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

Saturday, July 26, 2014

Lakecliffe - Why Perform an Engineering Study?


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Anyone in our HOA who reads the newsletter or regularly attends HOA meetings is aware of the fact that an engineering study was made of Lakecliffe before proceeding with the replacement project. The goal was to determine the condition of the street so a proper remedy could be designed. That study indicated problems more serious than was apparent. That's one of the reasons some sections of seemingly good curb are being replaced.

The handful of owners who come to HOA meetings are aware of the board's determination to head off additional problems on the other streets of BLMH. The owner body has been informed of the award of an engineering study for this purpose.

Was it an easy decision for the board to do this? No, it wasn't. Spending money is never easy. Spending other people's money is darned difficult. It is for me, that is, and I think the other members of the current board are as cautious about this as I am. Each and every very dollar in the HOA accounts has been allocated for a purpose.  I for one do not operate from "We have enough money." I operate from "We have sufficient funds in our budget" or "This is included in the reserves" and I only state that to the board after checking our actual funding levels. How much we have in the bank is irrelevant. Using the bank balance as a justification to spend money would be deceitful.

Project management including cost accounting, etc. would make for another very long post.

However, infrastructure maintenance decisions are a task of the board. Water main breaks, for example must be addressed if there is or is not a sufficient budget amount in any calendar year. 

So why spend money on a study of the remaining streets?  Each owner has an investment of about $2,000 in our streets. Is it worth spending about $27 to protect that investment? Do we want to minimize the disruption to residents caused by street failures? Do we want to achieve full life of the streets and do we want to know what that full remaining life is to be? Do we want to design our reserve fund accumulation program using the best information possible? 

As I recall, I first made the suggestion for a complete study to the current board in 2012. I'd been promoting the taking of core samples since 2008-2009. I  made a formal recommendation to the board in 2013 after a discussion with a registered professional engineer and after completion of the study of Lakecliffe.  With board approval an engineering firm was asked to provide a proposal. This was again discussed early in 2014 and this is what I asked of the engineering firm:

In order for me to ask the board to approve the funds for this overall study, I needed to be assured by the engineer that the following would be provided in that study:
  1. The purpose of this work is to ascertain the condition of the remaining streets, the possible remaining life and the possible (reasonable) steps this HOA can take to extend the remaining life of these streets. 
  2. I advised the engineering firm that these streets were not expected to be replaced until 2020, 2021 and 2022. In other words, the installation dates imply there are at least 7 years of remaining useful life. The condition of the streets indicates otherwise unless remedial action is taken. 
  3. One of the things I expect from any report provided by the engineering firm as part of the scope of work is a candid appraisal of these streets. That includes a statement pertaining to the probable life remaining if no preventative measures are taken. This statement is to be in straightforward layman's terms. e.g. "The association should plan on replacement of Harrow Ct. in 20xx.". 
  4. An estimate of the costs to achieve full life of the streets per the report is not a scope of the work of the study. 
That study will be underway with the taking of core samples in the next few weeks. The engineering findings will be used as part of the 2014 update to the reserve study.

Are all owners aware of this effort? No they aren't I can say that because of recent comments and questions by several owners.  Some of our owners either don't read the newsletters or can't remember what they read. Some don't attend HOA meetings and that includes the annual meetings. In fact, less than half attend the annual meetings. At the last annual meeting I gave a very fast 15 minute update to all owners. That update ranged from streets to driveways to roofs to water mains to drainage improvement to flooding in south Wheaton and also included budgeting from the perspective of Architecture and Maintenance.  I said it was "fast" because I was time limited. However, I think a summary to owners is necessary.

Do all owners agree to the board action? No they don't. I can say that because of numerous owner conversations and emails over the last 7 years.  Who are these owners? Some see any money spent on any endeavor in which they will not directly benefit as an entire waste of money. Some live elsewhere on the property where the streets have not yet degraded. Some see planning as a complete waste of time and money, Some plan on selling. Some don't think they'll live for another 10 years.  But they all get a ballot and can vote in each election. 




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