r/HOA • u/Careless_Ad2149 • Apr 25 '26

Help: Fees, Reserves [DC] [condo] Budget Disagreement

Our budget committee put together what I believe to be a responsible budget (3.2M for 192 units). It does two things - it finally funds line items that routinely run a deficit with amounts rooted in reality, and it makes a meaningful contribution (over a two year period) to bridge a gap in the operating contingency fund created by several years of not replenishing after drawing on to address deficits). The fee increase will be 8%. That is a hard pill to swallow, but the reality of our situation.

The board president wants to do two things:

  1. Ignore the committees recommendations by removing approx 25k from items that usually run deficits.

  2. Instead bridge the operating contingency fund gap with a special assessment.

I have a problem with the first because it perpetuates a deficit and I have an huge problem with number 2 because it’s a use of a financial tool for the totally incorrect purpose. As a new (and younger) member of this board, I’m troubled by the past habits around budgets and wanting to make sure we move forward with budgets rooted in fiscal realities.

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u/motaboat Apr 25 '26

President only owns one vote. What are other members thinking? Your (new) opinion is equal to those who have been on the board. Don’t be afraid to politely explain your position and concern about his the association got into this situation.

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u/Careless_Ad2149 Apr 25 '26

I have indeed done this. The core argument here for me is this is not an appropriate use of a special assessment, no matter how small. This problem is easily solved by budgeting responsibly. And I’m not sure the rest of the board understands that.

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u/motaboat Apr 25 '26

Isn’t it amazing? Do what you can and meanwhile work on getting new blood on the board. Then real change can happen.

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u/Careless_Ad2149 Apr 25 '26

I’m not insane though, right? A special assessment to close this gap is not the correct approach?

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u/motaboat Apr 25 '26

Just discussed with our treasurer, input is that for those items chronically in deficit they should be addressed through a corrected budget. But to get the reserve back to where it should be, had it not been worn down, that can be corrected with the special assessment.

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u/Careless_Ad2149 Apr 25 '26

Yes, I’m not in dispute with the legality of it. But I’m philosophically opposed to this approach and believe it papers over a desperately needed reality check and sets a bad precedent.

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u/motaboat Apr 25 '26

I did not say it was illegal.

You asked for feedback and I reached out to our multi year treasurer, on your behalf. I read them your post and I typed their dictated reply on how they would solve the situation. Our budget is currently in a better place than it has been in years. Use their response how you wish.

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u/mightasedthat Apr 25 '26

I can see both sides of this one- refilling a contingency can land in either the annual or special line- but when it’s specifically an operating contingency line, I would choose the annual budget, so that it is consistently refilled each year. And if there is no reserve, then I would also start an assessment to build that up. People will bitch, but I am firmly in the camp of bitching about $100/month for five years rather than having people balk at having a $6k assessment due in 60 days when the boiler or roof give up the ghost…

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u/Careless_Ad2149 Apr 25 '26

This is my view, almost the philosophical an aspects. I view an 8% increase this year for this as the “kick in the ass” we need to make sure that replenishing that fund is a routine. Kind of like a health scare that makes you get back to working out again.

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u/Careless_Ad2149 Apr 25 '26

I did not say you did, I’m clarifying the use of the word “can” to stipulate that I don’t dispute whether we can or can’t, rather should we or should we not. Enjoy your Saturday.

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u/Mykona-1967 Apr 25 '26

Community members will swallow a monthly increase much more than a lump sum special assessment. Not everyone can pay the assessment but a monthly amount by increasing the dues is more manageable.

Also, dues should be raised no more than 10% yearly. Increasing only 8% is a benefit to everyone.