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, June 9, 2016

Clueless


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In any given month, our HOA monthly meeting is attended by two or three owners. In an HOA with 336 minus the 6 currently on the board, this poses a real problem.

In a nutshell, our owners are clueless. Becaused they don't attend monthly meetings they aren't aware of the board discussions and the issues. They aren't aware that the longest term board member who advocates "financial" responsibility and who began a $2 million + project with no means to complete it in less than 20 years has argued during budget meetings for two years for substantially higher fees. Or substantially more onerous rules. That's after a decade of a cash strapped HOA.

There are a lot of quaint expressions that I have heard. "Clueless", "Stupid is as stupid does", and so on. Some times these do sum up a situation, Frequently they are misused. "Slamming the barn door shut after the horses have left" is another expression. It seems to fit current circumstances. Yet another expression is "You can't teach old dogs new tricks." But I do keep trying. Some learn and some don't. Some will and some won't. [I've been training people in business and as a volunteer for nearly four decades; some of these groups achieved extraordinary things.]

A lot has been accomplished since 2008. Some subtle pressure was required, and some not so subtle pressure including a palace revolt. There is only so much I can do. Owners are oblivious to the doings in executive session. That's a great way for politicians to torpedo other board members if they are so inclined and owners are completely unawares. In a HOA if the owners are unawares they may continue to elect the politicians and any "feel good" group. Not that we all have a feel good plan. Here at BLMH one plan enacted for a long long time was to delay repairs as long as possible so funds funds could be accumulated for that behemoth roofing project. Owners noticed, too and that's why some owners came to HOA meetings a decade ago and complained "What do we get for our money?"  This type of strategy puts owners in a position where they must come to a HOA meeting and argue to get their improvement. "The squeaky wheel gets the grease." and those inclined to be power brokers love it. After all, what good is power if one can't exercise it? Me, I've got better things to do with my time and talents. As I've stated repeatedly I don't have to live here. I've set up home bases in MI and and AZ.  I can rent or sell my BLMH unit at any time. I'm not a member of that less than 5% group who promotes themselves and the "Neighbors Club." In other words, this HOA needs worker bees far more than we, the owners, need them.

In my brief tenure on the board I have upgraded the newsletter from a "feel good" sales brochure or fluff piece to something that informs owners of some of the issues facing the HOA. I refer to our owners as "shareholders" which is precisely what they are, but that is like pouring gasoline on a fire. For many reasons, as well as my willingness to go against the grain and get things done, it is my understanding that one board member has told management that I'm unfit to be on the board. Some people play games, throw others under the bus and treat everyone with disdain. It is not unusual for the entrenched to do whatever they feel is necessary to protect their legacy. But board members are supposed to be fiduciaries! As I've stated repeatedly, owners do get the boards they deserve. Previous boards, cash strapped because of their lack of planning deferred maintenance and put all of the "reserve" money into an ill planned and underfinanced roofing project.It took another board to raise the money to do the work they began, I spent 5 years putting together a program to not only get that project done, but also all of the other maintenance items ignored or deferred.

In fact it took a new board to get a reserve study and to raise fees to the level required to fund these projects. One board member who presided over this multi million project made the point of accosting me during a HOA meeting and stated "You spend all of the money," It can be difficult for us to take responsibility for our actions and it is better to blame others for our lack of accomplishment. I will stand on my record, as imperfect as it is. Boards are required to treat all owners equally. In taking up the mantle of responsibility I was required as a fiduciary to finish this project for the remaining 280 owners. After all, we are all equals, aren't we? We are each to be treated fairly and consistently and uniformly, board members included.

Using the approach advocated by the most experienced board members, the president got a new roof first, and the rest of the owners after an interval got new roofs in the increment of 2 to 3 roofs per year. Simple arithmetic indicated the rest of us would get new roofs in 14 to 21 years, at which time some roofs would be 30+ old. The fly in the ointment was the fact that these roofs were designed for 18-20 years maximum. However, the "fiduciary" boards were apparently more interested in taking care of number one. Recently, the concern was raised by a resident of the first building to be re-roofed that this roof might be "defective." This roof was installed without the attic insulation added in following roofs. Attempts by a resident to get insulation added were rebuffed by me. I stated that "There are a lot of people here who have old roofs and are waiting in line. After the completion of the project, we'll revisit that first roof." That was insufficient and "where there is a will there is a way." No matter that many other owners had 15-20 year old failing roofs.  There is a simple decision if one does not have attic insulation and some owners have dealt with this so called "deficiency" by installing attic insulation at their own expense.

The problem facing our HOA is simple. Very little owner involvement, board issues and inadequacies, personal agendas at play. and board members who have no where else to go. Here is one valid concern. Our HOA board is comprised of individuals who are entirely above the age of 65. Mental degeneration begins at the age of 50. We begin to lose cognitive ability at the age of 50. Certain illnesses accelerate that. So would you entrust your major financial investment to a bunch of amateurs above the age of 65?  I guess our HOA owners feel that's perfectly appropriate.

Stupid is as stupid does. My point? It's your money and you can flush it as you see fit, or entrust it to those you choose! That's exactly what owners do when they post their annual votes, or decide not to vote. In our HOA we have great difficultly getting half of the owners to cast their annual votes. Of course, some of the pap pieces provided by some candidates on their forms doesn't help; after all, the politicians would never get elected if they stated " I think owners are stupid and I want much higher fees." But that is the reality. To the owners all I can say is "Don't come to a HOA meeting and complain "How could this happen.""

One thing I've learned at BLMH is this. One would think that those of us who are trapped, who can't leave or lack the financial wherewithal because we have no where else to go would be the most capable, and the most interested in HOA success. That is absolutely not true. Those of us who have no where to go are most interested in maintaining power, running our agenda and maintaining the status quo. After all, if we left, what could we do? Watch "Wheel of Fortune" I guess.


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