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Harbour Towne Financial Issues
The past two years have been a trying time for the condo association.
We have experienced higher than average Maintenance Fee expenditures for: building repairs, landscaping, irrigation, snow removal, water damage insurance claims, increased insurance premiums, etc.
This problem is further compounded by the fact that several co-owners and the developer are delinquent on their monthly association dues and/or the special snowplow assessment for 2007-2008.
This shortage of funds, and rising Maintenance costs, has required the board to transfer money from our Reserve Fund, which is established to pay for long-range capital replacement of items such as roofs, driveways, walkways, streets, etc.
The board has developed a comprehensive plan to address these issues. The plan comprises:
I. Innovations
II. Reduction in Service Levels
III. Revised Collection Procedures
IV. Dues increase.
As neighbors, friends and board members we deeply regret any negative impact these changes may create for anyone! We have delayed the dues increase implementation until 5/01/2009 to allow co-owners to make financial adjustments to their budgets.
Major Rising Budget Cost in 2008-09
The following is a summary of major cost increases since May 1, 2007 that contributed to our present funding shortage:
Ant spraying $ 8,135
Building Repairs $34,300
Delinquent Fees/Assessment $16,375
Group Insurance Increase $ 7,000
Increased mowing & edgings $13,622
Insurance deductibles 2007-08 $10,000
Landscape replacement $12,390
Legal Fees $ 5,077
Lawn spot treatment $ 3,232
Pine tree scale treatment $ 6,000
Carry over 2007 Budget deficit $60,000
Total: $176,131
I. Innovations
We have explored our current procedures and budget to see if there were alternative methods that would be more cost effective. As a result of that review the board has, or will, implement the following changes in 2009:
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Using city water for lawn irrigation costs the association $30,000 annually. We are implementing a trail program in the spring to substitute well water for city water. We first need to verify that we will not have a problem with iron (brown stain) on the pavement and buildings, before we totally implement the system. Once the system is in and fully operational we estimate an investment pay back period of two years and a reoccurring annual savings of $20,000.
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A new computerized tracking system is being implemented to process all owner requests for service(s). This system will assign work orders, track costs, monitor progress and completion dates, process vendor payments, log repairs by category, unit and building, notify the owner when work has been completed and rate the individual vendor’s performance for each job.
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All future replacement trees and shrubbery must now be low maintenance and not require annual pruning. Our current annual expenditure for pruning is $11,300.
II. Reduction in Service Levels
Your association board has implemented several cost containment measures in 2009 aimed at reducing operating costs:
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Delinquent accounts will be aggressively pursued (including the options of Small Claims Court, foreclosure proceedings, debt collection agency referrals and other legal remedies). Additionally all legally allowable debt collection fees, processing cost, attorney fees and penalties must be paid prior to any money being applied to an overdue fee or assessment balance.
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The number of annual mowings will be reduced from 27 to 22. The number of lawn edgings will be reduced from 14 to 8. We will specify when the service occurs (annual savings $16,173).
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Spider Spraying are reduced from twice per year, to once a year (annual savings $5300).
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Window washing will be reduced from twice per year, to once per year (annual savings $7410).
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Any expenditure exceeding $1000 requires approval by a majority of all board members.
We are also looking at reducing our annual expenditures for: pruning, fertilizing and flower bed maintenance. The board fully recognizes that cutting back on common grounds expenditures, while still maintaining a well-groomed look, is a difficult balancing act.
III. Revised Collection Procedures
Sun Agency has reported that six co-owners and the developer are behind in their monthly condo fees and/or the special assessment for last year’s snow removal ($16,375 total amount due).
Several delinquency notices have been mailed to all involved parties.
We have placed property liens on all involved units.
None of the involved parties has made any attempt to contact Sun Agency or the association board regarding these delinquent accounts.
We are now commencing further legal action against all parties. Our options are Small Claims Court, foreclosure proceedings, debt collection agency referrals and other special legal action that have been discussed with the board’s attorney.
IV. Dues Increase effective 5/01/2009
Currently our dues are $215.00 per month.
A $160.00 of this monthly amount is allocated to Maintenance Fees (annual expenses for snow-plowing, landscaping related, unscheduled
building repairs, etc.).
The remaining $55.00 is allocated to our Reserve Fund (appropriations set aside to provide funding for major future repairs such as roofs, driveways, painting etc.).
The timing and volume of most Maintenance and Reserve Fund expenditures occurs during April through October of each year. This cycle makes it impossible to maintain a proper separation of the two funds, as all incoming money during this period is needed just to pay for our Maintenance Fee expenses! We have recently negotiated an agreement with our lawn care and snow removal vendor to spread the majority of our costs over a 12-month period. This measure should improve our ability to stay within specified budgets.
During our normal “slow expense cycle” (November to March) our typical expenses are only for snow removal and we have been able to repay some, or most of the money that was channeled from our Reserve Fund.
As of January 01, 2009 we have spent our entire annual budget allocation for snow removal ($48,000). We also have borrowed $109,000 from our Reserve Fund that needs to be repaid with 5% interest. Additional snow plowing or above average Maintenance repairs occurring before April 30, 2009 will increase this amount.
Our fiscal year ends on April 30, 2009. This is the final date when we know precisely how much we are short in our Reserve Fund.
It is of imperative that the board, maintain the fiscal integrity of our Maintenance Fee and Reserve Fund accounts. Current and future co-owners need assurance that the association is properly maintaining our common ground areas and adequately funding past and future expenses in a fair and equitable manner.
The board is in agreement that our Reserve Fund deficit needs to be addressed quickly! Therefore effective May 01, 2009 our monthly dues will be increased to $260. This $45 increase will remain in effect until our Reserve Fund shortage has been repaid and our Maintenance Fee expenditures stabilized within budget.
It is our estimate that the present Reserve Fund shortage of $109,000 can potentially be repaid sometime in 2012. Our annual Maintenance Fees could increase or decrease. Our cost reduction measures may, or may not have a lasting effect on trimming our annual expenses. These are all unknowns that would affect the repayment of the money borrowed from our Reserve Fund. Our Condo fees are and will remain a moving target for the board. We will continue to charge what is reasonable and prudent for the operation of all common ground areas. No more, and no less…..than needed!
Bud Tips
Helpful hints from Bud Kemperman:
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Clean or replace your furnace filter.
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Clean your humidifier filter with soap and bleach or replace it to prevent mold.
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If your windows are fogging up on colder days decrease the moisture setting on your furnace humidistat, if you have one.
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If you are getting a draft at the bottom of your exterior doors, push the removable weather strip downward to disconnect it from the bottom of the door. Take it to Sethco Lumber (4566 Apple Ave.) and get a replacement and instructions on how to adjust your threshold height to reduce future weather strip wear.
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If your garage door is noisy apply a light coating of WD40 to the interior of all rollers and hinges, plus put some WD40 on a rag and wipe the tracks and overhead torsion spring areas.
Important Insurance Changes
Philadelphia (our Group Insurance Carrier) initially declined to renew our group Insurance Policy on 12/01/2008.
The main reason for their initial refusal was attributable to our high volume of water damage insurance claims in the preceding 24 months (4 claims totaling $61, 525 in water damages). These 4 claims alone resulted in a pay out exceeding 94% of the total premiums collected.
All 4 of these claims involved absent owners who could have prevented these claims had they maintained the heat at 50 degrees and/or turned the main water supply valve off.
Ryan Osborn, our Independent Pinnacle Insurance Agent, solicited two other major condo Insurance carriers to give us a quote. Both carriers declined to submit quotes based on our high volume of preventable water insurance claims in the preceding 24 months.
Ryan Osborn was finally able to get Philadelphia to reconsider our group policy with an additional annual premium increase of $7,000 coupled with a $10,000 deductible on all future water damage related claims in 2009.
Philadelphia will review our claim history at the end of 2009 and may eliminate the $7,000 additional premium charge and drop the $10,000 deductible requirement contingent upon our improved claim history!
If you leave your condo vacant for more than 3 consecutive days, make sure the heat is minimally set at 50 degrees and your water is turned off at the supply valve.
If you have already left for the winter and have not taken these precautions please have who ever is watching your condo address these two issues immediately.
If no one is available, please contact Kathie at Sun Agency and she we will have two board members access your residence, set the heat at 50 degrees, turn off your water supply valve and re-secure your residence.
Also make sure your personal insurance provider is aware of the fact that all water damage insurance claims now have a $10,000 deductible.
New Arrivals
During October 1, 2008 through December 31, 2008 there was one re-sold unit at Harbour Towne.
During this same time frame there was no new units sold by the developer.
Please extend a warm Harbour Towne welcome to the following new residents:
Names: Grant and Laura Birkly
Address: 1494 West Harbour Towne Circle
Newsletter/Website Input
If you have a particular item or concern that you would like discussed in an upcoming issue of our newsletter or website, please contact Jerry Siminski at 759-3451 or any Board Member
Harbour Towne Activities Calendar:
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HT Ladies Luncheon Group - meets the 2nd Tuesday of the month, at 1:00pm, at Pints and Quarts.
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HT Bunko Bunch - meets the 4th Tuesday of the month at 1:00pm. Call Arlene Wickland at 759-5513 for the location and to RSVP.
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HT Condominium Association Board normally meets the 2nd Wednesday of each month at 6:30pm in the upper level of the HT Yacht Club. Always check with a Board member to verify that a meeting is being held for the month you choose to attend.
Past Christmas Party
Our second annual Christmas party at the Harbour Towne Yacht Club was a fun time for all 53 persons who braved the icy roads and parking lot to attend.
A special note of appreciation goes to Linda Taylor, Rosemary Shoemake and Nancy Siminski for their Christmas decorations and buffet setup!
Looking for Volunteers
We are still looking for a few more condo volunteers to assist with our website updating. Volunteers need a computer with Windows XP or Vista, scanner, Microsoft Word and Internet Access. If interested please contact Jerry Siminski at 759-3451.
Famous Quote
“Democracy is the worst form of government, except for all the others." - Winston Churchill
Work Wanted
Laura is a 15-year old, hard working, honor student, living in Harbour Towne. She would like to earn a little extra income baby sitting, providing pet care or assisting with other personable tasks. If interested, please call her at 759-8297.
Condominium Assoc. Board Members:
Dave Taylor – President – 759-1193
3529 Sand Bar Court
Dave Shoemake – VP/Secretary - 755-8747
1476 W. Harbour Towne Circle
Dan Weller – Treasurer – 755-3936
1440 East Harbour Towne Circle
Jerry Siminski – Communications - 759-3451
1500 West Harbour Towne Circle
Jim Geisler – 755-6750
1659 East Harbour Towne Circle
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Kathie Vanderwater (Sun Agency) 759-7722
Call Kathie for “all building and grounds complaints,
Insurance claims and Condominium Fees"
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