Updated Surplus Numbers

Updated Surplus Numbers
Updated Surplus Numbers: Actual surplus 2018 per audit was $85,163.
Boards 2011-2018 implemented policies and procedures with specific goals:
stabilize owner fees, achieve maintenance objectives and achieve annual budget surpluses.
Any surplus was retained by the association.
The board elected in fall 2018 decided to increase owner fees, even in view of a large potential surplus

Average fees prior to 2019

Average fees prior to 2019
Average fees per owner prior to 2019:
RED indicates the consequences had boards continued the fee policies prior to 2010,
BLUE indicates actual fees. These moderated when better policies and financial controls were put in place by boards

Better budgeting could have resulted in lower fees

Better budgeting could have resulted in lower fees
Better budgeting could have resulted in lower fees:
RED line = actual fees enacted by boards,
BLUE line = alternate, fees, ultimately lower with same association income lower had
boards used better financial controls and focused on long term fee stability

Wednesday, January 13, 2010

Who Is Managing the Managers?

We have a very important association meeting on Thursday. Our board will discuss the proposed 2010 budget with unit owners. I did send a letter to the board of managers, via our professional management and I raised my concerns and briefly stated my case. I received a response that my letter was "passed to the board". However, there was no indication that the board will address the issues I raised. I understand there was an association "non-meeting" the other day, which was attended by a professional manager, some members of the board of managers and some unit owners. I have been told that concerns about the budget were discussed. This meeting was not posted to the unit owner body; nor was it listed under the "Events" tab of our official website. I was not made aware of the meeting prior to its occurrence and therefore could not attend. I assume that was also true for the majority of unit owners.

I suggest unit owners attend the association meeting on Thursday and determine if the proposed budget is viable.  Certain board members have stated that our fees are "high" and at one time issued a statement about unit owner "outrage" over our fees. I conclude that they are pre-disposed to lower fees and have also made it known that our management should be replaced. In such an environment, there is pressure on the professional managers to say what the board wants to hear.

I am not in favor of increased fees. I am in favor of long term planning, i.e. 10 years or longer and budgets to accomplish these plans. Such budgets prioritize spending and the accumulation of reserves and will provide the funding necessary for maintaining this association. I have written letters to management and the board of managers, presented my case in those letters and here and have made statements at board meetings. This has resulted in "unpleasantries" directed against me.

I have not published my findings on this site because I want the members of the board to produce their plan. The proposed budged incorporates a plan which could create extreme pressure on future boards and unit owners, and some hard and unpleasant choices. I stated my case in a letter to the board. I want the plan of the board stated clearly to me and to all unit owners. I want to know how much will be accumulated year by year for roofs, drives, streets and all other maintenance and I want to know the proposed expenditures year by year. How many roofs will be replaced in 2010, 2011, 2012, 2013, and so on until all are completed and how will this be achieved with the proposed budget? When will these projects; roofing, drives, etc. be completed with the proposed budget? How much money is anticipated to be spent on each of these projects year by year? How will the problems with Lakecliffe be corrected? How much money is being allocated to this problem and is it sufficient? How did management and the board come to their conclusions and what data was incorporated?

If our fees are insufficient to achieve a "10 year" plan and if the board intends to hold fees constant, then where will the money come from? Special assessments, a reduction in services or from a loan to this association which will be repaid by the owners as higher fees? Are we, in fact, mortgaging our future? If services costs are to be reduced to achieve the budget and "10 year" plan, then where and how will they be reduced? What inflation numbers and other assumptions are incorporated in our proposed budget? Does this board have a "10 year plan" and if not, why not? If it doesn't, then how can it state that the budget is a "good" budget. It has been said that any road will take us where we are going, if we have no idea what our destination is. So it is with planning.

We, the unit owners are responsible for managing our board. Ultimately it is our responsibility to be assured that whatever plan our Board has, which is behind the proposed budget, will maintains fees constant and achieve all of the maintenance at BLMH next year and well into the future. That includes accomplishing and solving all identified problems or issues.

It is my concern that our board is constructing a budget which justifies their proposed positions and fee structure and which passes severe problems to future boards and future unit owners. It is our job to manage our board in such a way that problems built into the current budget are not ignored or glossed over and are not passed to future boards and to future unit owners. I frankly do not want to attend an association meeting in 2015 in which angry unit owners again storm the gates and loudly proclaim "how could this happen"? We are creating that future today and our board will pass a budget which includes solutions or problems and possibly both. There are choices to be made. That is why they were elected. I want them to articulate those choices to me and so should you.

"Brian" has stated in a comment on this site that our board "probably does not read" this blog. As the person who is creating our official association website, under the direction of the Communications Director, he is in a position to to make such a statement. If he is correct, it is unfortunate that our board wants "good news" people surrounding them, and doesn't want unit owners to ask the hard questions.

I will review the position of the board and management and I will then compare it to my analysis and I will then publish my agreement or disagreement. I ask that concerned or involved unit owners attend the meeting, take notes, ask questions and support me in this endeavor. Ultimately you are supporting yourself.  Someone has to ask the hard questions.

2 comments:

  1. Norm,

    I would like to clarify a comment you posted in your most recent blog. I have always been nothing more than a 'lurker' in this blog, but on this point, I believe clarification is needed.

    You mention that there was a meeting about finances that people were not made aware of. This meeting was a workshop, and I volunteered my services as a CPA to explain certain financial statements, letters to management from the audit, internal control, and host of other things that nobody in our association but myself (and any other CPA's I don't know about) would be qualified to answer. There were no determinations or suggestions made about finances or budgets, only definitional explanations.

    If you have any questions as to what was discussed, I will be more than happy to go over it with you.

    ReplyDelete
  2. Sean:

    Thanks for posting your clarification!

    ReplyDelete

Please leave a comment!

Note: Only a member of this blog may post a comment.