Sunday, August 31, 2008

Why does our reserve account have to be fully funded?

First, let me say that I own a one-bedroom unit and no others, and I am not a realtor. I am a retired person, living on a more-or-less fixed income. I like the complex, and I love my apartment. I would not like to have to move on within the next two years because I could no longer afford to live here. Am I the only one of my kind here at Stoneybrook? I ask this question because I have not heard many complaints or concerns regarding the complex’s financial troubles, and I have great concern on this subject.

At the February HOA Board meeting, the Board approved a 20 per cent raise in HOA dues and a special assessment of $210 per unit based on the perceived under funding of our reserve account. In addition, the Board discussed raising the dues another 20 per cent in each of the next two or three years. If that happened my dues would be approximately $385 in 2009, $452 in 2010, and $543 in 2011. Those with larger units would pay more. The only alternative, according to the Finance Committee, would be an additional assessment of around $2,500 per unit. Then perhaps, but no promises, the additional raises in the dues might not be necessary.

Currently, we have about $1.5 million in reserves, and at the end of this fiscal year, the operating account has a surplus of approximately $100,000. In three to five years the buildings that were not re-roofed last year will need new roofs. In addition, we apparently have some serious water intrusion problems, and, well, I forget what else. It appears that we are in trouble because of past financial neglect; however, I guess there is no point in dwelling on that now, except to say that it seems unfair somehow that folks living here right now should have to bear all the burden of the past and the future.

At the March Board meeting, the Board voted to apply the operating surplus to the reserve account and discussed the need for the additional special assessment mentioned above. A $2,500 special assessment would have to be approved by the Association (you and me), so I expect we will hear more about this very soon.

The Finance Committee is a hard-working group; however, I wonder if they have considered all possible alternatives to raising dues and special assessments? Have they thought about this from the point of view of homeowners who may not be doing too well in the current economy? Why does our reserve account have to be fully funded? Many associations do not have fully funded accounts, and do quite well. If there are current needs that will cost a lot of money, why not think about a loan? And finally, if we are in such dire straits, why not put out a clear and complete report to the members of the Association explaining the problem? Perhaps there are residents with financial expertise who might have helpful ideas.

What do you think about all this?
Pat Donley, 436/105,

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