Your Neighborhood
March 2018
WWW.DOBSONRANCH.COM
State of the Association By David L. Jones Executive Director
Last year, there were 417 homes resold in Dobson Ranch. Prospective and new homeowners that come into the office cannot believe how low the assessment rate is and that it includes all the amenities, events and more. Compared to most associations $138.60 per quarter is a bargain. There has not been an increase to the Association assessments since 2015. Financially, the Association is healthy. At the end of December 2017, the Association operating account was at $2 million, the reserve account at $2.2 million, and Capital account at $416k. So, what does that all mean? The Operating Account covers the daily expenses of the Association. Insurance, utilities, maintenance, Landscape, payroll, and events are paid from the operation account. It also funds Reserves, Capital and Water Conservation. Total expenses for 2017 were 2.8 million. The Association develops a plan to fund for future repairs or replacements. In order to do that, each year the Association has a reserve study prepared by a reserve specialist. The study consists of two parts; 1) the information about the physical status and repair/replacement cost of the major common area components that the Association is obligated to maintain, and 2) the evaluation and analysis of the Association’s reserve balance, income and expenses. All this information helps the Association Board to plan for funding the Reserve Account. The January 2017 reserve study showed if our Reserves were fully funded we would need a balance of $2.4 million, we had a beginning balance in the Reserve Account of $2 million and a funded rate of 83%. At the end of December 2017, reserve expense was $386k. Expected expenses for 2018 is budgeted for $613k. Prospective homebuyers ask for reserve information prior to purchasing a house within an as-
sociation. A higher percent funded reserve study informs the prospective buyer and the homeowner that it is less likely that the Association would ask for a special assessment. Many of us like new things, for our home or personal use. So why wouldn’t that carry over to the use of the common areas? Any new asset purchased is funded from the Capital Account. Capital expenses keep the Association relevant, accommodating the needs of the current homeowners and prospective buyers. The mission of the Board is to maintain property values. You may have to spend money to do that, not just cut expenses. Just as your expenses increase each year, so do those of the Association. A significant impact to the Association last year was the increase to minimum wage. It was a 19% increase from the year prior. Minimum wage will continue to increase fifty cents each year until it reaches $12 per hour in the year 2020. Although there have been increases to expenses, the Association has managed to not increase assessments, which in turn brings value to the Association and homes within. At monthly meetings, the Board conducts the business of the Association. These meeting are open to the membership of the Association. The Association Board is made up of homeowners who live within the community. Just like you, they too are homeowners that pay assessments and must live inside the rules of the governing documents. Each month, the Association Board must make decisions on behalf of the homeowners. As servant leaders should, they look to the needs of the Association and not their own when making decisions. Board of Directors have a responsibility to be present and engaged for monthly meetings. Overtime, it is necessary to have the Association documents updated and then reviewed by the Association attorneys to enSTATE OF THE ASSCIATION | 5
4 THE DOBSON ASSOCIATION