By Steve Smith
HOA Treasurer

In a 3-hour meeting on Nov. 1st, the Board approved the budget for 2023 as  recommended by the Finance Committee. By now, each of you should have received a copy of it in the mail.

Cost increases are not pleasant and we go above and beyond to avoid them. Yet, sometimes they are unavoidable as it is during this time of historical inflation. The Federal Reserve reports that the cost of goods and services has gone up by 13.8 percent on average from January 2021 to October 2022.  That is just an average. In sectors like insurance, energy and construction materials, for instance, all of which impact us directly, that percentage has doubled or even tripled in some instances. The Board, working hand in hand with the Finance Committee has successfully managed this challenge and delivered a budget that is well under inflationary levels with an overall increase of only 7.2 percent. Monthly assessments are being raised by just $20, which keeps North Shore well below many other comparable communities in our local area. 

Highlights from the 2023 approved budget are as follows:

• Total budgeted expenditures increased approximately $160,000 (7.2%) from the 2022 budget. 
• The amount budgeted to be transferred to the Reserve Fund increased by $54,750 (13%). The amount that is transferred each year is the amount recommended by the reserve study which was updated in 2022. This study is done by an independent firm specializing in reserve studies. Reserve funds are indispensable to make sure there are sufficient amounts on hand to replace and refurbish assets owned by the HOA. 
• The amount transferred to the Reserve Fund increases each year because of inflation. If we don’t transfer enough money into the Reserve Fund each year there won’t be enough on hand to pay the costs when the work is done. The largest single expense being reserved for is the  re-asphalting of all the streets and parking areas which will occur most likely in 2026 at an estimated cost of $2.3 million as of 2022. Orange County requires us to reserve sufficient funds at all times for periodic major maintenance to our streets. Reserve Funds were established by the original developer and are required by our CC&R’s. You can find the entire Reserve Study on the website at northshoreatlakeharthoa.com.  
• Budgeted property and liability  insurance costs increased by $11,770 (18.2%). The HOA maintains Property insurance coverage to protect against damages such as we experienced in October of 2021 when a  tornado hit the clubhouse area and caused $75,000 in damages. We maintain Liability coverage to protect all homeowners against claims filed against the HOA. Property and Liability insurance coverage premiums are increasing all over the state of Florida and nationwide.   
• Administrative costs, which include legal expenses, decreased by $2,900.
• All other budgeted expenses, which include amenity operating and maintenance costs; Common Area expenses including street and sidewalk maintenance and off duty and private patrol costs; gate maintenance and operating expenses; landscaping expenses including mowing, trimming, edging, fertilization, weed control, tree trimming and removal; utility costs including street lights; and payroll and related benefits and expenses; in total increased by only $97,000 (10.5%).  

How we got here:

Preparing a budget is a very precise, time-consuming process. Much thought and consideration goes into the planning, research and ultimately the approval of a budget and monthly assessment to homeowners. To keep these as low as possible and at the same time remain financially responsible, the Finance Committee recommended, and the Board agreed, to spend more than $251,000 from the accumulated surplus on hand. This resulted in a monthly assessment increase of only $20 for 2023 resulting in a total monthly assessment of $160.

To get here, Finance Committee members spent lots of volunteer time for three consecutive months to review and research multiple areas of expenditures. They then met to discuss and ultimately decide on a budget and monthly assessment amount for homeowners, which resulted in unanimous  recommendations to the Board incorporated into the 2023 Budget. The Finance Committee consists of three members with strong accounting and finance backgrounds (two of which are CPAs). 

Previous to the Budget adoption meeting, Association Manager Laurie Bihailo collected questions from homeowners in advance and they were all thoroughly answered by the Board and Committee members during the meeting.

The Board and Finance Committee are working diligently to manage cost increases efficiently and to keep monthly assessments as low as possible. We are also making sure that all HOA assets are maintained and that the Reserve Fund stays at healthy levels for when it comes time to refurbish and replace all assets, especially our streets. 

By the Numbers

From left to right Cameron, Jason and Caroline Ledesma

Our vibrant, diverse community has many holiday traditions steeped deep in family and culture. For some, a spectacular tree under which the kids sleep in sleeping bags on Christmas Eve is the way to go, for others is the soothing light of the Menorah candles or cooking and baking dishes with love-filled aromas that have been passed from generation to generation. 

For the Ledesmas it’s about creating their own traditions. For a few years now, Bethany and Jason Ledesma, parents of Caroline and Cameron, have been celebrating “Christmas Eve’s eve”.  On December 23rd they host a family gathering with those they aren’t able to see on the 25th because of other commitments and share festive foods. They also do a Secret Santa. For the kids, this is a very special treat because they get to unwrap their first gifts a whole two days early! But there’s something else that stands out to Caroline.

“My dad’s mashed potatoes,” she says without hesitation when asked about her favorite thing to eat at Christmas. And what makes those mashed potatoes so special? “Butter!,” Caroline says without hesitation. Unequivocally, butter is the pixie dust of food. It makes everything better.

For the Ibañez-Barrios, bringing to their North Shore home the flavors and unique family traditions of their native Venezuela is what they look forward to. 

“On the 21st we finish putting up all the decorations to mark ‘Christmas Spirit Day’ (a Venezuelan tradition),” said Antonio Barrios, grandfather to Marcelo, Emmanuel and Gabriel Ibañez. “Then on the 23rd and the 24th the whole family pitches in making the hallacas.”

Antonio Barrios with his grandchildren Gabriel, Marcelo and Emmanuel Ibanez

Hallacas are a traditional Venezuelan Christmas treat. Three different kinds of meat -chicken, pork and beef- are used to stuff a savory cornmeal that is then wrapped and cooked inside a banana leaf. Hallacas are mainly eaten during the Holidays because they take a long time to make. They are an essential part of the Christmas table, alongside pan de jamón (ham bread), a pillowy, slightly sweet bread stuffed with ham, olives and raisins, among other things.

“On Nochebuena (Christmas Eve), we eat dinner late, right before midnight, to mark the arrival of Baby Jesus, who brings children their gifts,” Barrios said. Gifts are open at midnight and the kids play until they can no longer keep their eyes open. 

If you liked learning about these Christmas traditions, please go to our Facebook page and share yours!

If you’re a “numbers person” or have absolutely nothing else to do for a few days, you’re going to love going on the North Shore website and reading all 47 pages of the recent update to the Reserve Study. Some homeowners may find that tedious and that’s ok. Really! We’ve got it covered for you.

One of the most important things that the HOA does is to have a new Reserve Study done every three years and then have annual updates each year in between. The latest update was completed October 21st. It’s no small task to complete one of these updates. It began in July with the completion of a multi-page questionnaire and then providing financial information to Global Solution Partners, which did the new study in late 2020. Three months later, after providing a lot of information and updates and reading multiple drafts, we were provided with the final update. There may be additional changes made as we continue to read and study the report.

Reserve Funds are needed to make sure that there will be sufficient funds on hand in the future as different assets owned by the HOA are either refurbished or in some cases rebuilt. This includes all of the different pieces of the gate entry system for each community, the monument signs at each community, street repaving, asphalt sealing, parking lot repaving and sealing, the tennis courts including fencing, the basketball court, the swimming pool, the playground, the Clubhouse, the fitness center inside the Clubhouse, the dog park, the pedestrian bridge and walkout and observation deck, curbs lining the streets, the storm drains, the retention ponds, the irrigation system and multiple other assets.

The annual funding for the Reserve Fund is a large piece of our annual budget. For 2023, the HOA will move $475,000 into the Reserve Funds. Costs to refurbish and replace assets continue to increase every year. The current Reserve Study along with an Engineering Review of the streets (we have this done every three years) is estimating that the streets (along with the parking lots at the Clubhouse, Verandas condo units and the dock area) will need to be repaved in 2026. The current estimated costs of that project are approximately $2,346,000. If there was no Reserve Fund on hand in 2026, each homeowner would be assessed and must pay around $2,300 just for that one item. Without Reserve Funds there would be Special Assessments pretty much every year. 

So, when you wonder what causes budgets to increase resulting in increased monthly assessments, take a couple of days out of your busy schedule and go to Northshoreatlakeharthoa.com and read the latest update to the Reserve Study. You’ll quickly understand why the budget and monthly assessments can’t remain the same year after year. 

Why do we have a Private Patrol company? What do they do and why?  Why do we need off-duty deputies? These are questions that were asked by homeowners during the budget meeting and at various other times and places including a Facebook page. Let’s break it down one question at a time. 

1. Why do we have a Private Patrol company? After two separate incidents of vandalism at the clubhouse that resulted in over $100,000 in damages, the Board discussed at several meetings the hiring a private company to be on duty at times when there is no staff here and the clubhouse is still open for residents and guests to access and use. The Board requested competitive bids from multiple companies and ended up hiring Last Chance Enterprises. They started their services in December 2018 and continue to provide their services.
2. What do they do and why ? They are on site seven days a week. They inspect the clubhouse when they first arrive and the last thing before they leave as well as several times a day during the weekends. In the mornings they unlock and, in the evenings, they lock the gates to the dog park and walk out to the observation deck. During school days, they keep the parking lot at the clubhouse from being overrun with cars dropping off and picking up kids from the elementary school so that residents can get to the clubhouse, fitness center, pool area, playground, basketball court and tennis courts. They patrol the private streets behind the gates making sure that cars are only parking on the proper side of the road so that emergency vehicles can have unhindered access to provide medical, fire and safety needs to all residents. They make sure that fire hydrants and mailboxes are not blocked. While on duty,  they constantly monitor neighborhoods for any suspicious or unusual activity and call 911 if necessary. They keep their eyes and ears open and report daily to management.
   
3. If we have a private patrol, why do we need off-duty deputies? Deputies provide a different function. They are law enforcement officers and have authority that private patrol does not have. It’s that simple.
4. What do off-duty deputies do? At random times during the month, they patrol behind the gates. Their presence helps prevent crime in our neighborhoods. They also patrol the boulevard at random times during the month. While the recently installed stop signs and speed control devices have slowed traffic down significantly, there are still a few times when a driver wants to see how quickly they can get from one stop sign to the next or maybe not stop at one or more of the stop signs. Deputies really put a damper on this behavior except when some irresponsible resident sees a deputy watching vehicles on the boulevard and decides to take every effort possible to warn all other drivers to watch out for the deputies. Deputies also attend all Board meetings. Homeowners get passionate about the HOA and what the Board is voting on and discussing. That’s a good thing. However, sometimes that passion leads to anger. That’s a bad thing. And sometimes that anger leads to threats against Board members or staff members or even the HOA attorney. That’s an even worse thing. And we sure don’t want the anger or threats leading to violence. That’s why deputies are present at all Board Meetings and Member Meetings.

Shortly after Laurie Bihailo was promoted to the association manager for North Shore, a friend told her that managing the HOA is like putting together a 500-piece jigsaw puzzle except that it’s difficult to keep all the pieces on the table at the same time and the shape of some of the pieces change before you can get them in the puzzle. What a great metaphor. 

One of the most recent pieces that this ever-changing puzzle produced, is the requirement for HOAs to have an Existing Streets and Drainage Systems Report prepared by an engineering company every three years and 2022 was the time to have this done.  

After getting together the information needed, Laurie met with a representative from Windermere Engineering Services to get the project started for 2022. After several more meetings, the report was received three months later.

The report is broken down into five sections:

• Pavement evaluation
• Stormwater management system evaluation
• Community entrance features evaluation
• Sidewalks evaluation
• Community Dock evaluation

Included in each of these sections are areas that need immediate attention, recommendations for the near term and an overall evaluation of the condition of the pieces making up each area. The evaluation also helps the Finance Committee and Board determine how much to budget in 2023, 2024 and 2025 for annual street, stormwater drainage system, community entrance features (monument signs), sidewalks and community dock repairs and maintenance.

Recommendations contained in the report included some items that need immediate repair such as a couple of storm drains, a few curbs, and a retention pond weed barrier for an overflow inlet. One troubling item noted in the report was that lots of trash (including bottles, cans and yard waste) was seen in many of the storm drains which could have an impact on the effectiveness of the system. 

The report also contained some items that need addressing soon such as cleaning some large cracks in the pavement on a few streets and filling them with a hot-applied crack and joint filler to prevent further damage.

Overall, the report found our streets to be in pretty good shape, though it recommends that seal coating of the roads in all subdivisions be performed within the next one to two years. So, while we may have to seal the streets sooner than expected and pay for it with our Reserve Fund, we should be in good shape to wait until 2026 (as per the Reserve Study) to put down new asphalt on the streets. 

You can find a copy of the entire report on the website at Northshoreatlakeharthoa.com.