Help me understand my Annual Budget Report?

I just don't get it. If you are in the mood to explain the budget basics, I'm raising my hand. I understand some of the report, but not enough to feel confident in my translation.. What is the line below saying?

Late Charge Processing 12 month actual 7 months actual Current Approved Approved Annual
53.33 53.71 49.00 54.00 648.00

Renee,

If you can scan and e-mail the document to me, I may be able to give you a better explanation.

[email protected]

I have to be reading this wrong! It looks like the budget has APPROVED a money loss of 823.00!

If you saw Net Surplus (Deficit) and then the approved number was (823.00) in brackets , doesn't that mean deficit? Guess I better do the actual math.

I'm still studying over here. It looks like we are in a deficit, but we manage to pay our bills because we are using the Reserve Fund and the Bad Debt Fund...... I think that's what it's saying. I can't find a reference that is set out like mine.

Renee,

Is this information from the Income section of the budget or the Expense section?

If this is in the income section then what it is telling you is that the plan for 12 months is to COLLECT (process?) $648 in late fees (or $54 per month times 12 months). It appears that in the current month only $49 was collected versus a plan of $54 so your income was $5 less than planned. This would be an unfavorable variance.

If this is in the expense section then the plan was to SPEND $648 to process the late fees for a year ($54 per month times 12 months) and that in the current month you only spent $49. This would be a favorable variance of $5.

In most cases, if there is a cost to collect late fees there would be a budget entry for late fee income and a budget entry for late fee collection expense. If the total late fee income turned out to be less than the late fee collection expense you are doing something wrong!!

DAve

My analysis of your budget is now in your email. You are back in the black.

I'm going to try and get a renters list and see who owns what around here and get some conversations going!

Does your HOA have a requirement to provide a copy of the lease agreements or notify the board they are renting? If not, no one has to tell you a thing. Your best bet is to find out from the tax assessors office by property lot numbers the owners on record. It may not be accurate up to 6 months. However, death and taxes are assured.

Renters should have no bearing on your budgets. The owners are responsible for paying the dues NOT the tenants. The number of renters matter for certain loans requirements but not the budget.

Renee,

After reviewing all the documents you provided, I need to revise what the headings indicate. This revision is:

12 month actual = the actual averaged monthly income/expense for the last 12 months.

7 month actual = the actual averaged monthly income/expense for the last 7 months.

Current = Actual income/expense of the current month

Approved = The current month's approved amount of the budget

Approved Annual = The annual budget. However, it's unclear what year that annual budget is for.

Basically, this document isn't very useful in understanding much beyond the current monthly expenses. It could be helpful if the Association or MC would simply make a few changes.

a) Identify which year the annual budget column is for
b) Include a Year to date column

No, I didn't want to know about them for budget purposes itself, I was looking to see who I should avoid talking to about the budget. I've since learned :-), the better way to go is to get the membership list. That would make sense because even though we do indeed have a renters cap, no other rule is being enforced, so why should that one.

I'm going to see what they have at the tax assessors office as well.

California is basically the only state that can enforce a renter's cap. However, it's only been since 2012 that can be enforced and only for HOA's formed in that time frame and beyond. All others are "grandfathered" in to the older rules which renting caps can't really be enforced. The ones that can do that is the lenders. The HOA does NOT own the homes, so it can't put such restrictions on technically. That is the logic of why rental caps can't be enforced as one would like.

You can easily get a member's list. Simply walk your HOA and write down the addresses off the door and street. There you have your list. The HOA can ONLY communicate to those property addresses even if the owner does not live in those homes. Contacting them out of town contacts is a "courtesy" while all papers and documents are to be served directly to the HOA home address on record. That is to be the owner's record of ownership for that home. So get your tennis shoes on or ride in the car... The information you need is right in front of you and no real mystery.

Oh and it is ILLEGAL to put something in a mailbox without a stamp on it. Your HOA may also have no solicitation rule as well. Which means putting notes on doors wouldn't be proper either. So you may want to mail (at your cost) your information you want to put out. Unless your HOA has an open bulletin board.

I am hoping that I am conveying to you that it's not as simple as one thinks it is when it comes to certain aspects of enforcement and knowledge. Even knowing who is an owner and who is not, can be a daunting task that your HOA may NOT have that information either. Ours didn't. Not that I did not know. It's just I had to put on my tennis shoes, walk my dogs, and ask questions. Otherwise, even as President, I could not tell you for sure who was a renter or an owner. Don't sue the entire HOA for it.

Don't sue the entire HOA over it? What are you even talking about!

If there is one thing I've learned this past 3 years is NOTHING is as simple as one may think.... except contacting the tax assessors office. 0930 in the morning and they are calling me back saying they are going to send me an email outlining all the different ways I can get the names, so that I won't pay like I would if they just mailed it! I think my emails are being intercepted because that can't be the government! ha!

I want the names because I want to be able to go up and ask for Mr. such and such. Doesn't live there? I'll be moving along. That to me is an easier way to approach a stranger than "Are you a renter?". I'm not trying to bypass anything or be sneaky, it would just be more comfortable for me as a conversation opener. Leisurely strolling around the neighborhood isn't in my future for awhile, as I am disabled. Today Physical Therapy is going to start and try to teach me how to get back in a car. My walker does get me a certain amount of sympathy, however, so I should use it to my advantage while I still have it :-)

I would never in a million years mess with someones mailbox.

I'll learn the different personalities as time goes on :-)

Renee

For you to get a picture of the health of the association, you'll need the following documents:

Income/Expense Statement-this is the amount that comes in as income, assessments, late fees and misc and then the amounts or expenses going out, management fee, landscapers, utilities, insurance, repair and admin. This will also show year to year and compare to current budget.

Balance Sheet-will show how much is in each account, operating and reserve, what liabilities (accounts payable and prepaid owner assessments), and accounts receivables (delinquencies).

In December, your association should have received a packet from the management company called the Annual Disclosures. In it will be the a notice whether there is any increase in dues and why, next years budget, certificate of insurance, collection policy, IDR and ADR policies, reserve study summary and a few others. Here is a link to full list: http://www.davis-stirling.com/MainIndex/Disclosurechecklist/tabid/456/Default.aspx#axzz2rGt2aWlI.

If you find problems, ask for the General Ledgers. As they say, "the devil is in the details".