KV WATER BUDGET CRISIS!!!

In 2015, the cost to provide Water/Sewer for the community was nearly $30,000. This was about $4,000 over budget. During the first four (4) months of 2016, the Association has spent about $5,000 more for water/sewer than the first (4) months of 2015. Besides an increase in water usage, it was just discovered that the Association was not being charged for sewer costs until November 2015. The addition of sewer costs has doubled our monthly water/sewer bills. This has now projected our 2016 cost for water/sewer to exceed $45,300, which is more than $19,400 over budget. This unexpected increase translates to each of the 84 owners needing to pay an additional $230 for the year; or just less than $20 a month more in dues.

In addition, Tucson City Water is scheduled to increase water rates about 9% in July 2016. We experienced a 7% increase in July 2015, along with fixed administrative costs increasing as well, i.e. fire protection, cap charges, and conservation fee. Just considering the actual cost for water/sewer in 2015 with the projected 9% increase in rates, each KV homeowner is going to be responsible for payment of $45.00 a month, which will be paid out of the monthly assessment; currently $130.00. Currently, only $25.00 of the $130.00 is budgeted to pay water/sewer. If the current monthly assessment remains at $130.00, other community services would have to be sacrificed.

Not only must the Board of Directors be prepared to address this substantial water/sewer increase, it must also take into consideration annual capital reserve funding. The recent Reserve Study has determined that the Association should be collecting over $43.00 per unit in order to pay for necessary improvements in the upcoming years. Currently, out of the $130.00 monthly assessment, each owner is only contributing about $23.00.

Therefore if the Board were to adequately address both of the issues in the upcoming year, monthly assessments would have to increase a minimum of $40.00, to $170.00, a month. During nothing will effectively eliminate any capital reserve contributions for this year.

The Board realizes not everyone can afford a $40.00 a month increase, so the Board wants to consider other alternatives.

Controlling anticipated future capital improvements is difficult since prices are always on the rise. Painting of the community could increase to over $130,000.00, which is estimated to be redone in seven (7) years. Resealing of roofs every five (5) years is currently costing us over $45,000.00. Repairs and sealcoating of the parking lot will cost us over $12,000.00. As you can see, the current amount of approximately $150,000.00 in our capital reserves would not last long with these types of expenditures. Therefore, the Association cannot responsibly permit our annual reserve contributions to decrease from the current rate, without special assessments being implemented. Special assessments would require each homeowner to pay fees of $1,000 to $2,000, depending on the improvement needed. This would basically be a “pay as you go” plan. This is not a popular option as owners are required to pay the special assessment immediately.

The other alternative is getting a handle on water usage. Conservation of water is everyone’s responsibility, particularly since we are living in a desert and with the concern of the decreasing flow of water in the Colorado River. However, without voluntary compliance, the Board has little control, except for irrigation and pool usage. The Board has been addressing water conservation in landscaping by planting more desert tolerant plants, and cutting off irrigation where it is no longer needed.

The Board recently discovered an alternative that would greatly assist with voluntary conservation of water and provide more fairness in paying for water usage. Currently, part-time owners, those living alone, and those trying to conserve water are forced to pay the same amount each month for water/sewer as large families and multi-families living in Kinney Village. This is currently not a fair system.

This recently discovered alternative involves water submetering. Water submetering involves placing individual water meters at each unit, and each owner will only be responsible for the actual amount of water they have used each month. Each owner would individually be billed for that usage, along with administrative charges of approximately $5.75 for reading, billing, and collecting. Meters would cost $300.00 for each unit; however, they can be rented, whereby a company would be responsible for any repairs. A rental charge of approximately $5.75 would be added in this case. With these two fixed charges, owners would be required to pay a minimum monthly charge of about $11.50, along with the charges for water/sewer usage, which would be the same as Tucson City Water is charging now. Owners practicing conservation would be rewarded with lower water/sewer charges. In addition, the Association would be able to track the amount of water used for irrigation and the pool, which is not subject to sewer rate charges as it is not potable water and does not enter a drain. This would save the Association annually in getting a credit for these charges. An employee at Tucson City Water has stated that submetering has led to a 30% to 50% decrease in water usage among communities.

If this alternative is pursued, the Kinney Village monthly assessment charge could be substantially reduced from the $170.00 a month that would be needed without pursuing an alternative. Consideration of the administrative and/or rental charges could also be taken into consideration whereby monthly assessments could be reduced by a minimum of $11.00 from what they would need to be to help offset the fixed charges associated with submetering.

Water submetering would obviously affect every owner. Therefore, the Board wants to gather input from all owners, while still gathering information to ensure this is a viable idea. Currently there is no incentive for owners/tenants to conserve water. If anyone has other ideas to address these issues those would be entertained as well.

In order to gather your input, the Board is requesting each owner complete the attached SURVEY form and return to our Community Manager, Mario Martinez, by JUNE 30, 2016.

Please complete the SURVEY form and return to: Kinney Village HOA, c/o ADAM, LLC, 516 E. Ft Lowell Rd, Tucson, AZ 85705. You may also return your form or comments via email to HOA@KinneyVillage.com.

This is not a binding vote; however, the Board values your input on how to proceed.

You can print SURVEY from from link below!