Not only do board members not refer to minutes they approve, they do not even refer to budgets they approve. In fact, I am convinced most board members do not even understand the budgets they approve nor the variance reports they receive.

With respect to the replacement capital carryover issue, I reminded the entire board at its 9/16/2015 meeting that the FY 2014-2015 replacement capital budget was underspent by 48%! The directors in attendance seemed bewildered by my comment. This is somewhat understandable since this variance was not highlighted by OPA in any of its communications about year end financial results. It is regrettably understandable since the issue of replacement capital spending variance is seldom reviewed by either the BoD or the B&FAC (except for my bringing up the issue at the B$FAC meetings).

As of October 27th, my "use-by date" expired on the B&FAC. After two separate three-year terms on the B&FAC, I can opine that:

(1) OPA's management of reserves and capital spending is still very weak;

(2) MOST directors do not understand the management of reserves and capital spending and clearly do not even know where to find replacement capital spending variance (it has never been highlighted in the Controller's Monthly Variance Reports);

(3) It is probable that the reserve study will suggest OPA should have larger reserves to support future spending needs (whatever they are). This may lead to calls to increase the reserve contribution portion of assessments. This, in turn, would be totally irrational as:

   (a) OPA underspent its replacement reserves by $1.7 million last year:

   (b) OPA budgeted $500,000 for a replacement police station and $140,000 for replacement restrooms at WHP this current year knowing full well neither will be done;

   (c) the bulkhead replacement reserve has been carrying historically high ending balances;

   (d) the above items should result in another significant under-expenditure and/or year end balance for the replacement reserve and - consequently - an abnormally high starting balance for building next year's budget;

   (e) The BoD just approved a reserve investment policy that does NOT protect the purchasing power of the funds contributed by association members. This is absolutely insane if the BoD approves building up reserves even more. 

(4) Good capital budgeting can never happen in isolation nor without the benefit of good capital planning. In fact, good capital budgeting is a CONSEQUENCE of good capital planning. Without good capital planning, the annual exercise of capital/reserve budgeting is simply a crap shoot and is absolutely of no benefit to OPA beyond the next budget year.

(5) Someday OPA most start using some long-term, mission critical, objective, measurable performance goals to evaluate if OPA's annual operations are progressing to those goals. Measuring performance against monetary budgets only are meaningless with respect to meeting long term goals.

(4) OPA is in its third fiscal year where it has budgeted for an IT manager. Based on a very reliable source, OPA is no closer to hiring an IT manager than the first day it was put in a budget three years ago since OPA has no idea whatsoever what IT structure it needs nor the duties an IT manager should have. The salaries for the position have impacted assessments each year.

(5) OPA must seriously consider borrowing funds from a third party lender for future major capital projects. The concept of collecting the total replacement costs for all capital assets over the lives of existing assets from current members runs counter to the referendum requirement for major project spending.

This is not an complete list of my  concerns, but it will do for now.

Gene