At their meeting on Oct. 26,
2012 the Board of Directors adopted the 2013 Budget, which sets
the 2013 monthly condo association fees at $225 for Units 16
through 167 and $80 for Units 1 through 14 (there is no Unit 15).
The new monthly fees will go into effect with the January 2013
payment.
Rather than wait until we formally notify you by mail in November, the Board felt it was important to also give you a "heads-up" as soon as possible about the condo fee increase via the flyer that was placed on your door earlier today and to also provide additional information about the 2013 Budget via this blog post.
What follows is some historical background along with the rationale behind the
Board's decision to raise the 2013 monthly condo association fees.
It focuses on Units 16 through 167 since those represent the
majority of our units and that is where most of our expenses are
incurred. Similar information for Units 1 through 14 (site condos)
would be based on their assigned percent of value and therefore
would be proportionally and significantly lower.
Historical
Background
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The chart above shows
the co-owner's monthly average of expenditures for assessments
and condo fees that were (or will be) made in each of the budget
years 2008 through 2013. The monthly condo fee had been raised
from $150 to $175 effective with the Jan. 2008 payment. In both
2010 and 2011 a $420.00 additional assessment ($35 per month) was
levied for exterior painting and trim replacement. In 2012 a $548.83
special assessment ($46 per month) was levied for the final
paving of our roadways.
On an averaged
monthly basis, in 2013 you will pay $4.26 more per month than you
paid in 2012 and $15.00 more per month than you paid during 2010
and 2011.
On an annual
basis, in 2013 you will pay $51 more than you paid in 2012 and $180
more than you paid in each of 2010 and 2011.
Looking at the bigger
picture, your combined monthly condo fee and property tax
payments for 2013 will still be less than what you paid for the same in 2008.
This chart is the
same as the previous one, except that it includes the monthly cost
of the annual property taxes that were levied on a typical Manors
Unit 16-167 (the 2013 property tax is an estimate). As you can see,
a co-owner's monthly cost for all fees, assessments and property
taxes levied against the typical Manors Unit 16-167 has declined
since 2008 and then remained fairly constant, even with the
increased condo fee in 2013.
The Board of Directors discussed their 2013
Budget priorities at their Sept. 28, 2012 meeting and over the
following four weeks, the treasurer and president worked to
prepare a proposed budget that would meet as many of those
priorities as possible.
In the meantime, the Board of Directors of the Central Park Master Association adopted their 2013 Budget, which increased the annual Master Association fee to $200 per unit, beginning with the annual payment that is due in January of 2013. Since the Manors Condo Association will be paying this fee on behalf of all co-owners out of the 2012 Budget, the 2013 Budget had to not only include the $200 fee for each of our 118 units that is due in January 2014 but it also has to include the $10 per unit increase to make up the difference that is due in January 2013.
As they developed the proposed 2013 Budget, the treasurer and president also sought and incorporated the latest available cost data so that the planned expenditures in the 2013 Budget could be as accurate as possible.
__________________________________
UPDATE: A question in the comment section asks, "Have we went out for competitive bids in the last few years for landscaping, sprinkler system, and snow removal etc. to save some money?" The answer is "yes" for the landscaping and snow removal. At their meeting of September 28, 2012 (all of the Board Meeting minutes are posted here on the blog for all to see, you can read that meeting's minutes by clicking here), the Board of Directors reviewed competitive bids from four landscaping companies and four snow removal companies. The four snow removal bids came in at $47,660, $43,608, $40,900 and $40,425. The Board awarded the 2012-2013 contract to the second-lowest bidder because that company has been removing our snow since the 2008-2009 season and the Board has been satisfied with their past performance. The four landscaping bids came in at $50,190, $40,500, $29,150 and $17,480. The Board awarded the 2013 contract to the second-lowest bidder because:
a) that company that has been our landscaper since the 2009 season and the Board has been satisfied with their past performance
b) the lowest bid was an obvious outlier and we could not expect a proper level of service at that price.
The sprinkler work is not competitively bid. The current sprinkler maintenance contractor was recommended by our property management agent after the Board received estimates in 2008 from two of our previous sprinkler contractors to redesign the sprinkler system zones on the berm so that they would operate properly with the new well. These estimates were beyond our budget capability and it looked like the return on our investment in the berm irrigation well would never be fully realized. However the recommended company was able to come up with a simpler way to redesign the zones that saved us about two-thirds of the amount quoted by the other sprinkler contractors. They were awarded the job and this company has been our sprinkler maintenance contractor ever since. Over the past four years on average they have performed about $5,200 worth of regular sprinkler system maintenance per year for us and your Board president remains satisfied with their work.
__________________________________
After several e-mail exchanges in which various alternatives were discussed, the Board met again on Oct. 26, 2012 to discuss and modify the proposed budget, after which they voted unanimously to adopt the Association’s 2013 Budget which includes the $225/$80 monthly condo fees.
Here is a chart that compares the 2008 through 2013 budget years, showing the total annual income and expenses for each year as well as the end-of-year balances in the operating and replacement reserve accounts.
This is the first annual budget developed for the Manors since the Association transitioned from developer control to co-owner control in January of 2012. The new Board of Directors has heard your concerns about the past operation of the Association and attempted to address them as they prepared the 2013 Budget. For example, co-owners have told us that:
Sincerely,
The Board of Directors of the Manors at Central Park Condominium Association
Mike Grobbel - President
Bhartan Amin - Secretary
Larry Cybulski - Treasurer
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| (click to enlarge) |
2013
Budget Rationale
In the meantime, the Board of Directors of the Central Park Master Association adopted their 2013 Budget, which increased the annual Master Association fee to $200 per unit, beginning with the annual payment that is due in January of 2013. Since the Manors Condo Association will be paying this fee on behalf of all co-owners out of the 2012 Budget, the 2013 Budget had to not only include the $200 fee for each of our 118 units that is due in January 2014 but it also has to include the $10 per unit increase to make up the difference that is due in January 2013.
As they developed the proposed 2013 Budget, the treasurer and president also sought and incorporated the latest available cost data so that the planned expenditures in the 2013 Budget could be as accurate as possible.
__________________________________
UPDATE: A question in the comment section asks, "Have we went out for competitive bids in the last few years for landscaping, sprinkler system, and snow removal etc. to save some money?" The answer is "yes" for the landscaping and snow removal. At their meeting of September 28, 2012 (all of the Board Meeting minutes are posted here on the blog for all to see, you can read that meeting's minutes by clicking here), the Board of Directors reviewed competitive bids from four landscaping companies and four snow removal companies. The four snow removal bids came in at $47,660, $43,608, $40,900 and $40,425. The Board awarded the 2012-2013 contract to the second-lowest bidder because that company has been removing our snow since the 2008-2009 season and the Board has been satisfied with their past performance. The four landscaping bids came in at $50,190, $40,500, $29,150 and $17,480. The Board awarded the 2013 contract to the second-lowest bidder because:
a) that company that has been our landscaper since the 2009 season and the Board has been satisfied with their past performance
b) the lowest bid was an obvious outlier and we could not expect a proper level of service at that price.
The sprinkler work is not competitively bid. The current sprinkler maintenance contractor was recommended by our property management agent after the Board received estimates in 2008 from two of our previous sprinkler contractors to redesign the sprinkler system zones on the berm so that they would operate properly with the new well. These estimates were beyond our budget capability and it looked like the return on our investment in the berm irrigation well would never be fully realized. However the recommended company was able to come up with a simpler way to redesign the zones that saved us about two-thirds of the amount quoted by the other sprinkler contractors. They were awarded the job and this company has been our sprinkler maintenance contractor ever since. Over the past four years on average they have performed about $5,200 worth of regular sprinkler system maintenance per year for us and your Board president remains satisfied with their work.
__________________________________
After several e-mail exchanges in which various alternatives were discussed, the Board met again on Oct. 26, 2012 to discuss and modify the proposed budget, after which they voted unanimously to adopt the Association’s 2013 Budget which includes the $225/$80 monthly condo fees.
Here is a chart that compares the 2008 through 2013 budget years, showing the total annual income and expenses for each year as well as the end-of-year balances in the operating and replacement reserve accounts.
This is the first annual budget developed for the Manors since the Association transitioned from developer control to co-owner control in January of 2012. The new Board of Directors has heard your concerns about the past operation of the Association and attempted to address them as they prepared the 2013 Budget. For example, co-owners have told us that:
- they are having trouble re-financing their mortgage because the Manors at Central Park Condo Association no longer has FHA Project Certification. If you are trying to sell your unit, this also causes potential difficulties and increased financing costs for your prospective buyers. At one time, the Manors was certified but after it expired in 2011, the Board learned that the requirements had been tightened in the meantime such that we no longer qualified. After investigation, the Board learned that in order to be re-certified in 2012, our budget needed to include additions to our long-term replacement reserve account that were greater than or equal to 10% of our income. Since our budgeted 2012 replacement reserve additions equaled only about 3% of budgeted income, we did not meet the FHA requirements for re-certification. The 2013 Budget includes $29,598 for additions to the replacement reserve account, which equals the 10% requirement and should enable the Association to become re-certified in early 2013. This Board believes we must make up for the fact that during this Association's first six years of operation (2005-2010), the Board that was controlled by the developer never budgeted any additions to the replacement reserve account. If not for the two non-recurring expenses in 2013, this Board would have budgeted an even higher percentage of income towards the replacement reserve account. This percentage will need to be increased in 2014 and later years so that sufficient replacement reserves will be there when we need it.
- they did not like the frequently shaggy appearance of our lawns and the increasing grub damage that has been worsened in the autumn when skunks tear up the lawn to eat the grubs. Therefore, the 2013 Budget increases the number of cuts from 20 to 26 per season and adds an application of grub control insecticide. In 2013 the lawns will be cut once a week instead of once every 10 days or more (which had been implemented in 2010 as a cost-savings measure). This should also reduce or eliminate the occasional problems we have experienced with accumulated layers of long grass clippings. We will also receive an application of grub control in June 2013 that should kill most of them and minimize the kinds of lawn damage we experienced in the summer and fall of 2012.
- Shelby Township has raised the cost of the water we use for landscape irrigation by 9% in each of the past three years; therefore the 2013 Budget anticipates that a similar 9% increase will go into effect on January 1st and we have budgeted $45,000 to cover our anticipated usage in the coming year. To put these rate increases into perspective, the amount of water usage anticipated in our 2013 Budget would cost us only $31,645 if we were able to pay for it using the Township's 2009 water rate.
- the Sprinkler System Maintenance line item has been increased by $5,628 to cover the replacement of the existing well pump and controller with a variable frequency drive system that is more applicable to the design of our berm irrigation system. The existing well pump will have five season of use on it and has already needed several service calls. This is a one-time expenditure that will not recur in 2014.
- the Maintenance & Repair section of the budget includes $11,250 for the completion of repairs to the remaining units that have cracked bricks above their garage door. This is a one-time expenditure that will not recur in 2014.
- the Association will no longer benefit from the volunteer labor that in past years minimized our landscape irrigation water usage and our sprinkler repair and electrical repair costs
- some Blue Spruce trees are beginning to show evidence of disease and will need fungicide treatments; treatments for the Blue Spruce trees in the front yards along with other tree/shrub maintenance and mulching that had been deferred are all included in the 2013 Budget.
Sincerely,
The Board of Directors of the Manors at Central Park Condominium Association
Mike Grobbel - President
Bhartan Amin - Secretary
Larry Cybulski - Treasurer
