HOA Loan and Insurance Quotes

I understand that there is a 1% origination fee, payable at loan closing. Submitting this form puts me under no obligation. *


Subscribe to Blog

Your email:

Follow Us

Looking for answers?

condo association blogCan't find the answer you're looking for?  Ask your question here and we'll post it in our blog.

Browse by Topic

Condo Association Management Blog

Current Articles | RSS Feed RSS Feed

Homeowners Association - No Budget Approved

Posted on Mon, Feb 16, 2009 @ 07:08 AM
  
  
  

No budget was approved and no yearly assessment was set at yesterday's board of directors meeting at Lake of the Woods.

After nearly four hours of debate, there was finally a unanimous vote--to recess the meeting and try again later this month.

Figuring out how to finance an $8.5 million spending plan for the Orange County homeowners association while not raising the yearly assessment is going to take much more work, the directors agreed.

Revenues never cover expenses at the gated subdivision, so the shortfall is made up by a yearly assessment on the owners of each of the 4,260 lots.

For the current fiscal year, the assessment was $1,127 per lot. Directors said they wanted to stay at that level or lower for the fiscal year that begins May 1, but that goal has not yet been met.

Board members had spent hours wading through ideas to increase revenue and decrease expenses. But when the work came down to the wire yesterday, there was more money to be spent than to be saved.

"This whole exercise was supposed to generate some reductions," Director Jeff Flynn said, in obvious frustration.

"Today we've heard from the county, the school system, fire and rescue and the Sheriff's Office. They're all cutting their budgets. How can we possibly think we're immune to the effects of the economy?" he asked.

"We can cut more expenses," said Director Tom Sheridan. "There is more to be cut."

The biggest disagreement was whether to pay off the $815,000 balance of the no-interest Community Association loan with the money that is being held by the bank in interest-bearing CDs as collateral.

That early payoff was approved 4-3, with President Bill Wilson joining Flynn and fellow directors Margaret Darby and Bruce Kay on the prevailing side. Directors Neil Buttimer, Tom Sheridan and Peter Williams opposed the move.

Buttimer argued vehemently to keep the loan and to extend it to seven years.

"This is taking replacement reserve money for new capital, the Community Center," he argued. "It's irresponsible."

"Director Buttimer, your math is not logical," said LOWA Treasurer Olive Kelly, who had earlier told him he was using "fuzzy math" to argue for keeping and extending the loan.

Directors did agree on keeping semiannual payments for the yearly assessment; keeping amenity user fees at 2008 levels and road fees at 2007 levels; and decreasing the payroll expense by $75,000 less than originally proposed.

But intentions to keep the assessment level fell apart after subsequent votes increased new capital reserves and failed to decrease General Manager John Bailey's contingency fund.

The directors gave up when they got to the point of approving last-minute changes by Bailey, and decided to try again Feb. 25.

Tags: , , ,

COMMENTS

Currently, there are no comments. Be the first to post one!
Post Comment
Name
 *
Email
 *
Website (optional)
Comment
 *

Allowed tags: <a> link, <b> bold, <i> italics