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GeoffR
(Illinois)
Posts:1
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| 09/05/2006 8:11 PM |
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| I have been recently elected to the board of my association. I have been trying locate a web site or tool that will help me determine if the fees which are assessed are in line with other comparable associations. There are 417 buildings, roughly 20 years old or so. The monthly fee is 234, which includes a "special" fee of roughly 25 a month. This to me seems high. There is no club house/pool. If I could be provided with a comparison tool, I would be grateful. Also do other boards have no bid contracts? I have been confused by just having a single vendor with no other bids for projects.... any help would be appreciated! |
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JosephW
(Michigan)
Posts:787
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| 09/05/2006 9:11 PM |
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Don't get caught up in "comparisons". No two associations are alike and you would be comparing apples to oranges. I think that's the main reason there has been no menaingful survey of fees done to date (at least that I'm aware of).
All budgeting should be "zero-based". There are a number of good articles on this and other budgeting issues at:
http://www.communityassociations.net/finance_taxes_main.html
At 20 years old, your assocaition is probably looking at some major replacement issues, whcih could account for the budgt and "special fee".
As a rule, there shouldn't be any original no-bid contracts. By that I mean, the first time the contract is let. It isn't unusual for contracts to be renewed on a no-bid basis, if the contractor has done a good job and any increases are justifiable. Even then, I would consider re-bidding it every few years. A brand-new contract should always be bid.
Joe |
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GeraldT1
Posts:0
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| 09/06/2006 12:42 PM |
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GeoffR,
Over the course of 20 years, your maintenance fees have probably increased to your current number of 234/month. So it is conceivable your community has collected somewhere in the range of $20,000,000 over 20 years.
What do you currently have in reserves for the replacement of the common elements at the 20 year mark, and going forward(roofs, roadways, detention/retention basins, community fencing, common element gutters/leaders, etc.)?
What does your transition report show the amount in reserves should be? How much will a new transtion analysis cost because the original may only have projected 30 years from date of inception.
Your basis for the maintenance fee must not be compared to other communities, rather upon a multitude of items. Such as, what you have that needs to be repaired and replaced, cost of administration, management company, attorney, utilities, reserves, insurance, landscaping maintenance, electricity, etc.
Best of success and congratulations on getting elected!!
GeraldT1
NNJ |
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BrianB
(California)
Posts:1748
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| 09/06/2006 10:39 PM |
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theoretically, dues/fees are calculated yearly, based on a forecasted budget.
The BOD prepares a forecast of what money will be needed to sustain the HOA over the next year. this includes bills, taxes, upkeep, payments, utilities, insurance, postage, office supplies, payroll, reserve funds, etc..
then, that number is divided by the total number of homes, and that is each home's assessment for the year. If the board did their budgeting correctly, and everyone pays, then you should end the year with the exact right amount. |
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CharlesW1
(Georgia)
Posts:821
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| 09/08/2006 11:46 AM |
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GeoffR,
I wish I could be of help to you. That’s a pretty large job to take on.
I too would have to question the fact that your community, (yes is old in deed) doesn’t have any amenities? What about a reserve? The monthly dues are assessed to all 417 building? Each building is required to pay assessment per month? Per month that figures to be $97,578.00 per month for all 417 building. Over the twenty years. I would think you would have some sort of reserve GeraldT1 is extremely close in his estimate.
Each building is required to pay the month assessment of $234.00 per month.
every HO is 234, meaning $234.00 per month? Have you ever received a yearly budget from the MC?
I hope you receive the advice you are in inquire about.
Chuck W.
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Charles E. Wafer Jr. |
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