Budget Question/Opinion

Hi,

I have a question on an HOA budget. We have a Grounds keeping company that charges us X per year. In the contract we have additional fees (approx 8000 per year) that would be applied to us if they performed these duties. Currently we have volunteers perform thus saving us that money. Those fees are not included in the budget.

My question is this: Should these be included in the budget as the services are performed, even though we realize the savings by volunteers doing it. My thinking is Yes. If we plan 250K for services-258K-is not s hugh difference. We are an over 55 community so volunteers are not guaranteed. I lean towards all operating expense should be included. If we save some by volunteers great, but we plan for paying for it if goes away. I have heard both ways --just curious --thanks... We are a self managed association

Alan

The use of volunteers always scares me. All you need is one incident and some scumbag lawyer gets involved. Pay the landscaper to do the work.

Hi,

Thanks for the reply. I am new to the board (all of 28 days exp) and I am trying to get my head around the views of six other folks and what is considered best practice etc.

It's good that you're asking around - most folks wing it because their colleagues don't know and don't want to admit it, or just fall on the "that's the way we've always done it, so what's the problem?"

In addition to this website, where you'll find all sorts of conversations on all sorts of issues, you may want to check out the Community Association Institute's (CAI) website, which has lots of educational materials, and I believe some are geared towards self-managed communities. Consider getting a few (they aren't very expensive and some may be free) - between that and reading your documents, and using your own common sense, you'll get a good idea of what works and what may need to be tweaked.

For newbies, one of the best things you can do is ask lots and lots of questions and listen more than you talk - that's an education in itself. The people who BS or refuse to answer at all are the ones you need to watch out for. Good luck!

I agree.

What is being done here is on the unusual side, because IMO best practices is not to have volunteers regularly doing HOA manual labor. I am not against what you are doing, but the wise board will do as KellyM3 suggests, IMO.

I think the workers comp laws vary by location, so people have to check what they're required to do. Don't assume volunteers aren't required to be covered.

Should I trot out my usual "Why Using Volunteers Isn't as Smart as You Think It Is". Of course I should.

* Volunteers are not free. If they're not covered by workers comp, they do have to be covered by some form of insurance - unless you want to risk an uninsured accident.

* They don't provide professional quality work. They do not provide warranties or guarantees (and may even void existing warranties). They can also walk off the job with no notice.

* Boards will have to manage the volunteer work crews, and boards already have too much to do - especially if a community is self-managed.

* Using volunteers is not sustainable. Just because you have willing workers now does not mean you'll continue to have them. Most people don't move to HOAs or condo communities in order to have an unpaid side hustle.

* Using volunteers misleads owners about the true cost of ownership. At some point you will probably have to increase your assessments to cover professional workers. You will get pushback. This can cause real trouble in communities and states where owners have the authority to vote down budgets and assessment increases. In these places, a few years of unrealistically low assessments can result in a financial hole that the community may be unable to dig itself out of.

In short, boards who use volunteers to replace paid service providers can look like financial geniuses for a short time, but eventually their decision to do so will come back to bite them.

If your board is using volunteers:

- Make sure your association does carry workers comp insurance or equivalent and STOP until you address this.

- Have the volunteers sign Hold Harmless agreements to supplement your insurance protections (A lawyer needs to draft this agreement since it is intended to reduce your liability risk.)

- DO NOT, under any circumstances, use volunteers for snow removal - not even young able-bodied ones. You're asking to be sued.

- Manage the volunteers and step in if it looks like they are doing poor-quality work or doing something dangerous.

- Take those nice low monthly assessments with a large grain of salt.

TS, If you knew otherwise, you would have posted a link. Until then, my position stands.

TS, you mean you have nothing to back up your contention.