William-Douglas

Membership Questions and the Annual Budget

This time of year with coupons arriving in the mail, the membership always has questions about what they are paying for with their dues. At William Douglas Management we have always stressed open communication with the membership when it comes to most matters, and especially when it comes to annual budgets and dues.  Communication is vital to ease possible concerns and to inform the membership what they are paying for each dues pay period.  As many of you are aware, some in the membership have no real understanding or appreciation of what they receive for their dues.

 

Copies of the budget can go a long way in reassuring the membership that their monies are spent wisely.  Many associations go as far as providing expense breakdowns in their monthly newsletters and at their annual meeting to stress that a certain percentage goes to the maintenance of the pool and a certain percentage goes to the landscaping etc.  A better understanding by the membership of expenses is always beneficial.

 

Why Are Our Dues Higher?

 

If you have been on an association Board long enough you will hear something like this: “I have a friend who lives at ABC Association and his dues are lower than ours and they have more amenities.”  Many times this can be a tough question to answer if you are not familiar with this association as compared to your own.  However, there are numerous factors that influence dues amounts:

 

Size of the Association:  Economics of Scale; for example, an association with 100 homes will generally have the same pool maintenance expense that an association with 200 homes.

 

Age of the Association:  Age, for obvious reasons, can affect maintenance expenses of an association.

Amenities of the Association:  The Operations of certain amenities, such as pool lifeguards and the cleaning of clubhouses, can drastically affect budgets.

 

Features of the Association:  Security fences and gates, security guards, parking decks, ponds/lakes and other features that are not routine for some associations can have major impacts on annual budgets.

 

Reserves of the Association: All William Douglas Management Company associations are funding their reserves to some degree; but do not assume other associations are funding their reserves.

 

If these key points do not shed light on the matter, request that this member obtain a budget of the association to which he is referring. This will provide a wealth of information that can generally answer the question in short order.  An association board president of one of our associations was confronted with this very question several years ago at their annual meeting regarding a neighboring association of similar size, age and amenities.  This association’s dues were reported to be on average $30 a month less than his association.  However, upon further investigation, this neighboring association had had at least one special assessment per year, and in some year’s two special assessments, in the last five years to meet general operating expenses.  Taking all this into account, the neighboring association’s dues were on average $35 a month higher.

 

The key to the membership understanding and accepting the association’s budget is communication.  The membership has a right to know how the dues amounts were determined and how these dues are going to be utilized.  If this communication is done effectively, the membership often obtains a new perspective of what goes into the operation of their association.  After all, there are no trips to Paris for the board of directors in the budget and arguing about utility bills can be similar to complaining about the weather.    WDPM

 

 

Copyright – William Douglas Management, Inc. 2016