Raising Regular Assessments

We look at each line item in our operating budget and raise assessments based on the line items' current history, known increases, e.g., electricity, in the upcoming year, raises in hourly wages and salaries to our vendors' employees who work here. CA, for instance, is raising its minimum wage eff. 1/17, and some CA cities are raising theirs too.

We also examine if we need to increase assessments because we want to better fund our reserves.

So we do not use a fixed percent.

Like CA, IL may have limit on how much you can increase assessments without an Owner vote. In CA, for instance, it's 20%.

We don't do automatic increases. Here are our general steps to determine the dues for the coming year:
- We look at the current year budget and determine how much over/under we are.
- We then look at each major expense, and adjust for any anticipated increases or decreases.
- We determine if any non-reserve funded maintenance items or expenses need to be incurred. For example, we are required by county law to have an engineering study of our infrastructure every three years. Some things are not on a regular schedule and just done as needed, every few years we sealcoat the roads, every few years we have some sidewalks repaired, etc.
- We evaluate our reserve fund vs. the reserve study and decide if/how much to contribute to reserves.
We add it all up, create the next year's budget and set dues from that. Some years we go up, sometimes down.

Our biggest expense is landscape care, and that contract hasn't gone up in several years. Second is street lighting and electricity, that also hasn't changed over the past couple of years. Many of our other expenses and utilities also have not gone up, so just blindly raising dues every year seems like a poor way to set the amount.

Think you're confusing raising dues and instituting a special assessment.

(Most) other replies look good, Conor. Do you have the support of the board of directors to raise assessments? Are you on the board?

Btw, what do you mean by "regular" assessments as in your subject line? Vs. some other kind of assessments?

Our documents listed the maximum increase at 5% over the current year - anything higher requires homeowner approval, so we usually tried to keep it around 2% and 4% (the inflation rate is usually between 2.5% and 3.5%)

As most have said, checking the documents to see how much they can be raised is a start. In addition to looking at this year's budget, don't forget about reserves - to ensure you're funding them appropriately, consider any major projects coming down the pick sooner rather than later and adjust accordingly.

You might also want to take a poll among the homeowners to see if there's an area or several the board needs to pay close attention to. When the board finishes the budget, be honest and candid with the homeowners. They should be told why the budget is increasing and what type of projects the Board hopes to undertake next year.

As others have said, we prepare a budget and utilize that budget to both identify the amount of any increase and to justify the increase to the membership. We also utilize a Reserve study to identify how much we need to assign within our budget to put away for future expected repairs and replacements of capital components.

I've attached an example of our last budget to give you an idea.