In May, I wrote about what I believe has been a pattern of overcharging owners through our maintenance assessments.
At the June 30 Board meeting — the same meeting where the Board refused to answer owners’ questions — I raised another issue:
Why are we sitting on approximately $2.6 million in excess cash in our operating accounts?
The reaction suggested that the amount may have come as a surprise to the board.
That is troubling.
These numbers aren’t buried in some obscure document. They appear in the Association’s financial reports. More importantly, our own independent auditor specifically called attention to the Association’s unusually high operating fund balance.
So let’s follow the money.
First, Go Back to 2024
In March 2024, the Board amended the budget and returned $1,029,000 to owners through reduced assessments.
That sounds wonderful. Who doesn’t like lower maintenance payments?
But there was a problem.
Our auditor’s guidance has been:
“We typically recommend that Associations maintain a fund balance of two months’ worth of maintenance fees or 10% annual budget.”
Using that guideline, approximately $700,000 should have remained in the operating fund.
That means only about $329,000 of the $1.029 million was actually above the auditor’s recommended operating-fund level.
Yet the Board reduced assessments by the entire $1,029,000.
Think about that decision in light of what we know today.
We are facing major future capital expenses, including an estimated $5 million to replace the pool shell and deck. More to complete all of the deck (including Tennis Courts), exterior Stucco, generator, Fire alarm system, lobby, and hallways
Rather than dramatically reducing assessments, those dollars could have been preserved for the Association’s future needs, subject to the proper accounting, reserve and owner-approval requirements.
Fast Forward to November 19, 2025
The 2026 budget approval meeting was cancelled at the last minute with NO explanation.
The budget meeting was rescheduled for December 29th
The meeting was held at the last minute possible, with a very low attendance as a result of the date. Now the proposed November budget was replaced by a new budget with a $290,000 increase (.045%). Why?
Now look at the year-end December 31, 2025 audit
After two years under this Board, the same issue appeared again — except now in the opposite direction.
Our auditor called attention to the Association’s operating fund balance.
The year-end financial statements show the cash was sitting in operating funds:
Why Does This Matter?
Because while that money sits there, some of it is not earning interest for us.
Properly invested reserve funds can earn interest.
With more than $2.5 million, that difference becomes real money very quickly.
Money that could help pay Association expenses.
Money that could help fund future projects.
Money that belongs to all of us.
Adding Insult to Injury
While we are sitting on $2.6 million in cash, we are paying to use someone else’s money to finance our insurance at 6.37%.
Thus we are needlessly paying $31,499.22 in interest.
Meanwhile, Another Number Is Going in the Wrong Direction
Nothing is made up on this website, here is the proof:
That is not a picture of careful financial management
We Deserve Better
I am not bringing this to your attention simply to beat up on individual Board members.
I am bringing it to your attention because these are our dollars, our reserves, our future assessments and our property values.
Board members volunteer their time, and that deserves recognition.
But volunteering for the job does not eliminate the responsibility that comes with it.
Voting for a neighbor does not equate to their skill set being one that can manage a 42 year old condo and a $7.5 million budget. We can’t forget 9 months to repair two elevators and going on 10 months to update an elevator lobby an area the size of most living rooms.
When owners entrust millions of dollars to an Association, we should expect those responsible for overseeing that money to understand the financial statements, read the auditor’s recommendations, plan for future expenses and make informed decisions about our cash.