New Fences
The fences in our community are as old as the units themselves and each year thousands of HOA dollars are spent repairing them. The Board has elicited bids and is entertaining the idea of replacing all the fences throughout the community. This includes all 57 buildings, or 229 units, and is estimated to cost $379,870.00 for the removal of our current wood fences and installation of white-vinyl fences. Because of the substantial cost of replacing all fences at once, including maintaining our reserve funding for future projects (e.g., roofs), the Board is considering levying a special assessment to cover the difference in costs. In other words, if current HOA funds can cover half of the cost ($189,935.00), the remaining balance would be split among the 229 units and spread out over 1 to 3 years. For example, the remaining balance between 229 units equates to $829.41, which would further be reduced to, hypothetically, 24 monthly payments. Thus, in addition to regular HOA dues, a special assessment would require unit owners to pay an additional $34.56 per month.
Again, these numbers are hypothetical, and the Board wants to hear your feedback! Thank you for taking the time to offer us your comments.
Where do our monthly dues go?
*The following are rough numbers. Please see the above '2o23 Budget' and '2023 April Financials' for more detailed and accurate information.* For 2023, Homeowner dues are $142.00 per month. Including 229 units, this totals $390,216.00. Before any of this money is spent on improvement projects (such as fences), the HOA must account for and pay for daily operating expenses. These expenses include things such as:
- Insurance: $62,000 (this was the budgeted amount; in actuality, it was $70k+ because of market factors)
- Property management: $25,000
- Taxes & licenses: $1,390
- Groundskeeping: $51,990
- Pet waste pickup: $2,900
- Pest control: $12,000
- Utilities: $11,800
- Trash removal: $57,800 (split between compactor and cleaning illegally dumped items)
- General maintenance: $35,000 (repairing things like siding, roofs, fences, columns, sidewalks, etc.)
Thus, after payment for all of the operations that run our community on a day-to-day, the HOA has roughly $118,000.00 to fund additional projects, savings, etc., in 2023. However, we also have to factor in costs, such as (i) the additional $8k for insurance, (ii) soft-washing: $15,340, and (iii) mulching: $14,904.52. This brings the total down to $87,748, which may be used for projects or saved for future expenses. Again, please note these are rough numbers, and additional, unexpected expenses happen. For more accurate numbers, please refer to the financial documents posted to the CMA portal. For more information on HOA budgets and reserve funds, please visit here.
Why can't we use the Reserve funds?
As of June 10th, 2023, the Cottages at Indian Park financials include $92,453.79 in our Operating account and $301,184.73 in our Reserves account, totaling $493,638.52. To help offset future expenses, $100,000.00 of our community Reserves has been placed into interest-bearing CDs, which places our workable total at $393,638.52. From this total, we must deduct money that has already been spent but not paid out, such as (i) resealing & restriping: $102,822.36., (ii) soft-washing: $15,340.00, and (iii) mulching: $14,904.52. This leaves the Association with roughly $260,571.64. While this amount is healthy, please remember, it does not factor in saving for major future repairs as described above, daily operating expenses (e.g., grounds maintenance, trash haul, etc.), etc. Naturally, it would not be financially responsible to completely deplete the community accounts on one project. After evaluating the bids received from multiple vendors, the cost of fence replacements is estimated to be $379,870.00.
Why does planning for the future matter?
While an extra $35 a month to replace fences seems upsetting now, the failure to adequately plan for the future may be worse. Major projects lie ahead for our community, such as re-asphalting the roads and replacing the roofs. It is true that the roofs were replaced 8-10 years ago; they will need to be replaced within 10-20 years. Based on a reserve study done (i.e., a third-party company assessed our community and projected when future repairs/projects would need to be completed, as well as their estimated cost), the replacement of the roofs alone will cost an excess of $1 million. If the Board does not maintain an eye on these future projects and implement ways to begin saving for them now, HOA funds may not be available when they are needed most. In other words, if all HOA funds are exhausted as they are received each year when the time comes for these other major projects, a special assessment would have to be levied for each project. For obvious reasons, the Board does everything in its power to prevent levying special assessments; however, as discussed above, running a community as large as ours is very costly. **Note, a special assessment has NOT been levied at this time regarding fence replacement. The Board is merely considering all options and avenues.**
Want to learn more?
Each year at our Annual Meeting, the Board reviews and explains our community financials. While you are welcome to reach out to the Board with questions at any time, please be sure to join us in September at our next Annual Meeting for a more detailed overview. More information on the Annual Meeting will be announced as we get closer!