November 2nd, 2021
Dear Residents,
Please see below for questions and answers that have been brought up before this Saturday’s Budget Meeting. (Shared with permission from the resident who submitted the following)
MEMORANDUM-GLEN BUDGET MEETING POINTS
Questions and Answers
- Note; 29 Sept board report Reserves = $298,000. 12 Oct board reflects “approximately $250,000 in Reserve funds”. $48,000 poof!
As stated in the homeowner information meeting and other correspondence with the community, Securitas removed ALL their equipment on September 28th. All that equipment needed replacement. We contracted with SafePassage Solutions and AJNSecurity for the virtual attendant and license plate reader equipment needed at our entry gate for a total cost of $25,267.98. We also contracted with AJN Security to purchase and install replacement cameras throughout the common areas and access card readers. These companies required payment for all materials upfront and payment for labor as vendors completed each piece. The payment for AJN thus far is $23,337.00. The outstanding amount still due is $15,500.
- Sept 29 meeting Suggested the need for hiring an In-House Maintenance Person. What would be the duties, equipment requirements, job description, hours, and pay rate?
The board was considering in-house maintenance instead of paying our current vendors for extras to see if we could save the community money. We were looking at hiring someone for 20 hours a week to pick up the trash along roadsides, clean the clubhouse, keep the garbage area tidy, perform clubhouse-only lawncare, shovel snow at the mailbox and clubhouse sidewalk, and perform various other handyman types of duties. We were performing a cost-benefit analysis and ultimately decided that there was no benefit at this point after multiple negotiations with AAF. We prepared a costing worksheet for supplies and materials that would be needed in addition to labor. That worksheet gave us leverage to negotiate with AAF and comprehensively provide the majority of these services as part of their contract.
- What is best use of HOA money? Collections attorney vs. current attorney with utility considerations- cost/benefit or expense to recover each dollar?
In the past month, the board had several meetings with a collection attorney and decided to provide three delinquent accounts to the collection attorney firm as a test through motion and vote. Cost-benefit factors include total cost, time involved, ease and frequency of communication to the community manager, timeliness of filing and recovery efforts, and overall ROI (return on investment). We will evaluate the performance of those collection actions and decide the best path for next year. It is important to note that the Fair Housing and Debt Collection Regulations and the court processes factor in our ability to collect on the approximate 100 past due accounts. The law requires us to give 90 days of notices before filing for a civil judgment. A civil judgment is only awarded if the member accepts service. Once a judgment is entered, the member has 30 days to appeal. If no appeal is filed, we have to go to court again to collect the judgment.
- Sept 29 meeting revealed “need” for inspection truck vehicle be provided by HOA. A specific new vehicle high end brand was recommended and ultimately funding approved.
The new compliance officer(s) are FirstService Residential employees. The board planned and budgeted to compensate the compliance officer’s personal vehicle use at .56 cents per mile for an estimated 15,000 miles plus a $500 yearly maintenance per diem for a total of $9,400 for 2022. At the end of September, we learned that FirstService Residential Human Resource Policy runs contrary to our plans. They will not require or demand that their employees use their own vehicles. Officer Joseph Diehl declined using his personal vehicle, putting the board in the uncomfortable position of securing a vehicle within the budgeted parameters or risk losing Officer Diehl. Given that vehicle maintenance was a considerable cost in the past, the board researched the market. We were fortunate to secure a base model 2021 Toyota Tacoma in stock with favorable lease terms under $300 monthly, including maintenance, wear, and tear, for 36 months with the option to buy. The lease payment, including the maintenance mentioned above, etc., is $331.46 per month (approx. $40 a month for maintenance coverage, excess wear and tear, etc.) with an approximate residual value of $20,000. We researched many vehicles before finding this vehicle, including Suburu, Ford, Chevy, and GMC. The spec sheet is available to any member who requests it in writing. The $9,400 budgeted line item now breaks down to $4000 for the vehicle and $5000 for gasoline, thus reducing the total by $400. The vehicle gets 20MPG and has an on-demand 4 WD.
- CCR & BYLAW ITEM; #3 HOME BASED BUSINESSES desirable to be allowed with ZERO foot traffic proviso. Why not add words allowing businesses that could help/benefit this remote community like our snow plowing, lawn, tree service, handyman, child care and educational compositions.
The final language of the proposed amendments for membership vote is not complete yet, so your suggestion to add clarifying information is most helpful. Thank you!
- Based on a review of the written budget conversations and actions of the past we are using the “Reserve Fund” not as an emergency cash reserve but as a operational cash drawer. There seems to be no true set aside for defined “emergencies”, just draw from it for every perceived want or need .
This statement is not accurate. In accordance with the law and best practices, reserve funds can ONLY be used for replacement, repair, or addition of community assets/ capital items. Standard accounting practices track reserve expenses and segregate them from everyday operating expenses. An example of a reserve expense is the repair or replacement of our roads. The replacement of the security technology removed by Securitas is another reserve expense. We had a professional reserve study done at the end of 2020, and the report was delivered in January 2021. This reserve study is available to the membership on the Connect portal, along with the monthly financial statements.
- The October 12, 2021 stated RESERVE FUND minimum goal is $463,000 and we have $250,000. Shortfall = $213,000. We will achieve and exceed this with 400 units paying $360 per year ($144,000) with $288,000 in two years all things being equal. [$250,000+ $288,000=$538,000]
That calculation would be correct if we did not have membership approved and necessary required projects next year. As you know, the membership approved the pool repairs and fitness room equipment. In addition, the reserve study makes a compelling case for the need to redo our community roads. There are a few areas where the asphalt is completely undermined. The price tag for the roads, as of December 2020, is estimated to be $2.5 million. In addition, the final invoices for the labor associated with the security technology replacement have not yet been submitted as the project is not yet complete. It is also important to note that out of 456 total member-owned lots in this community, approximately 100 of them are delinquent.
- Are we setting a new reserve goal of $538,000? Are the fund draws from the past made the reserve fund a permanently floating use fund not to be used as a solid goal as illuminated in #7 above?
Please refer to the reserve study for more details. Our engineers and accountants’ professional recommendation is to obtain a reserve fund balance of 1 million dollars within five years while considering necessary reserve spending.
- $1522.00 + $360.00 = $1882.00 PER YEAR $156.84/MO.
We decided to separate annual maintenance fees from the reserve funds by a special assessment. The reserve fund special assessment will be earmarked for the reserve fund only and not used for the general operating expenses. We can undoubtedly reconsider this decision and combine the two into one annual amount based on members’ feedback. We were taking into consideration that increasing the total yearly maintenance fees because of a specific need usually results in the fees remaining high even after the particular need is met. We are directly impacted by this increase, just like our neighbors. We do this with a heavy heart as absolutely nobody wants to increase assessments. We are once again offering a thirty-day written comment period and will seriously consider any viable solutions that our members present.
Your board of directors volunteers their time and talents in service FOR the community, not TO the community. We encourage members like yourself to be part of the solution and engage with us. We welcome collaborative efforts while fulfilling our fiduciary duties to the association.
Sincerely,
Scott Matthews Jr.
Community Manager
