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

Wednesday, September 28, 2016

Projects Nearing Completion



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It's fall and the annual good weather projects are in completion, We're completing the roofing project this year, 13 years after it began. [But it is important to note that about 70% of the roofs were completed in 2011-2016]. We repaired one of the cul-de-sacs, replaced four decks, will do four driveways, repaired a stream, created drainage for one of the final large muddy areas, and so on,

Some of these projects required years to get to this stage. That's a problem when board continuity and mentoring doesn't exist. Without a mentoring program and frequent owner participation on committees, or with frequent partial board turnover, we instead may have inexperienced people who struggle to figure out what we are doing in the long term sense and short timers who leave the board after a year or so. It does take several years on the board. Some of the challenges and issues for new board members were described during the annual meeting. Budgeting might be the single most daunting task and certainly the one which carries the strongest opinions and emotions among boards.

Even with some board members on the board for a decade or more, with a previous lack of long term plans it can become difficult to impossible to take on multi-year projects.

We will have a number of projects continuing for a decade. Who will spearhead these and see that they are completed? I raised this question at the annual meeting and addressed the 10-year plan during that meeting. The few owners in attendance were given a summary. I advised them that they are being given that summary for several reasons which go beyond the requirements of informing our shareholders and transparency.

In fact, it is probable that some of the owners in attendence will serve as future board members. With 10-, 20- and 30-year plans it also also probable that many on the board won't be available to serve and complete even the 10-year plan.

So continuity becomes essential if we are to avoid some of the maintenance pitfalls that occurred in recent decades. It is a fact that some aspects of maintenance actually stopped for a period of years.

So what is included in the 10-year plan presented to owners?

  • Streets, curbs, catch basins and driveways,
  • Interior carpeting, entry ways and doors, intercoms and mailboxes.
  • Water mains and related, including long term planning and finances.
  • Masonry walls and window sills.
  • Drainage improvements and roofs.
  • Concrete ponds, walks and streams.
  • Garage floors.
  • Common area decks, gazebo, pedestrian bridges.
  • Unit limited common element patios and decks.
  • Common area lighting.
In fact, we are saving for the next roofing project which may begin with one roof in 15 years. That's the roof that was done in 2003. We do have major street projects for the cul-de-sacs and we do have stream and related deck work to do. We have a common area deck to complete and a gazebo replacement. 

If associations fail to plan, save and do the work in a timely manner, it becomes impossible for associations to catch up unless boards are willing to take extraordinary steps, I worked up to 750 hours per year to define costs, conduct the numerous condition surveys, and direct the board to get many projects back on track. My involvement is unusual and I assure the reader that I did not "expand the tasks to fill all available time."  I informed owners at the annual meeting that our board is comprised of amateurs. We are not paid professionals. Yet too many owners feel that our boards should be held to professional standards. There is a range of expectations for individual board members. Why is that? According to the Illinois Condominium Act, we are each to have equal skills and capabilities. We are each working in an amateur capacity. We each should be putting in equal time. We each should be able to perform the tasks of any other board member. My position is simple, If owners want such "professional" results from amateur boards then we need to hire more professionals, be they management, engineers or whatever and we need to pay them to achieve the professional results. Of course, that will result in higher fees. Which is why so many owners talk out of both sides of their mouths. Ditto for some board members. In fact, I've observed a range of expectations for our professionals. I guess having a level playing field with uniform standards is simply too much for some of us. But, no matter how many years on the board or even our backgrounds, it is true that we are all amateurs. 

To assist future boards I prepared a 30 minute video with audio track. It is unscripted and a version without audio was presented to the owners during my 20 minute presentation during the annual meeting. I didn't prepare it for the couch potatoes. It is a tool for current boards and for future boards. In part, I am disgusted by the politicking and undermining that sometimes occurs during the budget meetings. Totally unsuitable for fiduciaries. 

In fact, what is necessary for budgets is realistic plans including future expenditures, realistic fees to back those plans and ongoing preventative maintenance to prevent "kicking the can down the road." Far too many boards at our association kicked the financial and maintenance work down the road to the detriment of future owners who had to pay for these failures. However, it is also true that owners elected each and every one of these boards. Ultimately, it is the owners who are fully responsible. Boards are sometimes pawns or tools and fall to the personal agendas of the owners. Not all boards do, which is why we have accomplished what we have here. There is no question each board did their best, but at times they didn't ask the important questions, at time they failed to act, at times they didn't stand their ground when owners ran their personal agendas, and at times they failed to plan. Yet, here we are. It wasn't easy. 




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