Update On HOA Fee Increase – FAQ

FAQ

Due to the recent inquiries about the dues increase and the operations of the new board, we have compiled this list of FAQ’s for your reference. You may read it in full here, or download it as a pdf by clicking here.  Of course, you may still contact anyone on the board for additional information.

The River Run Homeowner’s Association Board

Question:  Please provide more explanation for the dues increase from $400 to $475?

There are four primary reasons for the dues increase.

  1. Cash reserves are at unacceptably low levels to deal with any uncertainty and they need to be rebuilt to a more reasonable level.  The reserves dropped to $4,395 at December 15, 2014 from $19,499 at December 31, 2013. (The final 2014 actual expenditures will be posted to the River Run website shortly after December 31, 2014.)
  2. Watering costs increased substantially in 2014 primarily due to the HOA now being properly billed for the full amount of water used for the HOA’S parks and common areas.  Until July of 2013, one of the HOA’s water meters was being inappropriately billed to Life Center and they were paying for some of the park’s water.  This was going on since 2006.
  3. Costs to maintain and replace trees in the common areas are increasing as they grow.
  4. The combination of the higher expenses resulted in a forecast operating budget deficit of approximately $7,500 for 2015 if dues were not increased.

The new Board prepared a realistic budget and determined $475 was necessary to pay all the HOA’s operating costs and build back some reserve.  The current target is to build back the reserve to 25% of our annual operating budget (approximately $20,000). This is roughly comparable to the reserve at HOAs like Eagle Ridge. The Board is considering and likely will undertake a more formal, commissioned study to determine the final reserve. A similar study cost $1,500 for Eagle Ridge. In any case, the Board is certain a $4,500 reserve is not adequate.

Question:  How do our dues compare to other HOA dues?

The Board’s primary driver in setting dues is to make sure to cover our costs and maintain an adequate, but not excessive, cash reserve.  While the Board did not complete a market study relative to dues, we are aware of some other dues levels.  As an example, the Eagle Ridge development dues are $600 annually.  We feel this is a good comparison because it is a newer development with comparable parks and trails.  Eagle Ridge is larger with over 750 lots and homes. We have 170 lots and homes in River Run and another 36 lots and homes in the Cottages at River Run, so we operate on a smaller budget.

Question:  Can we pay our HOA dues on installments?

The dues are payable by January 15th of each year.  We currently do not have an installment program.

Question:  What caused the depletion in the cash reserve in 2014? 

The primary cause was the HOA reimbursing Life Center $10,000 to help settle the portion of water bills for our parks and common areas that were improperly billed to and paid for by Life Center from 2006 to July 2013.  The improperly paid amounts were about $70,000 over those years.  In the spirit of compromise, Fort Wright, LLC (the developers) also reimbursed $10,000 to Life Center, Life Center agreed to absorb $10,000, and the City of Spokane rebated Life Center the balance (about $40,000).  While the compromise was agreed to by the then existing Board, the current Board feels the compromise is fair and avoided the HOA entering into a lengthy dispute which would have potentially cost an unknown sum for legal defense.

The second reason was $2,915 in un budgeted legal expenses to make necessary adjustments to the Bylaws and the Declarations Covenants Conditions and Restrictions.  These changes were necessary and agreed to by the previous Board.

The balance of the reserve depletion was due to operating costs exceeding the dues assessed in 2014, primarily due to the higher watering costs mentioned above.

Question: Why are the dues for the Cottages at River Run lower than the dues for the main River Run?

Dues charged for the single family residence lots in the Cottages at River Run are limited to 60% of dues assessed to the lots in River Run proper.  The lower rates were negotiated based on a value ratio between the Cottages at River Run vs River Run Homes.  This was agreed to by the previous Board in a Supplemental Declarations to Covenants, Conditions and Restrictions dated January 13, 2013.  The following link will connect you to a copy of the By-Law modification.

The recent River Run Ramblings incorrectly stated the Cottages at River Run dues would be $310 and they will actually be $285 (60% of $475).

The developers of the Cottages at River Run were under no legal obligation to join the HOA or pay dues. The then-existing Board of the HOA was able to negotiate their inclusion in the HOA as described above.

Question:  Why does the HOA use M-T Management for certain business matters of the HOA?

M-T Management has been working for the HOA under contract with the previous Board for a number of years.  They provide numerous services for the HOA including billing and collecting dues, paying bills, managing the bank account, preparing monthly budgets, and publishing and distributing the River Run Ramblings.  They are a licensed business against which we would have redress if mistakes are made.  The HOA would not have the same redress if these services were performed by a private individual or volunteer. The Board is comprised of uncompensated volunteers and their duties should not include the duties M-T Management provides for legal liability and practical reasons.

Question: Why can’t we get stop signs, yield signs or speed bumps to slow down traffic?

All the streets in River Run (with the exception of River Edge Lane) are maintained and managed by the City of Spokane. The Board recently investigated the question of stop and yield signs with the City.  The City indicated we could not install stop or yield signs as River Run does not meet the following criteria;

  • There must be five or more reported collisions of a type correctable by an all-way stop within the latest 12 month period, or
  • The combined vehicular, pedestrian, and bicycle volumes for the major street must average 300 units per hour and the minor street must average 200 units per hour for the same 8 hours.
  • All-way stop control should not to be used for speed control.

The following links directs you to the City web site with more information regarding these issues of stop sign requirements and speed zone restrictions.

The Board also investigated installing speed bumps a number of years ago.  The City indicated these are not legal on City streets. This point is made in the linked documents referred to above.

Question: Who do I reach out to if I notice something I feel is in violation of the CC&Rs?  How about if I want to modify my property and need architectural committee approval per the CC&Rs?

The HOA has an Architectural and CC&R Compliance Committee.  Members of the committee and a contact phone number are listed below.

Tim Murphy – Lead (509) 922-1504

Ed Murphy (No relation to Tim) (509) 326-6260

Dan McGuire (732) 977-9398

Freda Zimmerman (206) 915-7490

Please feel free to reach out to any of these people if you have a CC&R compliance issue or wish to make a modification to your property requiring architectural committee approval under the CC&Rs.

Question: Describe the Board structure and when we will have elections?

The current transitional Board was seated effective November 1, 2014 through appointment by the previous Board. It is comprised of fellow homeowners in River Run.  The previous Board was controlled by members from Fort Wright, LLC (the developer) and their ability to appoint Board members was contemplated in the By Laws. The Board was appointed for a one-year term and our primary objective (as outlined at the annual HOA meeting in August) is to prepare for a Board election in the summer of 2015, with the elected Board to be seated November 1, 2015.  The current Board is hopeful those of you with a keen interest in the HOA and a passion to become involved actively seek a position on the Board.