All-Community Meeting minutes, Wednesday November 13, 2024

Topics:  budget -- insurance, income, reserve, expenses, budget requests

Present:  Ben, Lynda, Alex, Michael A, Emily, Laura, Kerry, Mike W, Joe, Kay (notes), Coleman, Renae, Robin, Jorge

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Budget

Insurance

Talked to agent. Claim in 2021 for Unit 5, fridge line sprang a leak while unit was empty, $7K.  In 2022 C.H. upstairs toilet $3K.  Agent says we are doing things right but

• construction, labor & replacement costs are going up
• fewer insurers who cover condos
• expensive natural disasters. 

We are moving the common house and workshop from their own separate policy with a $1K deductible to the master policy that covers the units, deductible $25K, which saves us several thousand in premiums.

Management is shopping around for new policies and have gotten a few recommendations of companies.

Q. Can individual units buy earthquake insurance if they want it rather than everyone?  A. No, everyone has it or no one.  We will ask potential insurers, but have been told the same thing by several companies.

However, if the association has earthquake insurance, you can choose whether or not to have an earthquake rider on your HO6 policy to cover the deductible, which is strongly encouraged. The earthquake deductible is on a per-building basis, and is the responsibility of the unit owners of that building rather than the community.   If you don't have a rider, you personally are responsible for the deductible.

Without earthquake insurance, damage would be the association's responsibility (thus everybody's). So earthquake insurance protects you from the cost of the damage to someone else's unit.

The insurance premiums are very large amounts, but keep in mind they are spread among 26 units. A 1/26 share would be quite a reasonable amount to expect to pay for insurance including earthquake on a single family home.

Income

Some income we hoped for this year didn't come in; there were fewer pay or play payments, and we didn't get the CCR changed to allow a transfer fee.

Fund-raising wasn't in the 2024 budget but raised a few thousand. 

Because fee increases in each annual budget become effective as of February each year, the income from fees is one month at old-year amounts, eleven months at new-year amounts. 

Each unit is allowed seven nights use of a guest room, after which the unit owner is charged a $30 fee per night.  The 'actual' shown in the budget v. actuals report is small but expected to be greater by year end; the book-keeper isn't caught up yet; units have free nights before charges start; and usage tends to be higher late in the year because of the holidays.

Reserve

Looking at analysis, Management thinks we can slightly lower the amount going into the reserve. 

The operating budget shows our contribution to the reserve but not expenditures from the reserve.  A separate tab in the spreadsheet shows the yearly reserve expenditures.  This year $32K for gutters and $16K for deck-roof repairs, $48K total.

Over the next few years the association will have a major expense of repairing & painting stucco, estimate of $260,000, paid out of the reserve. This is also not something that individual units can opt out of; the association is responsible for the unit exteriors. Not repairing will let water into the walls. All units have at least small cracks; some have major ones.

The purpose of the reserve is for (usually planned) large expenditures on maintenance and replacement on things that don't need work every year and so need to be saved for.  This purpose is quite different from insurance.

The largest expenses in the budget, by far, are the $50K into the reserves and insurance premiums, which jumped $13K this year.  For a property of our size our reserve should be several hundred thousand. Once our reserve is fully funded we might be able to drop the yearly contribution to $30K or so, but meanwhile we are trying to get closer to where the reserve should be.

Budget Requests

Large request from common house committee to repaint the common house interiors, just materials.  Robin has volunteered to do the work.  The Cohousing people will be paying us several thousand to stay here; having a nice facility may give us similar opportunities to raise funds.

The Farmette is asking for $1K for tools and supplies.  Alex calculates that the Farmette produced $7K worth of vegetables in 2024.  Request includes a water meter for the water line to the Farmette, so they can know how much the Farmette uses vs. the other users on that meter.

Expenses

Maintenance asked for $15K, may get $10K.  The two people who've been convening Maintenance are both leaving the committee.

We overestimated our recycling costs for 2024, so estimate for next year is lower, despite Ace's rates going up.

For more information on this year's expenses, see the Budget vs. Actual statement Jorge sent out.

Q. What is 'water reimbursement'? A. The field north of the garden is watered from community water; there is a meter which is read about once a year and Mary has been repaying us. 

Q. Why do we have electricity charges?  A. Electrical bills include a flat metering fee even if you use no electricity.

Emailed 11/16/2024.