You should have recently received an email this week from our Property Management Company, Timmons, regarding the HOA dues increase from $65/month to $70/month, or $105/month to $110/month if on Dobson Branch, which will become effective in January 2021. The HOA Board would like to explain the reason for this increase, and what it means for the financial position of our Bent Creek community.
The Board has many responsibilities to Bent Creek homeowners. One of those responsibilities is to ensure that the community is financially sound for today, tomorrow, and for the long term. We do this by creating an annual revenue and expense budget, by negotiating favorable contracts through a multiple bidding process, and by contracting a professional reserve company to assess the adequacy of our reserve balance. All of this is also annually reviewed by an independent auditor.
Each year we review all of the above items to determine if our monthly dues are set at an appropriate level. This has happened annually since Bent Creek was put on the map. The Board is happy to say that due to a financially minded HOA the monthly dues for Bent Creek have remained at constant since 2008. That is 12 years of no increases. While prudent management has been one of the reasons for these 12 years, a community that is newly built and growing has the advantage of, being new and things not breaking. After more than 16 years in existence, the community is still a beautiful place to live, however, it is an aging community. As a result, the array of amenities we have will start to need some rejuvenation. This became evident after our recent reserve assessment and something we have already begun to address. Just recently we have invested in repairing and replacing some of our trails and doing some major renovation/repair work on our pool (see 2020 Q4 newsletter). This is just the beginning of addressing an aging neighborhood.
At the beginning of the year, the Board was advised to update our communities reserve study. The last study was completed 5 years ago. At the time of the last study a reserve amount of $700k was recommended, and we had a cash position to meet that amount. Fast forward 5 years and the community has grown and aged. The recent reserve study now recommends a minimum reserve balance of $1.4mil through 2025. In order to achieve that balance the study recommends a $32K increase to our annual reserve contribution. The study indicates this should be sufficient through 2025.
In addition to the results of the reserve study, there are several other factors which have increased the funding needs of the community. These include inflation pressures on services we receive, and a loss of income from our steady but safe investments due to a decline in interest rates.
The board realizes and appreciates that it is never a good time to increase dues, especially this year, and we have kept the increase to a minimum. Deferring an increase this year would only compound the distance we are from the required balance. This is a prudent decision and will ensure the community stays on a solid financial footing for the long haul.
You may review all our Financial documents, including the Reserve Study, on our website, https://www.bentcreekhoa.org/financials/. As always, please reach out to us with any questions.