2015-2016 Proposed SLohA Budget + Reserve Schedule

This is a great question to ask of the Board as it defies logic unless there are some new expenses anticipated next year. One needs to look at the proposed budget, which is available at the office now and I will post it under BUDGET AND RESERVES. I have one and it shows additional expenses:

... is giving itself another Sm all raise

...Legal Fees are projected to DECREASE by $20K (Really? Based on...?)

...Insurance premiums have INCREASED by around $35K (thank you Board!)

..property taxes have DECREASED by $2K

...Contingency Fund is still be funded to $15K despite having spent only $1200 (Why are owners being assessed for a fund which has no operating purpose other than slush?)

...UNCOLLECTABLE Assessments is being funded at DOUBLE last year from $5000 to $10000. The amount actually charged to Uncollectable Assessments this year is $26. (Why are owners funding DOUBLE this year over last when there has been nothing to collect?)

...Grounds Parts/Signs is being DECREASED by $11K from last year but is still funded way high. The amount projected to be spent for this fiscal year is under $9K so why are owners funding $25K?

...Water and Sewer OPERATING Costs ie parts, supplies, contracts (Not Reserves): is unchanged and being funded at $57,800 but has already spent $41,381 and that is projected to double. SLohA is only at the halfway mark of the fiscal year.

...Allocation for liens/foreclosures is increasing to 8K (from 5K) despite the fact that ZERO funds were expended because SLohA has NO LIEN/FORECLOSURE authority and will have none next year (Why are owners being asked to fund an illegal activity?)

...Pool/Jacuzzi: Projected to spend $23, 401 this year. Budget was $18K and proposed is unchanged. There must be an explanation for being $5K+ over budget this year but not expected to be over budget next year.

Maintenance: Misc I HATE to see Misc and Contingency or Sunbank credit card charges when it comes to a budget--the costs are not easily traceable from the check register. There are very few expenses that are so strange that they don't have a rational line item home. What is going on with this? It was budgeted at $18K and is projected to spend $33,021 this fiscal year. The proposed is $22K! What was ORIGINALLY "assigned" to this $18K? C'mon , when you get costs that high, they should be broken out into relevant and meaningful line items.

Trash: INCREASED from $55K to $85K. That is a contract service and supposedly a fixed cost, but TT trashed SLohA's contract with them mid-contract and they are the cheapest service around.

Contract Services-Sewer: Spending projected to be $42,850 this fiscal year but only budgeting $30K next year--why?

Garden Upkeep: Budgeted last year at $10,200 but since Fox Hollow was terminated, it is not a funded category. I believe I recall the Board saying that Maintenance would have to do it since they terminated Fox Hollow Landscaping and there is no Garden Club.

SBA Loan: Will be paid off this year with only $8/Q collected. This was a DEDICATED specific and directed expense and owners should be given the relief that payoff of the loan provides; ie $17Q. Instead Management Company and the board has shifted YOUR funds to the General Operating/Reserve Fund and will continue to spend owner money without cost controls and continue to fund KCNet's operations. The actual increase in the Operating Budget to owners is 7 1/2 % from $425 - 457. It is NOT 3% as our Treasurer would like us to believe by massaging the numbers $525/510. Shame on you Treasurer.

I have a LOT of questions for the Board at the Budget Forum before I voted Yes to this budget.

Buildings: DECREASED by half! From $30K to $15K. Why are we spending so much less than budgeted? What expenses were originally allocated to that Line Item?

RESERVES: Allocation to Buildings DECREASED slightly, ROADS same, WATER & SEWAGE DOUBLED, RECREATION same, MISC cut in half (What is this fund for? Towers?) and Due to Reserves UNFUNDED. SLohA did not pay any loan back to Reserves in 2015 and appears it has no intention of paying back Reserves in 2016. SLohA borrowed $18K from Reserves and moved it to Operating and MUST pay it back, but it looks like SLohA will not meet its obligation.

So here’s how it might work in S-bag. Take the swimming pool, for example. S-bag would “rent” the pool to a pool club for $1/year. The rental agreement, however, would require that the pool club be responsible for all operating costs, repairs and insurance on the pool (including an indemnification clause on the club’s liability insurance policy by which the insurer will defend any personal injury suit brought against SLohA). In order to cover its costs, the pool club would sell annual memberships. The cost of each membership would be based upon the cost of operations but I estimate it would be between $75 and $100 per year. The club would also offer the option for those who do not want a full membership to purchase a “day pass”. Base upon my research these day passes typically go for around $5 per person – thereby encouraging frequent users to purchase a more economical annual membership. Then, like a mutual insurance company or a Sm all business cooperative, any funds remaining at year’s end (including the revenue from sale of day passes), are distributed among the members as a dividend.
Again, it is difficult to precisely estimate how this would affect our HOA dues without additional information (including how it would affect SLohA’s liability insurance premium). My S.W.A.G., however, is that such an operational change would reduce our HOA fees by approximately $25 per year per S-bag owner.