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

Thursday, July 30, 2015

Dealing with Aging Infrastructure


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We have some infrastructure issues. I'm well aware of them. Here is a copy of a simple sketch I prepared and presented to the board on May 14. This was prepared in 2015 to track drainage requirements but I also wanted to know the true magnitude of the tree situation.

The sketch was something I had prepared for three reasons:
  1. Stimulate a conversation on the board about creating a multi-year project to deal with this. We've been discussing this issue.  I see no way to deal with this but via a multi-year program, similar to the approach for our roofs, driveways and so on. I am of the opinion that it was important to come to grips with the magnitude of the problem and begin a discussion with the entire board.
  2. I was concerned by the condition of the landscaping as a consequence of the removal of Ash trees killed by the Emerald Ash Borer, pines killed by a blight and some weeping willows which have been removed because they posed a danger to buildings on the property. That pronouncement of rotting willows was by our arborist. I also had concerns about coordination with the drainage project. 
  3. I was of the opinion that it was reasonable to assume that other owners would be concerned. I've been the target of barbs since 2010 because this HOA cannot move fast enough for some owners. Of course if we operate as a reaction, we'll never move fast enough. I think I am not a boat anchor in this HOA.
Of course, removing dead or dying trees can cost about $1,000 each and that doesn't include remediation, plantings and new trees. Each "X" represents the location of a recently removed tree, which is now a pile of wood chips or a dirt spot. Each "D" is an area in which drainage improvements are to be made in the near future as a consequence of the roofing project.

The HOA has been moving on some of these area. First by stumping, then by grading and sodding. After that trees can be planted. The Landscaping director has stated he favors certain maples.

At the time I presented this to the board, I did so with this statement "I did this work so as to avoid duplicity and additional cost." I want to avoid making landscaping improvements and then removing them in a year or two because of necessary drainage improvements.  Drainage improvements were first initiated by a board more than 10 years ago as part of the first roofing replacement in 2002. Boards thereafter sometimes failed to do this, but all had little choice but to continue these improvements to avoid water issues in units  or garages and entrances, and to treat all owners uniformly and fairly. Of course, the cost of these drainage improvements are in addition to the nearly $1,900,000 this HOA is spending on these roofs.



I'll let you count the "X" marks. That provides some idea of the magnitude of this problem. 

During the July meeting an owner attended and expressed concern about the state of some front lawns because of tree removal. I produced this sketch and addressed the concerns as best as I could. First, by producing my sketch I wanted to assure owners that the board was aware of the magnitude of the situation. Second. I wanted to have a conversation about "cash flow." We can address this problem and correct it as rapidly as we can. However, I think the board is in agreement that we would like to do this within the current fee structure. In other words, we can certainly do remedial work (grading and turf) but adding trees may take some discussion among the board, obtain bids and then execute. That will not happen in a year. However, I am also of the opinion that with planning and judicious application of funds, we can replace these trees with something better than toothpicks, and we can accelerate the growth. Yes, it will take 10 years for these trees to come to fruition, but then, this HOA didn't have tall growths when it was built in 1978. 

This sketch is merely one example of why or how I spend about 600 hours each year as a board member in this HOA. Some may wonder where my time is spent. It isn't twiddling my fingers. I'll be posting some additional financial data in the near future. Trust me. It can take dozens of hours to perform a good financial analysis for a property worth about $100 million. 

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