Community Budget Survey
Dear Homeowners of Kingsgate 3&4,
My name is Paulie Burns; my husband Don and I are long-time homeowners. I and 13 other homeowners volunteered to work on a Budget Committee. The goal of this homeowner Budget Committee is to represent all the members of Kingsgate 3&4.
The following survey has been developed to help guide the Board as they make decisions. Over time, the Board has been working with the monies available to maintain our community. However, this has not been enough to repair or replace big ticket items such as the pool (may be $300,000 to $500,000 to repair or replace), park fence ($80,000 to replace), park driveway and parking lot ($70,000 to resurface), and community entrance signs ($20,000 to replace). Please see below for a summary of the estimated cost to replace or repair selected community assets.
Why are we at this point? While our community is great, there are a few things in our financial history that have brought us to this point.
Many years ago, a past bookkeeper misappropriated funds. The Board at the time did not have audits completed or checks and balances in place to catch this. Additionally, assessments (dues) remained flat for a long period of time and a financial reserve was never built. Just so you understand, this chain of events happened before the current Board members were in office; they inherited them from previous boards.
After these issues were discovered, a group of homeowners volunteered significant time and expertise to correct the problem. A new bookkeeper took on the huge responsibility of working to get our books whole again. Some information was retrieved; however, the amount of missing funds and other important information was lost. Lawyers were hired to help in this dilemma. Some money was paid back, but because of the loss of information we will never know exactly how much was lost.
For the past ten years, our community has been healing. As of the last Board meeting, our association is now current with required tax filings and our reserve has a healthy start of approximately $116,000 in it. Our reserve study (completed by a licensed professional) suggests that our reserve should be between $500,000 and $750,000 currently, but what we have is a good start!
To add to the anxiety, the state legislature noted that many HOAs like ours were becoming financially insolvent because they lacked the funds to repair or replace big ticket items and it was difficult to raise funds due to supermajority requirements to raise annual assessments or special assessments. The legislature passed laws requiring all HOAs to complete an annual reserve study, perform audits, and overrode existing HOA covenants so that budgets, annual assessments, and special assessments proposed by Boards would automatically take effect unless rejected by more than 50% of all the homeowners in the community (not just 50% of those voting; in our case, that means 151 or more homeowners voting No).
The Board created this committee because it realized that our current situation is too challenging to address using only the budget process that it has used in years past and believes it needs the attention of a dedicated team. I would also like to highlight that while the board has perhaps not done the best job of communicating in the recent past, it has made several improvements to our community. This includes starting audits, recovering tens of thousands of dollars in unpaid delinquent dues, filing tax returns (which had not been done for 10 years), building a reserve, following the latest legal requirements, and following the state’s required budget process which helped create this committee – to name a few!
With all that said, we as a committee have created this Kingsgate 3&4 Community Budget Survey.
This is your chance for feedback!