With all the Government incompetence flying around us like a swarm of locusts, thought I’d share a story on fighting City Hall & winning.
A few years ago, while still living in the molten Hades known as Phoenix, Arizona, I was introduced harshly to the HOA (Homeowners Association). I was told by “those in charge” that we just send them a check every month for 50 bucks or so & they’ll “handle” keeping the neighborhood nice.
For those lucky few who don’t know, an HOA IS a government entity, don’t let anyone tell you differently. They are mandated by “neighborhoods” to keep the common areas neat & tidy, that SHOULD BE the limit of their duties.
Back to they story…Our HOA was handed over to us from the builders at a point shortly after we moved in. We were told that there was a reserve built up for long term items and that that surplus buildup was in the monthly fees. That turned out to not be entirely accurate.
Shortly after the community elected a board & took over the “management” of the HOA management company the Board realized that we were hemorraging money at an incredible rate. Lucky for me, someone leaked to them that I was a CPA so I was contacted to solve the problem.
It took some serious effort, but we finally were able to obtain financial statements for the preceding 4 months. Collections were at 92% but it seemed that there was about 10k a month going out the door for “in-house” copies. Basically, at a very generous 10 cents per copy, we were paying for about 100,000 copies a month of something. Seemed a bit fishy. When confronted, the thieving HOA Co. said that they were sending out late fee notices. Back to the math…1000 homes, 92% collection, 80 homes delinquent. That explained it, each home was getting a 1250 page delinquent bill monthly. I was convinced, 1250 pages a notice seemed more than reasonable until I looked at the postage line. Nope, not nearly enough postage to send out 80 1250 page notices a month, in addition to the 1000 regular 1/3 page notices.
Lucky for the HOA Co, HOA boards are about as effective as any Government entity, so they didn’t fire the company, they just asked them to reduce the copy costs 10k or so a month.
The second problem was it appeared we were greatly over paying for an inferior landscaping service. 2 minutes on the internet & I discovered that the HOA co & the landscaping co were one and the same. Nooooooo favoritism there. Some arguing, himming & hawing, & a few bids later, we were able to save another $8k/month.
In summary, they were raking in over 30k a month for a 3k contract. Nice work if you can get it.
The other interesting fact, the HOA Board member that worked on this with me was hated by the other Board members for his directness, rather than lauded for his effectiveness. You just can’t make this shit up.
After about 20 hours of work we saved the community $18k/month. Not a bad return on investment. The HOA was solvent again, we had a fee CUT after 2 years, and had replenished the stolen money to the reserves in about 2 years. The pussies on the Board STILL wouldn’t fire the crooks, but at least we neutered them.
Oh, and about 15 people in our community out of about 2,000 even went to meetings and 2 people fixed the problem. We don’t need a majority to prevail, just a tireless, irate, minority.