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

Tuesday, April 13, 2010

Spring has Sprung - Roof and Other Repairs Under Review

Our board is considering and evaluating repairs and expenditures of reserve funds for 2010. According to the report by our Architectural Director at the most recent association meeting, this will include:
  1. Some Roofs.
  2. Driveways approved and voted by the board to be repaved in 2009 but not done due to "weather" and "city code issues" and "other" interferences.
  3. Additional Driveways discussed in 2009 as requiring repaving but not approved or included in the 2009 vote. These were deferred by the board until 2010.
  4. Additional Driveways subject to discovery in the 2010 survey as being in need of and candidates for repair or replacement.
I don't believe the problem with the shifting building on Harrow Ct. was included in the discussion of projected expenditures. This problem was discovered by the former AD and our maintenance company during the roofing project and was discussed by the board in 2009. It was also discussed by the board during an earlier association meeting in 2010.

Our management is looking deeper into the asphalt problems on Lakecliffe.

All of this work is subject to motion and vote by the board. It is possible that no work will be done in 2010. That is however, unlikely and improbable. It is a reality, however, that the board may discuss and vote "NO" to any and all proposals and work on the above list. It would be unusual to reverse course on the driveways approved in 2009. However, that is not an impossibility. It is a fact that our CD voted 'NO' to the driveways approved in 2009. It is a possibility that she preferred to have other driveways repaired and resurfaced. If our board decides it is unwilling to spend the funds necessary for all the driveway repairs and the roofs designated as in need for 2010, then something will be removed from the list. This will be done in view of the unit owners, or behind closed doors, then brought forward, motioned and voted.

You may recall that in 2009, not all driveways earmarked by management as in need of replacement were slated for work in 2009. There were about 12 in need and only 7 were approved by vote of the board for replacement, as I recall. The remaining 5 driveways were deferred to 2010. There may be additional driveways in need; however, I am not aware of the board making a request of management for such a review at this time.
  • Comment: I'm in favor of review of roofs, driveways and so on by management, with technical benchmarks. I have stated so repeatedly. Why management rather than board members? because of the political truism that there is always a possibility of favoritism. Our CD used to speak of "retribution" by the former board. So our current board is well aware of the possibility of this and I have spoken and emailed some of them on this subject. I become very concerned when members of the board of managers play "stupid" or pretend to have short memories on this subject. That I interpret as a signal that these types of activities are a very real possibility.  When people tell me "it would never happen here" I cringe. I wonder how naive or how embroiled are some of these people?
It's also a truism that "Time and tide tary on no man" [1639 J. Clarke ParÅ“miologia Anglo-Latina 233]. Our driveways will not heed the wishes of our board and will age and disintegrate as determined by weather, the weight placed upon them, and soil and base conditions. This was pointed out to our board in 2008/9 by the former AD, and at least one of the current board was present; that is, our CD. The former AD stated at one or two association meetings that driveways were never designed for the loading placed upon them by vehicles parked continuously; our driveways were not built to the same specifications as our streets. It is common knowledge that there are varying specifications for streets, parking lots and driveways. These are designs for varying loads placed upon them.  I provided technical advise and materials and specifications to the former AD. So I have more than a little knowledge of the condition of our driveways, of the concerns and opinions of the board expressed during the meetings (I was present) and I also am aware of the alternative methods available when rebuilding the driveways. I'll post more on that later.

This complacency and willingness to defer problems indefinitely has been a source of frustration. Member(s) of our board talk about "how we are all neighbors" and then, when it is time to do what is necessary as a board member, turn a deaf ear to the real problems unit owners experience. In 2008/9 I sat at association meetings in which unit owners expressed the very real problems they were having while entering and exiting their garages due to the state of some of the driveways. Yet, when the time came to spend the reserves we all contribute to, the vote by one of the board was "NO". Yet, this is the same board member who presses an agenda of parties, neighborliness, coffees and so on.

As I expressed to the board during a "homeowners session" in 2009, deferring these repairs simply compounds the problems, as more and more driveways reach a level of disrepair and urgency. How many driveways are we to do in a year? 10? 15? 20? The problems accumulate, the costs escalate. As I have stated repeatedly many times to this and last year's board, this association has finite human and capital (cash) resources and reserves. Allowing them to accumulate and problems also, means that we do not have the reserves we think we do. Are we playing money games at unit owner's expense? When that same member of the board stated during the April association meeting that we were at the appropriate percentage of reserves, the light went on. Ref: (1)

This year, it seems, based upon his statements during April's association meeting, the AD will use contractors as the primary source of recommendations. Question: If I were to ask a contractor his opinion, after a disastrous 2009, in which many contractors lost money, "How many roofs at BLMH require repair", what do you think the response would be: A) None, B) Some, C) A few, D) Only those that require it, or  E) As many as I, the contractor, can do in this year?

Here are a few photos of a roof. Do you think that a roof in this condition should be included in the repairs for 2010? Or, should it be patched? Or, should it be ignored?  I'm independently cataloging the roofs here at BLMH. I'll catalog and compare my photos to the roofs selected for replacement this year. In the future I'll provide a comparison of the roofs that were selected with those that are the "worst" in my files. It should be interesting. We have the tools and we have the technology. Modern digital cameras has expandable memory and after the initial investment in the camera, the photos are "free", requiring no development costs, paper, etc. They can be edited (compressed0 and enhanced and transported via email, flashdrive or CD. Business people and site engineers routinely use them for documenting and cataloging. As for the rest of us?

I will have a photo record of each roof. This is one from the archive I am building.



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References, Errors, Omissions, Comments:

Ref: (1). A few years ago, I received an urgent telephone call. A million dollar machine had been diagnosed by protective equipment as having experienced a critical failure. With this machine out of operation, the process plant was unable to produce. The problem? Various experts of the protective system had concluded that there was a small possibility that the protective equipment had an internal software flaw. There was a possibility the diagnosis was in error and the machine did not have the problem it was diagnosed to have.

However, if we ran the machine and the diagnosis was accurate, we could destroy it. So what to do? I was asked my opinion and I suggested that the client take a spare machine out of inventory. Yes, they actually had a $1 million machine in storage as a "spare part". Installing it would permit resumption of production while the "defective" machine was sent to a shop for sophisticated diagnosis and tear-down.

What did the client do? They decided not to use the spare, but to risk destruction by trying the machine. Why? because to take that "spare" out of inventory would have meant a $1 million write-off, decreasing the value of the plant by that amount. So they decided to take the risk, bypass the protective system, and start up the machine.

It was a decision reached for financial means. This is similar to pumping up and holding our reserves at a specific value. Taking our funds and "investing" them in repairs will reduce them, and possibly reduce our perceived value and worthiness to potential home buyers. A possible solution is to only spend a reserve amount equivalent to that collected in any one year. Is that what our board is attempting to do?

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