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, February 13, 2018

10 years later - It is all merely a coincidence


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Spent a good part of 4 days working on condo stuff. Time to reflect. The above chart is our annual fees. The actual are the blue, the projected is the red. As you can see, the blue departs from the red in 2009-2010. 2008 was the year of the revolution. 2010 is the year I joined the board.

I'm the pres and the architecture/project director and I also assist the treasurer and the maintenance director. In fact, we are actually two boards. One half does little to nothing. About half of the board is aligned and the other half is not. Why did I get involved? One picture is worth a thousand words.  Look above. The red line indicates the trajectory for our fees. The blue line indicates the actual fees. With my involvement after 2008 the fees stabilized and the actual (blue line) departed from the punitive red line trajectory imposed by previous boards. 2009-2010 is the date the actual blue fees departed from the red projections. Not an accident. This coincided with the wholesale firing of a terrible board. "Terrible" as in not capable of effective communications with the owners. "Terrible" as in not able to make good, long term financial decisions. "Terrible" as in not being honest, truthful and forthright with owners and "terrible" as in unwilling to take full responsibility for their actions and finally, "terrible" because of the undermining efforts of some of the board members.

In 2008 a "Change" board took over and attempted to run the HOA like a social club. I'd had enough. That's how I became a board member and one would think things were resolved, but they weren't. Boards are comprised of human beings and we all bring our preconceived notions, inabilities, laziness and whatever with us. One old timer lingers even today for God knows what purpose. Perhaps it is simply spite or to protect a legacy. What a waste!

Some of this continues to this very day, which is why getting some board members to write a newsletter article is like pulling teeth. In fact, when the board developed the 2015 budget I had to stare down the former president who continued to push for even larger fee increases. At that meeting I stated that 1) There was no evidence that such fees increases were necessary, 2) It is inappropriate for boards to operate from a fear of "not having enough" and financially punishing owners as a consequence, and 3) If that is the way the HOA is going to operate I will immediately sell my unit and move on. I have absolutely no desire to live in such a community.

As a consequence the person on the board who has caused so much financial pain for owners took the position that "The budget meeting should not be an open meeting." In other words, it was intended to make these decisions behind closed doors so owners would be unaware of what was transpiring.

I was elected in 2010 only because our previous treasurer resigned immediately upon being elected; I was next in line. Yes, it was a desperate ploy. Yes, there was a group of owners committed to preventing my achieving a place on the board. Some in the HOA were passing around the slander that "Norm is dangerous" and "If you elect Norm your fees will increase." Somebody actually drove nails into the sidewalls of my tires.

At the time our major street was failing less than 7 years after replacement, the board had begun a $1.6 million roofing project with insufficient funds, other capital expenditures were on hold, fees were on a trajectory since 2001 to reach more than $450 a month by 2018. The blue line in the chart is reality and you may notice a dramatic change in 2010 when I achieved a board position. In 2008 we were in the middle of the "financial panic" when the $8 trillion housing bubble popped and people were frightened.  Foreclosures were increasing and some owners were afraid they could no longer afford the fees. One little old lady offered to work on the property to reduce her fees.

The leader of the cabal that created this mess still believes she did a great job. I have asked "How much financial pain did the decisions made under your leadership cause for owners at BLMH?"  That has earned me the stare of death.

In my business I would tell people "We can do anything, all it takes is time and money" and I would add "The impossible takes a little longer". In my case at this HOA it has taken thousands of MY man hours to do this. That is a part of the problem in HOAs. Boards don't prioritize, some board members expand the task to fill all available time, some don't have reliable email much less have a PC or can make a spreadsheet, and some aren't willing to put in the necessary hours or acquire the necessary skills. Owners are oblivious or lazy. Just like voters. In fact, in 2017 we couldn't even achieve a quorum at the annual HOA election. Some HOAs are entitlement programs.  It's a mutually destructive situation in which both boards and owners expect someone else to get the job done.

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