The association spreadsheet provides a glimpse of the proposed and actual budgets for 2004 to the present. Only "2010 budget" information was included. I assume the "actual" information for 2009 was not the audited data for the year, and so is possibly "preliminary" data.
For your information, here is a chart I made of the Operational and Maintenance expense portion of the budgets.
You will notice a spike in 2009. I suspect the actual for 2009 includes the expenses for concrete, landscaping modifications, etc. which were associated with the roofing and driveway projects. As near as I can surmise, the spreadsheets do not indicate the amounts spent on reserve items in 2009; for example, roofs and driveways. Or, if they do, the amounts are buried within maintenance items. However, no clarification was provided.
One item of interest was the expenditure for "Grounds Maintenance" which was nearly 59% greater in 2009 than it was in 2008 (3). The actual difference was $16,423. This is not a trivial amount. I am not aware of the explanation for this variance. Was this a one time event? Is it related to the driveway and roofing projects of 2009? Our 2010 budget increases the amount for this category by 12.4% above the actual expenditure for 2009.
You will also note that expenditures for operational and budget items continue their upward trend. Several items of interest here. First, the budget adapted for 2010 is identical to the budget for 2009. However, the actual costs for 2009 were 3.96% greater than the budgeted amount for 2009. Nonetheless, our Board of Managers decided that the 2010 budget will not be based on the "actual" budget for 2009. So it appears to me that we may have a possible 3.96% shortfall built into the operating and maintenance budget for 2010.
Second, even though costs continue their upward trend, the board has decided to hold our monthly fees at the same level as 2009. So the question is, if costs do increase, where will the funds for any budget shortfalls come from? My guess is, from reserves if the board can find a way. Third, this budget is after the great uproar by that group called the "Residents of Change" and their vow to go over the budget and bills "item by item".
Here is a graph of our actual expenditures, with 2010 using the amount projected by our Board of Managers. You will note that the trendline is continuously upwards. From the "actual" in 2004 to the end of the trend line in 2010, the trend in increasing at 3.35% per year. However, our association is budgeting for a 0% increase in operating and maintenance expenditures in 2010. I think there will have to be a few budget cuts to accomplish that. So where will those occur? I suppose our Board assumes that the annual inflation rate, which is currently 2.7%, will have no impact on us. In other words, energy, contractors who held the line on costs last year and so on, will not pass along their costs increases to us as the economy moves out of recession and expands. All costs will be exactly the same as that budgeted last year (2), and therefore will be nearly 4% less in 2010 than they actually were in 2009. Hmm, I don't think Com Ed is going by that play book.
Please don't make the assumption that a 4% fee increase was required in 2010 to meet rising costs. That portion of the budget allocated to operating expenses and maintenance is about 75% of the total annual budget. So, if the amount allocated to reserves is a constant amount per year, then our total budget shortfall will be about 3% in 2010, using the data provided by the Board of Managers.
According to the Balance Sheet dated November 30, 2009 as of that date, BLMH had a surplus of $6,643 for the year to date. I am uncertain if that Balance Sheet reflects the expenditures for roofs and driveways in 2009. I hope some of this becomes clearer with the balance sheet for the calendar year ending 12/31/2009. You will recall, the driveway projects for 2009 are incomplete and were scheduled for completion in 2010. Of course, our new Board of Managers may choose to go in another direction, to save funds. I understand another "reserve study" has been ordered by the Board of Managers, as announced at the January(1) association meeting. Obviously, the board is trying to find a way out.
I'll be publishing additional information on the adapted budget and I will also be publishing my projections for the driveway and roofing projects for BLMH. I had hoped the Board of Managers would have provided us with this information but they apparently chose not to, or did not do the analysis necessary. No matter, I have done mine.
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Errors and Omissions
(1) In the original post, the December meeting was cited.
(2) In the original post, was mis-spelled.
(3) the original post compared the 2009 budget.**
**With kudos to a sharp pair of eyes!
Norman, you constantly attack the board, specifically the ROC members, saying that the board has not done it's due dilligence for a budget that keeps up with inflation and for proper funding of future maintainance issues and upkeep. Try to understand, if you can, w/o that big ego of yours getting in the way, that the two ROC members of the board were not a majority, therefore not able to make a stand and make budget changes that you say are necessary to maintain our association's funding. I guess you can't get over your issue with a certain member of the board, to allow you to think straight. I suppose you don't realize that we pay for a management company to manage our association's funding and property, and to inform the board of any funding or operational issues. FUP, which I say has the expertise to manage our association effectively, has decided that an increase in assessments was not necessary at this time. Your number crunching, however accurate as could be, should be directed at FUP and not the board. The board has been elected to represent the owners and manage the best that they can and don't forget, they don't get paid, this is all done for free. Why don't you get on the board and give up your time and find out first hand, what is is to be on the board. Yea, I know, you are going to say that you have been on boards and so on. Believe me, if you were as successful in your endeavors as you say you were, I am sure you could be living in a community that deserves you and your opinions. One more thing, I am not saying that your numbers are incorrect, I just think you are directing them at the wrong group.
ReplyDeleteWow, Anon. 1:10pm, stop your whining, already.
ReplyDeleteI attended a meeting and at one point, the professional asked the board for direction. He stated "we will do as the board directs". The board makes the decisions, and can use or disregard information as it chooses. The board is responsible.
As I recall, three ROC members were elected and how many of the board are now such members? If I can believe what I read, the current board includes two remaining of the original three who were elected and also include the CD's endorsed candidates. So isn't that a majority?
If I understand this post, there is a shortfall but the board did not make budget cuts. So how can we have it both ways? No fee increase but no expense cuts. I can add.
To quote Massachusetts' new Senator "People Aren't Stupid".
Anon 1:25, Wow, you attended a meeting and are now an expert. Talk about stupidity. Get off your lazy ass and attend all the meetings so you can become educated. The budget was drawn up before all of the so called ROC people got elected to the board.
ReplyDeleteI think this is just about having the numbers add up, questions answered, and going forward. I don't like all the back and forth about who said what. If we care about this community let's go for clearing things up. Period.
ReplyDeleteTo clarify my response where I refer to "this board had ample time to review......." - I am referring to the current board that is in place.
ReplyDeleteAnon 9:21AM, So what you are saying is the previous board, before ROC, were perfect and did everything right. Is that correct?
ReplyDeleteTo Anon 7:45 PM - No I am not saying the board before ROC was perfect - no board can be. But at least they had the interests of the residents in mind and attempted to resolve issues. I don't want to get into the ROC issue, but unfortunately, they ran for the board for ALL THE WRONG REASONS. Now we, the residents, are going to suffer the consequences. I have feared a special assessment, and now that it is a very real possibiliby, I am angry. Of course, the ROC people will blame everything on anyone other than ROC people - and they will say I am picking on the ROC group. That is their mentality - and so be it. We have to keep in mind that the one constant in all this is WE HAVE PROBLEMS AND THEY NEED TO BE DEALT WITH. PERIOD.
ReplyDeleteAnon. 1:37pm
ReplyDeleteI agree. We need solutions. All this conversation about "picking on the ROCs" is really about misdirection. I won't get sucked into that trap and won't comment on that.
So, how do we avoid a special assessment in the near future and get the driveways and roofs all completed???
I'd like the board to respond to this question.
It's something for the next meeting and a letter or two to the board.