 3.5 to 4.5%. For some years it is lower and for others higher. So for simplicity, let’s assume that long term inflation is 4.0%. My saving for reserves must include an additional amount to compensate for the higher future cost of everything.

My actual saving should be increased by 4.0% per year. For example, in year two, my savings would be $1,342 plus an additional 4% of $1,342. The total amount to be saved in year two is $1,342 + $53.68 = $1,395.68.

The saving for year three would be increased by 4% over the amount saved in year two. In year three I would save $1,395.68 plus an additional 4% of $1,395.68. The total amount saved in year three is $1,395.68 + $55.83 = $1,451.51. And so on for years Four through 25.

Here is a brief spreadsheet:
























The column "Accumulated Savings" indicates how much has been saved since beginning in Year 1. Of course, if this were a true savings account, the actual amount in the account would fall as I spent funds to replace items according to the budget. For example, sometime between year 10 and 15 I probably would have replaced my clothes washer and dryer. That would have depleted some of the funds in the account and lowered the amount saved.

Is this plan realistic? Will my anticipated or planned costs meet the actual costs of these elements in 15 or 25 year? Probably not. It is necessary to assess the actual cost of replacement of the elements with the amount of reserves I have accumulated for that purpose at any specific point in time. That is what our Association does from time to time. The Board and Managers and our professional managers review the amounts saved for each item in the “reserves” to the current actual cost to replace that item. Savings to each reserve item can thereby be adjusted.

In September of 1998 the total reserves for BLMH was $86,321. Subsequent review revealed this was inadequate for th ecommon elements including 44 roofs, streets and so on. That is why the Board of Managers began adjusting the fees collected. They were honoring their fiduciary duties and acting responsibly. I can’t say why the reserves were what they were. The professional manager, whose responsibility it was at that time to guide our Board of Managers, is no longer with us. Our current profession management came on board in 1999 or so and our fees began increasing shortly thereafter.

The Board of Managers increased the Association fees to increase the amounts directed into the Reserve account. In my personal plan, I might have to do the same. For example, when I purchased my unit, the windows were about 22 years old. They have already exceeded their anticipated life and to achieve the funds necessary to replace the windows in the near future will require I increase the amount saved each year to make up for that shortfall in funds. If I save an additional $500 each year for windows, I should have enough to do the job in 8 years or so. To save additional amounts, I'll have to reduce discretionary spending or increase revenue. Of course if the windows fail in three years, I may have insufficient funds to do the work. As an individual I may have the ability to borrow funds and go into debt. Our Association does not have the option of using a "credit card" and so it must save. Financing is a possibility, if it is available. However, boards must exercise caution because fees would increase to service the debt. Reserve funding must continue and cannot be diverted to "servicing the debt". As a Unit Owner, I can escape from under the yoke by selling my unit and renting. The Association has no such escape clause. Any and all debts pass to the Unit Owners and must be serviced by the fees collected.

The result of a “personal” Unit Owner Reserve Study:
On viewing this, you might be shocked by the amount shown to be necessary over a period of 25 years. The amount of “Accumulated Savings” is the total amount saved over that period of time. From the perspective that 25 years is 300 months, the projected amount to be saved and spent on replacing the “elements” for which I am responsible, is an average of $186.30 per month.

What the chart above indicates is how these small sums can accumulate over long spans of time. To look at it another way, if I live at BLMH for 25 years I may have to spend $58,000 on appliances, an air conditioner and furnace, windows, two stoves, two hot water heaters, etc.
Of course, I may choose to attempt to use the same stove for 25 years. There are choices and lifestyle tradeoffs. It may also be that inflation will only be about 3% for the next 25 years. Should that be the case, I would only need $48,928.33 to accomplish the same. Inflation at 5% per year would require $64,049.77. So lower inflation is my friend.

Unfortunately, I’ll have to pay whatever the going rate is for the appliances and windows at the time I replace them. I can choose a lower tier product such as the cheapest possible dishwasher when the one I am using requires replacement in 2033. But I can’t predict what that will cost in the year 2033, so for now I must use inflation and current costs.

So it is with our Board of Managers and our professional managers who, hopefully are diligently attempting to guide this Association to an uncertain future!

A well run Association will always be balancing the requirements of staying the course, with the requests of unit owners to expand the programs or change the course. Some of the demands placed on the Association are mutually exclusive and contradictory and cannot be readily achieved. So it is with our personal endeavors.

I would like to make one final observation. The amount I should save to maintain the elements for which I am responsible is $111.42 each month in 2009. The association is required to paint, repair, replace, maintain, snowplow, mow, provide street lighting, clean the common elements, provide insurance hire a professional manager, provide service, etc. etc. etc.! So when I am inclined to think my assessments are "high" I think it is useful to remember that my personal budget, which excludes the exterior and common elements, is about 33% of the budget I'm allocating to the association so that it can do its work. Sounds like a bargain.

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Notes:

1. This is an example. It would be prudent for each Unit Owner to prepare a similar budget for their own use. The Unit Owner budgeting technique described above will be familiar to people who practice the technique called LBYM. That acronym means Living Below Your Means.
2. I have used the cost of "mid tier" furnace and appliances in preparing this example. These are generally mid price and moderately energy efficient. If you want "only the best" then your prices could be at least 50% higher than what I have here. You should therefore plan a budget accordingly.
3. I am using a dollar figure for windows which was mentioned to me last year. I cannot say that it is accurate and I should get an estimate and update my personal numbers.
4. Inflation may be higher or lower than what I have used here. Any plan should be re-evaluated periodically to verify that the prices being used are realistic. If not, then the plan should be adjusted to correct the amount saved. However, from time to time we go through periods of unusually low or high inflation. We are currently in a period of very low inflation and many prices are unusually low. I caution the reader that such periods are often followed by higher inflation. It would be unwise to understate the amount to be saved.
5. Day to day or "Operational Expenses" also vary with inflation. It is prudent for the Unit Owner to plan on annual increases to the cost of fuel and energy. Food too, will vary from year to year. The U.S. government provides "CPI" data each year. Annual Social Security increases, determined in the fall of each year, are useful for anticipating the cost increases to basic consumer items. These predictive indicators are not perfect and are sometimes inaccurate, but they are useful.
6. I do not include a "contingency fund". This is an amount budgeted to cover possible shortfalls or unexpected price increases. Such a fund is an expression of the Associations committment to get the job done on time, even if there be modest price changes. If you have a driveway that is disintegrating, you probably want that repaired or replaced, rather than waiting another year because the price of asphalt is high this year due to high oil prices, and the Association had no contingency amount in its budget. "Contingency" amounts vary but are typically 10% or so. If I were conservative in building my personal budget, I might include such a contingency.
7. When constructing a personal budget, there are lifestyle choices to be made. For example, automobile prices and features vary greatly. For the purpose of this budget I consider a "basic" vehicle as being a sedan that seats 3 to 5. According to Kelly Blue Book there are about 20 such new vehicles priced under $20,000. Of course, you may choose a Kia Forte at $15,430 plus tax, title and delivery. Donald Trump would probably choose a Bentley!
8. If you have a personal bias against having a budget of the type described in this post, you probably are not a good candidate for a position on our Board of Managers. I suggest that because it is difficult to leave a personal agenda at the door when putting on our "Manager" hats. Of course, many people operate differently in their professional, work environment than they do in their personal environment. However, if I do not believe in budgeting, saving for the future, seperating essential costs from discretionary expenses, etc. then it might be difficult for me to do so with the Association funds.
9. I have heard our reserves described as "deep pockets" which alludes to the seemingly large amounts in those reserves. They are not available at the discretion of individual board members. They are Association savings and belong to the Association and have a specific purpose as defined in the published budgets. This excludes "emergency" expenditures which pose an "immediate danger to the structural integrity of the common elements or to the life, health, safety, or property of the unit owners".

The Board of Managers - Part 4 - Job Descriptions

It is that time of the year and the Association is looking for volunteers for the board and committees; a form was included in the June “Manor Briefs” newsletter. Deadline for submitting a completed Candidate Form is August 28, 2009. The newsletter neglected to include a description of the various positions and the duties and responsibilities of each. I have obtained a “BLMH – WANT TO VOLUNTEER” bulletin which describes the positions of our Board of Managers.

The descriptions omit the Communications Director, which is a newly formed position; however, based on my observations during board meetings, the person occupying that position seems to include some of the duties of the Newsletter Director, newsletter coordinator, website or blog coordinator, social director and the alderman or special representative for the members of the ROC. Note: this blog and the writer is not a member of that committee.

The “BLMH – WANT TO VOLUNTEER” bulletin has a cutout coupon:
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If you made your decision place a checkmark on the committee best suited for you, here are the benefits, rated 0 – 10, that you will receive:

• Money = 0
• Special favors = 0
• Decreased assessment = 0
• Appreciation = 10
• Sense of sharing = 10
• Something to do = 10
• Fun = 9
• Sometimes not fun = 1

Briarcliffe lakes Manor Homes Association is an equal opportunity group of great volunteers. Join us for a meeting and bring this coupon with you for a free round of applause.
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Here is the official, published list of positions.

PRESIDENT
Shall Preside over both its meetings and those of the voting members and shall be the chief executive officer of the Board and shall be responsible for mailing and receiving al notices and executes all amendments to the Declaration, by-laws and other documents of the Association. The president is authorized to co-sign operating checks and will approve transfer of all funds. The president may volunteer his/her services to serve on an established committee.

VICE-PRESIDENT
Shall assume the responsibilities of the president during his/her absence The vice president is authorized to co-sign operating checks The vice-president may volunteer his/her services to serve on an established committee.

SECRETARY
Shall report and keep minutes of all meetings of the Board and of the voting members and, in general, shall perform all of the duties incident to the office of secretary. The secretary may volunteer his/her services to serve on an established committee.

TREASURER
Shall monitor the financial records, books of accounts, transfer funds as needed and co-sign all operating checks. The treasurer is required to approve all transfer of funds. The treasurer may volunteer his/her services to serve on an established committee.

ARCHITECTURAL COMMITTEE
The director of the committee shall oversee all projects involving any repair, replacement or maintenance to the architectural and/or structural (interior/exterior) of the 44 buildings on the property. The director must work closely with management and contractors and will supervise, advise and direct the actions to be taken regarding all projects. Frequent property inspections are required. All bids/proposals involving architectural projects will be submitted directly to the director and he/she will make recommendations to the Board.

LANDSCAPING COMMITTEE
The director of the committee shall oversee all landscaping projects involving general maintenance, improvements and special projects. The director, management and the contractor will walk-through the property in early spring and late fall. Continuous communications during the season will be maintained. Frequent property inspections are required.

RULES & REGULATIONS
The director of committee shall oversee the implementation of the rules and regulations as set forth. The director shall direct management upon request regarding any questionable actions to be taken or notices to be sent. Frequent property inspections in early spring in preparation for any amendments to be discussed at the annual meeting.

NEWSLETTER
The director of the committee will be responsible for picking up the completed newsletter from the newsletter coordinator, having the paper printed and distributing to all unit owners both on-site and off-site plus contractors. The newsletter will be disbursed every other month and all articles submitted to the coordinator by the first of the month. Any newsletter inquiries will be directed to the director.

WELCOME PACKETS
The director shall distribute welcome packets to new residents listed on the monthly management report. The director shall determine the information to be included in the packet and shall submit this information to management to be printed.