Budget

Started by LaverneB • 16 replies • 1683 views

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LaverneB (Florida)
Posts: 79

Posted:

A group of homeowners want to know why our community is not being maintained . Our tennis courts can not be played on , cracks, mold, torn screens. The shuffle board courts, bocce courts same way. All the board will tell us , "its not in the budget", how as a group can we get these things done. The money is there!Can we with hold our maintance payments put them in escrow , until the BOD does something. Our home values are going down. The BOD "dance" around the subjects...any advice out there?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Do NOT withhold your dues.

DO attend the meetings and demand a committee be set up to discuss this. Assign a board member to hold a work session meeting to field the concerns.

They say the money is "not there.' Get all the financials and see if there IS the money for these repairs.

PS Why are these repairs and replacments not a part of a Reserve Fund?
Do you have a Reserve Fund?

LaverneB (Florida)
Posts: 79

Posted:

Yes the reserve money is there to maintain all the common grounds

TimB4 (Tennessee)
Posts: 21,046

Posted:

It's possible that the volunteer board members don't have the time to solicit bids for these things. Perhaps you can contact the board and volunteer to gather bids and provide a report to the board so the Board can make a decision on who to award the contract to.

BonnieG1 (Nebraska)
Posts: 1,186

Posted:

I like Tim's response. I know that I have other responsibilities that take up much of my time during the week. Another Board member is dealing with an ill husband, one other is still working many hours, and one lives a few miles from the building. Fortunately we have a great building manager-owner that gets bids to present to the Board.

Depending on you documents, you may be able to hire an owner as a manager to handle getting bids, etc.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I will post this again...A HOA is ONLY funded by it's members FOR it's members...It works much like a "poker kitty" pot. Everyone puts in their share to play (dues) but it is the one with the best hand or bluff that gets the funds...Just keep in mind that the operating money is like the house/Casino money and it's cut is always the highest and priority...

If you want something fixed or to force an owner to pay their share, it costs money or volunteer hours. It isn't an open fund of which wishes and dreams come from. Someone has to do the work or pay the bills. That "somebody" means you or your neighbors. I'd suggest if you want something done and in the budget you have a special assessment or raise your dues. All of which is defined in your doc on how to do...

Think outside the box a bit and maybe organize a volunteer day. The HOA can buy the supplies and the owners the labor. I've done this several times with some success. It is up to you and your neighbors to define how you want your HOA to be and look. So get to working NOT complaing if you want something done...

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By LaverneB on 02/03/2012 10:05 AM
Yes the reserve money is there to maintain all the common grounds

LAV

Capital Reserve is usually money set aside for things that will have to be done down the road not as part of routine maintenance.

Let us say we know 20 years from now that roofs have to be replaced and let us say it will cost $20,000.00. Capital Reserve says we will set aside $1,000.00 per year for the next 20 years to be able do this when the time comes.

Not let us say we have to do routine maintenance every month of say mowing the grass at $500.00 per month. Well this should come out of the Operating Budget, not the Capital Reserve.

Look at Capital Reserve as saving for a rainy day and the Operating Budget as what do I need to spend day.

If there is "no money" there are several ways to get it:

1. Increase dues and better plan.

2. A one time assessment on each homeowner.

3. Borrow money and make pay back arrangements.

Hope this helps.

LaverneB (Florida)
Posts: 79

Posted:

To Melisia,

I also was president of our HOA for 5 years! The community is made up of the average age of 70. It is a 55 + single family homes.Alo tof us do help out, but re-placing tennis courts, power washing shuffle courts? Re-placing torn tennis screens. I don't think so...but we do have a lot of good people who do what they can..

BonnieG1 (Nebraska)
Posts: 1,186

Posted:

When Melissa answered, I assumed she did not live in a 55+ community. I know very few people here are able to work. Four or more of our residents have caregivers come to help them with routine housework, cooking etc.

Althugh, I at 64 am still completely independent, I can't do things I used to be able to do. I keep my door open if I get down on my hands and knees to clean so that I can holler for help if I can't get up.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

While not defending Melissa, when one is unable to do things that need to be done then one must make arrangements to be sure that things needing to be done are done.

This might require more money then sweat equity which is one reason I live in an HOA. HOA or not, over 55 or not, etc., if I cannot unplug my own toilet (which I know how to do), nor make my own meals, nor drive, etc. then I have decisions to make.

BonnieG1 (Nebraska)
Posts: 1,186

Posted:

I agree with you John.
Most people who moved into our community (including me) moved here to be free of the upkeep of a house. We knew we were not getting any younger.

As I mentioned before, I am still completely independent, doing anywhere from 25-40 hours of volunteer work a week. But I don't climb on ladders to paint anymore or do other physical jobs related to keeping a house in repair. I have always needed help with most plumbing problems even though when younger I tackled and completed a difficult (for me) pipe replacement. Wouldn't even attempt something like that now.

The people here who have care givers come moved in when they were in their 60s and are now in theire 80s and 90s. Families do help.

I know if a resident becomes a danger to themselves, it is our job as a Board to report the situation to the Adult Protective Services if the family does nothing. But so far the people who need the care gives are quite mentally competent.

Some of our residents have made the decision to move to assisted living. Very few people just move out once they move in unless it is to assited living or a nursing home.

EdC5 (Florida)
Posts: 117

Posted:

One thing that hasn't been mentioned, what's the percentage of owners in arrears? Our HOA has an annual budget of about $27K, and we have delinquent owner balances (assessments, interest, collection fees) of about $24K. So, there just might not be enough in liquid capital to maintain the recreational facilities.

Edward J Cooke, CMCA, LCAM

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I did not see anywhere in the post this was an over 55 HOA prior to my posting my response. Plus I volunteer with Habitat for Humanity whre most of the men I work with our 70 to 80 plus years old. They are still building houses from scratch and are the main house leads. So I don't see age as a factor unless it's an assisted living situation.

There are many handyman companies out there now. I use one that is $200 for 2 hours of work and will do anything in those two hours. There are others who are more defined. They come in uniform and are licenced& insured. Things to require whwn hiring a contractor. Again my advice is a HOA is ONLY funded by it's members FOR it's members...You want things fixed find a way with what you got...

Former HOA President

BonnieG1 (Nebraska)
Posts: 1,186

Posted:

granted Melissa some 70 and 80 year old men are able to work circles around men half their age. But the majority of men this age are not building houses.
This is not an assisted living community. But the people who live here who are in there 80s and 90s are definitely not able to build houses.

Of course we don't have a swimming pool, tennis court, or basketball court to maintain. Basically it is just the building we need to maintain.

Our documents state that a person may use the assistance of in home caregivers if their health declines. This would be no different than living in your own house and hiring out side help to come.

Like I stated before, most people who moved into this community (including me) did not want to handle upkeep of a house. It wasn't that they could not live independently. I was working for pay full time when I moved here.

My doctor told me to shovel snow no more than 15 minutes at a time. Of course when I was living in my house, I did not follow his directions all the time.

Now I am looking out at snow coming down and so glad that I don't have to get out and shovel although I could if I had to.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

I'll disagree that the items in need of repair can only come from the operating budget. The tennis court surfaces and other playing surfaces sound as if they need replacing. You can certainly argue in favor of tapping reserve funds if the property is literally falling part or is dilapidated.

Now, on the budget front, if reserves aren't healthy, monthly reserve deposits aren't healthy and the 55+ community's operating budget isn't leaving any extra revenue for such deposits, then your issue is cash flow. Retirement communities = fixed income = don't raise dues + ignore inflation + consider the reserve money deposits as "profit" so dues are high enough.

It's a terrible cycle.

BradP (Kansas)
Posts: 2,640

Posted:

since i deal with tennis courts and windscreens, etc. through my work I can tell you they are a money pit requiring constant attention if you want them done right. Plus they are expensive, unless you have quotes for the project and a reserve study which earmarks which funds are for what it is really difficult to say if you have enough.

The board probably dances because it isn't sure how to proceed. volunteer to help them figure out a path, first step is to review your reserve study and the current value in it. Second is to get some quotes to repair the areas to see if you truly have enough. 3rd step would be to bid out the work.

I have never been a huge fan of volunteers doing a lot of work unless it is a simple task that you can't get hurt doing. Windscreens are a pain and not something I would see the age of this population in question attempting. Tennis courts are specialty surfaces and need a professional to clean them, if a novice tries to power wash they can easily ruin the surface of a court.

Under no circumstances should you withold money, it only gives the board a reason to ignore you. Good luck

SusanW1 (Michigan)
Posts: 5,202

Posted:

LaVerne - if your community is made up of over 70's, that could be a reason why tennis courts are not high priority for your board.

You need to do more research on your budget and see where annual expenditures and reserve fund accounts are being spent

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