Operational Costs

One of our homeowners asked the board why do other HOAs have more amenities and nicer looking common property, but pay less in HOA dues. She wants the board to get feedback from other HOAs in the area and see if we are over-paying.

First off, can anyone provide feedback on operational costs/homeowner you see in your area?

Second, I am curious how other HOAs deal with these kind of questions.

I ask this because what I see primarily is a lack of homeowner participation. The past 2-3 years I have been on the board and have made great efforts to lower the operational costs. We have been very successful with it. Example: Previously, we were barely ending the year with $1,000 above the operational costs. After 1 year, we made significant changes to contracts and ended up with $15,000 above operational costs (which includes a set amount that now goes to Reserves per month/year). The following year, some of that backslid unfortunately due to rising costs claimed by contractors and we're now closer to $10,000/yr above operational costs.

Her question and the way it was stated, kind of bothers me, because we have always made this information available. We have held special meetings to discuss where we are headed and why. Yet we get few homeowners who even show up and virtually none that get involved in committees. This is not a new homeowner, but they only see the $ that comes out of their pocket and not what changes have taken place and the direction we are heading. We are on a path to lower dues, but many steps need to happen first. The recent Reserve Study pointed out concerns we need to address in 2008 which will cut our reserves almost in half. But at least we DID a reserve study, instead of making claims that we needed to raise dues without a reserve study to back it up, as out previous management company had essentially done.

So I am curious, whether other HOAs are experiencing the same level of homeowner apathy. In a way I am glad she is at least asking questions. But when they use words to blow off other statements already given, it's kind of insulting and aggravating to deal with them.

KevinH - You state, "other HOA's", so there is some comparisons occurring. You also state numerous areas in which the funds you do collect are being wisely re-invested. Me thinks the homeowner who asked the question, and all owners in your HOA would benefit from (yet another) presentation explaining "Where Your Maintenance Fees Go".

Who's to say that the "other HOA's" are investing wisely. They could be in the red, who knows. How long have these "other HOA's" been established, etc.?

Homeowner apathy is the scourge of all HOA's because I have seen all too often that rogue Boards, and the professionals they contract, feed on it and smother those that speak up and take an interest.

This seems to be a simple one to answer for her. HOAs are non-profits, so the owner's normally pay an equal share of annual expenses, plus reserve funds. You cannot compare one HOA to another looking from the outside. You could compare budget line items to see if you are paying too much for management, landscaping, etc (if other HOAs will share that with you).

Maybe this member would like to work on the budget committee and seek ways to save costs? She needs to understand that the formula is a simple one and has only to do with the costs of running your HOA, not others. Maybe you are overpaying for services in some areas, maybe not? You also need to ensure reserve funds are being accumulated properly as well.

Developers sometimes lower HOA dues during build out and leave HOAs with little to no reserves at turnover....this could be a cause of lower dues in new communities.

keven, since your assoc. has the apathy problem like most do,why not take this oppertunity to turn it around at least for one member. put it on the agenda and vote to form acommitte to compare hoa costs in your area she can be the whole committe . give her all she needs to conduct her study docs financals ect. and in the process she might become a informed usefull member, or at least come to realize what is intailed with being a bod and come away with a new outlook.

You do not say whether you have a pool or two.... a golf course, etc

See if this complainer wants to head up the Beautification Committee. Some pots with low maintenance flowers, drought-proof shrubs and gravel can really spruce up a commons area. Makes people feel good, too, about living there.