Some observations from the HOA budgeting process

Doing the annual budget in our HOA is always difficult. I wish more owners would attend the budget session but they don't. This year, fewer than 1% attended. We spent about 2 hours discussing the budget for 2016. But only three people in this HOA know that [other than board members, who are also owners.].

The board members take differing positions. I look at it as a balancing act. Balance projected and identified costs for 2016 with anticipated income via fees. Look at reserves very closely for the next 10 years. Take into consideration the possible financial well being and other costs for our 336 owners. Then mix this stew together and Voila' we can arrive at a possible outcome.

Other board members take very different views. Some operate from fear, others don't want to cater to the lowest common denominator. Others sit quietly and play "follow the leader." Frankly, I'm not satisfied with that.

I'm a very pragmatic guy. I know what it costs this HOA for each foreclosure and I do think we have an obligation to the shareholders. It is a balancing act.

For anyone who is interested, I've read reports that most probably anyone living on social security income will get the same amount in a check next year as they did last year. This is also true for many workers. No salary or wage increases for many in 2016. I do take the well being of our shareholders into account when looking into budgets and fees. [Posted at the Social Security Website October 15: "No Cost-of-Living Adjustment for 2016"  by  Jim Borland, Assistant Deputy Commissioner, Communications, SSA  - "The CPI has not risen since the last cost-of-living adjustment in 2015. As a result, your SSI benefit rate and, for most people, your Social Security benefit amount will stay the same in 2016."]

Unfortunately, HOA costs do increase from year to year. This shows up in contracts as well as utility bills. For owners, the problem might be more direct. In recent years health care has become an ever increasing burden and there is no indication that Medicare payments by retirees will be the same in 2016 as they were in 2015. Obamacare had become for many an insurance nightmare.

All I can say is, I'm aware of the bigger picture and I do take that into consideration when planning any finances for 2016.

HOA Annual Meeting - The State of the HOA

The annual meeting of Briarcliffe Lakes Manor Homes Condominium Association was held on Thursday September 24. Each board member gave a summary of the state of the HOA from the perspective of their individual responsibilities. The summaries included:

• President's Perspective
• Vice-President's Perspective - Projects, Architecture and Infrastructure
• Maintenance Director's Perspective
• Treasurer's Perspective
• Rules & Regulation Director's Perspective
• Landscaping Director's Perspective
• Welcoming Director's Perspective

There were some surprise announcements. But only approximately 10% of the HOA owners were in attendance in the audience, so most of the owners were not present for the announcements or the perspectives and summaries provided by each of the board of directors. However, the board of directors and management have properly fulfilled their duties. Owners have obligations too, and that includes attending the annual meeting. I suppose that some one might say the the six newsletters are so jam packed with information that there is no need to attend the meeting. However, our HOA business meetings span about 20 hours per year. They are jam-packed with information and believe me, 18 pages of annual newsletters (front and inside) cannot cover these meetings. Some owners have complained about transparency in the past. Coming to meeting would seem to be the best way to be informed. But many decided they were "too busy."

A quorum was reached and the elections held.

The HOA will now have only six board members. The president's position has been vacated.

Commentary:
As I have stated previously, the facilitator to the success of a condominium association is the owners. Owners can also be the greatest impediment. Board members are owners, too. So the quality of the HOA is determined entirely by the owners.

At BLMH it has been a struggle to fill the board positions with working members. We have had place holders from time to time. Because of the low interest by owners, we have had some board members "work for free" contributing hundreds of hours per year. We have also had some board member return year, after year after year. We now have one board member who has been doing this for about 38 years with a brief absence when the owners declined to re-elect her during a particularly rough patch. At the time we were entering the worst recession since the great depression, fees were up, we were in the early phase of a roofing project which would require another ten years to complete and but begun with less than 10% of the necessary funds in savings, we faced a major and early street replacement, etc. The ownership attributed all of these problems to the board. The economy surely didn't help the mood.

It's simply too easy for many owners to pretend this is an apartment complex or a retirement community. Owner involvement ceases with the paying of fees.  That's one reason why we have such low owner attendance at meetings. Boards may also have been their own worst enemies. I also am of the opinion from past experience that more owners would attend if there was something personal in it for them. For example, about 7 years ago a board attempted to bribe owners with free coffee and donuts. Some owners have come with their complaints and their hand outstretched and palm up. A compliant board a few years ago attempted to grant every wish and demand. It is unfortunate, but these hand outs require higher fees. And fees are really in short supply; we will spend every dollar we've collected simply do do the absolute necessities. No kidding! There is no "slush fund" with which to grant the personal wishes of owners, unless a board decides to avoid completing the roofing project, or stop driveway repairs, or let owners clear their own driveways of snow, etc. That would be okay for a few, as long as their driveway was plowed and if they already have a new roof, etc. why, then it is not a problem at all!