FAQs: Costs and Budget

The following FAQs are taken from the Official HOA Fact Sheet. They are broken out here by topic for homeowner convenience. They have been updated with links and line-throughs to show the current status of work completed. (All links open in a new tab.) You can see the FULL OFFICIAL FAQs here to verify that all information is accurate to the official version. This page is provided only for ease of reading and convenience in referencing additional information.

  1. Are we selling the HOA’s front lot where the swimming pool and tennis courts are located?
     
    No. The HOA Board received a letter of intent from a developer who was interested in purchasing the property for $4.5 million. The property was appraised for $4 million, but the HOA was informed at the last meeting that the Board turned the developer’s offer down. The lot owned by the HOA is not now, nor has it ever been, listed for sale by a broker. No one is advocating or planning to sell it in the future. The clubhouse purchase will be accomplished via a dues increase, and the amount of the dues increase will be sufficient to cover acquisition, operation, and maintenance costs. Moreover, a sale of the front property would require a much higher voting threshold as well as approval from mortgage holders.
  1. What are the terms of a proposed acquisition of the land and former clubhouse parcels?
     
    The Virginia Oaks HOA has offered to buy the clubhouse parcel, 19+ acres around it, plus all the land belonging to the former golf course except for the 2 acre maintenance shed lot on Route 29 and the 10 acres along the peninsula that were purchased by the Boones in May 2019. The total purchase price is $1,750,0000.
  1. How would we pay for that purchase?
     
    The HOA intends to obtain a 15 year loan for acquisition and renovation costs combined, secured by future assessments. The lender that has been chosen is Wintrust Community Advantage, a bank specializing in association loans. The loan will be a IO year fixed rate at 4.15 percent (first year the loan is a line of credit) and then variable for the remaining 5 years.
  1. How can we be sure that we won’t have to keep increasing HOA fees to pay for operating the clubhouse and property?
     
    The Board is investigating has investigated all aspects of the potential purchase to ensure that the purchase of the clubhouse, and its ongoing operation, will not be the basis for an additional dues increase in the future. However, the community has had virtually no increase in dues over the last ten years, so minor increases to account for our current operating budget (not inclusive of possible golf course operating expenses) may be necessary to keep up with inflation. This would occur regardless of whether the golf course is purchased.
  1. How do we know there won’t be unforeseen expenses related to the clubhouse that would force us to sell the front property a few years from now?
     
    To answer this question, it is important to understand how an HOA manages its assets and facilities. Facilities are managed according to guideposts set out in a “reserve study” which is a legally mandated report created and updated periodically by an outside engineering firm. The reserve study examines current conditions of all facilities, down to fencing and parking lot paving, plus HOA finances. It sets out a year-by-year schedule for when repairs need to be made to everything the HOA owns. The study also tells you, after adjusting for inflation and escalation, how much those repairs will cost. This then let’s the HOA set aside enough money in a “reserve fund” to cover those costs when the time comes. If there isn’t enough money, the HOA Board must find savings somewhere or increase annual fees enough in advance so that the money will be there when needed. This study has been completed and has been incorporated into the budgeting projections.
  1. What would happen if the HOA couldn’t afford the upkeep on the clubhouse or property or couldn’t repay the loans?
     
    The Board is independently reviewing has independently reviewed future operating costs and reserves necessary to ensure that the recommended dues increase will cover funding needed to maintain the clubhouse and former golf course property, make the necessary renovations, and repay the loan. Unforeseen circumstances, whether we own the golf course property or not, could arise that could necessitate dues increases in the future; this will be handled in accordance with our bylaws and declarations.
  1. How much would the purchase cost individual homeowners?
     
    At the moment, the preliminary figure still looks to be around The FINAL figure is an increase of $720 per year per household in addition to existing dues. The HOA Board is currently reviewing and refining has reviewed and refined the budget to ensure future operating and reserve expenses are adequately reflected in the proposed dues increase. The HOA Board is considering has considered all possible expenses that the HOA will incur should the purchase take place, including, but not limited to, landscaping, security systems, reserve increases, financing costs, utilities, snow and trash removal, and many other line items
     
    A 30-year “reserve study” was recently conducted on the clubhouse and land by an outside, independent engineering firm. This study maps out all maintenance and repair expenses related to the new facilities and how much those expenses will be in the year when they are made. The study is in-line with what has been projected. This confirmed number will be folded into the projected budget. 
     
    Again, by the time HOA members are asked to vote on anything related to the clubhouse and land acquisition, tThe Board will ensure has ensured that all in the community can have complete confidence in the operating and maintenance numbers and will provide has provided full explanations for how those amounts were derived. The Board has also had the budget reviewed by an outside, independent 3rd party Certified Public Accountant with HOA financial expertise. This CPA checked the budgets for completeness and verified that all costs had a valid basis. He provided a letter of confirmation to the HOA Board and residents.
  1. What would happen if the HOA couldn’t afford the upkeep on the clubhouse or property or couldn’t repay the loans?
     
    The Board is independently reviewing has independently reviewed future operating costs and reserves necessary to ensure that the recommended dues increase will cover funding needed to maintain the clubhouse and former golf course property, make the necessary renovations, and repay the loan. Unforeseen circumstances, whether we own the golf course property or not, could arise that could necessitate dues increases in the future; this will be handled in accordance with our bylaws and declarations.
  1. What repairs need to be made to the clubhouse immediately?
     
    The HOA Board and original Steering Committee commissioned a professional commercial inspection of the clubhouse facility from an outside engineer in May. Based on that inspection, R.W. Murray builders provided estimates for the completion of all required repairs. The clubhouse needs a new roof, new hot water heater, and potentially the replacement of some of the smaller HV AC units. There is wood damage and some water damage, including interior ceiling damage, that needs repair, and there are minor repairs to be made throughout. The building needs to be painted and sealed and the parking lot needs to be resurfaced. The loan that will be used to finance the purchase will also include an additional sum to account for these repairs, making the total loan amount $2.5 million at most. The $720 proposed dues increase assumes a loan of $2.5 million. Therefore, all repairs to bring the facility to a usable and stable condition were accounted for within the provisional proposed $720 annual fee increase, and those numbers are being refined and validated. A 30 year maintenance “reserve” study has already been completed and an updated inspection of the building will also be completed as soon as possible. Any adjustments to planned repairs or budget items will be made so that all figures and calculations are updated and validated prior to voting.
  1. What maintenance needs to be done to the land and paths after the HOA acquires it?
     
    The areas around the clubhouse and along the street frontages need to be cleaned up and cleared of weeds. Approximately 7 acres of golf course property abuts our street frontage and will need to be maintained, as well as approximately 4 acres surrounding the clubhouse. Some plants and visible trees that have died may need to be replanted. There are trees that have fallen across the cart path, bushes and limbs that have grown over it, and weeds that have grown up around that. The HOA will want to clean that up and keep it clear. The irrigation system around the clubhouse needs to be repaired. The HOA has included within its repair estimates a line item for initial landscaping work to bring the golf course property in line with current HOA common area. The HOA will want to mow on either side of the path and control weeds that grow in the cracks between the concrete sections. The HOA will need to cut brush around the stormwater ponds and water features and do some basic repairs. Then the HOA will need to hire a company to treat for algae and duckweed occasionally. The HOA will also want to remove the netting on the former driving range and will look into having the posts removed as well. 
     
    Funds have been included within the provisional proposed $720 annual fee increase to account for all these costs completely.
  1. What golf course property will be maintained after the HOA purchase?
     
    All golf course street front property and about 4 acres around the clubhouse will be maintained to the same Class A standard as HOA property is currently maintained. The immediate (one mower width) area on either side of the cart path will be mowed every other week and the path will be kept clear and free of weeds. The ponds will be cared for, although dredging the ponds is County responsibility. Individual homeowners will have the option to submit an application to trim or otherwise maintain areas behind their homes or between and around the newly planted trees in the Nutrient Bank, as long as that maintenance doesn’t violate the Nutrient Bank restrictions. Once such approval is received, this maintenance can be performed by individual homeowners or by a contractor hired by the homeowner.
  1. What if we want to add additional amenities later, like a dog park or additional parking for the townhomes?
     
    Having the extra acreage would allow the HOA flexibility to add additional facilities in future. Such amenities are not currently being budgeted, but may be considered if additional savings can be found within the renovation budget.
  1. What is the property worth?
     
    It is hard to use any type of objective standard or value to determine what the property is worth to the Community, as the golf course is an integral part of the community. That being said, the golf course owners received 5 other offers, at least two of which included offers to purchase the land and the clubhouse. The HOA Board believes it made a competitive offer in light of the all the offers that were made. Seven years ago, the Clubhouse parcel alone was assessed at $3,450,000.
  1. Will the HOA lose the $100,000 deposit if the HOA does not vote to acquire the land and clubhouse?
     
    The vote is anticipated to be will be completed within the 60 day study period allowed under the Purchase Agreement. Within that 60 days, the purchase can be terminated by the HOA at no penalty and with a full refund of the $100,000 earnest money deposit.
  1. What will it cost to insure the golf course land and clubhouse? 
     
    Farmer’s Insurance quoted a price for insurance that is already included within the provisional annual fee increase that is being refined by the Board. This price has now been updated to include all property and liability for the acquisition plus current property. Current property coverage has also been significantly increased to allow for full replacement cost. The final price is approximately $5,000 more than is currently paid by the HOA for existing coverage and Virginia Oaks facilities. Farmers walked the entire golf course property and determined that the land will fall under Virginia’s recreation laws. The former cart path will be treated as a “paved trail,” so while the HOA will do its best to keep it clear of weeds and brush, anyone who uses it will do so at their own risk-not the HOAs.
  1. How would acquisition of the clubhouse and golf course parcels impact HOA taxes?
     
    Once property is brought into the HOA, the tax on it drops to zero. The tax for open space used as a nutrient bank/recreation is also zero. Therefore, our only 
     
    liability for increased taxes would be for the clubhouse, and only until the HOA vote to incorporate the property into the HOA. The HOA can cover the cost of that tax within the provisional proposed annual HOA increase that is being validated.
  1. Would the proposed verified annual fee increase put us out of line with other communities in the area?
     
    Owners of single family homes in Virginia Oaks pay $1000 in annual dues, and town homes pay $1120. This places Virginia Oaks as having the 6th lowest dues among 18 local communities. Virginia Oaks only ranks 4th from the bottom, though, in terms of the amenities (value) offered for that money. With the proposed anticipated annual increase, single family homeowners in Virginia Oaks would still pay dues just above the $1,666 yearly average among the 18 local communities. However, the HOA would become the only community among those 18 to offer five miles of private walking trails and 130+ acres of permanent green space.