2009 Budgets are out - what are your thoughts??

[Park North at Cheney Place]

We have a couple of budget options we need to decide on. I will post all the budget options here. Stay tuned.

Ok – we have three different budgets to consider. I also posted our current budget in the reply section since I am only able to upload three files at a time.

2009 proposed (this budget was mailed to you)
2009alt (removes the carpet from the budget, but keeps the write-offs)
2008 alt for considering use in 2009

I am working on putting them together in one budget to make it easier to understand. Stay tuned.

Note, as I mentioned during the budget meeting, we will not have an accurate forecast of write offs (bad debit) until after the first quarter of 09. Thus, the next board will probably have to special assess for the deficit in the future (beyond our control).

Also – the alt 08 plan reallocates $ from the 2008 plan to the 2009 alt projects (blending the two budgets).

I know this gets confusing. The short of it (from Renee's perspective) is that we can choose to spend more money next year on maintenance. If we choose to do this then our fees will go up. If we choose to not do this then our fees will remain pretty consistent with the 2008 budget. Some people are for our fees going up to fund more maintenance projects and others are not. Representing the board, we want to know what you think. Help us make this decision by making your thoughts known.

The one caveat on the 2009 budget depends how many HOA fee write offs we have next year. If someone foreclosures their condo unit then they probably are not paying their HOA fees either. We do our very best to try to collect these dues, but it takes months and we are not always able to collect all of it. Taking this into account, we need to estimate how much we will not collect next year and budget accordingly. If we choose to keep the 2008 budget then we will probably pay an assessment after Q1 of 2009. This assessment will take these deficits into account. I am not a fan of special assessments. It's too difficult for our property manager to collect and I think it causes more challenges.

I recommend we choose a 2009 alternative budget. This budget takes out our carpet project, but keeps the estimates for HOA deficits which should reduce our need for special assessments later.

[Park North at Cheney Place]

Here is our current budget. I am only allowed to upload three files at a time. Please take a look at the budget differences by comparing 2009 to our 2008 budget.

[Jeff Hogan]

I'm confused on the budget. I was given the profit/loss statement from Jan - July of 2008. It's $172K over budget from the 2008 budget.

Yet, I am told that the 2009 budget is going to be the same as the 2008 budget. How can that be if just during the first half of 2008 the budget was overspent by 172k?

I'm attaching the spreadsheet here....unless I am doing some wrong math (and I hope that I am).

[Park North at Cheney Place]

Good eye! We ended up approving last years budget and did not approve any of the proposed increases. We will have an audit in April to see where we are with our finances. It's challenging to project collections... foreclosures are not uncollectable debt, but it is challenging to know when the funds are going to come in. This is why the audit in April is important. In April they will be able to better gauge how the rest of the year will look from a collections/spending perspective.

[Jeff Hogan]

but the question remains....


How? How could a budget be approved that was known to be lacking by at least 340k? If it was overspent by 172k in just six months it stands to reason it would be overspent by twice that in a year.

I'm worried about HOA fees doubling when this overspending (and by overspending I simply mean spending more money than is budgeted) catches up to the reserves.

If the audit is done in April and it looks dire when would/could that change the monthly HOA collection amount? Or is it set for 2009 regardless of the April audit?

Thanks for entertaining all of my questions.

[Park North at Cheney Place]

These are all excellent questions. In the new alternate budgets we added in additional expenditures that were outside of the regular upkeep of the building. Since we decided to hold off on repainting the building and redoing the carpets, our needed expenses went down accordingly. We are also managing our budgets to 2008 levels so that we do not over spend the first six months.

Will you be able to attend the next HOA meeting? It might be easier to ask all of your questions in person or call the property manager to get a new breakdown of our expenses.

Jeff Hogan said:

but the question remains....


How? How could a budget be approved that was known to be lacking by at least 340k? If it was overspent by 172k in just six months it stands to reason it would be overspent by twice that in a year.

I'm worried about HOA fees doubling when this overspending (and by overspending I simply mean spending more money than is budgeted) catches up to the reserves.

If the audit is done in April and it looks dire when would/could that change the monthly HOA collection amount? Or is it set for 2009 regardless of the April audit?

Thanks for entertaining all of my questions.