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, October 28, 2016

Are HOA Newsletters Important?

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A newsletter may be the only means of communications with complacent or uninvolved and consequently uninformed owners. Here's an example.

I am and continue to be very concerned by the overall owner malaise and lack of participation here at BLMH. Overall I would much prefer a higher participation rate by owners. I think we had about 20% attend the annual meeting and we did achieve a quorum. But I think voting percentages below 50% are too low and I am certainly distressed when fewer than 33% vote. I've provided my perspective in the newsletter. In fact, my primary interest in being the president of our association was that it gave me access to the "President's Message" which is the first item in our newsletter. Why? Because "In communications we can accomplish anything."

The causes are many and some are historical. This association made no demands upon owners for decades other than keeping the rules and paying monthly fees. In fact, paying monthly fees is one of the rules, so I guess I could say that the only requirement to be an owner here is to keep the rules. That is the minimum standard. A very long term board member once quipped to me when we were discussing the impact of budget increases on owners "I didn't think we catered to the lowest common denominator."

Yet, that is precisely what that board member and many earlier boards have done. It is not a surprise to me that we have long term owners (25 years or more) who live on the property and never in the last 15 years do they attend association meetings or even vote in the elections. They have decided they live in an apartment complex and benefit by the labors of the various boards. Of course. they have their complaints to fall back on as an excuse for not participating or attending. "Stupid is as stupid does."

I see the newsletter as a means of supporting all of our owners, be they active or not. I prefer an enlightened and informed ownership over the opposite.

Why are Newsletters Important?
I’ve been observing and attending HOA meetings regularly for about 10 years. For my first HOA meeting only I and my spouse were the owners in attendance. This was in February or March of 2002. We were excited to be new owners. When the president addressed us "What do YOU want?" the wind went out of our sails. Some things haven't changed here at BLMH.  Furthermore, boards have had an adversarial relationship with owners at times. So we have an association history to deal with. That includes entrenched, uninvolved owners and any former board members who have a personal position or legacy to protect.

I do appreciate the resistance of some board members to a newsletter. Newsletters are a lot of work. Board members prepare them and walk the entire property with their committee to distribute them. Via the newsletter board members reveal themselves to the owners, and that can be uncomfortable. One long time board member has had a lot of negative things to say about the newsletter and since 2008 there have been differences of opinion.

I see the need for a factual and far reaching newsletter this way:
  1. There is the obligation of the board to communicate with all owners in a fair and balanced way. 
  2. All owners should be given as much information as possible and the newsletter is our only method of communicating with all owners and our residents.
  3. The newsletter can be an informative and educational tool for owners and for future boards. 
  4. We should have a concern about the future of our associations and the ability of future boards to carry on many long term programs and plans. In fact, reserve studies do have a 30 years horizon. Our association expands this to include a 10-year rolling plan. How are future boards to be prepared to continue this? As a matter of fact, all future boards will come from the ranks of our owners. It is best for the association if all owners are prepared to assume these duties in the future, 
  5. Owners vote each year for their board, It is my opinion that owners be well informed of the substantive issues in an association. A fact filled newsletter is one very important way of achieving this. 
  6. One of the purposes of the newsletter is to engage owners in the operation of their association. 

I do have a real problem with some of the attitudes that have been expressed by board members from time to time over the years, including “If owners want to know what is going on they should come to HOA meetings.”

Yes, owners should attend meetings but there is no formal requirement that they do so. In fact, some previous boards and board members have actively discouraged owner attendance and participation. The most crass think they can do it better than anyone else. So today we have to deal with the 66% of our owners who were trained by those earlier boards, as well as the more recent 33% who may not be aware of the realities of association community living.

It really shouldn't be that difficult, and via our active programs and the current newsletters I intend to lay the foundation to prove that. I stated in our most recent newsletter "Moving from Reaction to Creation-  We are now entering a new chapter at our association because of the capital reserve program that is in place, the completion of the roofing project, the replacement of major portions of our water mains under Lakecliffe and the replacement of Lakecliffe and Salisbury. The past 10 years at our association has included breakdowns and reactions to many factors, including a maintenance backlog and the financial pressure created by both internal and external forces. There is a lot of work to do and for that, see the other reports in this and future newsletters. Even better, come to an association meeting.'

Owners Make Ciritical Decisions
Our owners vote for their board and decide who will be on the board. That includes themselves. Our association is again understaffed, But we have had two owners step forward and expressed a willingness to be on a committee. Each and every one of us makes a difference. As I stated in the November-December newsletter "Annual Meeting  Thanks to those owners who exercised their right to vote and thanks to those who attended the annual meeting. Thanks also to those who have expressed a willingness to be on a committee; you will be contacted about this.   Each board member gave a concise presentation about the State of the Association. My presentation focused on our 10- and 30-year plans and I presented a series of charts, documents and explanations for about 20 minutes. Each board member was subsequently given a DVD copy with audio added.  I prepared a version for YouTube."

Bottom Line
The obligation to communicate rests with the board as one of our fiduciary duties. Some of our recent newsletters provide more insights into the decision making processes here at our Association. There has been a deliberate evolution of the newsletter since the Fall of 2010. I have pointed out to the board on several occasions that our ownership has shifted dramatically since 2009. Since then about one-third of our units have been sold. I interpret this several ways, including the fact that some of these owners are not really aware of the meaning of community living and they don't carry the baggage of 25 years of living here at BLMH, nor is it likely they are fully aware of our rules and regulations. The newsletter is an obvious way of informing them.

It is fortunate that many of our rules and regulations are common sense items. But one might be surprised by some of the complaints that surface. I use the problems that surface with new owners to support my position that continuous education and reinforcement is a necessity. The Newsletter is the obvious tool. I am hopeful that more owners will participate in our HOA, but I have observed some resistance by board members since I purchased here in 2001 (closing early 2002).

It may be that the board is at times its own worst enemy. However, I do appreciate that some board members may be averse to more meetings and more work. I do know that I am.

Our Newsletter:
For the November-December issue of our newsletter, click on the following:

BLMH November-December Newsletter, less our Winter Tips Insert



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