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

Tuesday, October 4, 2016

All it takes is time




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I don't want to understate the difficulty of operating with a less than fully staffed board in which tasks are not spread equally. On the other hand, I don't want to overstate the difficulty, either.

However, that old expression "We can do anything, all that is required is time and money" remains as true today as it did 50 years ago. The dilemma for most associations is both a lack of funds and volunteer boards which are understaffed.

Why could there be money issues? Early owners are inclined to press for lower fees and might prefer to ignore the requirements of a 30 year reserve program. If things become too far out of kilter, boards may delay crucial and expensive maintenance. They may undersave for reserves. Later owners won't want to pay the price for these earlier owner and board missteps.

Boards are always under pressure from a few owners. "Personal Agendas Running Wild" could be the title of a sometimes humorous video about the wants, needs and desires of the few. Boards may become insular and I've seen boards "circle the wagons" and avoid or discourage new board members. This may eventually haunt associations.

 It is not unusual to see boards fracture into groups. Come to our association meetings and at times you would think there were two meetings underway. One board member constantly carries on side conversations with a sub-group. This is also an example of undermining. I've attempted to reign in the side bar conversations. I've even interrupted them and asked if they were running their own meeting. I was accused of being rude.

That's how far out of tilt some associations can become.

At some associations the splits may be along age lines. Retirees may approach a board position as their main social activity and power base. Yes, it can be fun getting to know contractors, local municipal officials, members of the police department and so on. There is power in spending money, particular if it is a large sum. Spending the money of others can be fun; watch the politicians in Springfield and Washington. The board job can be expanded to fill all available time. Boards can also dump the difficult tasks on younger or more capable board members. This may keep younger people off the board. After all, they are working, may have family responsibilities and duties far beyond the limited confines of the association. For anyone who is really busy, expanding time for tasks is considered to be a waste of time.

Ironically, with all of the changes in technology dumping on younger members may mean the board fails to retain some of its most capable members. I've also written about the real possibilities of cognitive decline as we age; this can begin as early as 50. I've written about the reality of physical health for people who are 70 and older. A failure to design association boards which are comprised of tiers of ages, or which become very insular, or which don't mentor and attract younger owners is a formula for disaster.

Time is our enemy and there will also be an insufficient amount.  Ultimately we are looking at resources, and human resources in a home owners association may be scarce. In our association with an understaffed board comprised of 1.8 percent of the owners, we are in a resource desert.

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