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

Saturday, January 12, 2019

"This will be a long, drown [sic] out process"


Bookmark and Share


The president's message in the January 2019 newsletter stated this about the negotiation with the city about our water mains:

         "It appears that this will be a long, drown [sic] out process."

It is my understanding the board approved moving forward with a letter to the city and directed management to proceed. This was during the January 10 meeting. The vote was 6 in favor, one against.

Will this be a long process? In fact, no one really knows how difficult this will be. I was the only board member involved in this process from 2013 and well into 2018. Why so many years? First, I had to get the board to agree this was worth doing. In fact, do date it has cost the association nothing, because I am the one who put in the hours to formulate a viable plan, met with the City engineers, discussed with the mayor and city council and so on.

As I have stated previously, the board member who is the current president took the position repeatedly that this was impossible; "It will never happen." The "locksteppers" echoed her refrain. Fortunately, the president in 2013 was in favor of proceeding so as to see what could develop. "Nothing ventured, nothing gained." So I was able to convinced the board to let me proceed because the association had nothing to lose, and it was my position we had a lot to gain. I was going to do all of the work for gratis (nothing unusual there!). In fact, all correspondence with the city was on my letterhead and did not reference the board.  So if things became difficult or contentious the board could blame me as an owner and avoid any Association involvement.

In fact, I'm the only one who has any idea of just how difficult this may be because I'm the only board member who was involved in the process.

Why did it take so long (2013 to 2018)?  First, I had to shift this association from the band-aid approach that was used for water mains for the years previously. I was aware that no city would take over a water main system which was in disrepair or failing. So I had to convince the board to spend funds when making certain water main repairs to replace large sections. This is common sense when working under streets or driveways. However, you would be surprised by how resistant the old-timers were to this. We were fortunate to have a younger, qualified president in 2013. In fact, he has a CPA.  As much as he didn't want to spend the money, he agreed that replacement was the way to go.

So we began in 2013 and since then we have replaced hundreds of feet of water mains, several fire hydrants and B-valves. The city monitors this work and requires permits. So they are fully aware of our efforts. Which is why in 2018 the City Manager sent me a letter which indicated the city was willing to proceed "based upon the history of maintenance" of the water mains.

I cannot overstate the hundreds of hours I spent on this initiative. I made it a point to be present for every water main replacement and discussed all related decisions on site with management, maintenance and the plumber.  Decisions were made on a long term basis, not as short term, stop-gap measures favored by previous boards. In other words, where prudent a band-aid approach was not used. Instead a replacement approach was used.

To move this forward I made certain that all were fully informed. Because I was president, architectural (projects) director and a motive force in the association newsletter I made a special insert for the August-September newsletter which was issued to all residents and owners. I also made a brief presentation to the few owners who attended the annual meeting. I didn't ask anyone's permission. I had enough of the do little, stonewalling bullshit of entrenched board members. ("No one reads the newsletter" to quote the current president).

I made the special report in the newsletter because I had announced I was not running for the board, and because I had a concern the 2019 board would drop this out and walk away from the work. They have proved themselves to be "penny wise and pound foolish" as well as lazy for many years, choosing pet projects and avoiding many tasks.

Here is what was given, in writing to the residents and owners as part of my final President's Message:

"Do you want your fees to remain stable? It must be decided Who will maintain the water mains.  There are some really significant things going on. For example, after 5 years of effort and discussions with the city of Wheaton there is a real possibility of turning over our water mains to the city, who would then maintain them. The city is waiting for a response from our association. Board member positions about this have ranged from “wonderful” to “ambivalent”. Nevertheless there has been substantial progress on this “impossible” project. A change in our approach to water main maintenance has facilitated this and we now have about 500 feet of new water main. The city will not take over infrastructure in disrepair. If your board fails to pursue this with adequate resources and vigor, then this will never happen. Over time failure to transfer to the city is a guarantee to cost each owner at least $4,500 via fees.  If this initiative fails then owner fees will need to be adjusted. You need to let the newly elected board know what priorities they should establish and follow. The last 8 years have proven that fees can be stable while maintaining and improving the association. Come to the annual meeting!"

Looking ahead, I did discuss the potential downsides of the transfer to the city with management. However, that's the purpose of negotiating. It will mean giving up some control, but it will save out owners $millions over the years. So what will we be giving up? That's to be discussed with the city. Asking the right questions will be critical. But that's what boards are supposed to do. Will it be perfect? Of course not. But will the board be willing to compromise $millions, or will they prefer to raise fees?  That should not be a difficult choice. But we've had control freaks as boards in the past who raised fees annually by 7% so as to fund a special project. That former president is the current president. So, choosing higher fees is a real possibility.

No comments:

Post a Comment

Please leave a comment!

Note: Only a member of this blog may post a comment.