Although not all expenses are in for 2010, it is already clear that the total expenses for the year will exceed collected revenues by $12,000 to $14,000. This deficit will consume roughly half of the cash reserves that had been accumulated over the previous eight years. While several unexpected items (pool heater repair, higher-than-average water usage, diseased tree removal, verti-cutting and over seeding common grounds to restore grass, etc) contributed to the expense overrun, the Homes Association dues collected last year did not cover even the fixed expenses for the neighborhood. The reduction in our cash reserve balance has put the Homes Association in a position to be just one major expense away from having to use special assessments to collect additional revenue from residents anytime unexpected events occur.
For 2011, the Board has agreed to shorten the pool season to 101 days (Memorial Day weekend through Labor Day); reduced fixed costs through competitive bids for
grounds services and pool maintenance; and negotiated a long-term trash and recycling agreement before the county-mandated recycling initiatives sparked price increases; resulting in an overall fixed expense reduction of $7500. Unfortunately, it has become clear that 2011 Homes Association dues at the previous rate of $525 per household per year would not cover the remaining fixed expenses for next year’s budget.
Therefore, the Board has proposed and the developer, John Duggan, has approved via resolution, an increase in the annual Homes Association dues to $600 per household per year. It is the Board’s belief that this increase should cover current and expected expenses and provide enough cushion to allow us to avoid special assessments and annual dues increases for at least the next three years. For 2011, the increase will allow the Homes Association to meet its annual fixed expense obligations, provide funding for a small number of discretionary projects and provide enough of a positive operating margin to contribute $2500 to $5000 back into the cash reserves to help protect the residents against the possibility of a future special assessment.
Along with this increase, the Board would like to provide a bit of separation of the annual dues from Christmas and other year end expenses. The Annual Dues Notices will be mailed shortly after the first of the year. However, the due date for 2011 and future annual dues renewals will be extended from the end of January to the end of February.