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, July 8, 2014

After the EAB


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Ecologists are beginning to wonder about the true impact of the destruction of tens of millions of ash trees in the region. This is or should be of interest to HOA owners and homeowners in general. I've also been interested in the full economic impact.

The impact will go beyond the cost of removal of dead trees. What about the woodpeckers who I have been watching making the rounds for the past few years and visited that ash tree outside my window? What about the critters that live in these trees, ranging from birds to squirrels? How about the increased cost of summer cooling because of the loss of the shade of these trees? How about the cost of tree replacement?

Of course, this is not the first time whole species of trees have been decimated in the area. The white pine forests were harvested in the 1800s and whole sections of Wisconsin and Michigan were forever changed. A reputed three billion American chestnut trees were destroyed by fungus. Another pest which is resurging on the east coast of the U.S. is the asian longhorn beetle (ALB). The ALB kills many hardwood trees, including ash, birch, buckeye, elm, horsechestnut, maple, poplar, sycamore and willow. It was eradicated in Illinois, but may return.

Firs and pines are not immune and have their own scourges, including pine beetles, pine wilt and root rot.

Here at BLMH, our trees include a variety of species. Total number of trees is estimated at 700-800. Most of our trees are susceptible to these imported pests. Most of our trees are mature and are about 40 years old. The associations spends a significant amount of money maintaining the property and these trees. "Too much" according to some owners, while other owners argued for the addition of flower gardens.

Of course, any funds spent on trees come from fees, and so I can understand the arguments against maintaining them. To achieve fees that "are as low as possible" one simply stops spending money. That will work for a time, I suppose. Do anything and everything possible to pass the hat to future owners is the mantra of the 1%,

At BLMH we did not have a reserve item for the ash trees. The replacement costs of trees has been broached several times. However, with the 2010 group, anything that meant increasing fees was quickly overruled; as one of that group was fond of saying "Our fees should not be as high as possible."

In fact, budgeting for tree replacement is a difficult thing to do, because no one can predict exactly how long these trees will live. We do know most ornamentals are good for about 25-35 years, and yet, here we are approaching 40 years. Some have become really gnarly looking and the landscaper simply hacks off the dead, offending branches. Over at COD the president would probably call it art.

This approach of hacking will continue for a time, I suppose. We will continue to have some strange looking trees as a  consequence, until there is nothing left but a single spike with a few leaves. I recently pointed one of these to our management and the arborist. At some point these strange looking trees become a statement about a HOAs inability to make decisions. They also become really terrible things to look at. I noticed that poor "tree" is now gone. Of course, that will require some landscaping work or a replacement tree. So a tree spike is the best and lowest cost way to go. Yes, the best way to keep fees low is simply to only do maintenance when it becomes impossible to do otherwise. It has been argued that anyone with common sense knows this!

However, I digress. Whatever the lifespan of our trees, we do know that many will not survive to 60 years. So at some point it would seem prudent to reserve for tree replacement.  That is if the appearance of the property is to be maintained. Alternatively, we can simply chop them down as they age and fail, using the Operating Budget. I suspect that approach will raise fees. I also suspect that if the association does this then at some point there will be  a substantial changes to the character of the property with many small trees on the property.

Our professional tree care people once said we might have a 85% survivor rate for the ash trees if we persisted in the EAB treatments and so boards have been doing just that. With that advice and the fact that we have other monies set aside for "landscaping improvements" it seemed to me that the board has been doing the fiduciary duty. As I remind owners, we don't have a crystal ball, and budgeting is a science, but is not absolutely predictable.  However, with the knowledge that the grounds are 40 years old and that the next reserve study will extend to an HOA age of 70 years, it might be prudent to consider reserving for trees. If not, then funds for removal and replacement can come from the operating budget, or special assessments. Of course, future boards may conclude that our reserve amounts in some area or areas might be excessive and will contrive a method to adjust the reserve categories.

Here's a couple of videos about the EAB and ALB insect pests:









>Note: Sorry to say, some of the recent posts were delayed and so I've had to disgorge them in quick order. Blogging is a hobby after all, and so is being a condo board member, or so I have been told. Certainly I do know of more than a few condo board members who operated that way.

Lately I've been editing videos, conducting the usual business including business travel and some for relaxation. Being involved in two businesses as a principal is a lot of work. Working on a condo board and cleaning up the messes, why that is pure pleasure and entertainment!

Recently the "push back" to my posts occurred as angry emails to me and to the management about the condition of a portion of Lakecliffe. Possibly one of them was the same comedian who has been impersonating the board. One owner said she was "embarrassed" by the condition of the street. I'm embarrassed by some of the aspects of BLMH. Let's talk about delinquencies and foreclosures, shall we? It's all relative I guess. For our poor embarrassed owners, all I can say is these are the same people who want "fees as low as possible"  and elected that "do nothing" board that ignored my entreaties to deal with the problem on Lakecliffe. See my earlier posts with my correspondences with the then president and architectural director. These are posted with the "Reality Check" label.

I got on the board because if you want it done in this HOA you have to drag some of the owners kicking and screaming all of the way. That is not a surprise to me. I've been a leader in a youth group and I did/do run several businesses. Anyone who has had employees or worked with volunteers knows exactly what I mean. We live in an entitlement society. I've also had to deal with dysfunctional organizations. There is nothing new here at all.

Or course there is and has been the usual BLMH stuff, the demands of the 1% which among other things contributed to the delay of the most recent newsletter, and the issues encountered preparing that newsletter. It was completed by me while sitting in a vehicle on the side of the road about 1000 miles distant. My Verizon jetpack hotspot works very well, but that morning I was delayed about two hours because of communications and editing issues; not that I had anything else to do or anywhere else to be! Of course not, my life is a hobby and it's "All part of the service" I am expected to perform, or so I have been told.  Bullshit. Well, folks, there are some big changes coming. No, I'm not resigning. One of the ringleaders of the 1% nearly fell over herself in glee about 18 months ago when she heard I was leaving the board. I know because she couldn't wait to find out directly from me if I was gone and stopped the vehicle to find out. Nope! The group got it wrong, as usual and I remain. So sorry to disappoint! I may stick around for the sheer pleasure of becoming a disruptor; I could become a defector to the 1% or better yet, start my own group. It seems it would be possible to rent my unit forever and simply arrive for board meetings, as an owner or as a board member. I could sit in the audience and when my turn comes I can complain. Better yet, do the "speak and dash" and then stay so I can harangue the board twice in one meeting.  Just kidding. I do know and appreciate that the board has a very limited amount of time during those meetings, and each meeting is supposed to be a business meeting. However, I don't have to live here and blogging can be done from anywhere. After all, if I can compose and issue the newsletter from somewhere in Texas, why not do any of this from anywhere? Add a couple of internet cameras and its done.

It seems I crossed 39,000 pageviews. Thanks to the readers.I'm pleased to report that we haven't had any nearby floods. That is not a good way to get viewership.

BTW, it seems that COD is doing what was suspected but denied. It is attempting to formally become a four year college. According to a statement by Robert Breuder the COD president "Currently, I am chairing a group of 15 college presidents who formed a commission to study the feasibility of Illinois community  colleges offering select baccalaureate degrees.......the College of DuPage Board of Trustees recently approved a resolution in support of legislation that would allow Illinois community colleges to award Bachelor of Applied Technology (BAT) and/or Bachelor of Applied Science (BAS) degrees."


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