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Subject: Budget
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Author Messages
JillS8
(California)

Posts:84


12/06/2018 5:34 PM  
Our annual budget was approved and sent to homeowners. The board is now wanting to add a line item that will be more than 25 percent of the existing budget. The management company says we can add a line item with a zero allocation and run in a deficit. I am strongly against doing this as I don't see this as a fiscally responsible choice. Any thoughts?
KerryL1
(California)

Posts:6397


12/06/2018 5:41 PM  
Are you on the board, Jill? Do you have any idea why the Board suddenly thinks this item is needed? Is this a normal typical expense? Or is this a capital expenditure for something new?

JillS8
(California)

Posts:84


12/06/2018 6:05 PM  
To hire a parking patrol company. we currently do not have a patrol or IMO need one. I am a board member and feel this is not needed and a sneaky way to go around paying for a patrol company.
KerryL1
(California)

Posts:6397


12/06/2018 6:23 PM  
It doesn't sound good to me either, Jill. But I'm unable to tell you if this is OK: "The management company says we can add a line item with a zero allocation and run in a deficit." If Richard of CA stops by, he'll be able to help.

How does the rest of the Board plan on paying this back, i.e., solving the deficit.

Another way to get the funds is to borrow from reserves. But you still must present a plan to owners to pay it back.

Unfortunately re: whether or not you "need" this service--the majority of the board apparently approved it.
JillS8
(California)

Posts:84


12/06/2018 7:15 PM  
Thank you. The board has not approved yet. It was given to us as an alternative to having a special assessment to pay. It will be discussed further at our January meeting. As always, thank you for your insight.😀
MelissaP1
(Alabama)

Posts:8281


12/06/2018 7:31 PM  
What is the purpose of this patrol? Does your HOA have this many violators to justify the cost? Plus if they are issuing fines, then the HOA could be subject to taxation on the collection of those fines. If it's to remove the violators, then does the HOA send the violator the bill?

It just sounds like a service your HOA hasn't thought all the way through. Was there some kind of sales pitch? I wouldn't know why a HOA would put such a service under contract. Seems a call to a Tow company would suffice.

Former HOA President
JillS8
(California)

Posts:84


12/06/2018 8:06 PM  
The reason for the patrol is because our management will not deal with any form of parking violations and suggested to hire a patrol to do so. I do not know if it has to do with California law or not. We are small (40) home community.
MelissaP1
(Alabama)

Posts:8281


12/06/2018 8:16 PM  
Sounds like you all have bigger problems. The MC isn't to direct the HOA. It's the HOA's job to direct the MC. If it's not in the contract for them to handle Parking or other violations, then they are not going to do it. Plus I believe it's NOT the MC's job to enforce violations. It's the HOA's.

Former HOA President
RichardP13
(California)

Posts:3644


12/06/2018 8:38 PM  
Posted By MelissaP1 on 12/06/2018 8:16 PM
Sounds like you all have bigger problems. The MC isn't to direct the HOA. It's the HOA's job to direct the MC. If it's not in the contract for them to handle Parking or other violations, then they are not going to do it. Plus I believe it's NOT the MC's job to enforce violations. It's the HOA's.



Melissa has all the answers!

Been there, Done that
LetA
(Nevada)

Posts:711


12/06/2018 10:06 PM  
Posted By JillS8 on 12/06/2018 7:15 PM
Thank you. The board has not approved yet. It was given to us as an alternative to having a special assessment to pay. It will be discussed further at our January meeting. As always, thank you for your insight.😀





I know here in Nevada, an HOA board can only raise assessments 15% per year instead of having special assessments. Our assessments are going up 15% because the board feels the need to hire an expensive landscape company like our homes are in Bel Air.

I am bothered that you mention that the budget was already sent to the homeowners for ratifications and now the board wants to add some pork to the budgets. That you might want to consult with an attorney. IMHO that appears unethical to say the least.
KerryL1
(California)

Posts:6397


12/08/2018 1:43 PM  
What's your advice, to Jill, Richard?

In CA, LetA, there's no requirement to send the budget out for owners ratification. It and a bunch of other things, e.g., reserves study, though must be sent out annually. this can be done electronically to owners who've signed up to received these items by email.
LetA
(Nevada)

Posts:711


12/08/2018 10:40 PM  
This video might help you with budget issues https://www.youtube.com/watch?v=rPq2cF4l9qc
SueW6
(Michigan)

Posts:501


12/09/2018 2:28 PM  
I wonder if this board thinks that the parking patrol issue has reached an emergency level and therefore has no other choice than to get an outside company to enforce the parking rules and their service includes towing.

To make sure it’s not overkill, contract for on- call only.
GeorgeS21
(Florida)

Posts:1243


12/09/2018 4:10 PM  
LetA,

You used the word “pork.” Opinion?
JillS8
(California)

Posts:84


12/10/2018 7:09 AM  
I have posted before so quick back story.
Bought new home 15 years ago and read CCRS with no parking restrictions. Private streets. No rules until 1 year later when development compeletd.
A rule saying no street parking between 2-5 am. Was put in rules. Rule never able to be enforced. No signs, no fire lanes, no red curbs, no parking stalls. Never any fines. ( so in my mind no rule) Years ago board would put "no street parking" papers on cars until they damaged a car. CCRS have no parking restrictions, under "Use Restrictions" so although there is language added to rules saying no street parking between 2-5am it can't be enforced and has never been enforced. It has been challenged as a more restrictive rule than what CCRS Use Restrictions.

There is no emergency situation. One owner has several cars and that's the issue. A couple board members say they don't want people parking in front of their house. We also live in large 5-6 bedroom homes many with guest houses so several cars per homes is to be expected.

Recently the Management Co. said they will not and do not enforce any parking issues that we should hire a patrol. Budget completed and sent to owners. We never budgeted for patrol so we were told we would need a special assets to pay for the patrol. Then Management Company stated we did not need an assessment but could run in a deficit and have add a line item with a zero balance

That's where we stand in limbo with no clarity.

SueW6
(Michigan)

Posts:501


12/10/2018 7:56 AM  
Well, a budget is a guide, not written in cement.

So if costs are added to the Buildings and Grounds line item,(already there) and that category runs over-budget due to added costs, then so be it. Yes, you will see a deficit spending at the end of the year.

Next year, plan for the cost to be included in the same category. But of course, you need the revenue to balance the budget. You have a full year to discuss and determine if assessments need to be increased.

My point was that - depending on your size - you might just need an on-call towing service AFTER a big orange notice is put under the windshield that the car will be towed in 24 hours unless removed. Then do it. My guess is that after a few tows, people will take it seriously.d the cost will be on an as-needed status.

But there's no need to jump in with a full contract at this time.


RichardP13
(California)

Posts:3644


12/10/2018 10:17 AM  
IMO, it is reckless for the majority of a board to hire a patrol company to enforce a rule that is unenforceable.

I would not want a MC that suggests running a deficit is OK, it's not. If dues need to increase for a contracted item, then raise the dues. In this case, no way.

As a MC, I can cite for violations, but I don't enforce violations, the governing body does. For a towing company to tow a vehicle they someone to sign off on the tow. It can be a Board member or a patrol company. As a MC, I would never sign off.

If something is a code violation enforced by a city, I will handle those types of complaints.

Been there, Done that
KellyM3
(North Carolina)

Posts:1387


12/11/2018 5:51 AM  
Jill,

Your board should absolutely call a new meeting, articulate the concern and raise dues to cover the operational cost of a parking patrol. If the residents don't want or support a dues increase, then the parking issues in your community are acceptable to them if not the board. If the service was minimal or the problem acute and easily (and permanently) solved, then maybe the board could get by. An expense equal to 25% of your annual budget is much too great of a percentage of your overall budget to slide by. Homeowners would lose something they like with that much cash going out the door and to the security company.

Enforcing parking rules is too big a burden for a property management company; it's too granular of a policy enforcement directive if, in fact, your manager is off-site.
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