By Kevin Burke, Treasurer
After considerable deliberation and analysis, the Lakeport Board has decided to increase the HOA assessment by $45/quarter, beginning in 2020. The assessment would total $1,380 annually for each unit in Lakeport Cluster, which would produce additional revenue of $14,760.
The Board is proposing this higher assessment, the first increase in five years, to be able to meet pending major expenses, especially repaving our roads and parking areas, as well as increasing demands for tree management as a number of our trees reach the end of their lifespan. The Board’s tight management of the Cluster’s resources means that there are no additional opportunities for significant savings if we are going to meet the current demands of the budget. We simply need additional revenue to maintain the Cluster in a way that enhances the property value of our homes and the community.
The Board projects this year’s budget will have a surplus of about $3,000, and if at the end of the year we still anticipate a surplus, we will redirect some of that to additional tree trimming in December (we’ve negotiated a 10-percent discount for this work if it is done in this off-season period).
Unfortunately, we had to replace our dock much earlier than originally planned, and Lakeport’s Reserve Study scheduled repaving our roads (the other $100K+ project) in 2020. Having these two major projects so close together creates a challenge for our reserve funds. The construction of our Cluster’s dock and the related replacement of our bollard path lights significantly dented these reserves. We have concluded that our roads are in good enough shape (with occasional patching done by some terrific Lakeport volunteers) to last an extra year so that paving can be postponed to 2021 (or perhaps even 2022). At the same time, we recognize that a repeat of last winter’s snow events and plowing could accelerate the deterioration of the pavement as well as place a greater burden on our operating budget. Each year we transfer $21,000 into Replacement Reserves, but at that rate we will not have sufficient funds to meet the costs of conducting a mandated study of reserve funds this year and repaving in spring/summer of 2021. In other words, we need to start transferring more into reserves to prepare for the repaving project.
We also must deal with the trees in our neighborhood that are showing their age and could threaten the safety of residents and homes. It is expensive to remove or trim mature trees. For example, the removal of two pine trees on Cluster property along Sunrise Valley Drive last year cost $900 each, and removal of an oak scheduled for this year will be $1600. The Board spent $16,000 on tree management the last two years. Because of less flexibility in the budget this year (and the need to allocate funds to replace the hedge by Safeway), we have only $5,000 for tree management, but considerable work still remains.
Hardly any of the expenses in the Cluster’s budget are discretionary: Insurance, snow removal, trash removal, electric service, association management, audit, and landscape maintenance are contracted services; common-property repairs are unavoidable; legal advice is necessary to keep the Cluster in compliance with applicable rules and regulations; and we are legally required to make transfers to fund our Replacement Reserves. The only significant budget item that is discretionary is landscaping, and that is critical for the appearance and appeal of our Cluster.
The Board’s decision to increase the dues is also designed to help the Cluster catch up to maintenance that has been deferred and cover the inflationary increases that have built up over the last five years.
The Board has scheduled a briefing for Lakeport homeowners on Monday, August 26, from 7:00 p.m. to 9:00 p.m. at 1919 Lakeport Way. Please notify the Board (Board@Lakeport.org) if you are interested in attending.