Tuesday, August 30, 2011
Debate over Palermo budget and reserves
Positively Palermo has received numerous e-mails with details and questions about Monday's HOA meeting, in addition to comments already posted here. We will over the next days review some of the topics discussed. The first up is the 2011 budget and a possible dues increase. You may recall that in the fall of 2010 the board approved a $28 a month increase in a meeting that few knew about that was held over the phone. Back then, there was a lot of after-the-fact discussion here about that unknown meeting and the purpose of the dues hike. At one point, there was a dispute about whether the meeting even happened, but later minutes posted on the DRM Web site verified that the meeting did take place with four of the five members on the phone. It's hoped that the board can do a better job at openness this time around. According to the e-mails we have received, there was discussion Monday night about the previous budgets being off base. One e-mail said there was board discussion that the spending in 2010 was more than $70,000 over what was budgeted for that year. History may repeat because the 2011 budget is on track to be at least $40,000 over budgeted expenses. It is important to note that these numbers only discuss what the board and DRM budgeted as our expenses and what we really paid out, and don't include the revenue side of the equation. Basically, actual spending in 2010 and 2011 have been at the same levels but the budgets for those years were off base and didn't reflect reality. As one e-mail pointed out, "The dues for 2012 should at least bring in enough cash for covering operating costs without stealing from our reserves. That's just basic good management." One concern is why the board last year adopted a 2011 budget that was lower than the real spending in 2010, and how this pretty much meant no money would go to reserves and in fact money might have to be taken from reserves just for basic operating expenses. One post here also pointed out: "I listened in to the Board meeting last night. While I love being a homeowner at Palermo I have deep concerns about the financial viablity of our community in its current state. The Board will be putting together the budget for approval in October and it does look like dues will need to be raised (I think $312 was the initial figure) just to meet our expenses. What is very scary is that this does not solve the problem of our reserves being fully funded (which currently they are not)! ... There was a great suggestion last night to survey the community - I really think that is a great idea. The homeowners should decide whether we want the clubhouse to be open everyday, two pools working, etc as these are all expenses that are making our budget difficult to balance." Miss Penny Lane says: She loves participating in surveys. Just tell her when and where.
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35 comments:
It seems like there's nothing to cut except closing the clubhouse.
The most important thing is to cut and get the HOA on sound footing by raising dues.
I have never been in the clubhouse for entertainment. If a survey was sent out I would vote to close it until we get our financials in line. I also think each unit should pay there own water bill. I don't have a pool and so why should I support the water bill for those that do when there is a community pool.
Maybe everyone with a spa should get a credit from the HOA for not using the community spas and the gas and electricity.
good idea about issuing credits for those that have their own pools! i will look forward to my credit in the mail from the HOA!
I own my own swimming pool at my primary residence. I felt it would be a really stupid idea to own one at Palermo since there are two with a stones throw. Save the earth go green!
I wonder how many delinquent HOA fees get written off each year as uncollectable?? Is the HOA filing liens on the properties to collect once they are sold?
How much could it possibly cost to keep the clubhouse open? What about just reducing the janitorial services and turning the AC down a little? The clubhouse is a very important part of the community and aside from all the people who use it to exercise, shutting it down will look TERRIBLE to potential buyers and raise all sorts of red flags, lowering property values even more.
I agree...closing the clubhouse and pool will only downgrade the entire community.
Keep the main pool open but shut down the clubhouse for the summer at least. The electricity, janitorial and other bills are tens of thousands of dollars.
If we are $40K over this year, what can be cut? Or do we want fees to go up to cover expenses? One or the other, folks.
How about just keeping the clubhouse open for a few hours every evening? Program the air conditioner to come on 30 minutes prior. Cut the janitorial work to once per week maybe and we can do our best to clean up after ourselves.
It is shocking but our community pays over $30,000 in refuse (excluding the big dumpsters which is an additional $6000). The Board is going to look into finding out if that $30,000 can be reduced but apparently there is some legality that DRM felt would not allow us to do so. It is a shame because many of us live at Palermo very part time and we are paying the garbage company a lot of money to pick up a very small amount of garbage!
The club house is costing appx. $60. a month per unit to maintain. It wasn't suppose to be built until the entire complex was complete and could afford it. I realize that all of us would LIKE to have at least all the amenities we have now but if the HOA goes broke, we will have nothing anyway. I think we should close the club house every other month or close it completely until our reserves are funded 100% and we no longer have to dip into them to pay our monthly expenses. We can not keep using the reserves to pay our monthly bills. It is very hard to sell a unit in here right now if financing is needed. The mortgage holder gets the financials from DRM and finds out we are not properly funded and they won't make the loan. Something has to give here!
What are there, 130 units? You are telling me the clubhouse costs $7,800 per month to maintain? Can we see a breakdown in the cost here? That seems absolutely ludicrous. The power bill for a 2 level unit (with comparable air temp) runs about $160 per month max. The clubhouse is larger, but maybe 2-3 times larger. That does not make sense. What is the rest of the expense? What does the cleaning service charge? We could cut this down to once per week easily, that should not cost more than $400.
The cleaning service costs 1000 bucks a month and they only come once a week and are here for a short time.
It's unfortunate to hear the HOA dues may be going up again after the surprise hike last year. Is it fair that those of us who pay our HOA dues each month be penalized for the ones who don't? Increasing HOA dues could potentially be the deciding factor for some owners who may be contemplating walking away from their units. This would be even more detrimental to the HOA. I feel the wisest thing we can do is close the clubhouse until we build up the reserve. The number of people affected by closing the clubhouse will be far less than the number of people who will be affected by increasing HOA dues.
oh come on grow a brain to all of you who think closing the clubhouse is going to save us!!! how is it possible that the club house is costing us $7800 a month if thats the case than cut back on some of the expenses! but boarding up the clubhouse is another reason why not to invest in this complex...why would we continue to pay HOA dues than? what am i getting than for $312 a month ? if we are going to have a complex with no clubhouse and no pools with heat than our HOA dues should be reduced not increased!
this is for the idiot that said " It is very hard to sell a unit in here right now if financing is needed" ...here is a little education for you...its going to be even harder to sell a unit in this complex if the clubhouse is closed!! if you need financing to purchase a $150,000 condo than maybe you shouldnt be here, i paid all cash so if you cant afford to live here move on!
They are being ripped off if they are paying $250 to clean the clubhouse. I would do it for $100 and I know some nice ladies who would do it for $70. Even if that is the case though, at 4 cleanings per month there is still $6,800 being spent to keep it open? ON WHAT? Air conditioning for something that size should not cost more than a few hundred a month. I think we need to demand an accounting for this, we are being ripped off.
To 4:16PM, I agree, with the currant financials, it is hard to get a mortgage on these units. It's a double edge sword. People don't want to buy where the HOA dues are too high or if the HOA is financially down the drain, like ours is. To 10:50PM, there is not need to call people names if they do not have the same opinion as you. Personally, I think anyone who pays cash for a home has not done there homework. That leaves you with an asset that can be taken if you should be sued. At least with a mortgage, there is less risk of that happening.
getting a mortgage so you wont get sued!!?? what planet are you from? if your getting sued that many times than perhaps you have other issues! buying things on credit and financing everything is the reason why america is in the situation its in right now!
$250 a week to clean the clubhouse and restrooms - which are rarely used in the first place?????
I think everyone needs to go to the next meeting and demand an accounting for the clubhouse cleaning/electricity. The numbers are ridiculous. There is no way it could cost that much.
Good idea.
I agree with 12:07, we should have some accounting for why the services are so expensive. A friend of mine in a different complex that also is managed by DRM complained of a similar thing. DRM hired gardeners who came so frequently that they didn't have anything to do--they would over trim trees and bushes, etc. The homeowners were completely overpaying for services they didn't need. There has to be a cheaper way to keep the clubhouse clean (and maybe turn up the A/C a degree or two?)
DRM...wag the dog....always scaring people with drastic measures like closing the clubhouse or not heating pools...rather than looking at their own messy book-keeping. Maybe their spending money on stupid things is what is costing so much. Shouldn't we have an objective third party CPA audit the records? That's what most HOAs and Property Managers do to ensure proper assessments.
We need a Property Management Company that will lead us through this difficult time rather than create havoc and infighting as DRM does. What's up with that?
Yes
Lock down the clubhouse completely for now and drain the pools. It will save on utilities, AC/heat, janitorial and trash. We can sell the furniture, appliances, TV, pool table and gym equipment. Let's have a rummage sale and a bake sale every month to pay for DRM's services. We'll be The Cove in "North Palm Springs" in no time. Maybe we can get Desert Hot Springs to annex us from Palm Springs.
That is a bit extreme. Let's think factually and solve our issues.
I think we need to find some cuts, landscaping, clubhouse expenses, sound good.
I think 544 was a joke.
Shut the clubhouse vin the summer
It's not needed in the summer.
really so i guess we dont need to go to the gym in the summertime is what your saying!!! lets just all get fat than in the summer!!
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