Trending now within city and state governments is the notion that operational costs and budgets for 2013 will call for either higher taxes or fewer services. The sluggish economy, along with property values remaining still or down, is not helping avoid tax increases. Tax increases are not popular or politically welcomed, which means local governments nix services as the first option (even though raising taxes may be inevitable). So now you’re probably asking, “What does this have to do with community associations?”
If governments have to cut services, the first to go are usually the non-essential services with large budgets, i.e., the parks and recreation department. In addition to the traditional parks, city and county swimming pools may be closed, as well as ballparks, gymnasiums, tennis courts, and playgrounds. The total cost to operate these services and facilities is not just the cost of paying employees to police, repair, and maintain them. The costs for lighting and security are significant, as is the cost of liability insurance. The trickle-down effect to HOAs, condominiums, townhomes, neighborhoods, and deed-restricted communities will be that their common areas will become, in effect, private parks and recreational areas. Thus the resident, and resident’s family and friends, will use these facilities more. This will increase community associations’ operating budgets for repairs and maintenance, as well as increase the rate of aging, which will in turn force an increase in reserve budgets for their replacement costs.
The covenants of most community associations allow for reservation of these facilities by the members for private parties and event use. Some communities charge a usage fee, but others don’t. For the ones that don’t, this may mean they will have to increase their budgets for their common areas and facilities, and consider whether to charge their residents fees to cover these costs that spike only because of these events. Communities will have to answer the question, “Is it fair to charge the entire community for a cost that is only associated with one member or a couple of members?”
There will also be an increased demand from the general public, as well as family and friends of members, to reserve or rent these facilities for their own private events. Each community association will have to weigh the income that can be generated from these rentals versus the wear and tear. They should also consider that their own members may get blocked out of using the facilities as often and as freely as they are used to. It may be wise to review your existing rules and regulations regarding the use and fees associated with using your common facilities.
Many people use public parks and recreational facilities for weddings and other family-related events. For example, if an owner has a family member or friend that is planning a wedding, and your community has a very nice clubhouse, swimming pool, and deck area, that owner/member may get pressured to request the use of your community’s facilities for that wedding. Perhaps your community does not charge now. Perhaps you don’t have a limit on the number of people that can attend an event that is privately reserved. You may not have a rule that allows or restricts catering events on common areas. Closing public parks and recreational areas and facilities will bring pressure to use private community common areas and facilities. This pressure and increase in requests for use by members may be cause enough to review your community’s reservation request procedures, rules of use, and fees.
Here is a short list of questions that should have good answers when it comes to the use of your community’s common areas and facilities.
The point of this article is to get you thinking about your common areas. When was the last time you reviewed your request procedure, rules of use, and fees you charge? The odds are you may be receiving more requests for unusual events, along with more noise, and more people than you have ever had to deal with before.
The bottom line is, as access to public facilities becomes more restricted or eliminated, the pressure on using private facilities, such as your community’s clubhouse, pool, or common areas, will increase. Give it some thought. Review your current guidelines for use. Take preventative actions to make sure you upgrade your related rules and regulations as necessary, and anticipate this increase in the volume and types of use. This economy has caused changes in all our lives and in our communities that we did not expect. But we do have to stay ahead of the curve to protect the assets of our communities for our members. Be proactive instead of reactive to prevent a problem, and your community will be better for it!