What the 0% Fee Increase Means to this Association

The board decided, during the January association meeting, to hold the fees of unit owners at the same amount as 2009. This decision was reached with a "No" vote by the Treasurer, a "Yes" vote by all other board members (1). This vote was also reached with the concurrence and advice of Management. The manager who was present, stated that a fee increase was not required in the view of Management.

From a personal perspective, this suggests that I don't have to adjust my personal budget this year to accommodate a fee increase.

This vote is, I believe, very significant. It carries some additional meaning, which is implicit in the vote and the position of Management. In passing this vote, the members of the Board of Managers who voted  "No fee increase" made a declaration, which I view as this promise to the unit owners:

1. There will be no operating and maintenance spending increases this year. The spending will be held to the figures used to discuss and debate, and published to unit owners prior to the discussion and vote, and mailed January 26. If any area in "Operating and Maintenance" should require additional funding, it will be achieved by budget cuts in the other areas of operating and maintenance.
2. Our reserves are adequate. With the current amounts collected and the amounts to be collected in 2010 they are accumulating at a rate sufficient to fund our driveways, roofs and even deal with repairs to Lakecliffe. 
3. There is no need for "special assessments" or unusual fee increases next year or into the foreseeable future. That is to say, the Board with the advice of Management, has decided that we will have sufficient reserves to complete roofs in the 6 to 7 years identified by management in the "reserve study" released and discussed as part of the review. Driveways, etc. will also be completed in a similar fashion and on time.
4. No funds will be transferred from Reserves to Operating and Maintenance budgets to cover shortfalls in O&M. That does not prevent the use of Reserves for drainage improvements required by relocation of downspouts, as part of a capital roof project. It does prevent use of Reserves for decorative or other embellishments. 
5. There will be no loans or mortgages by the association to cover O&M or Reserve shortfalls. Shortfalls will not occur in the best business judgement of our managers and the Board. 
6. Fee increases in the future will not exceed the average here at BLMH, which is 5%. That is to say, current collections will not create future deficits which will be corrected by higher than average fee increases, loans or draconian measures which would require unusual service or other cuts.
7. Management and the Board took into account current inflation as well as near and mid-term inflation, as well as the long term averages for inflation when making recommendations and making their decision. 
8. The Board decided that with current receipts (fees) and expenses (O&M and Reserve expenditures in 2010 as well as Reserve deposits in 2010) that this association does not require the approximately $22,000 that even a modest fee increase would have provided.
9. The Board decided that the recommendation of the current Treasurer, who is a seasoned board member, as well as the recommendations of the previous Treasurer and a past President, who all recommended a modest increase, could be ignored. 

The board did decide and vote for another reserve study. I am not really clear about the specific reasons for expenditure of funds for this purpose. However, doing our best to establish clarity is understandable.

I want to congratulate Management as well as all of the past members of the board, in particular those who served in the period 1999 to 2009 for their hard work, dedication and perseverance, and for taking the necessary and at times unpopular steps to get us to this point. I thank you for doing your fiduciary duty. I will also be sending a letter to Management, with my thanks.

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Errors and Omissions
(1) Originally reported that the LD was not present.