BOT Budget

The BOT is budgeting to hire from a company a full time handyman at a cost of $50 per hour $113,000 a year.. The position will receive 14 paid days off a year. The position will perform Janitorial cleaning, Minor repairs, moving furniture for meetings/ social events and possibly $200,000 in capital replacement projects. The cost of the handyman is $25 per month per homeowner.
Question
1-Assuming the Handyman can complete all $200,000 of capital projects shouldn't that potion be charged to deferred maintenance and not to the annual operating expense.
2- shouldn't the cost of each capital project be awarded on a bid bases and not simply done on time and materials

$113K a year seems a lot for a handyman - are you factoring in the cost of benefits (e.g. pension or 401K contributions?) Does that include supplies the handyman might need for the work? That could explain part of the cost, but if you have a large community, that could also explain some of it - how big is yours? Is it a high-rise, townhouse, etc.?

For the capital improvement projects, I would prefer a bid process, as Melissa noted, but if they want the handyman to do this, I need more information on what's needed. For example, if your community maintains parking lots, repainting the spaces is necessary from time to time. That's not done every year, so that would be a reserve expense. Not sure what you mean by deferred maintenance - deferred maintenance generally refers to repairs that are done to infastructure that was delayed because of budget issues.

You have good questions - have you raised them with the board? If so, what was the response? If not, why not?

I think that all major work should have 3 bids from licensed and insured companies.

However, to my knowledge, there is no requirement that this happens.

Keep in mind that a salaried employee does have additional payroll tax expense in addition to what you have identified.

Whether the $200k is for "capital replacement projects" or "deferred maintenance" (which arguably is a sub-category of capital replacement costs," both of these categories are typically chargeable to the reserve account and not the operating expense account.

However, sometimes it is a judgment call.

What is most important is that the BOT (meaning "Board of Trustees," I presume) is, among other things, following a recently completed reserve study when it comes to their budget planning.

Have you looked at the reserve study and compared the assessments it recommends with what the board is doing here?

It's a BOT judgment call.

Are you on the HOA Board?

Are you the treasurer?

What's your end game here? Owner (your) commentary at board meetings? Determining how you will vote as a director?

Former Trustee
BOT contracted for a handyman to preform janitorial cleaning, light repair and starting this year mover furniture for social events and meetings.
In the past Janitorial cleaning $34k
light main $12.

Handyman was part time 12 hours, grew to 20 hours than full time.
Furniture moves for social events and meetings was for 20 years done by residents.
Now by Handyman. N
No specific Capital projects were identified in budget other than a one line statement that total cost of all were $200,000

The club house was last painted in 2015. We have an engineering review every 3/4 years
reserve established to repaint in 10 years. Scheduled for 2025. clubhouse in excellent shape. Based on condition probably 2027.