Following on from my post about the real cost of running Fairway Springs, and the mostly unresponded to appeal for Board Member volunteers, I'm just going to give it to you straight.
On October 1st, 2023 you will see an increase in your HOA dues.
How much is still yet undecided and work continues unabated, but on August 30th, the HOA Board, made up of your neighbors and people just like you, will vote on a budget for our 2024 fiscal year.
You don't like it, The Board doesn't like it and I personally don't like it, but we need to be prepared. Let me educate you first. There are three categories of cost and expenditure in flight for next year.
Annual recurring costs
Allocations for reserves
Expenditure for items not in annual recurring costs or allowed for in reserves.
For 1 above: Our ByLaws (ARTICLE VI - ANNUAL BUDGET) explicitly states that our annual recurring costs cannot increase to greater than 115% of the prior year's amount. That, at least caps our operating budget at $423.20 ($368 x115% = $423.20).
For 2 above: It also states "In determining whether assessments exceed one hundred fifteen per cent (115%) of similar assessments in prior years there shall be excluded in the computation any provision for reasonable reserves made by the Board of Directors in respect of repair or replacement of the property or in respect of anticipated expenses by the association which were not anticipated to be incurred on a regular or annual basis."
Now, therefore, on top of the maximum $423.20 we must add the annual reserves allocation, that is money that must be put aside for major projects, one off rehabs etc. Things like new roofing, pool refurbishment, parking lot resurfacing and so on.
As those of you, who have been paying attention, know, we recently secured the services of Reserve Advisors, LLC to help us build a reserves plan for the next 30 years. We will be meeting with them in the next two weeks to get a better understanding of their recommendations but right now, they have offered up two different methods of reserves calculations, with differing (for 2024) amounts.
a) Cashflow method ~$21,000 (=$51.72 per home)
b) Component method ~$36,617 (=$90.19 per home)
That brings us to 3 above: This cost category is additive to the other two and we are still determining which Chart of Accounts/General Ledger code should be applied, and some may already be applicable to existing codes and allocated money, but even assuming a minimal $16,000 for the arborist work behind the clubhouse, fixed electricity, AC and modernization of the bathrooms, lighting to allow the pool to be open after dusk and a full documents digitization project, that's still practically $40 per home. And this could still be considerably more as there are 25 other important projects and acquisitions we need to fund (~$48,000 ~$118 per home). Remember, that every $406 we need to spend costs your home $1!
What all this means to you is that your annual HOA dues will be increasing and you should be preparing your budget to ensure payment is received before October 31st. I watched far too many homeowners picking up late charges and interest fees last year and it's entirely avoidable, with some advanced planning and communication with the property Management company.
Mathematically, you could be looking at up to:
up to $423.20 +
one off around $ 51.72 or $90.19 +
up to $118.00
TOTAL: ~$592 or ~$631 per home.
We are still working hard to prioritize projects and secure 2024 quotes from existing and new vendors, so nothing is final yet and we want to reduce these costs, but it's where we are now, so I wanted to send out advanced notice to set expectations in advance.
We recognize that any increase causes concern, especially to those on lower and fixed incomes. To that end, we do support a variety of payment programs, with monthly payment options available too.
This budgeting season has been a hard one and it's not over yet. Fewer Board members and reduced availability, because of work commitments of others, further compounds the problem. Everything we cannot do we have to pay to have done and it's just that simple. On the bright side we are still paying annually what many of our neighboring communities are paying monthly but that may come as little comfort to some of you.
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