FLA HOA - treasury holds $651,000 - why assess for Capital Improvements of $450,000?

why would the HOA Board treasurer insist on taking out a loan to cover the cost of capital improvements which are projected to cost $450,000 and to assess the HOA Members for same? we have over $651,0000 in the treasury as of june 30,2011.

the Treasurer is obsessed with accumulating 1 million dollars in the treasury, which is also absurd.

I am on the Budget Committee and i need to make an intelligent argument against this issue. the HOA members are stretched more than enought already financially, as is everyone else in this country.

please advise. thank you. mary

How sensible this is would depend on how large the HOA is and what maintenance is planned for the future.

Do you want to argue against the capital improvements, as being unnecessary?

Each homeowner pays and is responsible for their property. Roof, property damage, painting, etc.

the HOA is only responsible for maintenance of the common areas.

there are 418 homes, we are not in a flood zone, we are in northern palm beach county, however, we are at least 10 miles west of the ocean and intracoastal waterway.

each homeowner, if they choose to do so, can purchase (i have one) a flood policy with their homeowner's insurance. my opinion is a as a life long resident of coastal county south florida, that the entire state is a flood zone.

the capital improvements necessary are repair/replacement of aging irrigation system and dredging of retention ponds (4). the community is approximately 25 yrs old and the lakes (retention ponds) have NEVER been dredged.

need to make an intelligent argument against this issue. the HOA members are stretched more than enought already financially, as is everyone else in this country. [Mary]

Mary, only you can make an intelligent argument. You said ‘improvements’ and it seems the money is being used for maintenance and replacement. Big difference.

my opinion is a as a life long resident of coastal county south florida, that the entire state is a flood zone.[Mary]

Not according to FEMA flood maps and I think they may be more qualified than you to determine that.

Petunka, she said it was her opinion, and that the area wasn't actually in a flood zone. No reason to get stuck in semantics.

She's just asking for some discussion from others in HOA leadership, which is what this forum is for.

To make an intelligent decision, you need to know future expenses. Is the money in the reserve fund enough to cover future expenses? Is $1 million even enough? All that money may already be spoken for for future replace/repair issues. To make an intelligent decision you need a reserve study.

It will estimate the price of everything that needs to be replaced and the date it needs to be done.

allegedly, according to prior HOA president, the last "reserve study" was completed in 2002.

i was on the Board in 2004, 05, 06 and have been involved with the Board and budget committee since 2004.

I have been requesting and been very vocal about getting the lakes/retention ponds dredged as a matter of regular maitenance to no avail since 2004. additionally, i have also made an issue about maintenance of the irrigation system.

throughout my involvement with the board and budget committee, we have "repaired and replaced several irrigation pumps, pool pumps, pool heater, resurfaced the roads, and tennis courts" within the community.

However, unfortunately, the boards throughout the years i have lived here (12), do not share itemized breakdowns of bids with all board members, or budget committee members, or community at large.

the community was built by a locally prominent developer who's premise was all about low maintenance community living. This community was built between 1990 and 1996.

i understand and realize that communities and items age and need replacement. but, we do we require 1 million dollars in reserve when there is no golf course, or any other amenities other than listed above. seems a bit excessive.

you are right, a reserve study is in order, however, i do not believe the powers that be are willing to get one. please advise. thank you.

Petunka,

I have a good one to share. Our home was never listed to be in a flood zone. Then FEMA came in after Francis, Jennie and Wilma, declaring our area, (2 miles west of U.S. 1) a flood zone. Any homes with mortgages were now required to buy flood insurance.One of mt rental associations required us to buy flood insurance. That association pays for repair and painting of the exterior portion of the villa unit so we became required buyers of flood insurance. It almost became like a frenzy to grab flood insurance even tho there had never been any flooding. And it is expensive to purchase it.

how do you differentiate between "capital improvement" and "maintenance and repair"? please advise. thank you [Mary]

Mary,
I will be happy too but first I would like to know how many reserve funds you maintain and where the money will be going. Typically, you must have reserve funds for:
a. deferred maintenance
b. replacement and
c. recreational areas (pool).

Do you maintaing any more funds? Also, do you have to fully fund your reserves? And, if so, did the membership approve the loan?

Donna, so you cannot cash a check unless approved by the association. Well,it is probably fair since the association is responsible for the exterior maintenance. But still, each owner’s insurance may vary in $ amount. Never mind. I really do not need to know.