The following is the latest in a series of monthly messages from the RVR Master Association Board, called “A View From the Board.” The messages summarize recent Board decisions and discussions and are designed to bring RVR homeowners up to date on issues important to the community.
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Dear River Valley Ranch Homeowners,
Fall always marks a transition here in the mountains, the down jackets emerge from the darker recesses of the closet, and we watch Mt. Sopris for those first dustings of snow.
Another change that fall brings is of the financial variety. This is the time of year when Ashley and his team pour over spreadsheets and consider the year ahead. As always, we look for financial benchmarks to give us an indication of what the future might bring.
The consumer price index is one of the metrics that the team looks to, alongside the actions of the Federal Reserve. The trailing 12-month Consumer Price Index (CPI) is currently at 3.7%. Federal Reserve officials seem to indicate that more work needs to be done to tame inflation, bringing it back down to a 2% target, but this data is certainly more reassuring than it was this time last year.
Inflation is a part of life that’s almost as predictable as death and taxes. A dollar could buy you a lot in the days of Laura Engles Wilder, these days… not so much. We know that prices will always increase as time progresses. It’s just a matter of how much. Contracts for lawn maintenance will become more expensive, the price for irrigation supplies will increase, and all employers in the country will be asking themselves about wage increases in the next budget cycle.
We have a competent management team with strong financial acumen and operational expertise. They have meticulously forecasted the remainder of 2023 and plan to end the year within 1% of budget. That should give us around a $20K-$30K surplus at year end.
The proposed operational portion of your dues are increasing only via inflationary pressure. The only added expense outside of CPI is related to the Emerald Ash Borer, which is threatening our urban canopy, just as it has in so many other areas, including the Front Range. The team worked hard to find savings to offset this cost, largely via labor controls. The 2024 budget reflects only a 2.5% labor increase over the 2023 budget in spite of inflationary figures that are around 3.7%.
RVR has over 60% of Carbondale’s Ash Trees, and those trees are going to require some extra expenditure now that those pests have found their way from the front range to our little mountain oasis. While that expense is not excessive when considered as a percentage, we are budgeting to treat a good portion of those trees as is recommended by the Carbondale Town Arborist and Carbondale Tree Board. This is a topic that has been discussed at length in board meetings and GM communications, so I won’t dwell on that topic here. There will be many opportunities to further discuss this in the future.
So what does this mean for homeowner dues in 2024?
First let’s define 2 aspects of RVRMA’s dues. There are Operational dues and then there are Reserve dues. Both of these combine to represent your overall dues. Currently in 2023—$324 of your monthly dues go to operating with $70 going to Reserves.
This first draft of the 2024 budget shows a $14 increase to monthly operational dues, that is around ½ of last year’s increase, and it constitutes a 4.3% increase year over year. That 4.3% consists of inflationary increases along with increases associated with treatment for Emeral Ash Borer.
Now on to the Reserve portion of the dues:
We anticipate ending the year with $2.5 million in reserves. The management team recently ordered a new reserve study (in 2023). That study assigns a percentage, which tells us how well funded we are on a scale from 0% to 100%. The results of that study put us at 58% funded. Somewhere closer to the 70% mark is generally considered to be a very good place to be (though that’s debatable).
Given this analysis, the RVRMA Board of Directors felt that a $10 monthly increase (moving from $70 in 2023 to $80 in 2024) to the reserve portion of your dues would be prudent. This reserve increase constitutes a 14% increase year over year. We felt that this was a pragmatic decision to ensure that our reserves are robust into the future—particularly given historic construction related inflation in the Roaring Fork Valley.
What’s next?
Now it is time for the community to have a look at this draft. We are holding feedback sessions in the Ranch House where we will be available to discuss this proposed budget with homeowners. We invite any interested parties to come down to the Ranch House (or via zoom).
Just as last year, another draft budget will then be included in the October board packet (board packets are always emailed out the Saturday before each monthly board meeting). In this meeting we will discuss feedback that has been given and the Board will have the chance to discuss as a team.
During the November Board Meeting (11/15), the Board will vote on the proposed budget. If approved, it will be posted to the website and a vote will go out via Survey Monkey in early December.
Well that’s about all that I’d hope to share, I think that the rest of the story is best told through the links below, which will walk you through the nuts and bolts of the proposed budget.
Sincerely,
Michael Banbury
RVRMA Board President
