BOARD BUZZ - August 2022, Everett Lunsford, Treasurer
Posted on Aug 1st, 2022
Welcome to our newest Board Member, John Ryan, a Chelsea Green owner. John was appointed at our July Board meeting for a position through December 2023. Mr. Ryan is a patent attorney and intellectual property counsel for a Virginia based corporation. He has prior experience on HOA boards in New York City (where he served as condominium association President) and Vienna, Virginia.
The engineering contract for a Roper Park transition study was approved at the July Board meeting, along with the charter for a Roper Park Transition Working Group of residents. (See July Town Crier for more background). At least one more volunteer for the working group is still needed. Contact me at email@example.com if you are interested in assisting the Association in identifying improvements needed to the common areas in Roper Park.
All exterior inspections of homes have been completed through the efforts of our Asset Maintenance Committee volunteers. Reinspections of homes with violations in Chelsea Green is complete and Charlotte Park’s reinspections will start soon. Be sure to respond to any violation notices that you receive.
Our last Lemonade and Listening session with individual neighborhoods will be Saturday, August 13th with Charlotte Park’s home owners (Roper Park was scheduled earlier). Thanks to all those who have joined us for a chat so far.
Mid-Year Financial Review
We appear to be slightly over budget at this point, but doing better than 2021. The biggest overage in our operating budget is late attorney fees for 2021 work (Town Management did not set aside funds for these monthly charges.) Similarly, pool skimmers and filter repairs approved in 2021 from replacement reserves and assumed to be completed, were only recently installed and billed. On the Village Walk operating side, the Board authorized hiring independent engineering and roofing contractors to conduct in-depth evaluations of the roof issues across Village Walk. This investment is already paying dividends in our discussions with Eagle Construction over how to correct this situation.
Some community members have asked about the lack of complete financial statements on the website; no balance sheets for 2022 have been posted, only income & expense statements for January-April. There are 2 reasons for this:
- Avoiding confusion or misinterpretation. Last year Town Management had difficulty entering the 2020 audit adjustments to the financial records. Mistakes were made trying to fix these problems through the management company transition. The 2021 year-end balance sheet is incorrect, and the Board decided therefore to also hold the 2022 balance sheets until all can be corrected, rather than posting and then replacing the information. Our audit firm has provided the necessary fixes, but they were received after Chesapeake Bay Management started its transition to a new financial software system. The fixes cannot be entered until that financial system transition is completed.
- Chesapeake Bay Management’s new financial system. This spring Chesapeake Bay changed its financial software system. They encountered data conversion problems and have found themselves in the situation of manually fixing the converted data. Manual data repairs are a slow process, and Chesapeake is a relatively small company with limited staff. The financial software also had to be integrated with their bank and autopay vendors. Thus, the financial system transition is incomplete, and new monthly reports cannot be produced until that process is carefully audited.
Even without these full reports, we are continually able to monitor Association expenses. Chesapeake has a robust and transparent payables invoice processing system that remains operational, and NTRA has daily access to that system. Spending data can be extracted from that system, but it does not contain internal charges like Chesapeake’s management expenses. Chesapeake is also providing monthly bank statement copies, so checking and investment account balances and activity can be monitored. Bear with us and we will update the website when we are comfortable the data is solid.
Planning for the 2023 Budget
The 2023 budget cycle started in July with the Finance Committee sending budget request forms to all NTRA committees.
We are quite aware that the community does not like the assessment increases that were necessary for 2022. Unfortunately, there is no way for NTRA to avoid noticeable increases again in 2023. The major drivers are:
- Replacement Reserves – our updated replacement reserve study (December 2021) recommends larger annual contributions in 2023 ($35,000 more) and future years. The Board is committed to fully funding our reserves and during last year’s budget process, the community was advised that an increase would be required in the 2023 budget.
- Inflation and increased prices – the US inflation rate is now 9-10%. Higher costs for fuel, parts, services, etc. as well as inflation will likely affect all of our contracts – pool, trees, repairs, BMP maintenance, etc. Budget contingencies will have to increase because of the adjustment and add-on clauses that we expect to see in new contracts. I doubt any of NTRA’s large contracts will be truly “fixed” for a year.
- New landscape contract. We have bid a new 3-year landscape contract and are awaiting bids. Landscaping is the single biggest vendor for our Association and we know that meeting our requirements plus annual adjustments will be expensive.
As a Board, we will work to control all discretionary expenses for 2023.
Finally, editing the new Governing Documents is nearly complete and then we will move expeditiously to a Member vote. Look for a Zoom community information meeting on August 17th to present the changes and answer any questions. (An in-person Q&A could be scheduled later in August as well.) Engage in the process and become advocates for us to move ahead.
I know this is a somber ending to our monthly message. If you don’t like what is happening, please consider the following:
- The Board is required by Virginia law to follow the Association’s documents (regardless of whether the Developer Board followed them). Look at the new documents and decide whether you think they are an improvement. If these revised documents are not approved by 2/3 of the community, the current documents remain in force.
- Two Board positions will be open in the December 2022 election. Run for the Board and bring your ideas forward for future improvements.