Frequently Asked Questions - Fees, Budget & Allocation of Funds

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1.    How large is our budget?
Our 2007 annual budget will approach $2,100,000 per year. This  includes nearly $550,000 for maintenance & replacement/repair of common property, or loan payments for them, and nearly $350,000 for water and sewer. For additional information, go to the Financial Page.

2.    How much are the maintenance fees, how were they determined and when are they to be paid? 
Originally a flat fee per unit, in the "90's" the method of calculating maintenance fees was, at least partially, changed to be based on the maximum occupancy of each unit and it's size.  At that time, some units fees went up and some went down. Fees are payable monthly and range, presently, from approximately $199 to $250 per unit. 

3.    What do the maintenance fees pay for? 
They pay for nearly all association operating expenses as well as repair or replacement of the association's common property; payment of any capital improvement loan the association owes and maintenance of a capital reserve funds for unanticipated capital expenses. Basically, the Association runs on those fees like a municipality runs on property tax.

4.    Do we have any other income outside of maintenance fees?
The association is always looking for additional sources of revenue allowed by our by-laws. Presently, we receive revenue for the rental of the sign at BHP and Leipzig Ave, from fines and penalties, from pool badges and pool beverage sales, & from governmental rebates for our roads and lighting. While it would have been better to have recieved the money when originally due, and the collection costs are significant, we have been receiving collections of long-delinquent fees for the past couple of years.

5.    If the maintenance fees pay for items that are often paid by a homeowner's taxes, why do I have to pay real estate taxes as well? ...and what if I feel that my taxes are too high?
Sometimes, your Board would like to "chime in on that" and say, "Yeah, why!?"  However, that is a question to ask of the government. Your association does not pay your share of school costs (that make up most of our taxes), nor do we separately subsidize the police, garbage pick-up, etc.  We do, however, pay for many expenses that are usually paid for by the government. If you feel that, on that basis, your real estate taxes are too high, you may want to consider calling your local taxing officials to find out how to appeal your taxes...but, beware...a tax appeal may cause your taxes to go up! 

6.    So, what is good about being an Association member & paying membership fees in addition to real estate taxes? 
Many normal homeowner costs (snow removal, landscaping and lawn mowing, water and sewer charges, certain pest treatments, etc.) are included in the monthly fee. Many maintenance costs (such as exterior painting, roofing and siding) that would normally be a single-family homeowner's responsibility, are also the association's responsibility. In addition, by having a Board of Directors to negotiate the cost of the items covered by the fees, it is likely that the negotiated costs are less than you would pay if you owned a single-family home.  For example, though it may cost us $2,500 to replace a building's roof each of, say, 10 units in one building...that may be as much as 1/2 of what it would cost you to have that amount of roof over your own unit replaced. Finally, you have a Board who takes the responsibility off of your own shoulders to make sure that maintenance is being performed correctly.

7.    When are fees due & when are they considered late? 
The fees are due on the first of each month and are considered late after the tenth of the month. 

8.    What can happen if I don't pay the fees on time & why?
Penalties for non-payment range from mild to severe and are necessitated because they are the nearly total source of the funds needed to run and maintain the community.  Initially, non-payment incurs a $30 fine for each month they are late; revocation of parking privileges and exposure of the offender to being towed at their expense; exclusion from the swimming pools and tennis & basketball courts; loss of your right to speak at board meetings or vote for association issues or during board elections. The Board of Directors has also authorized that late payments be reported to credit bureaus which can hurt credit ratings...so it is urged that owners take the fees seriously.

9.    What can happen if my payment history is worse yet?  
If the account is not promptly brought up to date, or payment arrangements made, the offender is subject to legal collections actions ranging from fines to judgments to foreclosure.  This is serious. You will incur substantial legal fees if you become seriously delinquent and you could lose your home!

10. What can I do if my payments will be unavoidably late?  
Don't "hide your head in the sand!" Talk to the property manager. Ask to speak to the Board. Payment arrangements may be possible. Fines and legal action may be able to be temporarily abated. There are no promises, as every situation is different, and the association can't show favoritism. But, we understand that hardships can happen to anyone and we would prefer not to incur expensive collection costs. Anything is possible if you accept your responsibility and make the attempt to work through your difficult time and communicate with us. We realize this may be embarrassing, but no-one can help you if you don't come forward and explain the situation and request help. Ignoring the problem is the worst thing you can do!

11. Who handles collections for the Association?
Initially, the Association office, itself, tries to get accounts current. If unsuccessful, the account is turned over to Stark and Stark, or other legal firms that specialize in these matters. The Board has no choice but to choose aggressive law firms that are experienced and very successful at this task because delinquent accounts end up costing & hurting everyone else who pays their maintenance fees in a timely fashion.

12. What accounts for fee increases? 
Your Board always tries to "hold the line" on fee increases. To avoid fee increases, our only options are to create a realistic budget, cut unnecessary services (where possible), and get services done as cost-effectively as possible. But, we cannot prevent inflation from increasing some of our costs; our association insurance has not dropped back to pre-911 levels; and we have been forced to borrow money to accomplish long-overdue repairs at a faster pace than fees can accomplish alone. The reality is that in spite of our best intention, periodic fee increases are inevitable.

13. Can you explain what "Assessments" are? 
When necessary, it has been the Board's policy to handle operating cost shortfalls with "one-time" fees called “assessments”. If the size of the needed assessment is large enough, the Board may make it payable over multiple months. Your Board uses assessments as an alternative to permanent fee increases, when possible, because we realize that fee increases are rarely "rolled back". But, our by-laws only allow for special assessments for budget shortfalls when those shortfalls are unanticipated. The by-laws do not permit us to knowingly create a deficit budge (with a built-in loss anticipated), and then special assess to pay for it when the money runs out.  For Your Information:  While the assessments that have been approved of the last 5 years have often been referred to as "Special Assessments" (which require a majority member vote), they were all of an emergency nature and, as such, were actually "Emergency Assessments" which only need Board of Directors approval for implementation.

14. Can you elaborate about inflation and capital repairs?
Even without accounting for unanticipated and emergency requirements, the best guess is that, about every 5 years, inflation will make a fee increase warranted. If nationwide, annual, average inflation is 3.5%, and considering that about a third of our costs remain fairly stable, we can figure that our costs will increase by 10% over about 5 years.

Over the last 15 years, or so, there have not been many fee increases at the Woodlands. In the '90's, there was a restructuring of how fees were calculated for each unit and there was one small increase due to rising insurance costs.  Since 1997 there have been two fee increases ($50 in 2001 & $30 in Jan., 2007).  These were strictly to allow us to borrow a total of $2,400,000 so that the pace of capital repairs could be accelerated ... primarily consisting of the replacement of all remaining original siding and a significant number of roofs.  Virtually none of that fee increase was used for operating increases.  The fee increases were needed because the size of any loan, we could obtain was limited by the income available to pay it back.  There is only limited "cash from our pockets" to pay for unanticipated expenses. As has been said, "There's no such thing as a free lunch." If we want to improve our community, it has to be paid for.

15. Was the Jan, 2007 fee increase required in order to enable paying back the existing capital improvements loan?
No. The monthly payments on the present loan have been paid from monies that would, otherwise, have been spent on repairs or contributions to the capital reserve fund and was enabled by the 2001 fee increase. The purpose of that loan was to allow us to make, in one year, the repairs that would have taken 5 years to accomplish without the loan.

16. What happened in the 5 years since the last fee increase that required a fee increase in 2007?
The proceeds of the present loan were totally spent...and there is more work to do. Unfortunately, we’ve discovered that there has been significant damage to our buildings under our deteriorated siding. This was impossible to anticipate when we obtained the first capital improvements loan.  But it meant that the present loan did not accomplish all we hoped it would. Rolling the balance of that loan into a larger loan has given us another $1,200,000 that will enable us to finish the remaining siding replenishment and replace all of the poorest roofs. 

However, the larger loan has a larger payment which required the fee increase. The only ways to qualify for the additional funds, but keep the payment as-is, would have been to accept a long loan term that would cost us hundreds of thousands of dollars in extra interest. In order to be approved for the additional loan funds to allow us to continue our renovation, while keeping the term of the loan short enough to avoid huge interest charges, it was necessary to institute the increase in maintenance fees.

17. Do association members get to comment and vote on fee increases? 
While preliminary discussions of such may occur in executive sessions of the Board, any contemplated fee increase is always approved by means of a vote during an open board meeting, generally preceded by public discussion. While association members may witness the discussion, and may be provided the opportunity provide input and suggest alternatives, the mandate to maintain sound fiscal policy and a sound physical plant is a duty that is given exclusively to the Board as part of the association election.  There is no association membership vote that is mandated or required in regard to maintenance fee structuring or increases, except for "special assessments" (which are generally for non-emergency fundings).

18. When fees are to be increased, how much warning do we get? 
A minimum of 30 days notice is mandated but, when possible, the Board tries to give more warning.