Montclair HOA Dues Increase Explanation


Posted by rfay

 
Summary: We are asking the member of the Montclair HOA to approve an increase in the monthly dues from $66/month to $80/month beginning second quarter, 2011.
  • Old dues: $66/unit/month or $792/year
  • New dues: $80/unit/month or $960/year  ($168/year more)

Note: The board has already voted, on its own authority within the by-laws, to increase dues 10% to $72.60 effective second quarter, 2011. So the increase we'll be voting on at the meeting is really to raise the monthly rate from $72.60 to $80.

Although nobody wants to pay larger bills, we felt it was absolutely essential to recommend this to the membership and that we would be irresponsible if we did not do so.
Why?
  • We have only a very small reserve fund at this time (about $7000). It could be wiped out by any number of relatively minor problems. We believe that the reserve fund should be maintained at approximately one year's budget (about $32,000). We are budgeting to put more than $6200/year into the reserve fund, which could get us to a reasonable level in a little over four years.
  • Although our neighborhood is relatively new, the sidewalks, curbs, and alley asphalt are already aging. Our HOA is responsible for those. We need to start saving to cover their maintenance.
  • Bad things can (and do... and will...) happen that can eat up many thousands of dollars. If we have an appropriate reserve fund, we can handle this. If not, it would almost certainly mean a direct assessment on the members.
  • We have immediate maintenance needs outside the scope of our past normal expenditures:
    • Replacement of the pond liner
    • Irrigation pump motor replacement
    • Replacing aging irrigation pipes.
    • Building or obtaining much needed pond access for dredging!
What do you get for what you pay?
  • Landscape maintenance
  • Curb, Gutter, and Sidewalk maintenance
  • Alley maintenance

Ask around...
If you ask friends you'll probably hear lots of stories about HOAs that did not properly maintain a reserve fund. You'll hear of some where dues went up from $100 to $200 in one year. You may hear of others where an assessment of a thousand or more dollars had to be levied against each unit. We want to avoid that and responsibly manage the HOA's resources.