Editorial: BOARD TO VOTE ON DUES TODAY; URGE "NO" TO PROPOSED INCREASE WITHOUT INDEPENDENT AUDIT

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It is encumbent upon Quail Meadow homeowners to contact the members of the Association's board in advance of today's scheduled budget ratification vote to object to the adoption of a new 2022 budget that raises quarterly dues to $862 without the Association first conducting an independent audit of the Association’s finances. Directors Valerie Halaby, Harriet Sacher and Linda Ward are expected to vote "No" to the proposed increases. Directors Sharon Bross, Anthony Chiarello, Lucy Connery and Brenda Mueller are expected to vote in favor. Directors' email addresses may be found at the end of this post.

An audit (or even a "review") of the Association’s finances has never been conducted. Though not required by statute, it is prudent and good practice to conduct an audit whenever a community changes property managers after a long period of service or when there are red flags concerning the community's finances. Here we have both situations.

During a period of nearly two decades, the Association’s finances appear to have been managed negligently and its financial reporting conducted without regard to generally accepted accounting principles or other applicable accounting best practices. As a result, it is very likely that the financial condition of the Association has been materially misstated. Adopting an amended budget that substantially raises quarterly dues without first determining the actual operating results for the period in question is not only reckless but a dereliction of the board’s fiduciary duty to the Association’s member homeowners.

One obvious concern is the “free rider” problem created by the apparently deliberate decision to maintain the Association quarterly fees at artificially low levels for nearly two decades, refusing even to raise the quarterly fees to keep up with inflation. From 2000 to 2019, the average rate of inflation in the U.S. was 3.1%, with the cumulative rate of inflation of over 49%. With only a $25 raise in the quarterly dues in 2006, from $475 to $500, the insistence on a "zero increase"policy for Association dues resulted in an estimated dues revenue shortfall -- based exclusively on the failure to keep up with inflation since 2006 -- in excess of $600,000. Over 15 years, that's around $480 annually per home that was neither billed to nor collected from homeowners but should have been, just to keep up with inflation. It does not take into account many other questionable practices with impacts on actual operating costs such as eliminating services mandated by the Association documents or by Florida law, including mulching and maintaining coach lighting, failing to account properly for deferred or ignored maintenance, failing to replenish the Association’s reserve account after spending funds designated as reserves, and failing to account for unbudgeted contingent liabilities such as reimbursement of $250 per lot for replacing dead palm trees (a $21,000 unbudgeted contingent liability), maintaining and replacing Foxtail palms lining the community roads (an approximate $10,000 unbudgeted annual expense), among others.

The result of the Association's failure to collect sufficient revenue to fund its liabilities over such a long period, is the whopping deficit we have now which likely far exceeds the $600,000 shortfall attributable to the failure to keep fees in line with inflation. This has resulted in a very real "free rider"problem that, like the term indicates, allowed homeowners who have sold their homes and moved from Ibis to escape paying their actual pro rata share of the actual expense of operating and maintaining the community. With its planned vote today, this Board seeks to cover the shortfall created by prior boards' failure to collect sufficient revenue to run the community from many homeowners who have left Quail Meadow, by transfering that additional financial liability to you, and all current homeowners.

Make no mistake, what a majority of the board intends to do today is to force Quail Meadow homeowners to foot the bill for the incompetence of successive boards, without disclosing what the increases are really about, namely those boards' unreasonable failure and deliberate refusal to raise and levy fees on lot owners commensurate with expenses, by voting to shift the liability of those departed lot owners to you.

In order to understand the magnitude of the “free rider” problem, and the extent to which the proposed Association quarterly fee increases constitute an attempt to recover from current members amounts that should have been apportioned and paid pro rata among all lot owners but were not charged to certain of them, and in order to fulfill its fiduciary duty to the community’s membership, the Board must commission an independent audit. This audit/investigation should cover not only the free-rider problem but also the magnitude of the mounting costs of deferred maintenance and repairs and unbudgeted liabilities created by prior boards that were never reflected as contingent liabilities on the Association’s books.

Email the board and urge its members to vote "No" to a new budget and the proposed increases, until an independent audit is commissioned and the real deficit and current operating expenses can be verified and assured. The board of directors' email addresses are:

Brenda Mueller muellercreek@gmail.com

Anthony Chiarello tkchi@att.net

Lucy Connery lucy.connery@ihg.com,

Sharon Bross sharonbross@msn.com

Valerie Halaby valeriehalaby@gmail.com

Harriet Sacher hmsacher@aol.com

Linda Ward ward0924@yahoo.com