2023 Proposed Budget - Letter from the President
Hello neighbors and friends!
It was so good to see fellow neighbors at our last HOA meeting. For those who could not attend I would like to introduce myself. My name is Chris Adams, the newly promoted HOA President. After five years of being our HOA president, Mike Nelson stepped down from the board. We wish him well and thank him for his commitment to our wonderful community.
A little about me. I have lived in the neighborhood for almost 14 years with my wife (Bri) and 2 kids (Samantha age 12 and Liam age 10). We love the neighborhood and can’t ever see us moving out of it. When I joined the board five years ago my No. 1 goal was to do everything I could to continue to keep our neighborhood amazing for years to come. We live in amazing community that everyone should be proud of.
Since being on the board, projects that I am most proud of include modernizing the website, cleaning up a large majority of delinquent accounts (thanks to the help of Nova) generating roughly $40,000 in additional revenue, and allowing residents to do a lot more online: to pay dues; to register and pay for pool parties, swim lessons; and to sign up for swim team.
While there are a lot of things for our neighborhood to take pride in, there is more we need to do.
As you remember, last November we presented a budget with a very large increase to each individual home. As a board, we admit our communication to you was terrible. And you let us know.
We used your feedback, listened to our neighbors, and withdrew that whole budget proposal.
We then established a budget committee to consider all our neighbors’ concerns and make recommendations on how to proceed. We have worked hard, and I want to ensure you that clear communication is our top priority from here on.
Our neighborhood budget committee has worked very diligently to get as much feedback as possible from every resident, and received feedback to their survey from roughly 60% of our homeowners.
Our proposed 2023 budget is a direct reflection of everyone’s feedback. This budget includes building up our capital improvements reserve. Approval of the budget is a two-step process. There is an initial vote taken at a scheduled board meeting, followed by a final vote at the next.
Here’s the 2023 budget breakdown:
• Operating expenses: $257,304
This reflects an 11.6% increase because of inflation. Between August 2020 and August 2022, the consumer price index for neighborhoods like ours (CPI-U) has increased 14.7% during that time. Operating expenses cover everything the HOA must pay — utilities, lifeguards, pool staff, park maintenance, pool maintenance and association management. We are anticipating across-the-board vendor rate hikes next year due to continuing inflation.
• Capital improvements/reserve: $45,000
This money will first be used to repair the pool, (more information about the pool below) and then we homeowners in subsequent years will prioritize other repair projects that will reduce liability and keep our neighborhood beautiful.
That gives us $302, 304.
• Now we subtract $35,000 in pool revenue
Pool revenue is as it sounds. This is the money that the pool brings in every year. Our pool generates a large amount of money with 200+ lessons, 30+ parties and ice cream. Yes, ice cream sales generate a significant amount of money. The board and our pool staff will review our lessons and rental rates to make sure that in 2023 they are reflective of the increase in costs to provide these services. Every dollar we bring in through the pool will help reduce the annual assessments for residents. For the 2023 budget, this income reduces everyone’s assessment by $117 per lot.
• Therefore, our total proposed 2023 budget is $267,304.
In the initial vote, on Oct. 12, the board unanimously (8-0) approved the proposed operating budget, which breaks down to $891 per lot.
This is a monthly an increase of $20.25 per month, which includes the capital improvement assessment.
There are two other proposed changes:
• For 2023, the budget does not include a prepayment discount. There is no discount this coming year.
• Dues will no longer be collected quarterly. They will be $74.25 per month. You may, of course, pay in advance for any number of months or for the full year. Why? This change is intended to bring in revenue in a steadier stream, without having to wait for cash to arrive in quarterly spurts. This will allow our HOA to have a more predictable cash flow.
Now, let’s talk about how the capital improvements/reserve money will be used.
We need to repair the pool.
We were informed this past summer that our pool, which has been leaking, has gotten to the point where it needs to be fixed. The plaster throughout the pool is failing. Unaddressed, this will undermine every part of the pool, which is our neighborhood’s greatest asset. Chlorinated water can damage rebar inside the pool’s shell and undermine the foundation, and the pool’s filter and other mechanics can be ruined if the water level drops too low. Right now, water needs to be added to the pool every three days to keep the level high enough to prevent mechanical damage.
Our pool committee and manager assigned Nova to seek multiple bids for this repair. So far, we have received the first bid from our recommended vendors. That bid was $150,000, plus tax.
As of today, we don’t have enough in existing reserves to cover this project. We have $123,000 in reserves. Fixing our pool must be our main priority, and we need to do it in a timely fashion, so this does not affect our pool usage next summer. For sure, there are other items on homeowners’ to-do lists for our park, but repairing the pool must come first. Then, in the future, as a community, we will decide on any other repairs or improvements.
What happens next? We have a second budget ratification meeting, which will be held in-person at 7:30 p.m. Wednesday, Nov. 9, at Frost Elementary. It will also be streamed via Microsoft Teams — here’s the link http://www.kingsgate3and4.com/BoardMeeting.
During this meeting the board will answer budget questions anyone might have. I encourage everyone to attend, in person or via Teams.
The budget will be ratified at the November 9th board meeting. At this meeting, homeowners can also choose to reject the proposed budget either in person or by written proxy. If 151 lots (greater than 50% of the membership) reject the proposed budget it will not pass. In that case, our 2022 budget remain in place until a new 2023 budget is approved. There is no “yes” vote required and if 151 rejections do not materialize that 2023 budget as proposed by the board will be ratified.
The proxy vote form is available on the Nova Portal (https://kingsgatehighland3and4.eunify.net/), or you can call the solutions team at 206-215-9732 or 503-606-8002, or email email@example.com
With all that said, please know that we are trying to do everything we can to keep the community amazing for the next 50 years and beyond.
If you have any questions please reach out to me @206-963-9966 or firstname.lastname@example.org. I am here and available for any questions or concerns you may have.