Residents should be concerned about where their Association dues are being spent and whether the Board is sensitive to controlling expenses. The Board has a responsibility to keep dues as low as reasonably possible while at the same time providing the management and services necessary to safeguard homeowner’s investments. That duty also requires that we collect enough to cover all expenses and build a healthy reserve. How do we make decisions about curbing costs? Some things are within our control; some are not.
We are able to negotiate certain services and can contract for a year or more at a time. This is helpful during the budgeting process. However, other items must be considered based on what we believe the cost will be for the coming year. An educated guess is the best we can do. A cursory look at the budget will reveal some of those items; utilities and common area repairs to name a few. When considering snow removal, we know how much per hour it will cost, but we don’t know how much snow will fall. We do our best to anticipate, based on past experience, how much such items will increase or decrease. It’s rare that an expense will go down.
Our insurance policy runs from July 1 to June 30. Insurance is an interesting animal. Every year our broker asks for quotes from at least three companies. This allows us to compare and choose the best policy for the least amount of money. However, if the Association is involved in a lawsuit, insurance companies will not consider insuring us. This means we have to pay the price our current carrier quotes for the coming year. Believe it or not, most suits against homeowner’s associations are brought by its own members. I’m not sure if they realize they are spending their own money to defend the suits, but that is the nature of the beast.
What can you do to help control Association expenses? Recently a resident suggested a pay-for-use system for the showers similar to charging for use of the washers and dryers. However, the charge for the machines is to cover repair and replacement, not water or the cost to heat it.
Pick up after your dog. If you don’t, maintenance will. However, the company adjusts costs every year to account for how much time they are spending “grooming” the Common Area.
If your idea of “winterizing” is to leave your water running all winter, you are adding to rising costs in two areas. The City of Show Low charges for every gallon of water that runs through the Association’s meter. They use that same number to calculate the sewer bill which means YOU are paying for your neighbor’s unwillingness to winterize properly.
A complaint HOAMCO often hears is that one of the dryers is not working properly. The appliance technician is contacted and HOAMCO is told the dryer is fine. The resident placed too many clothes into the machine so it was taking longer to dry. The Association is charged for the maintenance call and you guessed it, the amount we have to budget for the next year increases.
A few other suggestions to help curb costs:
- Think twice before threatening your Association with legal action, especially when more efficient and civil approaches are readily available. Any time legal advice is necessary for the Association, you’re footing the bill. This also puts the Association at the mercy of its current insurance carrier that can’t refuse to continue insuring us but can and does raise rates.
- Leave clubhouse fans on. The fans circulate air helping to keep the clubhouse warm during winter and cool during summer. Opening windows and doors adds to costs in two areas; electricity and extermination.
- Turn lights off in the clubhouse.
- Place trash inside, not in front of or on the side, of the dumpsters. Don’t put items in the dumpsters that don’t belong there. Someone has to take care of what you don’t and it’s not free. Neither is dumping large items on other parts of the development.
- You are probably sick to death of hearing this one, but here we go again. Items that don’t belong in the sewer can be very expensive.
- Replace broken sewer caps on your lot. This will prevent debris from entering the sewer lines and traveling to the lift station. They can be purchased from Ace Hardware or HD Supply.
- Last but not least, slow down and drive responsibly to prevent an expenditure on bigger speed bumps or a large payout to an injured resident or visitor.
These are just a few suggestions to help curb costs. If you have additional thoughts about what residents can do, please don’t hesitate to post them in the comments section below.