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Subject: New budget item
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Author Messages
JillS8
(California)

Posts:97


04/25/2021 9:25 AM  
If the Board is attempting to hire a parking patrol on our private streets and adding about $900.00 expense to a monthly budget income of $4,905 (45 owners x $109.00) do they need to have a special assessment, or increase our dues immediately?
Can they use reserves and not notify the owners?

CCRS
“ In the event that the board at any time determines that the estimate of total charges for the current year is or will become inadequate to meet all Common Expenses for any reason, it shall immediately determine the approximate amount of such inadequacy and issue a supplemental estimate of the common expense and determine a revised amount of Regular Assessments for each member and the dates or dates when due.”

It goes on explaining how you can vote and the allowed percentage of increase allowed.

So the question is can they incur this large expense without a immediate dues increase and just use reserves without informing the owners the cost before they vote to contract with the company.
MaxB4
(Maine)

Posts:209


04/25/2021 9:32 AM  
Actually the answer is they could allocate some of the funds funding reserves to pay for the parking patrol. For instance if the monthly allocation to reserves is $5000.00, then it can be reduced to $4200.00 and use the $800.00 to pay for parking patrol without raising dues or creating a special assessment.
AugustinD


Posts:300


04/25/2021 9:37 AM  
-- By my reading, this California HOA board can borrow from the reserve fund, as long as the reserve is paid back within a year. See https://www.davis-stirling.com/HOME/Borrowing-from-HOA-Reserves

-- Per the covenant you quoted and California statute, I think the Board should immediately increase the regular assessment to (1) cover the cost of the parking patrol and (2) repay the reserve fund as needed.

-- I would also start with this site to make sure the Board is meeting its obligations regarding a change to the budget: https://www.davis-stirling.com/HOME/Unexpected-Expense#axzz3hxJrmRrD
MaxB4
(Maine)

Posts:209


04/25/2021 9:39 AM  
Let me revise this a bit as you only take in $4900, I don't think you would be contributing $5000.00 monthly to reserves.

They could raise dues, without a vote, to $129.00 and pay for the patrol.

They could borrow from the reserves, but have to repay within 12 months and the vote has to be in the minutes to be legal.

If the budget was not sent as required 30 days prior to the end of the fiscal year, then they can't raise assessments, until a new budget for the following year is done.

SheliaH
(Indiana)

Posts:3921


04/25/2021 9:43 AM  
I think that part refers to the entire budget, so if they wanted to increase the entire budget, I would expect to see something really major, such as emergency repairs to the roofs (if you lived in a high rise condo or townhouses which have common roofs).

It may be the board has moved some things around to allow this without an assessment increase, but because it will be a new expense, you can count on next year's budget to include this line item and the assessments adjusted accordingly. Right now, this looks to be $20 per homeowner - maybe that's reasonable, depending on what else is going on.

Have you asked the board these questions? If not, why not? Look at your previous board meeting minutes - was this discussed? Did the board get estimates for several vendors before settling on this one? Have a majority of homeowners asked for the patrol and are they aware how this will affect the budget?

If they're aware and want this done, you may be in the minority on public opinion - or the board is making assumptions it shoukdnt, which is why you ask the board these questions. If necessary, you may need to remind THEM of what the documents say.
JillS8
(California)

Posts:97


04/25/2021 9:48 AM  
The CCRs so state Regular Assessments can only increase 20% over the regular assessment for the preceding fiscal year and special assessments not exceed 5% of the budgeted gross expense without a owner vote.
Would this be a regular or special assessment
JillS8
(California)

Posts:97


04/25/2021 9:56 AM  
Great questions.
I am a board member against the parking patrol at this point. The only issue is a civil issue going on between 2 homeowners. This issue came up a year ago at a meeting. Of the 45 owners 32 showed up at a meeting and were adamant against this. Board dropped it. Same board but they said they don’t need to ask they can do it.
Side note. At the meeting that owners showed up the board agreed to put committee together of owners to redo parking rules. The committee has spent countless hours revising and are ready to give findings to the board. The board is going ahead with the patrol without hearing from the committee they established.
I am the lone dissenting board vote until we get results and cost under control.
Also is it required to get more than one estimate ? I do not see that in our docs.
AugustinD


Posts:300


04/25/2021 10:05 AM  
Posted By JillS8 on 04/25/2021 9:48 AM
The CCRs so state Regular Assessments can only increase 20% over the regular assessment for the preceding fiscal year and special assessments not exceed 5% of the budgeted gross expense without a owner vote. Would this be a regular or special assessment
-- How much was the prior fiscal year's regular assessment? ​

-- After factoring in the proposed $20 per unit per month increase, would the increase from last year to this year exceed 20%? If so, it appears to me you have a few options, including borrowing from the reserve fund as described above.

-- You should check Davis-Stirling.com to see whether more than one bid is required.
MaxB4
(Maine)

Posts:209


04/25/2021 10:12 AM  
Posted By JillS8 on 04/25/2021 9:48 AM
The CCRs so state Regular Assessments can only increase 20% over the regular assessment for the preceding fiscal year and special assessments not exceed 5% of the budgeted gross expense without a owner vote.
Would this be a regular or special assessment



Regular assessment
MaxB4
(Maine)

Posts:209


04/25/2021 10:14 AM  
Posted By JillS8 on 04/25/2021 9:56 AM
Great questions.
I am a board member against the parking patrol at this point. The only issue is a civil issue going on between 2 homeowners. This issue came up a year ago at a meeting. Of the 45 owners 32 showed up at a meeting and were adamant against this. Board dropped it. Same board but they said they don’t need to ask they can do it.
Side note. At the meeting that owners showed up the board agreed to put committee together of owners to redo parking rules. The committee has spent countless hours revising and are ready to give findings to the board. The board is going ahead with the patrol without hearing from the committee they established.
I am the lone dissenting board vote until we get results and cost under control.
Also is it required to get more than one estimate ? I do not see that in our docs.



Is it prudent to get more than one bid, yes, is it required, no.
AugustinD


Posts:300


04/25/2021 10:17 AM  
Posted By JillS8 on 04/25/2021 9:56 AM
Side note. At the meeting that owners showed up the board agreed to put committee together of owners to redo parking rules. The committee has spent countless hours revising and are ready to give findings to the board. The board is going ahead with the patrol without hearing from the committee they established.
First, I know of no law or covenant that the Board is violating when the Board ignores a committee. Second, in my experience HOA/condo boards ignoring committees is common. Third, I think that this business with the committee is no battle over which a director (especially one in the Board minority) should linger.
JillS8
(California)

Posts:97


04/25/2021 11:08 AM  
Prior year dues are $109.00. If the board signs the contract, our budget is Jan-Dec and the contract would be signed to start in May. I guess they would borrow from the reserves and need to pay it back as stated above.
So that would mean in January our dues would go up the monthly cost of the contract and the amount we would need to pay back the reserves if I understand correctly.
I have looked at Davis Sterling. Thank You
JillS8
(California)

Posts:97


04/25/2021 11:09 AM  
Posted By MaxB4 on 04/25/2021 10:12 AM
Posted By JillS8 on 04/25/2021 9:48 AM
The CCRs so state Regular Assessments can only increase 20% over the regular assessment for the preceding fiscal year and special assessments not exceed 5% of the budgeted gross expense without a owner vote.
Would this be a regular or special assessment



Regular assessment




MaxB4
(Maine)

Posts:209


04/25/2021 11:27 AM  
Posted By JillS8 on 04/25/2021 11:08 AM
Prior year dues are $109.00. If the board signs the contract, our budget is Jan-Dec and the contract would be signed to start in May. I guess they would borrow from the reserves and need to pay it back as stated above.
So that would mean in January our dues would go up the monthly cost of the contract and the amount we would need to pay back the reserves if I understand correctly.
I have looked at Davis Sterling. Thank You



Actually they could legally do a 20% increase on the monthly assessments with a mandatory 30 day notice, so it could start as early as June 1st.
MichaelS56
(Minnesota)

Posts:179


04/25/2021 2:13 PM  
The Board could wait until the next budget cycle and put in this new line item. The owners then get the chance to respond to the budget and vote on it. Too many negatives if the Board just does it and sticks it to all of the owners.
JohnC46
(South Carolina)

Posts:10944


04/25/2021 2:34 PM  
Jill

Jill

If I read your posts correctly, association monthly income is $4,905.00 and the proposed parking service is $900.00 per month which would require about an 18% raise in income to cover it.

You also say the BOD could raise the dues (Annual Assessment) 20% without owner approval so like it or not, they could cover it.

You say 32 of 45 owners objected when the BOD tried to add a parking service earlier. You say you are against such a service. Seems to me it is time to rally those 32 again to attend a BOD Meeting and let their displeasure be known. Might also be time to maybe threaten/discuss a Special Meeting to recall some BOD Members.
MaxB4
(Maine)

Posts:209


04/25/2021 3:09 PM  
Posted By MichaelS56 on 04/25/2021 2:13 PM
The Board could wait until the next budget cycle and put in this new line item. The owners then get the chance to respond to the budget and vote on it. Too many negatives if the Board just does it and sticks it to all of the owners.



Sorry Michael, Owners don't vote on the budget in California.
MaxB4
(Maine)

Posts:209


04/25/2021 3:11 PM  
Posted By JohnC46 on 04/25/2021 2:34 PM
Jill

Jill

If I read your posts correctly, association monthly income is $4,905.00 and the proposed parking service is $900.00 per month which would require about an 18% raise in income to cover it.

You also say the BOD could raise the dues (Annual Assessment) 20% without owner approval so like it or not, they could cover it.

You say 32 of 45 owners objected when the BOD tried to add a parking service earlier. You say you are against such a service. Seems to me it is time to rally those 32 again to attend a BOD Meeting and let their displeasure be known. Might also be time to maybe threaten/discuss a Special Meeting to recall some BOD Members.



Actually, those 32 could just overturn the assessment increase. Case closed!
KerryL1
(California)

Posts:8015


04/25/2021 4:11 PM  
Given Jill's overall lack of experience, I don't know if those 32 are from separate households or if the 32 include co-owners.
LetA
(Nevada)

Posts:1160


04/25/2021 4:31 PM  
How much revenue will be made when parking patrol starts issuing violation notices, It just may offset the expense.
JillS8
(California)

Posts:97


04/25/2021 4:51 PM  
Given my lack of experience...they are 32 separate homeowners. Maybe it's not my lack of experience but the refusal of the majority of the board to follow the rules and the law.I have been fighting this same issue for 17 years.
I like to get a wide variety of opinions and interpretations so I Am diligent in. making sure my suggestions are correct,legal,and serve the best for our community. 😀
MaxB4
(Maine)

Posts:209


04/25/2021 5:54 PM  
Posted By JillS8 on 04/25/2021 4:51 PM
Given my lack of experience...they are 32 separate homeowners. Maybe it's not my lack of experience but the refusal of the majority of the board to follow the rules and the law.I have been fighting this same issue for 17 years.
I like to get a wide variety of opinions and interpretations so I Am diligent in. making sure my suggestions are correct,legal,and serve the best for our community. 😀



Guess that covers Kerry's concern of your lack of experience.
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