Greetings from the Board – September 2022

Greetings from the Board
This month’s article is written by David Light, Vistoso Community Association (VCA) Treasurer and Finance Committee Chair.

It is now the time for the annual budget process—which is one of the most important routine jobs that VCA’s Board and committees are concerned with each year.

Homeowner association budgets may seem arcane to some members, but while the process to create them is complex and usually takes two months (typically September and October), describing that process can be simple and easy to understand. VCA’s budget must be approved by the Board of Directors by October 31, 2022.

Most members are concerned mainly with how much the assessment will be, or will increase from the current year. (To see a copy of the current budget, go here.) This is, of course, important, but there are other important purposes to the budget, as well, that have a bearing on the annual assessment.

An HOA budget is more than just an estimate of how much expenses will be and whether they will fit into the projected income—it is a policy statement that indicates what are the necessary annual operating expenses, and thus what must the annual revenue be to pay for those expenses. It also includes a figure for the recommended reserve fund expenditures (which typically come from the annually-updated reserve study (see here) provided by an independent reserve study company). This separate part of the budget, which is also funded by the annual assessment and other revenue, allocates the annual funding of projects related to the maintenance and replacement of our long-term assets, which the study projects for each year over the next 30 years.

The structure of the budgeting process

1. The first step is management’s draft of the necessary operating costs, using current and historical records, and a draft of the reserve fund expenditures as provided by the reserve study specialist.
2. This is reviewed and adjusted, if necessary, by the Finance Committee. Input from other committees is also considered.
3. Before the budget is approved by the committee and a recommended budget is sent to the Board, the assessment—which is the association’s primary source of revenue—is determined, and generally must be enough to cover the prescribed expenses (and estimated expenses, in the case of items such as utilities). However, as stipulated in our bylaws, the Board must also take into consideration any surplus or deficit from the previous year in calculating the needed revenue (and thus assessments).
4. The third step is the Board’s review and final adjustment, if necessary, followed by the Board’s adoption of the budget. The adopted budget guides the association’s spending for the budgeted year. An adopted policy limits the addition of unbudgeted items, unless they are emergencies.

Other issues
You may have noticed that the current budget has a projected deficit of $260,000. This is because the operating fund balance had grown to well over a million dollars over the last several years. An operating fund balance, or “cushion”, of approximately two to three months of our average monthly operating expenses for an HOA of our size is considered appropriate (currently, we spend about $200,000 on average per month). Thus about $400,000 to $600,000 in our operating fund balance should be considered adequate.

Occasionally, an expenditure that is not budgeted is proposed by a committee, the board, or by management. While emergencies give management (within certain limits) discretion on how best to handle, Board-adopted resolutions control the decision process, which may involve the Finance Committee to determine the impact on the budget and how, if at all, to fund the proposal, prior to a final decision by the Board.

The entire budget process is open to the membership, and can be observed and even commented on during meetings of the Finance Committee and the Board, which are noticed by email and on the website. See you there.

Snapshot – September 2022

In case you missed the August 25, 2022 Board of Directors meeting, below is a “snapshot” of the General Manager’s report to the community. The entire report begins on page nine in the Meeting Resident Info Packet on the VCA website calendar under August 25, 2022.

Shade Sails & Playground Surface Replacement
The shade sails for Wildlife Ridge, Torreno, Hohokam and Sunset Ridge Parks have been shipped. The ground surface replacement for Hohokam and Sunset Ridge Parks will be scheduled along with the installation of the shades.

Onsite Office
The VCA staff is coordinating the move from 945 W Vistoso Highlands Drive location. Expert Movers Arizona will be moving the furnishings to a local storage facility on August 18 that we were able to acquire. The Pitney Bowes machine and the copier will be moved and stored at FirstService Residential Tucson Office where VCA staff is temporarily working. The current owner of the building is anticipating taking the building down in September. We currently have access to the new location at Mountain View Plaza and FirstService Residential IT will be inspecting the site. As of last week, the new landlord has not started renovations on the space. AAA Landscape assisted in the disposal of items that we were not taking with us and saved the association the cost of renting a dumpster. All services will be
shut off by the end of the month.

Moore Loop Road Park
Both Mattamy Homes and Anthony Martin of FirstService Residential has been monitoring the drainage at Moore Loop Road Park over the last several weeks and found that the newly installed drainage system is performing well. Mattamy is currently concentrating on the grass area adjacent to the playground equipment. Once this is completed a final inspection will be scheduled prior to turn over.

Erosion Projects
Both John Wise from WLB and Anthony Martin from FirstService Residential inspected the erosion in the drainage area off N Big View Ct. The association received notice from John Spiker from the Town of Oro Valley Public Works Department about the situation. Anthony Martin will provide the oversight on this project at no cost to the association.

Storm Damage
AAA Landscape has been busy cleaning up the community from the monsoons. Several trees have been damaged and had to be removed.

Registration open for the Town of Oro Valley’s Community Academy!

Enjoy this fun and free 7-part series to learn about your community and local government. Topics include: Town governance, General Plan 2026 prep, public safety, roadways, parks, water planning, finance, zoning and economic development. Classes will be held twice a week throughout the month of October. Participation is available in-person or online but please register by October 1. For details or to register, visit Community Academy – Oro Valley.  Questions? Contact [email protected] or (520)229-5062.

Meet Your Neighbor – Karen Kreider

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Meet Karen Kreider – Ridgeview at Vistoso Trails

If you’re a Disney fan (and who doesn’t love Lady and the Tramp), then meeting Karen Kreider is a special treat. Karen worked at Disney Studios in Burbank, CA for 31 years, starting back when Disney was one of the smallest studios in Hollywood. Everyone referred to its founder as just “Walt” and all the executives preferred to be on a first-name basis. Karen started in the publishing division at Disney as an author and editor and moved on to become an online writer and producer, ending up as a Product Safety Engineer. Combing through hand-painted animation cells drawn as far back as 1937, Karen created some of the images used in coffee table books, her first being Encyclopedia of Walt Disney’s Animated Characters. Karen also authored numerous adaptions of Disney favorite animated films for Little Golden Books, Miniature Storybooks and Comic Books such as Aladdin, Snow White, and Beauty and the Beast.

Once Karen and her husband Bill Crounse retired and their daughter had moved out of the house, it was time for them to consider relocating. Bill’s brother had been living in Stone Canyon since 2015 and Karen and Bill visited every year. With her brother-in-law’s encouragement, Karen and Bill started looking in Oro Valley and in 2019 settled on purchasing a brand new home in Ridgeview at Vistoso Trails. Although they looked in other Tucson areas, they were drawn to the beauty and loveliness of this community.

Karen hasn’t wasted any time getting to know her new community. Currently Karen is HOA President at Ridgeview and is on the board of The Oro Valley Theatre Company (Karen has an MFA from NYU in theatre.). The Oro Valley Theatre’s next play, Deathtrap, will begin November 9 at the Gaslight Music Hall in Oro Valley. Karen’s other hobbies include tap dancing, choir singing and yoga. She encourages everyone to check out the upcoming shows at orovalleytheatrecompany.com.

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Do you have a neighbor we should meet? Please tell us at [email protected] why you think they would be good to meet and supply the neighbor’s phone number and email address. Also, be sure to let your neighbor know that you referred them to us.

Did You Know – September 2022

How well do you know where you live? 

1) Which of the following statements is not true about the expected income for the 2022 budget that was set last year (You can view the June 2022 Financial Statements here)?
A. Annual dues from homeowners are approximately $1.8 million.
B. Annual dues from commercial properties are approximately $707,000.
C. The VCA doesn’t expect any income from violations this year since everyone is expected to follow the rules.
D. Assessments to builders is approximately $114,500.
E. Late fees are expected to be $30,000.

2) Which of the following statements is not true about the expected expenses for the 2022 budget that was set last year (You can view the June 2022 Financial Statements here)?
A. Administrative fees including office lease, legal fees, management fees, salaries and benefits are approximately $767,000.
B. Water utilities fees are approximately $200,000.
C. Electric utilities fees are approximately $52,000.
D. Landscaping is approximately $1.2 million.
E. The VCA doesn’t pay for pet waste removal.

3) Which of the following is true about the budgeted reserve fund expenses in the (You can view the June 2022 Financial Statements here)?
A. Although the VCA will spend almost $1 million dollars this year fixing and replacing things, it won’t have to be done again for another 30 years.
B. Budgeted expenses for drainage is $200,000.
C. Budgeted expenses for repairs and replacement for irrigation systems is approximately $338,800.
D. Budgeted expenses for repairs and replacement for play structures is approximately $143,000.
E. Budgeted Expenses for repairs and replacement for park furniture is approximately $93,500.

4) Oro Valley is home to the 37-acre Tohono Chul Park. Which of these statements is not true?
A. Richard and Jean Wilson started the park in the early 1980’s in the backyard of their house which they thought was haunted.
B. Tohono Chul was named “One of the World’s Ten Best Botanical Gardens” by Travel + Leisure Magazine.
C. They have many different programs among them are Reptile Ramble, Birds of Prey – Night and Day, Butterflies and their Plants, Chillin at the Chul, Yoga in the gardens, and Rock and Ruins.
D. The 49-acre facility has a large gift shop, a bistro, nature trails, gardens, and constantly changing indoor and outdoor art exhibits.
E. Thirty-eight species of birds make their permanent home there while another 57 migrant species visit seasonally.

5) Catalina State Park is literally in our backyard. Which of these statements is not true?
A. The idea for the park originated from opposition to a proposal in the early 1970’s to rezone 4000 acres next to the Catalina mountains for a housing development for 17,000 people.
B. In 1974 House Bill 2280 was introduced to establish Catalina State Park but there was so much contention that at times State Parks staff was sent to the field so they would not be available to testify before the legislative committees.
C. The park has 8 trails, 6 reservable group areas, 120 campsites that have electric, water, and are either tent or RV ready, a visitor center and two gift stores.
D. Catalina State Park has been designated an Important Birding Area (IBA) by the Audubon Society and is part of the Tucson Sky Islands IBA.
E. Although you can bring dogs in the park, horses are not allowed.

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Answers:
1) C is false – income from violations is expected to be about $15,000 in 2022.
2) E is false – the HOA expects to spend $22,000 for pet waste removal in 2022.
3) A is false – Every asset that the VCA owns has an expected lifespan – some assets have long lifespans and others are short. The Reserve Study details the assets, their lifespan, and the current condition of the assets. The Board of Directors uses the Reserve Study to prioritize repairs and replacements and adds this to the budget. Upkeep of VCA assets is an on-going process that will always be included in the yearly budget.
4) A is false – Richard and Jean Wilson opened a bookstore called ‘The Haunted Bookshop’ in the early 1980’s – I do not believe their house is haunted. You can find more information about Tohono Chul Park here.
5) E is false – Catalina State Park has an equestrian center with 17 large pipe corrals of which 4 are partially covered with shade from a large barn. You can find more information about Catalina State Park here.