20122012 Legends HOA Legends HOA Annual MeetingAnnual Meeting

March 14, 2012March 14, 2012

AgendaAgenda

• Introductions– Guests: Summer Lawns and Anvil Fence

• 2011 Year in Review• 2012 Action Plan• Membership Participation• 2011 Budget Review• Planning for the Future• Election of Directors• Open Discussion

IntroductionsIntroductions

• Board of Directors / Officers– Seat 1: Steve Berch, President and Director– Seat 2: Kelley McGrath, Vice President and Director– Seat 3: Mike Hudson, Secretary and Director– Seat 4: Dana Wardein, Treasurer and Director– Seat 5: Open

• Neighborhood Manager – Denny Moller (AMI)

Guest:Guest:Summer Lawns, Inc.Summer Lawns, Inc.

• Overall Assessment of Legends landscaping

• Questions and feedback from membership

2011 Year in Review2011 Year in Review• Expenses at 95% of budget (was 103% in 2010)• Did not raise dues for 2012• Improvements/changes:

– Added five new trash cans - now at all entrances to common areas– Negotiated favorable, permanent cost for Sharvers Lateral fee– Reinstated National Night Out event as “Legends Night Out”– Second year with new tree/lawn service company (Summer Lawns)

• Repaired vandalized sprinkler control panel (improved its protection)• More sprinkler pipe and head repairs (aging system)• Replaced trees• Lifted boughs of all Austrian Pines

– Safety improvements at back entrance to Lowell Scott

2012 Action Plan 2012 Action Plan What we plan to do this yearWhat we plan to do this year

• Repair/replace broken irrigation pump this Spring• Establish reserve accounts:

– Iron Fence replacement– Wood Fence repair/replacement– Irrigation Pump replacement– Landscape maintenance (replace trees, clear overgrown bushes)– Other (e.g. pathway and Irrigation pipe repair)

• Investigate use of law firm to collect dues in arrears

Member ParticipationMember Participation

• Need volunteers:– Easter Egg Hunt– Neighborhood Watch– Spring Planting Event– Legends Night Out – Landscaping Committee

2011 Budget Review2011 Budget Review Revenue         Dues     $115,591   Transfer Fees,  Other     $3,906  

TOTAL REVENUE $119,497 Expenses        

 Administrative     $16,067      AMI $13,871      Insurance, Taxes $2,196   Common Area     $89,216      Landscape $41,494      Tree/shrub maintenance $5,133      Sprinkler Maintenance/Repair $11,901      Irrigation (water/ditches) $19,900      Electricity, entry lights, other $10,788   Communication     $2,604      Signs, website, mailings $1,659      Events, other $945   Capital Expenses   Trash receptacles   $2,195   TOTAL EXPENSES $110,082 Net Profit/Loss $9,415

Planning for the FuturePlanning for the Future The situationThe situation

• Legends is 15 years old; maturity brings increased costs.• Past budgets were set to just meet the next year’s needs.• Current reserves are only about $15,000 (very low).• Annual dues were $236 in 1997. • Dues are now $370 – a 3% increase per year since 1997.• Must prepare for future costs that will occur for certain:

– Replace fencing bordering all common areas and access paths– Continuous replacement of irrigation pumps and pipe repairs– Cost to maintain mature trees and replace dead/dying landscaping– Repair walkways

Planning for the FuturePlanning for the Future Funding reserve accounts Funding reserve accounts (estimates)(estimates)

• Replace iron fencing: $182,000 (25 year life)– $23/year (per homeowner)

• Replace wood fencing: $104,000 (15 year life)– $22/year (per homeowner)

• Replace pumps: $8,000 (4 year life)– $6/year (per homeowner)

• Increased landscape & irrigation maintenance: $3,000/yr– $9/year (per homeowner)

IMPACT: Dues would increase by $60/year to perpetually fund new reserve accounts ($430/year from current $370/year)

Iron Fence ProjectIron Fence ProjectHistoryHistory

• Refurbishment plans started in 2006• Divided into five phases• First phase started in 2007• Contractor significantly under-estimated their costs

– Honored contracted price for Phase 1; declined to complete work

• Payment: 50% HOA, 50% each homeowner with iron fence• Very time consuming to manage and at time contentious

Option #1Option #1Special assessmentSpecial assessment

• One-time assessment to raise $286,000 for fencing• Cost to each Lot owner: $905• Requires 2/3 approval of all Lot owners (211 out of 316 lots)• Advantages:

– Immediately collects necessary funds– One-time expense (until next time needed)

• Concerns:– Very challenging to gain approval– Major expense during difficult economic times

• Note: Annual dues would still need to increase to $430 to start funding reserves for subsequent replacements.

Option #1Option #1Special assessmentSpecial assessment

• One-time assessment to raise $286,000 for fencing• Cost to each Lot owner: $905• Requires 2/3 approval of all Lot owners (211 out of 316 lots)• Advantages:

– Immediately collects necessary funds– One-time expense (until next time needed)

• Concerns:– Very challenging to gain approval– Major expense during difficult economic times

• Note: Annual dues would still need to increase to $430 to start funding reserves for subsequent replacements.

Option #2Option #2Build reserves via Build reserves via fixedfixed annual increase in dues annual increase in dues

2012 baseline dues: $370% increase per year: 3.3%

# members: 316

Year DuesIncrease 

(over 2012)Additional funds

Accumulated Reserves

2013 $382 $12 $3,871 $3,8712014 $395 $25 $7,871 $11,7422015 $408 $38 $12,002 $23,7442016 $421 $51 $16,271 $40,0152017 $435 $65 $20,681 $60,6962018 $450 $80 $25,237 $85,9332019 $465 $95 $29,944 $115,8772020 $480 $110 $34,806 $150,6842021 $496 $126 $39,830 $190,5142022 $512 $142 $45,020 $235,5342023 $529 $159 $50,382 $285,916

Total  additional:   $905  per Lot owner

NOTE:  Board can increase annual dues by up to 10% each year (as per by-laws). 

Replace wood fencing

Replace iron fencingDecreases to $430 the next year

2012 baseline dues: $370# members: 316

Year % inc DuesIncrease 

(over 2012)Additional funds

Accumulated Reserves

2013 10.0% $407 $37 $11,692 $11,6922014 8.0% $440 $70 $21,981 $33,6732015 6.0% $466 $96 $30,315 $63,9882016 4.0% $485 $115 $36,204 $100,1922017 2.0% $494 $124 $39,267 $139,4592018 0.0% $494 $124 $39,267 $178,7262019 -2.0% $484 $114 $36,143 $214,8692020 -4.0% $465 $95 $30,021 $244,8902021 -7.5% $430 $60 $19,000 $263,8902022 0.0% $430 $60 $19,000 $282,8902023 0.0% $430 $60 $19,000 $301,890

Total  additional:   $955  per Lot owner

NOTE:  Board can increase annual dues by up to 10% each year (as per by-laws). 

Option #3Option #3Build reserves via Build reserves via variablevariable annual increase in dues annual increase in dues

Replace wood fencing

Replace iron fencing

Split-cost modelSplit-cost model

• Split cost between HOA and each homeowner with fencing.• HOA would fund its portion via dues or special assessment

funding method.• Each homeowner with fencing would pay their portion of the

fence at the time of installation (percent to be determined).

Pros• HOA members pay less• Those with fence pay their

share for their part ownership

Cons• 22% homeowners pay 50% for fence that 100% enjoy • Homeowner has no choice or control over their fence• Difficult to manage (71 separate negotiations)

Your inputYour input

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Election of DirectorsElection of Directors

• Conduct vote for each Director seat (pending quorum)

– Seat 1: Steve Berch nominated

– Seat 2: Kelley McGrath nominated

– Seat 3: Michael Hudson nominated

– Seat 4: Dana Wardein nominated – Seat 5: Sharlene Harvey nominated

• Select Officers and Committee Chairs– To be done at the April 19 Board Meeting

Open DiscussionOpen Discussion

• Comments

• Questions

• Concerns

• Ideas