The Poudre Overlook HOA Homeowners are set to vote upon the Proposed Budget for 2023 that Directors Ballweber and Jones passed on November 8, 2022. Homeowners who attended the meeting were not given any documents or presented with the details of the budget, but were merely given a rambling explanation by Director Jones about how inflation was really 16-20% (don’t believe the so-called experts!), fuel prices were going up (they are really going down), so we have to raise Assessments!
The Proposed Budget, according to Director Jones, is restricted from increases beyond the published CPI of 8.5%. If, in consideration of the budget, the homeowners wish to have an independent audit of the books, the Board can ignore it because the budget is not >$250k
Source: https://dre.colorado.gov/hoa-finances (Budget Process for an HOA per Department of Regulatory Agencies or DORA)
An audit shall be required only when both of the following conditions are met:
- The association has annual revenues or expenditures of at least two hundred fifty thousand dollars ($250,000); and,
- An audit is requested by the owners of at least one-third (1/3) of the units represented by the association.
- A review shall be required only when requested by the owners of at least one-third (1/3) of the units represented by the association.
- Section 38-33.3-303(4)(B)(b)(I), C.R.S.
If there are concerns, which I believe the evidence below supports, our only viable option is to table the Budget Approval for a second meeting like we did in 2017-2018. CCIOA doesn’t actually describe such a process, and appears to only give homeowners an up/down veto vote, but we have established at least some precedent for the action (which now relates to our $70k in “Reserves”, theoretically held to build the remaining fencing on the South side of the HOA).
Without the fanfare of a banner across the front page, or even a mention in the meeting notice she put up the day before, Director Ballweber arguably cured a problem with our documentation of Monthly Financial Reports just a day before the Annual “Homeowner’s” Meeting. She finally posted the July and September Monthly reports, bring us only up to date with 9/30/22 prior to having a vote upon the Proposed Budget for 2023.
First, examining the dates of each report and when uploaded, they are as follows:
June 2022: Prepared August 30, 2022 (uploaded November 21, 2022)
July 2022: Prepared October 25, 2022 (uploaded December 13, 2022)
August 2022: Prepared November 11, 2022 (uploaded November 21, 2022)
September 2022: Prepared November 11, 2022 (uploaded December 13, 2022)
(See screenshots below for the header for each report.)
It appears that the reports were created in sequence, but for whatever reason, whether competence or intention, only uploaded 2 of the 4 on November 21. And, even upon pointing this out shortly after receiving the notice, Director Ballweber only saw fit to post the remaining documents the day before the meeting. Innocent mistake or not, it puts homeowners at a disadvantage prior to a vote and makes their collective votes potentially less informed.
One of the key aspects of the November 8, 2022 meeting is that it included an analysis of the Budget based upon the books that they had completed by that date. The Report cited was through October (arguably after the 10/25 Report produced that was only through July of 2022. See Director Jones explain his budget that has $9k surplus through October, but then, somehow, an annual surplus of $13k. And, if the Proposed Budget for 2023 is passed, we will see a $5k surplus. Which is $4k more than the current. But, it’s all a “shot in the dark”.
If this is dull and boring, make it a drinking game, and drink every time Director Jones blames rising fuel prices. I jest, but this is how absurd we’ve become!
No, really, take a listen. There’s a reason these meetings are held at Noon on a Tuesday (Election Day), because none of us there could make sense of it either – particularly without the documents in hand. There’s a reason for intentionally making it difficult for others to attend, and to whitewash such meetings with fantasy “meeting minutes” that barely reflect what was said or done.
So, let’s examine what they actually proposed regarding expenses discussed. This appears to be the section that has the most delta (change) from 2022 to 2023:
There are three expenses under “ADMINISTRATION” that see significant amounts being spent.
- Accounting/Tax Prep
- Legal Fees
- Administrative Expenses
In 2022, POHOA only spent $299 for Accounting/Tax Prep, but without any explanation, presentation of bids, or any information even indicating this was part of the budget, it is suddenly $6,350 representing a 2000% increase! Looks like we are hiring an outside Accountant or . . . well, we don’t get to know in advance. No bids, no evidence of research. Just a budget for . . . whatever the board pleases to keep updated books when we have volunteers willing and able to do the bulk of the work.
In prior years, when this idea was floated and discussed openly at meetings, it was determined that the money was either not worth it, or it was better spent elsewhere. It appears that because Treasurer Jones, in his officer role, is uncomfortable or unfamiliar with Quickbooks, even though people like myself with over 17 years experience offered to help WHILE SERVING ON THE BOARD. For such a SIMPLE HOA, this is an unnecessary expense.
While two consecutive Boards have celebrated at $3700 “refund” from VF-Law, the fact of the matter is that even with that refund, we actually spent over $15,000 in the past 12 months. Through a combination of hiding the December 2021 Monthly Report for long period of time, and by failing to EVER answer the question about the $11k spent between December of 2021 and April of 2022 that was NOT related to “document revision”, they are attempting to distract focus from that HUGE expenditure that delivered us ZERO value.
If, in fact, that value is in legal advice, and the outgoing board members kept it in their personal email addresses and refused to turn them over to the new board (or delete the accounts entirely, as claimed by Former Director Sara Young), then that value is not held by the Association or its members – that knowledge, which is the ONLY value goes to those individuals personally.
But, more importantly, our Books appear to be deliberately fudged to push expenses that were not budgeted in 2021 into a month for which there is no Monthly Report, and then only revealed in the 2021 Annual Report – which wasn’t available to homeowners when they approved the 2022 Budget.
Then, by pushing that expense into 2021, it then appears that we magically came in UNDER budget in 2022, particularly since we got a “refund” on “document revision”, when, in fact, the actual amount spent on “document revision” was likely $7-8k, and again, we have nothing to show for it beyond draft documents that the pre-5/25 Board and Document Revision Committee resigned over rather than allowing these documents to be seen! This is not a good example of fiduciary duty!
So, when we see a “profit” or “surplus” which Director Jones openly admits is a wild guess or “shot in the dark” at the bottom of ANY of these reports – which may be holding back expenses being posted on the books until after the Annual Meeting – they should be taken with a grain of salt.
Recall that in the video above, Director Jones says there is a $5k surplus for 2023 WHEN THEY VOTED ON IT. But, when we finally get the written proposal, we are barely breaking even in spite of an 8.5% CPI-limited increase with moneys going out for who-knows-what? What?!?!?!?
Case in point:
At the 11/8 meeting, Director Jones claimed that there was a $9k surplus through October. We only have monthly reports through September, so it is a question as to whether he meant that he was updated through JULY (per the latest Monthly completed at that time) or whether he was revealing information PAST September, that he could only see with his private view of Quickbooks (no one else has been allowed access). The budget says that the current surplus is $7,680.78. And, then magically forecasts in this “shot in the dark” methodology, that we wind up with a surplus of $13,361.90.
However, if that is accurate, and we neither have any specific reasons to spend more on legal fees (no imminent litigation), nor do we currently hire an accountant, nor do we have evidence of Director Jones doom and gloom predictions on fuel prices to create any of the need to raise our budget!
But, the third and remaining area of the budget, “Administrative Expenses”, is yet worth more detailed examination. While we have a history of being +/- $2k in Administrative Expenses annually as far back as we can see publicized records (about 2017), for some reason, we booked $3,771 in actual expenses by either end of September or October (hard to discern, per above) and predict a total of $5395 (a curiously retailish price-is-right estimate) for this category in 2022.
What are these expenditures for?
Well, if we look at the 4 monthly reports that were only made available in the past 3 weeks, the YTD section offers us NO CLUE.
So, where are the numbers in the Proposed Budget for 2023 coming from? Who knows? They passed a budget claiming that by raising our assessments, they get a surplus which theoretically is still aimed at replacing our fences, since in the prior year, they claimed we DIDN’T HAVE THE MONEY TO DO THE PROJECT WE PAID FOR IN ADVANCE!
More importantly, when do we get answers before VOTING on the bundle of inexplicable calculations that simply do not add up?
Without transparency on what is being spent already – whether we are buying things or services – it is impossible to approve of an increase of a budget of $2,000 to a more than double amount of $5,827 without some details or explanation. We should have time to consider whatever is going on here – and given that this is being posted only a day in advance (most recent Monthly Financials), and that the Board refuses to participate in Town Halls or allow more than 10 whole minutes to discuss these expenditures ALONG WITH EVERY OTHER CONCERN, it seems that this Board is in a rush to force us to make a BLIND CHOICE.
Given the highly unlikely possibility that Directors Ballweber and Jones show up with any new documentation, a PowerPoint Presentation, or any written anything about this subject at tonight’s meeting, we are faced with a difficult choice. I believe that CCIOA and the Non-Profit Act give Homeowners only the choice of vetoing the proposed budget within 90 days of its passage on 11/8/22. And, veto power by the homeowners does not, at least by statute, give the homeowners any rights to amend or tinker – it’s an up or down vote.
We did, however, allow the issue to be tabled into the next calendar year in 2017-2018 when we held a secondary meeting in February. The primary reason was the vote about a Special Assessment which would pay not only to fund the conversion of the “natural area” along Overland, but also to buy us new fences – which is theoretically why we are debating where to put our $70k in reserves, including buying coins and bullion – potentially from the shop where Director Jones works!
With so little information and the unlikely prospect that it is sorted out at a meeting where Director Ballweber is likely to fillibuster significant time, and disallow meaningful dialogue between owners (at the “homeowners” meeting, she should NOT be chairing all evening), the best path forward is to repeat what we did in 2017, and table the approval of a budget until we can get real answers to questions about these financial documents that are, at best, smudged and difficult to understand due to competency issues, and hopefully not deliberately fudged.
December 14, 2022
– Andy Mowery
GALLERY OF MONTHLY REPORT DATES AND PUBLISHING DATES
