Budget Time at the HOA

The Finance Committee of the HOA should by now be hard at work on the 2025 Proposed Budget. 

The Proposed Budget should be presented to the Board by the November monthly meeting (11/12/24), so that the newly-elected board members and those with one more year to serve have time to digest it, tweak it, and approve it at the December monthly meeting (12/3/24).

It should be presented earlier this year, because there will be clear need for an increase in Assessment over 10%. For that, the approval of the Voting Members is required.

The November BOD meeting is important, because it immediately follows the Annual Meeting of Voting Members (AMVM). Three Director positions are to be elected (or re-elected) this year.

The AMVM is convened if a quorum of legitimate Voting Members is present. The terms of Dennis Rybicki, Tanisha Holmes, and the position vacated by the resignation of Tommy Williams are up for election. 

Williams was appointed to succeed Vernell Butler, who had resigned when he was not re-elected by the Board as Treasurer. Williams resigned in May, but his resignation was never announced. The vacancy on the Board was never announced, and no one has been appointed to succeed Williams. The leadership of the Board never should have allowed this condition, because an even-numbered Board of six can result in 3-3 ties on Motions, and a tie-vote fails.

Back to the Budget. A Standing Committee of the HOA is the Asset Evaluation Committee (PRM, Art. II, B, Section 11). An "Other Committee" is the Budget Committee (PRM, Art, II, C, Section 1). Both Committees are important to the work of the Finance Committee, yet neither committee seems to be in use or have any members.

The current year's (2024) Budget started with a $27,000 deficit. This is not permitted under the PRM. SEE Art.  III, C, Section 4. Budget Preparation Procedures. Paragraph (l) "An unbalanced budget is not allowed, Income must equal Expenses."

Paragraph (l) is actually worded backwards. It should read, "Expenses must not exceed Income."

Section 4 in the PRM is one of the most important guidelines in the Governing Documents of the HOA. 
  • The proposed Annual Budget is to be created by the Budget sub-committee.
  • Budget is to be completed before the Annual Board meeting (November). 
  • Community members are to be involved (not just Finance Committee members). 
  • Line-item records are to be provided. 
  • The Expense budget is to be completed before the Income budget. 
  • Minutes of all Budget meetings are to be recorded and published. 
  • A Budget sub-committee member presents Proposed Budget to the Board.
  • Voting Members must approve any increase in Assessments over 10%.

It is time to raise the annual Assessment more than 10%. No dollars were set aside for Reserves in the 2024 Budget. The contribution to Reserves in previous years declined as more of the income was directed into Operating Expenses (without increasing income). 

The CC&Rs address Reserves in Article 10. Maintaining healthy, designated Reserves is essential to the financial stability of the HOA.

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