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

Friday, September 16, 2016

Owners and their personal agendas




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Owners aren't forthright about their personal agendas, and in my experience neither are board members.

There have been times that this association was apparently run on special favors; that could be a source of some owner confusion. At times in the past I observed owners cornering the board and the board complied with their request. For owners, the reasons are sometimes financial. It is a means to transfer wealth from the coffers of the association to their own. Of course, that wealth was contributed by their neighbors, But I suppose for the greedy that is what neighbors are for.

A few years ago I sat in the audience during an association meeting. On cue I watched 30 or so owners pass slips of paper up to the board. These were the wish lists.

This is a political way to run a HOA, and a populist way. With an elected board, should it be any other way? I think there is a better way, but owners and even board members have conspired otherwise. So that is how it has been at BLMH from time to time. There are a variety of reasons for boards to run a HOA this way. One is to be liked. Another is to get re-elected. One is to get persistent owners to go away, and another is to stretch budgets; things that can’t be given to all for financial reasons are given to the few who complain or are favored. Then they go away and the problem is swept under the rug. The other owners aren’t informed and remain clueless.

If boards wanted all owners to participate this way they would mail a “wish list” to each owner and ask them to compete it with the special requests and things they want, and then provide it. No boards have ever publicized their back door manipulations and so past owners were not aware of some of the machinations that have occurred. One would have to attend each and every meeting as I did for years and practice critical thinking skills to figure this out.

A few years ago an owner who was struggling financially wrote to the board and said that he/she would gladly give up some perks to stop the continuous fee increases. I always have wondered how that person would have felt had he/she attended the meeting in which owners demanded more flowers, or a better view or whatever.  This association doesn’t have funds to operate this way. It doesn’t now and as near as I can determine it never did. But owners continue to make demands and some boards do eagerly spend. I don’t.

Our budgets are really tight. Yes, we do have more than a $million in the bank. That seems like a lot, but by year's end it might be less than a $million. How much is that really? About $2,976 per owner. That is less than I spent to have my fireplace removed. It is far less than the typical remodelling project in one of our units. Even the appliances cost more than this.

So it is no surprise to me that owners will try to shake down the board from time to time.

Yet a few owners see that $1 million and lust for the gold. Okay, so why do I say that our reserves are barely adequate and why can’t this association flush that $1million on owner personal demands? To answer that question one needs to ask “What is the condition of the infrastructure today?” For several decades minimal work was done on the streams, etc. We have additional major street repairs on the horizon, the consequences of hundreds of dead and dying trees to deal with as well as ongoing water main issues. Average cost to remove, regrade and replant a single tree is possibly $1000 and we have lost several hundred trees. This year the association will spend nearly $200,000 dealing with this and related landscaping issues. There are also the issues with rainwater drainage on the property which is in part attributable to the design of the new roofs. And that is merely the tip of the iceberg. Our buildings are now approaching 40 years of age, with failing mailboxes and antique intercom and door systems. Our most senior board member once made the comment “You can slap paint on a pig and it is still a pig.” Perhaps that is why earlier boards emphasized painting the buildings. In fact, there is no funding in the budget to provide special favors, and there never was.

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