While Councilman Sal DiCiccio’s assessment “it’s not a budget problem, it’s an expense problem” applied to the city of Phoenix, it’s equally true of Mountain Park Ranch HOA and for the same reason: employee costs.
After its Nov. 24 meeting, the MPRHOA Board mailed notices of another $12 annual dues increase for the second year in a row and then cancelled the December meeting where furious homeowners might attend.
The board actually passed the dues increase in July, but sat on the news for five months. Mailings for the Oct. 20 annual meeting didn’t mention the increase, nor was it announced at the meeting. Director Jim Welch and the board congratulated themselves at length for a job well done, but “forgot” to announce their second successive dues increase.
“Tax” hikes should be the last resort and only after considering all possible spending reductions.
I would love to have heard the board explain their decision to raise dues two years running while “hands-off” the Cadillac employee medical plan: MPRHOA pays $881 monthly per employee for a 100 percent-coverage plan (no co-pay) with premiums totally paid by the HOA. Employees’ tiny annual deductible is $250. Such a deal!
The annual HOA cost of medical, dental, vision, life and AD&D is $78,235 for seven employees.
The board could reduce premiums with a larger deductible, coverage reduction to 90 percent or even 80 percent, eliminate the 70 percent out-of-network feature and require an employee premium contribution and still offer coverage to employees.
But there’s no evidence that the board even considered cost cuts or sought competitive bids. On the contrary, I saw a consistent effort to evade any discussion of employee benefits and to conceal the HOA’s cost.
Board president John Engle signed the board’s written denial of my rights under ARS 33-1805 for the benefit cost figures. Only after I corrected their bogus legal interpretation and rejected a second barrier did they finally comply. When the board heard my findings on Nov. 24, board member David Carruth had the only reply: “What qualifies you to call it ‘Cadillac coverage?’”
If it looks like a Cadillac, drives like a Cadillac, and costs like a Cadillac...
Budget and Finance Committee chair Patricia Baimbridge insisted that her committee does review expenses, but didn’t explain why her committee approved two successive dues increases with no corresponding reductions to employee insurance costs.
HOA staffer(s) who finally supplied the requested numbers wouldn’t sign them as accurate or even provide their name for follow-up questions. But they did add their “wish list” for more benefits: 401K with HOA matching, short- and long-term disability and paid bereavement leave. They totally ignored benefits they already have: paid vacation, paid sick leave, nine paid holidays, group life and AD&D.
Employee benefits and costs seem to be the 800-pound gorilla that no one wants acknowledged, discussed in meetings or recorded in minutes. Because the monthly financial reports lump the cost in a catch-all category called “Payroll Overhead” together with federal and state taxes and workers’ comp insurance, it’s impossible to distinguish. And asking for itemized costs and plan features gets the door slammed in your face.
In fairness to the board, I doubt they even realized the cost of these benefits. Even Baimbridge was vague on what specific expenses are in “Payroll Overhead.”
The 2010 budget shows appalling increases in the two-year period since 2008:
• +13.5 percent for Admin Wages and Salaries
• +18.5 percent for Maintenance Wages and Salaries
• +37 percent for Admin “Payroll Overhead”
• +38 percent for Maintenance “Payroll Overhead”
Will the “overhead” increases fund the HOA staffers’ “benefits wish list.”
Other unexplored expense reductions could mitigate or alleviate HOA dues increases.
MPR Board’s arrogance in increasing homeowner dues while ignoring spending cuts repeats Marie Antoinette: “Let them eat cake.”
Sandra Miller has lived in Ahwatukee Foothills for 15 years and served as a director for the Mountain Park Ranch Homeowners Association during the developer-to-homeowner transfer. She has written commentaries on immigration issue since 2004 when she worked on Proposition 200, which required proof of citizenship to vote. The TEA Party movement expanded her focus to “taxes” and other involuntary payments.