Despite a proposed dues increase, fewer than two dozen landowners showed up for the Wednesday, January 4 Town Hall meeting on the Fiscal Year 2012-2013 budget proposed for the Seven Lakes West Landowners Association.
Presiding over the meeting was Treasurer Don Freiert, who addressed member feedback gathered since the Tuesday, December 13 Work Session, when the FY2012-2013 budget was unveiled.
Moving toward dues parity
The dues increase that Freiert is proposing falls more heavily on the owners of undeveloped lots, who will see a six percent increase, than on the Association's homeowners, whose annual levy would rise by only two percent.
That is part of a Board strategy to gradually achieve dues parity; during Wednesday night's meeting, Freiert explained the rationale for equalizing dues across the community.
First, Freiert said, all members are allowed to use SLWLA amenities -- whether they own an improved or unimproved lot.
“The Association’s governing documents provide basically only one class of membership . . . there is no distinction between improved or unimproved," the Treasurer explained. "If you own a lot -- whether you have a house on it or not -- you are a member and are entitled to access to all amenities in the community and are entitled to a vote . . . that is what we mean by class of membership.”
Second, in making the decision to move toward a single assessment, the Board felt that all properties benefit from the Association's maintenance and improvement of the Community -- whether or not the lot owner actually lives in Seven Lakes West.
“Maintaining roads, the lake and dam, and other infrastructure is critical to preserving property values," Freiert said. "That’s all property values -- not just improved home value, but even the land value of the lots being held."
Finally the budget reflects the cost of running the Community Association, which represents all lot owners.
“Lets face it," Freiert said, "this community has been around a long time. Things are wearing out, and they are wearing out by virtue of age. And unfortunately in some cases -- based on our roads -- the way they were built, not so much someone driving on them. We’re faced with, as a community, replacing those assets; and, when we look at that, we think all lots should participate on an equal basis."
Parity to be reached in seven years
The dues assessment rate that is being proposed by the Board is $930 for improved lots -- a two percent increase. The rate on unimproved lots will go up six percent to $726.
This brings the dues on unimproved lots dues to seventy-eight percent of the dues on improved lots. The Board's plan is to increase this ratio each year over the next seven years, until dues parity is reached in the 2018-2019 budget year.
There are currently a few more than 1,700 build-able lots in Seven Lakes West; 972 are improved lots and 730 are unimproved lots. Lots used exclusively for septic repair fields pay half dues. There are also 147 developer lots.
Former SLWLA President Bill Mamel asked whether the 147 lots owned by developers will also be brought into parity with developed lots.
Freiert explained that these lots are “contractually assessed at zero until they are actually sold off for development. Those contracts have been in place for years and have been passed down from developer to developer.” However, once one of those lots are sold it unbinds the previous contract, and the lot will then fall under the community’s fee schedule.
Adding to the CAS Staff
Freiert said that, in addition to the dues increase, the Board has received member feedback on the planned addition of a fourth CAS staff member at a total cost of $49,000.
That total includes an additional staff person at an estimated base salary of $35,000 plus benefits and payroll taxes, as well as a two percent increase in salaries for the three existing CAS staff employees per their current contract.
Freiert explained that this amount will be partially offset by a $5,000 expense currently spent on labor outside the base contract, making the actual budget impact $44,000.
The additional staff member will help the office team meet the expanded workload that has been passed on to CAS in the last couple of years by the Board.
Freiert noted eight areas where the additional staff member will be contributing:
• An expanded staff role in supporting the Architectural Review Committee in both permitting and compliance.
• Primary oversight of day-to-day safety and security operations.
• Hands on support for infrastructure repairs and improvements, including securing bids, monitoring contracts, and assisting in project management.
• Implementation and oversight of the Septic Management Program, vehicle entry, and barcode system and enhanced financial reporting.
• Handle Association’s website and related communications functions.
• Direct support of Board functions.
• Lake and Dam responsibilities.
• Retention of critical Association files and historical records,
During member comments Westsider Nelda Cockman, asked what skill set the Board is looking for in the next CAS employee. President Mick Herdrich, who sits on the HR Committee with Nancy Workman and Mary Anne Fewkes, said the main function of the future staff member will be to handle safety and security issues.
According to Herdrich this function currently consumes substantial staff time. Another function being passed on to CAS is the day-to-day operation of the website, which is expected to be handed over by Secretary Jane Sessler in May.
Reduced contribution to reserves
With an increase of $52,000 in income and an increase of $94,000 in expenses, the Board plans to reduce the 2012-2013 contribution to reserves BY $42,500. Last year’s allocation to reserves was $500,000; this year that number will drop to $457,500.
Coincidentally, projected capital expenditures for 2012-2013 are $457,500 -- the amount number that is being placed into the reserve balance. Of this amount, $178,000 will go to roads and related infrastructure as well as the next phase of the Community’s Fire Hydrant and Water Main upgrades.
The remaining $279,500 is for the mailhouse and front entry projects, as well as additional security fencing and amenity upgrades.
Infrastructure, Administration drive increase
Overall, the FY 2012-2013 budget proposes total dues and assessments for the West Side of $1.4 million -- a 3.8 percent increase.
The total operating expense budget is $1 million which is a ten percent increase year-to-year. This includes:
• Johnson Point for $26,000, an 8 percent increase.
• Infrastructure for $257,000, a 14 percent increase.
• Administration account for $360,000, a 14 percent increase.
• Safety and Security for $180,000, a 2.5 percent increase.
• Lake and Dam for $44,500, an 8.5 percent increase.
• Recreation for $14,000, with no increase.
• West Side Park for $118,600, a 7 percent increase
The FY 2012-2013 was given preliminary approval by the SLWLA Board during their December meeting. A final Board vote on the matter is expected during the Tuesday, January 10 Work Session.
The Board-approved budget will be presented to the community at the end of January, and will be voted on by the membership at the Annual Meeting in March.
A copy of the proposed budget, Freiert's budget summary, and his Powerpoint presentation from the Town Hall meeting are available on the SLWLA website.
