Looking at the 2019 Gunbarrel Green HOA Budget

The 2019 Budget was posted to the website just before the Board meeting (minutes) last week (27-March-2019), and also handed out at the Board meeting.

At first, I thought the Board had previously reviewed the budget, since they spent less than a minute discussing it, but from a question Board Member David Smith asked about dipping into the reserve, I’m now not so sure.

If they did discuss it previously, it would have had to be at a non-announced and non-minuted meeting, since it wasn’t discussed at the previous Board meeting, in Sept. 2018. So I’m assuming it was not discussed prior to the March meeting and, as I said, it was hardly discussed then.

In fact, here’s the entire report of the Budget discussion from the minutes:

Treasurer’s Report – Gina Hyatt – Gina presented the 2019 Budget and the 1.1.19 to 3.25.19 Treasurer’s report.

So, let’s take a closer look at the Budget, even if the Board didn’t. Since 2014 at least, HOA expenses and income have been pretty much in balance, always running a surplus. Here are the actual numbers, rounded to dollars, with the 2019 budgeted numbers at the bottom:

Year Year-End Assets Asset Increase
2014 50,874 (don’t have number)
2015 52,738 1,864
2016 55,094 2,356
2017 55,768 674
2018 55,970 202
2019 38,491 (17,479)

So, 2019 is planned to be a significant departure from previous years, something you’d think the Board would want to think about carefully. I was at the meeting, and, if they thought about it, they certainly did not discuss their thoughts with one another, other than David’s comment.

From the budget, it’s easy to see why the Board is planning to go $17K in the hole for 2019. They’re planning on $3,950 for meetings, and $17,000 for legal services related to re-doing the governing documents. To make the budget balance, the Board lists both the beginning checkbook balance of $2,447 and $15,032 transferred from savings (the reserve) as income. Misleadingly, that makes it look like the budget is in balance, but the actual planned income is $29,700, not the $47,179 shown on the budget document that was posted to the website.

As I said at the Board meeting and on this blog, I think the $17K for legal expenses is a waste, because the substantial changes to be made have never been explained to the HOA membership, and our desire for those particular changes has therefore not been assessed. If all that expensive legal work is done only to have the proposed documents rejected, then the money is wasted. Better to first get HOA membership consensus on the the problems to be solved and their solution and only then start the expensive drafting process. But I have gotten absolutely nowhere with this suggestion. So, I’m almost sure that the $17K will be for nothing.

As for the $3,950 for meetings, there’s no charge to use Boulder Country Club or Boulder Rural Fire Rescue, and committees usually just meet at someone’s house, so I don’t know why the Board continues to plan spend this money.

Anyway, the 2019 Budget runs a huge deficit, something very rare and unusual, and nobody on the Board seemed the least bit concerned. In fact, I think I’m the only one in the world who’s concerned. If you’re reading this, maybe you will be, too.

One more thought: The savings account has had $50K+ in it for years (not for long, alas), but the interest reported as income for 2018 was about 0.3%. I have an FDIC-insured savings account, allowing on-demand withdrawals and deposits, that pays 2.25%. If the Board got only 2% on its money, that would be about $1000. Again, money thrown away. (I think the Board considers only local banks. The best deals are with online banks.)

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