Continued from previous post, click to view.
Comparison of budget 2020 vs. 2019 shows that current management plans to spend 33% more on Legal fees, 90% more on Payroll; 31% more on Insurance in 2020; spend 38% less on Maintenance -contracted services, 36% less on General Maintenance, contribute 50% less to Reserve.
Click here to view the PDF file of Y2020 budget.
#3. Insurance - 31% budget increase
Budget for insurance has increased from $5,350/month in 2019 to $7,035/month in 2020, a 31% increase. While the actual insurance costs averaged $7,370/month through Oct. 2019, averaged $8,656 through Nov. 2019. It is apparent that the 2020 budget would not cover the 2019 cost of insurance, much less the cost increase imposed by the insurance company for 2020. One of the insurance premiums has gone from $75,000/year to $125,000/year effective Dec. 2019, a $50,000 increase, which was not recorded in the book when the budget was printed.
This particular insurance went from $25,000/year one year ago to $75,000/year in the past year, further increased to $125,000/year for 2020 renewal, a whopping 400% increase due to the increasing number of lawsuit claims under current management (click here to view 22 lawsuits list).
Let us examine the items with decreased budget.
#4. Contracted services - 38% budget decrease
This category includes specialized services such as pool, lake, tree, gardening services and maintenance. Budget goes down from $7,780/month in 2019 to $4,785/month in 2020, a 38% decrease. The 2019 average expenses was $7,772/month.
A question for Mr. CEO who prepared the budget, there is a line item under contracted services, GL No. 80701, Contracted patrol/common area expense, $7,067.90 was recorded in the 2019 book as of 11/30/2019, this expense was not included in Y2020 budget, why?
#5. Maintenance - 36% budget decrease, a 60% decrease from actual cost
Budget for general maintenance goes down from $17,095/month in 2019 to $10,964/month in 2020, a 36% decrease; while the actual maintenance costs averaged $25,822/month in 2019 through Oct., a reduction of $15k or 60% monthly from 2019 average cost to 2020 budget.
Does the lower maintenance budget mean some of the maintenance will be skipped in order to pay increases to payroll, attorney fee and insurance?
An earlier post was published regarding the run down properties of LLHOA (click to see the photos). With the greater cuts to the 2020 maintenance budget, is it reasonable to conclude that the properties will deteriorate further?
More questions for Mr. CEO. There is a line item under Maintenance, GL No. 86302, Event expense, $5,380.21 was recorded in 2019 book as of 11/30/2019, this expense was not included in Y2020 budget, why? Note that event expense was greater than event income ($4,770).
Another line item under Maintenance, GL No. 86311, Summer Camp expense, $20,124.79 was recorded in 2019 book as of 11/30/2019, this expense was not included in Y2020 budget, why?
What other items are allocated less in the 2020 accepted budget? The Reserve Account contribution!
#6. Reserve contribution - 50% decrease
Reserve contribution decreases from $30,000/month in 2019 to $15,000/month in 2020.
As of 11/30/2019, only $150,000 was made to the reserve account, the equivalent of 5 months’ contribution at $30,000 per month. The monthly contribution was not made in 6 of the 11 months in 2019. The expectation is no contribution will be made in Dec. either.
What does it mean to have a $175K budget deficit?
LLHOA is not paying bills on time. As of 11/30/2019, checks totaling $71,879.60 had been issued but not released to payees because there are no funds in the operating account to cover these checks.
There are $39,559.02 in bills that have been approved to pay but checks have not been issued due to the lack of funds in the account. Check out the email exchange between CEO and the management company about pushing checks of payment into future months (click to view). The email exchange was inadvertently included in a packet of financial documents handed out to members in open meeting and became public information.
Current spending is unsustainable. If it continues, the board will be forced to hit LLHOA members with special assessments or dues increases.
We have more financial questions for the Board and the CEO.
There are checks issued in large amounts for employees reimbursement. For example:
1. Check of $4,421.18 to Chris Barone for reimbursement of PW Gillibrand pd 7/8/19;
2. Check of $5,145.00 to Chris Barone for reimbursement of Summer Camp expenses;
3. Check of $2,396.00 to Chris Barone for reimbursement of Golf Course/Golfball Monster expense.
Why doesn’t LLHOA pay the vendors directly either by corporate credit card or corporate checks?
Why are the expenses paid by the CEO personally, then reimbursed from LLHOA?
Interestingly enough, the use of a corporate credit card to reduce/eliminate employee reimbursements was noted in the original open meeting Minutes of August 2019, but was changed in the altered version of the Minutes. (Click here to view the original and altered Minutes, #3 on page 1.)
There are also checks made to Chris Barone in various amounts for reimbursement of Amazon and Costco purchases. Where is the check-and-balance system when one person, the CEO, makes the purchase, verifies the delivery, and approves the reimbursement or payment for the purchase?
Do you want to clean up this mess?
Do you want business people to run our HOA like a business?
Join us, Vote for change, Vote YES on the recall !
Vote for Allan-Cohen-Siegel for a financially literate and fiscally responsible board !
Cast all 5 of your votes for these 3 candidates: Allan-Cohen-Siegel.
Yes, each candidate can receive more than 1 vote from you.
Vote, so your voice can be heard!
Recall Election December 19th
Vote: 7:00 to 7:30 PM
Vote Count at 7:30 PM
Mail in ballot, or
Attend meeting to Vote (bring your ID if you misplaced your ballot)
Your ballot MUST be mailed by December16th
or
Bring it Thursday December 19th @ 7:00
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