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Please allow me to follow up with some meaningful statistics to Mr. Warren Amason's questions regarding the ARB imposed fines against an owner on Tolomato Island. Let’s look at the numbers questioning what happened to the well documented fines which has had a non-reply:
The fines totaled $17,000.
The dues were increased by $40.00 per lot.
$40.00 x 261 lots = $10,440.00 in perpetuity, year after year.
What does this mean to we the homeowners? Simply put, we are paying the owner’s fines that the board saw fit to waive! In the not-too-distant past I stated in an open board meeting that the board in many instances was ruling by executive fiat, and this would be one more example!
How did this happen? Many of us thought it would be a good idea to have a complete audit done inasmuch as there has never been one. The board never took bids from accountants as to what an audit would cost. They only asked for an opinion as to cost from one accountant who told them, $15,000 to $18,000, so they ran with it. Those $17,000 in fines, if they had been collected, would have been a big help!
I do not remember any meeting notes waving the owner’s fines or discussion of audits, just an increase in dues! I suggest that the increase was political in nature to try to, in some way, discredit those who thought an audit might be in the best interest of the association.
Please allow me to follow up with some meaningful statistics to Mr. Warren Amason's questions regarding the ARB imposed fines against an owner on Tolomato Island. Let’s look at the numbers questioning what happened to the well documented fines which has had a non-reply:
The fines totaled $17,000.
The dues were increased by $40.00 per lot.
$40.00 x 261 lots = $10,440.00 in perpetuity, year after year.
What does this mean to we the homeowners? Simply put, we are paying the owner’s fines that the board saw fit to waive! In the not-too-distant past I stated in an open board meeting that the board in many instances was ruling by executive fiat, and this would be one more example!
How did this happen? Many of us thought it would be a good idea to have a complete audit done inasmuch as there has never been one. The board never took bids from accountants as to what an audit would cost. They only asked for an opinion as to cost from one accountant who told them, $15,000 to $18,000, so they ran with it. Those $17,000 in fines, if they had been collected, would have been a big help!
I do not remember any meeting notes waving the owner’s fines or discussion of audits, just an increase in dues! I suggest that the increase was political in nature to try to, in some way, discredit those who thought an audit might be in the best interest of the association.
Submitted on behalf of Richard Lang.
I want to give the new board the benefit of the doubt. I am willing to work from within for change. That said, I wholeheartedly agree, we are entitled to an explanation. The reason is not to point blame but to determine what broke down in the reporting so that the breakdown can be fixed.
I want to give the new board the benefit of the doubt. I am willing to work from within for change. That said, I wholeheartedly agree, we are entitled to an explanation. The reason is not to point blame but to determine what broke down in the reporting so that the breakdown can be fixed.
Unfortunately, that ship has sailed. Next year is another story.
The covenants state that the annual assessment shall be based upon budgeted expenses. That is the assessment can be less next year.
The covenants only restriction on annual assessment is that the annual assessment cannot be increased by more than 5% in a given year.
Another thing to consider, if annual assessments exceed expenses by more than 10%, the POA must file a 1120 with the excess taxed as revenue.
A final observation is that when the POA files the 1120H, all investment income in excess of $100 is taxed at 30%. That is, your return on investments is reduced by 30%.
Unfortunately, that ship has sailed. Next year is another story.
[list]
[*]The covenants state that the annual assessment shall be based upon budgeted expenses. That is the assessment can be less next year.
[*]The covenants only restriction on annual assessment is that the annual assessment cannot be increased by more than 5% in a given year.
[*]Another thing to consider, if annual assessments exceed expenses by more than 10%, the POA must file a 1120 with the excess taxed as revenue.
[*]A final observation is that when the POA files the 1120H, all investment income in excess of $100 is taxed at 30%. That is, your return on investments is reduced by 30%.
[/list]
I still believe an audit is in order. The $18,000 estimate was out to lunch. An audit committee can develop agree upon procedures with the firm. The extent of the procedures can be used to come up with a reasonable.cost.
Alternatively, if we have enough people with expertise and without bias, we could do it in house.
I still believe an audit is in order. The $18,000 estimate was out to lunch. An audit committee can develop agree upon procedures with the firm. The extent of the procedures can be used to come up with a reasonable.cost.
Alternatively, if we have enough people with expertise and without bias, we could do it in house.
Comments
Editorial Panel
on Tuesday, 06 February 2024 20:58
Please allow me to follow up with some meaningful statistics to Mr. Warren Amason's questions regarding the ARB imposed fines against an owner on Tolomato Island. Let’s look at the numbers questioning what happened to the well documented fines which has had a non-reply:
The fines totaled $17,000.
The dues were increased by $40.00 per lot.
$40.00 x 261 lots = $10,440.00 in perpetuity, year after year.
What does this mean to we the homeowners? Simply put, we are paying the owner’s fines that the board saw fit to waive! In the not-too-distant past I stated in an open board meeting that the board in many instances was ruling by executive fiat, and this would be one more example!
How did this happen? Many of us thought it would be a good idea to have a complete audit done inasmuch as there has never been one. The board never took bids from accountants as to what an audit would cost. They only asked for an opinion as to cost from one accountant who told them, $15,000 to $18,000, so they ran with it. Those $17,000 in fines, if they had been collected, would have been a big help!
I do not remember any meeting notes waving the owner’s fines or discussion of audits, just an increase in dues! I suggest that the increase was political in nature to try to, in some way, discredit those who thought an audit might be in the best interest of the association.
Submitted on behalf of Richard Lang.
JimandGinny
on Friday, 09 February 2024 14:58
I want to give the new board the benefit of the doubt. I am willing to work from within for change. That said, I wholeheartedly agree, we are entitled to an explanation. The reason is not to point blame but to determine what broke down in the reporting so that the breakdown can be fixed.
JimandGinny
on Friday, 09 February 2024 15:12
Unfortunately, that ship has sailed. Next year is another story.
JimandGinny
on Friday, 09 February 2024 15:15
I still believe an audit is in order. The $18,000 estimate was out to lunch. An audit committee can develop agree upon procedures with the firm. The extent of the procedures can be used to come up with a reasonable.cost.
Alternatively, if we have enough people with expertise and without bias, we could do it in house.