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December 2009
Budget for 2010
The budget for 2010 was mailed to all unit owners in December 2009. Financial plans were crafted to address needs as prioritized by the Board . In addition to Association operations such as landscape maintenance, insurance, snow removal, management, taxes and building maintenance, the Board has jump started the process of building a reserve fund to finance the replacement of capital items such as roofs, concrete and siding in future years. While most contracted operating expenses will remain the same, increases are anticipated in insurance and street lighting expenses. The operations budget also provides for the painting of trim over a three year period starting next spring and continuation the siding power washing program. An additional $10.00 per unit per month has been added to the budget for capital replacement costs. The reserve budget allocates funding for the replacement of the roof on one building per year (at a cost of $17,000 per building) with funding from current fee collections and a limited amount of funds on hand from prior years. As roofs reach the end of their useful lives, additional funds will be necessary. The Board, in adopting a reserve funding plan, hopes to minimize the possibility of a large special assessment.
Monthly maintenance fee payments are due on the first day of the month and are considered late when receive after the 10th. Should an unexpected situation cause a delay in payment, please contact us. The payment of Association obligations are second only to your mortgage and taxes.
Maintenance fee payments may be mailed to 680 South Point Trail, Berea OH 44107
Replacement Reserves
As noted above, the annual Budget prepared by the Board consists of general Association operating expenses as well as expenses related to the replacement of capital items such as roofs, concrete and other common elements as defined in the governing documents.
The Common Elements have finite life and all portions of the Association will wear out in time due to age and their exposure to the elements and will need to be replaced. Fully funded reserves provide that the persons who are using the elements that wear out pay for them as they use them. Adequately funded reserves can provide an ongoing source of funds thus reducing the need for special assessments at the time that capital elements need replacement.
Oftentimes, an immediate full need special assessment can be of a high value with a limited time for payment by homeowners. This can lead to financial instability as the assessment can cause hardships to the budgets of Association owners. Lack of adequate finances or credit on the part of unit owners can cause nonpayment of the assessment leading to delinquencies. These delinquencies may be a leading cause of liens and foreclosures.
Advance planning for maintaining multimillion dollar corporate assets - the common elements - demonstrates responsibility in the management of the corporation - the Association - and provides stability for the corporate share holders - the unit owners - when costs are relatively predictable.
The Board has authorized an in-house reserve study to inventory capital components, estimate their remaining useful life and calculate a contribution rate to provide guidance in planning for capital item replacement.
Additional information, including a media presentation on reserves is available at http://www.condohome.net/html/reserves.html