Spring is on its way – and with it a hope for a return to normalcy, no matter how measured the pace. We hope all have weathered the Covid storm and share with us optimism for the future!
As we emerge from Covid, however, we are experiencing increases in our vendor costs for this year, and anticipate additional increases next year (in 2022), primarily due to inflation. Unfortunately, our budget does not provide for increases in operational costs. We advised last year that we operated close to breakeven. We postponed improvements such as adding benches to our Commons Areas, additional upkeep in the Commons woods, and improvements to cul-de-sacs, rather than dipping into our Reserves. Your Board discussed, but did not proceed, with a dues increase last year – primarily due to Covid. This year our budget is no different. Once we plan for our ongoing operational costs, little remains for the desired improvements, let alone vendor cost increases next year. Good practices suggest our Reserves should be maintained at 50 percent of our operational costs. Our current Reserves are less than that, and our budget does not provide for any additions to Reserves.
We must budget for next year’s costs almost six months in advance. For example, for this year, 2021, we need to finalize annual dues requirements for next year (2022) by June. That gives us time to communicate the dues to Homeowners in July, bill in August, and receive annual payments by September 1. Those receipts are then earmarked for the 2022 calendar year. If we find next January of 2022 that our expenses will go up (through, say, vendor cost increases), we are unable to recover those additional expenses until the following year, 2023. We would be forced to use Reserves.
To summarize, we anticipate increases in our operational costs next year. Last year our budget did not provide for targeted improvements to the Association nor adding to our Reserves. This year’s budget has the same concern. As a result, the Board has decided to raise the annual dues, payable September 1 of this year, from $170 to $190. We last raised dues in 2018, when we increased dues from $150 to $170, also a $20 dollar increase.