Assessment Increase – $3 per month, for 2024
The 2024 Assessment amount is $396 per year, due semi-annually, starting: January 01, 2024, at $198, and July 1, 2024, at $198.
2024 Assessment Increase Q & A – Financial Health of our HOA:
Many of you who received the 2024 HOA assessments may have questions on the $3.00 per month increase. Below is information to explain the increase, and reasons why there is an increase which is an effort to keep up with current inflation and the rising costs of goods and services to properly manage our HOA.
The budget and finance committee along with the board of directors (about 10 people all together, and all members of our HOA) reviewed each line item expense for year 2024 and agreed that a $3 per month increase was warranted to keep the property maintained in the manner it was intended, and to steer clear of any future special assessments, due to being underfunded, which so many other HOA’s are experiencing, not us though. Matter of fact, these occasional assessment increases and with proper budgeting in the past 20 years, have kept us running smoothly. In the past 20 years we’ve only had 5 assessment increases. To break that down we’ve only gone up $6 a year, not $6 per month, but $6 a year, for 20 years, that’s unheard of in an HOA.
Recent times have changed for everyone, as we all know, and many of the goods and services we utilize have increases that are out of our control, but are for services necessary for our community to operate in the manner people expect. Take for instance; pool chemicals, fertilizer for our greenbelts, water, fuel for landscaping, insurance costs, have all gone up, and these products are what maintain the aesthetics around our community. Adjusting assessments, in tandem with these necessary goods and services, maintain appreciation in home values, add safety and security to our community, and keep us above water with current economic conditions. If we didn’t follow this protocol and not adjust for increases, it could cause adverse problems in the future for our community, kind of like a “kicking the can” type scenario.
The finances of our HOA and our financial health exceeds standards. We consistently keep around 80-90% funding in our reserve accounts at all times. This is something unheard of in other HOA’s. What this means is if something on the property goes wrong, needs emergency repairs and/or replacement, the money is already there, because we have pro-actively put monies aside each year to fund for any expected and unexpected repairs. By having this proactive ongoing savings account, not only protects our members from special assessments, but at the same time any potential new owners looking to buy in MPRHOA can be assured our HOA is well funded adding value to our community and giving them a piece of mind that we are financially secure.
We believe the following has contributed to our financial health:
When doing our yearly budget, Emma our controller and myself start our initial line-item budget review in late Spring each year, looking at present and future contracts, historical figures, cost from utility companies, among other sources. After gathering this information, we put those numbers together along with justifications for each and every line item so when it’s first presented to the 10 plus landscape and budget and finance committee’s members (all homeowners) for them to review, they have a good solid format and understanding to make their budget decisions. After their review, it then goes to the board of directors (which is 5 more MPRHOA members) for review and to give final approval on all costs and expenditures which now have all been justified so the board can make logical and prudent decisions to approve the budget. That’s teamwork, that’s disclosure, and more importantly that keeps full transparency on our budgetary line-item expenses making our members feel comfortable and at ease that their assessments dollars are being utilized properly, effectively and consistent with the manner the association was intended.
We managed to keep assessments lower than other communities by proper budgeting, staying within budgetary line item amounts, and proactively planning and mapping out future expenses before they materialize. For example, proactive erosion control to deter damage to our property, GPS time clocks for our sprinkler systems to save on watering costs, being properly insured for adverse monsoon weather like we had in the past, we reduced overseeding in common areas not utilized as frequently as other common areas, we reduced pool monitors at the recreation centers that have the least number of problems, we even bought a used scissor lift, so our maintenance guys can replace items such as tennis court and parking lot lights, in an effort to not farm out for these services, as we did previously. Matter of fact, with the savings of buying a used scissor lift, and not farming it out to an outside contractor, we calculate it will pay for itself within two more years. We did the same with a paint sprayer machine. If we find a small wall needing paint, or graffiti to cover up, we can do the work in-house without farming it out. These are the type of smart buying practices we incorporate for equipment that pays for themselves over time, thus saving the HOA money. Yes, there are some items necessary for our community we have tried to save money on and the outcome has not been so positive, like for instance mutt mitts (doggie bags) for cleaning up after pets. In this case, we found better deals on doggie bags and purchased them, but now we are finding out that saving on certain products, like cheaper doggie bags, doesn’t always produce the results we anticipated. Bags are smaller, not as durable, and people are noticing the poor quality, thus complaining, so, even when we try to be conservative and cut costs on certain products, it doesn’t always produce positive results. But at least we gave it a try.
Year 2023 has been a real challenge financially for our HOA and other businesses. Inflation is over 10%, restaurants, landscaping companies, grocery stores, retail outlets, all have had price increases, not to mention companies having a hard time finding and or even keeping staff. For us, the price of pool chemicals, seed for our common areas, fuel for landscape equipment, irrigation PVC piping that is passed to us by landscaping companies and manufacturers, trucking cost to get our granite and erosion rock delivered, and other normal supplies for our day to day operations, all have substantially increased in the last years.
Ask any real estate agent or broker around, we have very low assessments compared to other HOA’s that have fewer amenities than we do. Speaking of real estate agents, we often read positive write-ups in their news articles about our association compared to others.
For instance, we have pools, tennis courts, hot tubs, playgrounds, pickleball, volleyball, large common areas and greenbelts, water fountains, in addition to, top-notch landscapers, maintenance staff always here to help, who treat this property like their own, and an on-site positive administrative staff, that works for you. In addition, the Board of Directors and all committees make prudent and professional business decisions for our community, including proper bidding, researching contractors, and using contractors that are licensed and insured, all for the protection of MPRHOA, and only utilizing contractors when absolutely needed.
Staff, along with the landscape and budget & finance committee and board of directors, took several months of budget review, and the outcome was to increase $3 per month from the current $30 to $33 to keep us more compatible with the current state of inflation, ever changing economy and future uncertainty on services we use. Not doing so would be a financial oversight and miscalculation, and not fair to our members who expect our amenities and the property to be in quality shape.
There are other HOA’s out there with assessments even going higher, mainly due to the fact they are not as financially attentive like we are to changing economic conditions, and they historically didn’t exercise good budgeting practices, like MPRHOA has done in the past.
Let’s go back 20 years to year 2004. From year 2004 to 2024 the assessments at MPRHOA have gone from $276 per year to what they will be next year at $398 per year. Let’s break that down further. In 20 years, the assessment amount has only gone up $122. That’s just a little over $6 per year. That’s unheard of, and we’ve never had a special assessment. Everything else is going up.
Again, it’s not only the board of directors contributing to all the decisions, it’s the committees too, making it a combined, transparent, and unified effort. That’s what I like around here, it’s not a single or a few people making decisions, it’s a whole team of people (all MPRHOA members) looking out for all of us. We need our Members to know that we budget appropriately and conservatively to meet these new increases we’ve been handed, and at the same time keep up with services for our property that our Members expect, and as we have done in the past, we have to be cognizant and avoid future shortfalls by budgeting accordingly.
This increase is allowed due to past Boards incorporating maximum annual assessment increases, as permitted in the CC&R’s of the association, thus allowing for an increase of more than 5% in a given year, if needed, and can be found under:
ARTICLE VII, COVENANTS FOR ASSESSMENTS AND CREATION OF LIEN Section 1. Creation of Lien and Personal Obligation of Assessments and Maintenance Charges, Section 4. Maximum Annual Assessment.
The Maximum Annual Assessment:
The maximum annual assessment, and remember this is the maximum annual assessment, differs from the annual assessment. What this allows for though, as addressed in the documents of the association, is for a board to have the ability to raise the annual assessment a maximum 5% each year, for multiply years without actually raising the annual assessment. Then, if a situation calls for it, the assessment can be raised more than the allowable 5% per year, without having to go out and get membership approval. This was incorporated in years 2010-2014. Just click on the below “link” which show assessments and calendar years. In other words, the maximum assessment is there for, where a board of directors can initiate these resources, because they have already been pre-approved. Many HOA’s who did not budget properly, and do not exercise a maximum annual assessment, may be more at risk for special assessments which is something we want to avoid at all costs.