Proposed budget

I received the proposed budget and have some suggestions and questions regarding it. I am posting them here, assuming that others may also have similar comments and they can all be addressed at once. This may also save some time at the upcoming meeting.

Management contract - I understand that B&G has not had an increase. however this is typical in today's economic environment. Most companies are happy to retain the business and are keeping prices flat. Additionally, a 10% increase (over $4000) seems way out of line. No one in business receives a 10% increase now days. I suggest that if B&G are not willing to hold the price, that we consider looking at other firms or putting out a bid. This is what all businesses are doing these days.

Management fee - in addition to the above, there is a management fee of $1,500 listed. My question is what is that for?

Mailing & Postage - There is a proposed cost of $3,300 listed. I know that B&G sends out mailings a few times a year, but assume that is part of there fee for their service. What is this additional cost for?

RP website - websites typically cost less than $100/yr. I also notice that we advertise RE listings for realtors. I would suggest that if any realtor wants to advertise on our site, there is a fee to offset our cost. Actually, I don't think we should be advertising on that site in the first place. I think we can save money by maintaining our own site and eliminating the advertisements or charge for them.

Entrance gates - It seems that $5,000 is very expensive for a service contract.

Telephone - $3,500 for telephone calls seems very high. If B&G are making the calls, that should be part of their contract. What does that cost cover?

Club house rental - when we rent out the clubhouse, where is that on the income sheet?

I know that we all agree that the community has to be properly maintained and kept up to high standards, however in today's economy, I also believe that we can do that in a very cost effective manner. Today's businesses are closely scrutinizing every contract, particularly at time of renewal, and the expectation is that suppliers renew for a lower price with added value. I think as a community we can take the same approach.

Thank you for your consideration and I look forward to your thoughts.

I have responded below to the questions regarding the Proposed RPHOA 2012 Budget.

• Management Contract

Over the last several years, the Board has considered management proposals from several companies. We found that many of the companies used similar billing methods. They charge a fixed fee each month, but also have numerous additional charges for various services. For example, Kuester, our previous management company charged additional fees for the following:

- Attendance at every meeting with the Board or with individual Board members ($75 per meeting).
- Additional hourly charges for meetings that ran overtime.
- Calling repair vendors.
- Added their own surcharge to many of our bills that they paid.
- Coming to RP to facilitate repairs and maintenance.
- Sending letters to individual homeowners, vendors, or others on our behalf.

Our current management company, Brown and Glenn, does not charge extra for any of these services. They are all included in our contract. They have frequently provided additional services at no charge at our request that were not included in our contract with them. In general, they go above and beyond what they are required to do in the contract with no complaints.

There are a few items, as specified in our contract with Brown and Glenn, that include relatively small additional charges. The costs of these items appear in the Management Fees and the Mailing and Postage sections of the budget.

- Mass mailings to all or large numbers of our 362 property owners.
- The cost of supplies and postage for these mailings.
- Preparation of the extensive documentation needed to file liens on property.
- Preparation of documentation to submit claims to our collection agency.

When we considered the fixed fees as well as the add on fees that many management companies charge, we concluded that Brown and Glenn not only provides excellent service, but they are also less expensive than the other companies, even after the current increase.

• RP Website

In early 2012, Brown and Glenn will have the ability to host our website at no charge. The yearly budget amount was left in, since this change may not occur until a few months into the year.


• Entrance Gates

The amount listed is not for a maintenance contract. This category is for repairs and maintenance of the gates and the keypad system. So far, in 2011 we have spent $3871 on repairs caused by lightning strikes last July 4th. We are grounding the telephone system associated with the gate access keypad system to minimize the possibility of future lightning strike damage. In an abundance of caution, however, we are still including funds for Gate repairs and maintenance in the 2012 Budget.

• Telephones

These expenses are for phone lines and internet connections in RP. The state requires a landline that is accessible to those using the swimming pool for emergencies. That phone is mounted on the outside wall of the clubhouse in the pool area. We also must have phone lines and internet connections to facilitate the use and remote monitoring of security systems, smoke alarms, and the gate keypad systems at the clubhouse and gatehouse.

Although individuals could get these services at lower rates, RPHOA is considered a commercial enterprise by these companies. Thus, we must pay commercial rates which are much higher than individual rates. You will notice that we were able to reduce these costs from $4400 in 2011 to $3600 in 2012 through price shopping and by eliminating some unneeded services.

• Clubhouse Rental

We do not include Clubhouse rental fees in the budgeting process since we have no way of predicting how much they will be. We usually take in several thousand dollars per year in rental fees. We also have some other minimal miscellaneous income in the form of interest earned on our bank accounts. These funds are used at the end of the year if we have any small overages in some budget categories or if they are not needed there, they are added to our Capital Reserves. These funds are always recorded in our RPHOA financial statements (Profit Loss Statement, Balance Sheet).

If you have other questions, please feel free to post them or contact me directly.

Leighton Stamps
RPHOA Treasurer
Lstamps25@gmail.com
704-461-8149

Just out of curiosity, I noticed that the 2011 budget was calculated by 360 home sites, and 2012's is multiplied by 362 sites. What caused the change?
Thank you

The RPHOA has foreclosed on two lots. Since we are now the owners of those two lots, we cannot collect dues from ourselves, which reduces the number of lots owing dues to 360.

Leighton Stamps
RPHOA Treasurer

Thank you for your reply, but it looks like the number of sites went UP, from 360 to 362. That seems to be the opposite of your explanation.

2011 budget.
$1540 x 360 sites = $554,400

2012 budget.
$1690 x 362 sites = $611,780

If we now own 2 sites it should have gone down, not up.
Thank you

Sorry about my reply above. I misread the question. You made a good point. I should have used 360 lots in the budget calculations, rather than the 362 that I used (for the reason I mentioned above). I will make that change and the corrected budget will be distributed at the Annual Meeting on Dec. 1. The change will reduce the Income from HOA Assessments by $3380, and also decrease the budget line for Repair and Unanticipated Maintenance Fund by the same amount.

Leighton Stamps
RPHOA Treasurer

I believe there are 364 homesites in our community. Although the sites are numbered up to 362, the is a lot 271A and a lot 36A, therefore a total of 364. With our HOA owning 2 sites, the correct number of collected dues should remain at 362. You were correct in the first place.

The map of RP is not completely accurate. According to Gaston County records there are 362 lots in RP. There are a few lot numbers that are designated lots on the map that are actually common areas. There are also areas where there are missing lot numbers, etc.

Leighton Stamps

Ahhhh! I see. Do you know which lots are actually common areas and where the other discrepancies are?