ABOA Breakdown of 2024 Budget HOA Fee by Category
The following summary breaks down the sum of the 2024 per-property annual assessment fee of $260, net of the reserve component of that fee of $9.89 (see (A) below), plus budgeted ARC revenue of $51.22. The sum, $301.32 per property, is what makes up our total 2024 operating budget ($235,334 in Total Expenses per the 2024 Budget Letter you received recently, divided by 781 properties, equals $301.32 per property). The information below breaks out key expenses, by cost segment of the budget, to help owners understand how and where their fees are being spent. It aligns to the cost structure format of both the HOA’s financial statements and its annual budget. The ABOA is a large, relatively mature community consisting of 781 properties (most of which have been built upon) spread out over approximately 600 acres.
Revenue towards our annual HOA budget comes from two sources, (1) Owner assessments and (2) ARC revenue generated from project application fees, summarized on a per-property basis as follows:
2024 Owner Assessment per property $260.00
Less: Reserve component of Owner Assessment ( 9.89) (A)
Plus: 2024 Budgeted ARC revenue per property 51.22
Total 2024 Budgeted Operating Revenue
Available to Fund Operating Expenses $301.32
(A) Portion of fee which goes toward future funding of capital projects in common areas supported by the ABOA (e.g. mail kiosks and community monuments).
Note: Revenue contributions from ARC projects is in decline due to only a small number of buildable lots remaining in our community. This permanent trend is exacerbated currently by the economic conditions of higher inflation and interest rates, leading to fewer build projects assumed in the budget compared to more normal conditions.
General & Administrative Expenses: These costs consist of providing and/or procuring the ongoing, day-to-day activities, services needed and other requirements related to operating our HOA. Aperion Management’s fee is $73.00 per property for the year, and for that cost ABOA receives the following primary services: support for the volunteer Board, ARC and FireWise Committees; ensure compliance with CCR’s, Rules & Regs and ABOA’s non-profit, tax-exempt status; prepare monthly financials statements, annual budget drafting and coordinate yearly accounting review and tax prep activities; handle all owner communications including 24/7 property threatening emergency response; procure and coordinate activities with all ABOA service providers; counsel our community on HOA best practices; arrange and support community events (annual meeting, debris disposal days); coordinate all requirements and activities related to annual board elections as well as any ad-hoc needs such as ballot amendments. This category also includes budgeted legal costs, which this year is exceptionally high at $38.35 per property because of the two lawsuit the HOA is currently defending arising from the short-term rental amendment passed in late 2021. This amendment, and therefore its defense, was considered very important to pursue by your board given the overwhelming support the amendment received during the ballot process, with 85% of owners who voted casting their ballot in favor of limiting rentals to a minimum period of 30 days. Acquiescing to this challenge and voiding the amendment was not considered an appropriate alternative. Note that the primary cost for defense is borne by our insurance provider and the budgeted costs are supplemental to that support. Other notable categories in G&A include Meetings & Events ($4.74 per property); Insurance ($4.69), Operating Supplies/Storage ($3.69); and, Audit Review/Tax Return ($2.50).
Total G&A expense per property: $130.09
ARC Expenses: This volunteer Committee, managed by Aperion and three paid consultants with specialized expertise (architect, landscape designer and wildfire specialist), meets twice a month for two hours to: review an average of 20+ Architectural submittals per month, and make decisions that ensure compliance with community Rules & Regs as well as Design Guidelines; track project progress; ensure consistency with community aesthetics; communicate with owners; charge and collect appropriate fees; and overall administer the necessary ARC processes and procedures. The administrative requirements are managed by Aperion. The ARC budgeted expenses include: an annual management fee charged by Aperion Management of $66.55 per property; consulting costs totaling $49.17 for the three specialists; and, ARC-related legal fees $6.15.
Total ARC Expense per property: $121.87
Fire Prevention Expenses: In 2019 ABOA became a FireWise community, an important step in recognizing the fire risk inherent in our neighborhood and putting in motion steps to mitigate this risk over time. Initial efforts were to provide a free (to Owners) spring debris disposal event to promote fuel reduction pursuant to improving a property’s defensibility against fire threat. In 2022 your HOA significantly broadened this fire safety focus by developing a more active volunteer FireWise Committee that meets for two hours every month to track progress, target new opportunities, reset priorities, create new capabilities, and provide Owners with ongoing educational information. This Committee built-out fire mitigation processes and documentation, resulting in the creation of a free (to Owners) fire-assessment program that, to date, has resulted in over 300 properties being assessed and, in most cases, remediated to improve defensibility from fire. A wildfire consultant (Tamarack Wildfire Consulting) was also contracted with in 2022 to help with program development, assessor training and oversight, participation in monthly FireWise meetings, and to keep us abreast of new developments and best practices in community wildfire safety. Tamarack also provides services to the ARC as one of our three ARC consultants. Costs for Tamarack included in the Fire Prevention budget are $19.21 per property, and budgeted costs for two free (to Owner) disposal events is $12.16.
Total Fire Prevention Expense per property: $31.37
Common Area Maintenance Expenses: These costs are for maintaining our common areas (mail kiosks and monuments), and involve relationships with service providers for snow removal ($8.96), landscape maintenance ($5.64) and utilities ($3.39).
Total Common Area Maintenance Expense per property: $17.99
Top Five 2024 Budgeted Operating Expenses:
1. Aperion Management Fees (ARC at $66.55 & General at $73.00 combined): $139.56 (46% of total)
2. Tamarack Consulting (ARC and Fire Prevention combined): $42.25 (14%)
3. Legal- General (majority to defend current lawsuit): $ 38.35 (13%)
4. ARC Architect & Landscape consultants $26.12 (9%)
5. FireWise disposal events (spring and fall events) $12.16 (4%)
Total of Top Five $258.44 (86% of total)
All other operating expenses (14 line items) $42.88 (14%)
Total 2024 Budgeted Operating Expenses $301.32 (100%)
Hopefully this analysis is helpful in providing a detailed breakdown of how an ABOA Owner’s 2024 assessment fee of $260 annually ($21.67 per month) will be used towards the funding of the HOA’s annual budget.