August 18, 2016

Budget and Common Maintenance.  I reviewed the financial report for July and there seems to be some reasonable questions that should be asked of our Board and Manager.

What stands out to me is the money spent on maintenance.  According to the minutes of the July 19, 2016, meeting, our President reported that there were several unexpected issues that surfaced for which no money was budgeted.  She says that most of the issues have to do with the age and condition of our buildings.  And she speaks of an assessment or increased maintenance fees that RPM and the Board are considering.

According to the July 2016 Financial report, the money spent for Common Maintenance for the 1st 6 months of this year is  $20,849.  And this does not include the money that  will be paid for the paint job on the exterior of 113/213, rumored to be $3,800.  The budget allotment for the year is $12,000.

RPM has introduced a new budget item:  "Unbudgeted Maintenance Repairs" with an expenditure total of: $2,195.50.

The total expenditures for both maintenance categories for the six month period is  $23,044.50.  In the last 4 months the Association has spent approximately $15,050 on maintenance.

In the laughably, inappropriate Unbudgeted Maintenance Repair item, the General Ledger for June 2016, shows a payment for $158 to our cleaning service - J.W. Services, an entry that really belongs as a Janitorial expense.

The other payments made in June  for the Unbudgeted Maintenance were to  Bravo:

• $1,762.50 for waterproofing  Unit 113 
• $275 for a 25% deposit on waterproofing Unit  110.

Common Maintenance shows payments to Bravo:

• $587.50 with the notation of 25% down - presumably for Unit 113
• $825 for waterproofing for Unit 110.

Lousy bookkeeping aside, those are 2 contracts folks: $2,350 and $1,100 - each with a 25% down payment - you don't make a down payment without a contract. 

The Bravo contracts are two that we know were processed in June.  We also suspect that a contract with Dyco for their chip/crack report was processed, perhaps in May.  It is rumored that Professional Rehabilitation Services (PRS) received a contract for $1,300 for inside repairs in Unit 113, probably in April.  And we have the exterior paint job on Units 113/213, another contract with Bravo for $3,800 that was completed this month.  These are contracts that we are reasonably certain were done in the last couple of months.  How many more contracts are out that we don't know about?  Most of the above are contracts could be/should be presented to the Board and the owners for approval.  None except possibly the PRS contract can be construed as "emergency" and that would be a stretch. 

When it comes to contracts for the Circle, Janet and Kimberly are stealth operators - contract proposals  fly in, are processed and contracts fly out, and nobody is the wiser!

Just out of curiosity, I reviewed the Board minutes for the last 6 months.  I wanted to find out if the Board was keeping us fully informed on maintenance expenditures.  Here is what I found:

• In February no maintenance expenses reported.
• In March- the Board approved a contract for $1,500 to Dumala to work on the drain pipe from the roof of Building A to the ditch. Also, a contract for $5,214 was signed to replace the water valve leading into our Circle plus other plumbing needs associated with the water line break into the clubhouse.
• April - power washer was purchased - price not disclosed.
• May - A contract?? was reported with Dyco to examine our buildings to determine the level of potential water intrusions through chips and cracks in the exterior walls.
• June - no Board Meeting, although from the financial reports presented above, we know that at least 2 contracts to Bravo, worth $3,450 were processed during the month.
• July - Bravo soffit work contract was discussed but not approved by the Board for $3,800.  And a wind mitigation survey was apparently approved for $600.   

As far as the minutes are concerned, that is the maintenance information available to the owners.   Obviously, little or no accounting of the maintenance money or contracts has been presented at the Board Meetings in the last 4 months.  That includes the contracts that we are reasonably confident were processed during that period.  

Now, as noted above, Janet and Kimberly are talking about a need for an assessment or budget adjustment because of the maintenance expenses.    Shouldn't the owners know what the maintenance issues are, that is costing us a whole lot of money, before we consider an assessment or increased maintenance fees?  If Janet and Kimberly are going to be wanting extra money from us, then, I think, we should have a little quid pro quo from them and demand a full accounting of maintenance contracts and expenses!  And we should require that all contracts, short of a real emergency, be presented to the Board for approval and published in the Board minutes!

Flood Insurance News.  Recently there have been a few articles in the local paper regarding flood insurance.  It seems that the huge increases in flood insurance (ours have doubled in the last 4 years) are set to continue.  We won't know for sure until the November bill becomes due.   Obviously large increases mean larger maintenance fees.  And this is not the fault of the Board since FEMA dictates the flood bill.  Private insurance has yet to impact condominiums.  It doesn't look good, if we are to believe what the papers are saying.

Just my opinion!
Andy Johnson