Re: re: hoa fees, reserve study
From: Robert (robertenocommons.org)
Date: Thu, 2 Feb 2006 10:55:57 -0800 (PST)
Christine,

Not to say you gave bad advice, it is possible to do a budget and reserve study 
without paying professionals.

Here at Eno Commons we did our own reserve study.  Fortunately we had Jessie 
who works at HUD to do a top-down study (I believe it was 2% of the project) 
and Laura who works at Self-Help Bank to do a bottom-up study.  The dollar 
amounts matched!  Money for our reserves is 40% of our $100/month/household HOA 
dues.

I have forgotten how we initially came up with $50/month/household for the 
operating portion of our budget (but it has been reduced to 
$45/month/household.  The remaining $15/month/household pays for capital 
improvements.  It was initially $10/month/household and later increased to 
$15/month/household at the expense of the operating portion of the budget.)

The HOA dues were initially $90/month/household and we added the 
$10/month/household capital portion in 1999(?).  We never had an assessment.  
We have not had a dues increase since we added capital portion in 1999.

The slight caveat: Yes we have had fundraisers.  Yes, there was a proposal last 
year to increase the dues another $10/month/household but that did not pass.  
Yes, we probably should do another reserve study to see how our assumptions are 
holding up.

-Robert Heinich
 Eno Commons Cohousing
 Durham, NC
 where the topic of associate membership for neighbors adjoining our site
 will be considered at our next monthly business meeting.




----- Original Message ----- 
From: "Christine Johnson" <manzjohnson [at] netzero.net>
To: <cohousing-l [at] cohousing.org>
Sent: Thursday, February 02, 2006 8:28 AM
Subject: [C-L]_ re: hoa fees, reserve study


> Amy Dwyer, Wasatch Commons Cohousing Community, Salt Lake City wrote:  
> "Could you tell me what your fees are, if they go up yearly and by how 
> much, what they cover, if there is a sweat equity component to them, 
> and are they flat fees or square footage based, or both?"
> 
> I don't know that our budgeting assumptions would be useful to you.   
> For one reason, our costs will differ from yours even if have similar 
> improvements since we are in a different part of the country and 
> material and labor costs will differ.  To calculate our first formal 
> operating budget, we are using a combination of historical and zero 
> based budgeting.   Our initial budget was modeled on local cohousing 
> budget numbers and that budget was off the mark by quite a bit as a 
> result.  So, in short, can't recommend using other's estimations.  If 
> their numbers weren't close to true, yours will be even worse!
> 
> We contracted for and are about to receive a preliminary reserve study. 
>  We paid a team of engineers and reserve analysts a flat fee to  
> complete the work you are attempting to do on your own.    IMO,  
> contracting for a formal reserve study is one of the best decisions our 
> community has made to protect everyone's financial interests (present 
> and future owners,  present and future sellers and purchasers).  I wish 
> we would have done an initial study as soon as our plans were accepted 
> by the city for approval.
> 
> We will be working with the numbers provided in the preliminary study 
> to make any adjustments (for example: to remove an improvement, choose 
> not to replace an item included in the forecast, reduce or increase our 
> operating budget) and then following on the submissions (which we have 
> six months to compose), we will be provided the final report.  We will 
> end up with a financial plan to fund our reserves over the next thirty 
> years .  We may update it periodically, if needed, for a lesser fee.
> 
> There are so many good reasons to go with a professional firm to do a 
> reserve study.   There are way too many reasons to list here!  A 
> excellent resource for information on community association financial 
> management is Community Associations Institute at 
> http://www.caionline.org/
> 
> Christine Johnson
> Stone Curves Cohousing
> Tucson, AZ
> 
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