Thursday, September 1, 2011
How much does the clubhouse cost?
There's been a lively discussion on Tuesday's post on the 2011 HOA budget, dues and the clubhouse. In a nutshell, one concern is that the HOA is overspending compared to what the 2011 budget calls for. The same happened in 2010. The DRM management company at the last meeting seemed to indicate there was little fat to cut from the budget. If true, HOA dues it would seem need to go up just to cover basic operating expenses, let alone to begin funding reserves. Some homeowners believe that the HOA's recent history of not putting money into reserve accounts may hurt property values. One part of the budget discussion has to do with the clubhouse, gate and certain commons that the HOA is paying to keep up rather than the now-gone developer paying for this. For example, it was stated at an HOA meeting that the clubhouse and main pool were not due "to come on line" until one more of tract of condos was built. That's about 20 or 25 condos. But the developer apparently built the clubhouse sooner as a selling feature. Figures between $60,000 and $100,000 a year have been tossed out at HOA meetings about the additional costs that the existing homeowners are paying "extra" because control of certain common areas and these amenities supposedly came on line too early. If you do the math of $268 a month in dues per unit, times 12 months, times another 20 units, the figure is in the $60,000-plus range. What do you think? Do you believe there's no fat in the budget to cut, or think the cost of the clubhouse isn't really as high as has been stated? Do you think the clubhouse and main pool should stay open all year, or maybe just close the clubhouse for part of the year? Should HOA dues go up to cover operating expenses and to begin to make contributions to the reserves? (Thanks for the homeowners who sent in some of the above information and questions.) Miss Penny Lane says: She hates math but doesn't mind counting and adding up the ways she loves Palermo.
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14 comments:
Interesting... $60k - $100k to keep the clubhouse open? Why so expensive? Utilities, cable and cleaning... That can't be more than $1500 per month can it? Oksy, let's say $2000 per month. That comes to $24k per year. What am I misssing?
Is there some way we could get an exact breakdown from DRM regarding the expenses on the clubhouse and the pools? It seems these are coming up as the sticking points. And from what I've read, it seems like we are paying a lot for these services. I think it would be more helpful if we could get this information prior to the next HOA meeting so we can all look at it and come to the meeting with some knowledge. If there is anyone who reads this blog who is on the board, could this information become available?
I feel the club house should be closed part of the year or the entire year until our finances are solvent. This would be funding the reserves at 100% and having our dues cover the monthly expenses, even if that means raising the dues. Once we get a handle on what we are saving by not having a club house available, we can make adjustments accordingly. Maybe in the near future, someone will buy the vacant property and start building so we can have more revenue.
I've seen a bunch of questions about actual costs, incluing one above "is there some way we could get an exact breakdown...".
As a new owner of a unit in Palermo, I do not understand why this is a question. DRM and the HOA are there to manage the community on behalf of the owners. Every owner should be provided a clear statement of the costs, dues, where the $ are being spent, how to handle future expenses,...
If such information is not being provided, then that is problem #1 to fix. After that, sure, there will be decisions needed as to where to spend $.
But step 1 is to make sure property owners understand the facts.
Seriously people...The clubhouse includes the GYM. This should be a priority to encourage a healthy life. I guess you will still have the warm pool to float the fat around if they close it.
It is possible to close the club housevand not the gym. That is just a detail.
To 1003, you might not know that the board last year was disrespectful to owners and being open was not a concern and DRM was not helpful. Now we have 2 new board members of the five trying to open it up but the others are fighting it it seems to me.
Good point 11:41-
How about the clubhouse being reservation only during the winter and closed in summer? Then having the fitness room open as a separate unit? It is a lot smaller and should only require light cleaning once a week if we clean up after ourselves.
To 1208, yes yes yes.
Lets all take a look at the math here.....$268 per month times approximately 100 units equals $268,000 per year operating budget. How is that not enough to cover the trash, landcape, clubhouse and maintenace for our small community?
why would we raise HOA dues and than close the clubhouse this wouldnt make sense????!! other complexes that dont have pools and clubhouses pay under $200 a month in dues so if we are going to be paying $312 i expect the clubhouse to be open!!!
I think one answer to 3:10 is that we aren't putting money into reserves so an increase and closing the clubhouse would help make up for years of not doing that.
raise fees to cover actual operating cots..it's called a structurely balanced budget. The condo i lived in in PHX did exactly the same thing. under budgeted and then used reserve funds to cover the costs. That way the monthy fees remained low. The result..no repairs, no reserve and when the operating budget was made structurally balanced the dues when up (in my case) to over $1,000 per month. Raise the fees now to cover full operating costs plus reserves now!
When I bought at Palermo, one of the reasons was the low HOA dues promised by SCOTT LYLE REALTORS and ENTERPRISE. I could have had an historical condo at the Racquet Club, but decided on Palermo because the HOA dues were so much more reasonable. I have to check but it wasn't more than $120/month at Palermo in HOA dues in the beginning. Now it's $268 because the developer's gone and we have to cover their defaulted NUT. Bait and switch? Truth in advertising? Call a lawyer! Why isn't the board going after ENTERPRISE to try to recoup these expenses? There should be a law of some sort in the crazy world of California real estate to protect the homeowners from lying and thieving real estate agents and developers.
I also am not sure why all homeowners pay the same amount in HOA dues. Why should someone with a 2 bedroom townhouse with 1300 square feet pay the same as a one bedroom villa at 900 square feet? Just doesn't make sense.
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