The Edgehill Master Association is weighing the purchase of a new exterior sign to adorn the clubhouse/pool building. The current one was removed from posts during the clubhouse renovation and mounted beside the front door. If you live in the condo's, take a look at it.
The HOA board discussed the need or want, depending on your view, of replacing that sign to match the upgrades and throw away the old sign that literally is chipped and faded. I happened to eat at Mexican restaurant last weekend and noticed a sign shop next door (in the Sam's Club shopping center off Harrison). The guy there was friendly and whipped up sign design to match the signs that are posted at the entrance drives of the Edgehill Farm neighborhoods.
Sue Kear, a board member of the Master Association, refined the design with the designers' help by choosing the potential colors. Here's the 20 inch by 30 inch oval design they orchestrated.
The board borrowed about $48,000 to repair the clubhouse earlier this year. It authorized the hiring of services to bring the clubhouse back to acceptable standard. We'll repay that loan over six-years unless we scrape and pay it off sooner (which I'd like, by the way). The loan prevented us from seeking a one-time assessment and continued, basically, a loan the board floated years ago to overhaul the swimming pool.
We have about $500 of that loan still borrowed but not allocated towards clubhouse renovation. This sign would eat most of the remaining money but close the book on the clubhouse until a new roof is needed in a few years and hopefully we quietly pay down the loan for the next "big ticket" cost. There would be no more borrowed money to tap and no more loans to pull until this one is heavily retired. I sent this email to the board on Monday afternoon once the designed sign proposal arrived:
Edgehill Board,
Here's a new clubhouse sign we've had "Signs Express" of Cary create for us...
It's 20 by 30 inches and will mount where the current sign is mounted beside the front door.
The price is $427 and the sign will be made of material that holds the paint and last longer than wood. It's a form of dense fiber board.
Sue has spear-headed the colors and given the okay from her perspective.
Give us your vote and we'll go ahead and order it. There should be enough $$ of the remaining loan funds to buy it and you could argue it's an approved expense under the loan and club rehabilitation agreement passed by the board earlier but I want a vote.
For this price, we would spend more time bidding out to multiple companies than getting a deal so this is the offer that stands.
Kelly Mc
There's a discussion via email between myself and the board's "Reserve Fund Review" officer, Kevin Mc, about spending that last amount of money. That's his job on the board - squeeze the pennies and slap the hands of those reaching into the piggy bank. He's good at it and I respect his tracking of every dollar. He emailed me and the whole board after I sent an email asking about proceeding to get the new sign and have it up soon.
Kevin Emailed this reply:
The thinking of "There should be enough $$ of the remaining loan funds to buy it" is why we are a nation and association in debt! There is always enough money, until there isn't!
The new propoosed sign does not match or blend with our other existing Edgehill Farm signs. Can't you hear the call for new signs all around. But why stop there, let's have seasonal signs, spring, summer, fall, and winter. We can be the fashion mavens of signs. But do you think that this sign, no matter how wonderful will increase the propety value of any residence in Edgehill Farm?
I strongly think we should kick this around at our next meeting. Why are we so eager to spend money without discussion?
Kevin
I have replied with my position on the new sign - that it's a renovation expense. It does cost money but it completes the renovation to the clubhouse and we move forward into 2009 with this project closed.
Kevin,
We've already approved the borrowing of funds to rehabilitate the clubhouse. The clubhouse sign is broken and is likely a decade old, at least, and in need of replacing as repainting it isn't cost effective given its physical condition. My opinion is that this expense is technically approved as a clubhouse renovation expenditure.
The majority of the board approved the borrowing of a lump sum of money before the first bill was paid on repairing the clubhouse. That money was never borrowed for the sake of holding it in reserve. In that case, we're paying an interest rate penalty to simply hold money in a bank account earning a much lower interest rate - thus devaluing our own account. If we're to make a monthly loan payment, I at least want the borrowed money to be actively invested towards improvements.
We are a homeowners' association "in debt" for 100% strategic purposes. I agree with you that we have no business borrowing ANY more money and that a large capital expenditure in the near future will result in an assessment unless we've cleared enough equity to strategically borrow more money (unless the board would rather attempt an assessment over the leveraging of our debt capacity - it's a discussion-worthy topic).
I doubt the sign will increase property values but it adds to the completeness of a job that will cost the Edgehill dues payers about $48,000 plus interest until the loan is paid or six years, whichever comes first. You COULD argue that postponing even small maintenance items (yes, the sign is small comparatively) WILL result in a decrease of surrounding property values.
The issue here isn't revolving around a sign.....it's principle. After the sign is installed and we deem clubhouse renovations complete, I can't argue with a word you've said or the principle from which you speak. But this job "ain't" finished because the exterior sign isn't ugly - it's physically in disrepair. That's a big difference to me.
As always, the majority of the board rules the day and makes the decision. But, a decision needs to be made and it might as well be made sooner than later before the holidays drown out all HOA thoughts. Besides, we deserve more than to handle clubhouse renovations into 2009 and the new budget.
This is why I share this particular opinion and information with the entire board - to make a decision and weigh the pro's and con's.
KMc
I'll concede it's a great discussion on principles of handling, spending or investing your monthly dues. In this case, it's using the final few hundred dollars of our loan to buy a clubhouse sign. Sharing this email exchange, in my opinion, isn't airing any laundry because the whole HOA board has read it and it's been addressed to them despite it being a text based "conversation."
If replacing the old sign is a clubhouse rehab item, then we've already borrowed money to do it, voted in public to approve renovation projects for the clubhouse and can proceed. If it's not, the board must vote on it and since it isn't a "clubhouse renovation item," it likely would not be an expense for which we can tap the loan money. Instead, we'd take a final bite from the 2008 budget IF the new sign were approved.
