A Look At Our Finances 2017 Thru 2022

The new board has cast a lot of undeserved blame on the former board about our finances. However, a simple look back over the last 6 years will help everyone understand the true story how and why things changed.

In 2017 we were 99% funded. Since then the % funded steadily decreased. At year end 2023 we were looking at only 61% reserve funding. If nothing changed we would have been be bankrupt in 10 years, according to the 2023 Trower Report.

That is why in 2022, the year I joined the Board of Directors, we had to raise our dues twice in one year.

So what happened?

We can see that the 2017 Trower Report put us at 99% funded, and gave a projected 5 year roadmap to follow.

You can see that by 2023, Trower projected our funding to be at 91% (if we followed their recommendations).

However, that didn’t happen. Compare the 2023 Trower Report to the 2017 Trower Report:

So how did we fall from 99% in 2017 to 61% funded in 2023?

Well, we can look back and identify two key reasons we fell so far off the mark.

First, the old boards killed our funding % by lowering the HOA dues. In 2017 the dues were $245.00. Over the five year roadmap Trower recommended, the amounted allocated to the reserves per household unit should have gone from $59.06 to $66.47. That’s a gentle increase of $7.41 over 5 years. Very doable.

However, after 2017, the next five years saw our dues gradually lowered to $233.00. This was a decision made by some of the same board members we have on the board now. This was a huge mistake.

By the time the 2022 board took over, our reserve % was in the toilet. By then, also, inflation was rearing its ugly head.

Trower projects an annual inflation rate in its reports. If you look at the above summary, you can see Trower projected the annual inflation rate at 3%.

The inflation rates were actually:

You can see how over the last few years inflation really killed us. The old board ignorantly kept lowering the HOA dues and ignored the Trower Report recommendations, which would have helped us fight the inflation.

The second key reason was deferred maintenance. The old board was famous for not addressing its primary duty, which is to maintain the common areas as necessary. On my first day as the 2022 Maintenance Director, we got hit with a $15,000 water line break. A few months later we got hit with a $55,000 electrical line break. Later on, we had to pour $75,000 into replacing our rotting clubhouse roof.

That hurt.

The fact is, folks, we had board members who served on the 2017 thru 2021 boards who just didn’t understand finances. Some of those past board members are now back on the board.

In fact, to atone for their mistakes, the new board is now quickly adopting the ideas of the 2022 board, even though they vehemently opposed them before. Witness the resolution to buy a spare transformer, which the 2022 board attempted two years ago to huge opposition. The 2022 board was met with misinformation from current board members, a fake engineer, and a resident gossip who spread lies. The 2022 board was forced to abandon the project. This delay ultimately cost the community thousands of dollars in inflated costs, and has put us at continued huge financial risk of a transformer failure.

At any rate, I hope this sheds some light on our current finances. We need to take a smarter approach to funding our reserves than in years past. Our % reserve level must go back up. Unfortunately, our current board treasurer (not the one who screwed up the SDG&E finances, thank goodness), believes a 65% funding percentage is fine, as it is in line with most manufactured home parks. He is correct on this matter, but what he does not realize is that most manufactured home parks do not own their own infrastructure, as we do. The risk we take not being better funded is immense, as the 2022 board pointed out to deaf ears.

Hopefully, our FOSM residents are starting to understand the jeopardy we are in, and realize how they were lied to by the current board.

Stay tuned.