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From the WCA Treasurer: Your HOA Budget Questions Answered

In anticipation of your Westchase association’s budget workshop in September, the WCA Treasurer answers some frequently asked questions.

This FAQ article is intended to give some background information about how the Westchase Community Association (WCA) formulates its annual budget. This article, however, might not answer every question you have. If you have a question not addressed in this article, please feel free to send an email to the WCA management office at manager@wcamanager.com or to WCA Treasurer Forrest Baumhover at kingsfordwca@gmail.com.

What do the WCA’s annual fees pay for?

The WCA is Westchase’s HOA. Its homeowners’ assessments pay for the day-to-day operations of the facilities at 10049 Parley Dr. and 10405 Countryway Blvd. This includes the maintenance and upkeep of the pools and tennis courts, as well as the facility buildings themselves. This also includes professional management, insurance, and legal costs associated with managing a 3,500+ member HOA. The fees also pay for the maintenance of the meeting signs at each of the main entrances to the Westchase community. These signs serve as one way to provide notice to the Westchase community of public WCA meetings, as required by law.

How does the WCA decide how much to set aside for emergencies?

There are several categories of anticipated expenses for which the WCA sets aside funds:

Operating funds: The WCA’s goal is to have at least six months of operating expenses set aside at any given time. During the housing crisis, having operating funds set aside allowed the WCA to continue operations when many homeowners were unable to pay their annual assessments.

Capital improvements: Each year the WCA hires an outside firm to perform a reserve study. A reserve study is a tool that helps the WCA plan for the replacement of major items. The reserve study identifies the remaining useful life of each major item and our financial ability to replace items as they get closer to the end of their useful life.

Insurance deductible reserves: While the WCA carries insurance policies to protect against catastrophic material loss or against legal damages, there are required deductibles.

Each year the WCA books are audited by an outside accountant to ensure compliance with accounting rules and to ensure that the WCA is on firm financial footing. At the May 2017 WCA Board meeting our auditor told the board members that the WCA is one of the most financially solid HOAs he has reviewed. Our goal is to keep it that way.

How do you decide whether the HOA assessments go up or down?

That’s where the budget process comes in (see below). During the budget process the WCA management office, board members, and Westchase Voting Members (VMs) first review numbers from the previous year and the anticipated numbers for the next year and then determine the budget. During this process the WCA attempts to reach a balance regarding the following:

• Maintaining solid financials
• Keeping WCA fees as low as possible
• Funding projects desired by community members

What does the budget process look like?

This question is best answered by using a timeline.

July: The WCA office compiles actual expenses incurred during the first half of the current budget year (January-June). The WCA manager compares actual expenses versus anticipated expenses for analysis.

August: The WCA Treasurer and manager analyze actual expenses and create one (or several) proposed budgets for VM review. The proposed budget(s) attempt to incorporate:

• Changes to budgeted expenses (if required)
• Projects proposed by community members (Since these can be one-time projects, or projects that require future budgeting, these projects are presented to VMs during the budget workshop.)
• Changes to WCA fees

Additionally, budget information is shared with WOW. While this information might not be available at printing, it is posted on WOW’s website at http://www.WestchaseWOW.com as soon as practical.

September: Several things happen in September:

Budget Workshop: This workshop is a hands-on meeting for VMs and residents to understand the current year’s budget execution and proposed budget before it’s voted upon. This is the community’s opportunity to ask questions about programs, fees and other expenses. This workshop might be held in late August, but was held in September last year.
Board meeting: Voting on the proposed budget is one of the agenda items for the September WCA Board meeting. After the proposed budget is passed, the VMs have 10 days to review it. If necessary, the VMs can call an emergency session to review, revise or reject the proposed budget.

How much of my assessment goes to support the WCA’s swim and tennis programs?

The intent for all swim and tennis programs is that they remain cost-neutral. In other words, the cost to participants should offset direct costs (such as increased insurance costs, or hiring coaches and lifeguards for pool usage outside of normal pool hours), as well as indirect costs (such as pool chemical usage attributed to the respective program). However, we do not intend for these programs to be a fund-raiser for the WCA.

This year all programs will be evaluated to ensure they remain cost-neutral. If not, the program directors will be advised to adjust participation rates accordingly. A full accounting of the costs associated with each program will be made available at the WCA Budget Workshop.

By Forrest Baumhover, WCA Treasurer

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