Budget - It's the 2008 Budget Stupid!

The 2008 annual fiscal year $9,000,000 free spending budget is a flawed document and should have been rejected and re-examine before accepting it as the Foundation’s operational and financial plan for this year.

MVF’s tradition of arbitrarily setting unsubstantiated multi year future spending entitlements and then bully and beg Homes Corporation and Condominium representatives to bestow their blind faith-based blessing and approval defies any reasonable or commonly accepted budgeting principles or practices.

When establishing the annual assessments for Common Interest Real Estate Associations (CIRA) such as the Montgomery Village Foundation, Boards of Directors:

1. First, determine the expenses necessary to meet the obligations and requirements to preserve, enhance and maintain the association’s assets, facilities and property; deliver required services and set aside reserve funds for current and future use to maintain all assets in a like-new condition.
2. Next, make realistic estimates of non-assessment income for the budget year.
3. Then, subtract the non-assessment income estimates from the expense requirements to arrive at the amounts necessary to be funded by assessments.
4. Finally, they mail the proposed budget to the membership and at a public meeting discuss the merits of the proposed budget and funding proposals.

The MVF power structure has rejected such a silly concept and believes that:

1. First, arbitrarily set unsubstantiated future spending entitlements known as “assessment ceilings limits” for a 5 year period;
2. Next, without discussing or presenting the details of non-assessment income, expenses or reserve funding line item categories, engage in a six month public relations campaign in The Village News to convince Homes Corporations and Condominium elected representatives to bestow the future “ceiling limits,” a blind faith-based blessing and approval.

The campaign rationale resembles a desperate consumer pleading with his or her various credit card holders for a substantial credit limit increase or Congress’s annual vote to raise our nation’s debt limit ceiling.

3. At public budget information meetings and meetings of MVF representatives to discuss the proposed assessment ceiling limits, treat those who express an opposing opinion rudely and ignore all questions, suggestions and comments.

Questions and concerns raised by those in attendance at the September 25, 2007 budget information meeting and the October 18, 2007 meeting of MVF representatives were dismissed as not germane to the vote to raise the assessment ceiling. The case to reject and re-examine the 2008 budget as presented was made by North Village Homes Corporation in its North Village View column in the November 2, 2007 edition of The Village News.

The 2008 budget information provided was very limited, whereby no expenditures data was provided for fiscal years 2006 and 2007 in order to generate a more accurate comparison with the requested fiscal year 2008 budget increase. In addition, there was no breakdown of capital projects provided, including no strategic plan for future year guidance on capital projects.

Unfortunately, the North Village’s View on page 15 of The Village News, the dismissal of its comments and the concerns addressed at public budget meetings and in the letters printed in The Gazette and The Village News were answered with two front page articles by staff writer, Jaime Ridgley, in the same November 2, 2007 edition.

Headlined “MVF Board Passes 2008 Budget,” Ridgley writes “Board President Robert Hydorn commented that he was not completely comfortable with the budget, but he would vote for it. Board members Kathy (Katherine) Gray and Scott Johnson voted against the adoption of the budget, but it passed with five Board members in favor. Board members Jim King and Neville Levi were absent from the meeting.”

The outcome could have been different if King and Levi, whose previous vote had supported financial reform, weren’t missing and comforted Hydorn enough to vote against the budget.

The lead front page “In the News” feature broadcasted “Reps Vote on $3.14 Assessment Ceiling Increase to Cover 2008” and announced “Newly appointed EVP Dave Humpton is pleased that the representatives voted to cover the 2008 budget with the assessment ceiling increase.

“He and the MVF Board will focus on the 2009 budget in December and January to map out the potential budget increases and define the assessment ceiling needs for the next 5 years. Then, from January to March, residents will receive more information about the need to raise the assessment ceiling further, with a vote on another increase tentatively scheduled for the end of March.

“The Foundation must have the ceiling increase decided before 2009 guidelines are set in May. Two information sessions will take place for residents before the next assessment ceiling vote.”

Was this an accurate account by Ridgley of what happened at the October 18, 2007 Board meeting? Did Dave Humpton and the Board endorse at that meeting a plan to embark on another ill-advised assessment ceiling campaign, ignore the expressed concerns of so many about the inadequacy of the 2008 budget before “mapping out potential budget increases and assessment ceiling needs for the next 5 years?”

Or was this just MVF Consultant Lois Campbell in her capacity as MFV Communications Czar still very much in control?