Re: monthly assessment calculation
From: ROD CHAMPNEY/HP/HIGHLINE CROSSING (RCHAMPNEYdelphi.com)
Date: Thu, 30 Mar 95 00:07 CST
Monica,

This is in response to your questions regarding how monthly assessments 
should be calculated.  Here is what we decided at Highline Crossing 
(Littleton, Colo).

Criteria:

1.  Assessments should approximate costs where possible; i.e. members should
be assessed a variable amount if the costs are variable and a fixed amount 
if the costs are fixed.  Two primary variable "allocators" are the number 
of people in the "unit" and the size of the unit.

2.  We wanted to keep the highest to lowest monthly fee in the range of 2:1

3.  Special costs will be allocated among the special cost group.  (For 
example, not all units have garages, so garage maintenance and insurance 
costs are to be divided among garage owners.)

Here is what we came up with:

1.  Per unit expenses will be divided equally among the 36 homeowners in our
community.  These include snow removal, office supplies, common house telephone,
legal and accounting fees, parking and walkway maintenance and replacement, 
etc.  Our estimated monthly expenses for these items are divided equally 
among each homeowner.

2.  "People" related expenses are allocated based on "equivalent adults" where
each adult counts 1 and each kid age 4-18 count 1/2 and kids under 4 count 0.
(Lots of discussion to get to this scheme.....good luck!)  People expenses
include garbage collection, common house utilities (gas/electric/water),
repairs & maint for common house, etc.  So, if there are a total of 62
equivalent adults in the community and a household has 2 adults, 2 kids, and
1 infant (3.0 equiv adults) then that household would pay 3/64 of the monthly
people related expenses.  (Correction 3/62).

3.  Unit size related expenses give frontal footage a 50% weighting and 
finished square footage a 50% weighting.  Both of these variables affect
structural insurance costs, exterior maintenance, etc.

Although this may seem a little complicated, it meets our criteria (see 
above) and it is not too difficult to administer by plugging all of this
into a spreadsheet (i.e. Lotus or Excel) and bouncing it against an 
expense budget which is divided in these categories.  

We have decided to budget and adjust monthly quarterly during the year-or-so
that we are under construction and partially occupied and then to go to an
annual budgeting cycle once we are fully occupied.  

(Note:  We fine tuned our categories to keep the 2:1 highest to lowest ratio.
Our interim fees average $85/mo with the expectation our long term fees will
be under $100/mo average with a range of $65/mo to $130/mo.  We have a wide
range of unit sizes [we are a condo development] from 1 to 4 bedrooms and 
family sizes from singles to couples with 3 kids.)

I would be happy to answer any questions you may have on this scheme and 
I could send a copy of the spreadsheet we developed.  I am the community
"treasurer" and take care of invoicing/collecting monthly fees.

Rod Champney 
Highline Crossing
1620 West Canal Court
Littleton, Colorado  80120

(303) 795-7942

Results generated by Tiger Technologies Web hosting using MHonArc.