Residents often express concern for how their quarterly assessments, currently $360.00 per quarter, are utilized by the Homeowners Association (HOA). The purpose of this article is to help everyone better understand the finances of the HOA.
The budget of the community consists of two components; (1) Operations, and (2) Capital Reserves.
The Operations budget of the HOA is comprised of routine daily activities, such as property management, 24/7 guard house/security staffing, and common property maintenance functions (includes landscaping, irrigation, lighting, lakes aquatic vegetation control, etc.). The operations budget can be thought of as funding for routine items that occur every month. The annual cost for this component of the HOA budget is approximately $825,000.00 in 2018.
The Capital Reserves budget is for major maintenance and replacement of community assets for which the HOA is responsible (these assets have varying useful lives, generally ranging from as little as 3 years, to as much as 30+ years). Examples include the roads and drainage systems, the guardhouse, the playground, and various smaller items (entryway fountains, road signs, landscape/irrigation improvements, and the electronic sign board).
The largest capital reserve item is our road system so a portion of the quarterly assessments is placed into the Capital Reserve account for funding of future road system needs. In 2018, the Board plans to contribute $300,000 to the Capital Reserve account for future road system needs.
Today, the Deercreek HOA has approximately $1.4 million in the Capital Reserve account. The Board is currently analyzing the funding needs of various capital projects and will be prioritizing the needs of our community. One such project that has been generally regarded as being the greatest need is the resurfacing of the community’s roads. The road resurfacing project will cost the HOA approximately $2.0 million with spending spread over several years. Watch for more information on the road project, including the formation of an ad hoc committee, as well as other capital reserve type projects in future newsletters.
If you have any questions about the HOA finances, please contact Frank Tuenge or the Finance Committee Chair, Carol D’Onofrio.