Motion to Adopt Proposed FY 2017 Budget

The following comments were prepared by ECA President Sharon Bobb for the June 28, 2016, Board Meeting:

The Board has been looking at several iterations of the budget, and wanted to wait for the final numbers to come in.  Our first reaction to the budget that was initially presented was to ask the Committee and Management to go back and look at ways to trim expenses without jeopardizing safety, maintenance and services provided.  That has been done, and now we are considering a motion to adopt a more streamlined budget for FY 2017, and a proposed condo fee increase of 13%, rather than 15%.

In addition, it is important to note that the Board will be carefully tracking these expenses, and looking for additional savings throughout the budget cycle. 

Before I turn the mic over to the Directors during discussion, it may be helpful to review the Board’s obligation as it relates to budgeting, as stated in the following guidance issued by the Montgomery County Commission on Common Ownership Communities (CCOC). In the chapter entitled “The Wrong Way to Budget,” it states, and I quote:

“Unfortunately, many common ownership community leaders forget the overall purpose of budgeting and approach it with their minds already made up about the outcome. That is, they strive to ‘force’ the budget to balance despite projected increases so no increase in the monthly or quarterly assessment will be needed. In doing so, they do a tremendous disservice to their communities, even if many of the owners will regard them as local heroes for having done so.

The primary obligation of the board of directors of any common ownership community is to assure there are sufficient funds to properly maintain the community, not to keep assessments from going up. In fact, when a community goes several years without assessment increases, it’s a virtual certainty that the maintenance and upkeep of the community will suffer. It’s easy to understand why this is the case.

Every community has certain costs whose increases cannot be controlled. Utility charges, salaries, insurance premiums and essential service contracts, to name just a few, usually increase no matter what the community does to prevent it. When these costs as a group increase even a little, and assessments don’t increase along with them, then something has to be cut. That something almost always impacts the maintenance and upkeep of the community.

This is transparently foolish when one realizes that everything structural and mechanical requires more maintenance and repair as it gets older.  To ignore this reality ultimately will cost the community more money than it will ever save. It will also diminish the appearance of the community and make it a less desirable place to live. That will adversely affect its resale value relative to nearby communities that are better maintained.”