Strategies for Financial Stability

at Silver Sands

Now that we have presented information on the workings of our operations budget and reserve fund, it’s time to discuss the future. Our recent budgets have been structured around specific services and amenities. If we make no changes to our current expectations we can anticipate our future budgets to continue rising to meet escalating costs.

Impact of Inflation

While the long term inflation rate average is approximately 2%, under current conditions it is reasonable to expect inflation over the next 5 years might range from 3-7%. We have estimated the impact on our budgets for this range and projected the corresponding dues increases. For example, if inflation stands at 3%, monthly dues in FY 2029 would be $922 and in a scenario of 7% inflation, they would be $1,060. 

To tackle these mounting costs, our options are limited: we can either reduce services or amenities, renegotiate contracts like landscaping and pool maintenance with revised terms or seek alternate, more cost-effective providers. It is with these projections that the Board has been looking at both short and long term strategies to slow the increase in the HOA dues.

Short and Long Term Strategies

In the short term, revising some services is the most direct approach to address cost increases beyond those associated with our major contracts. Everyone is already aware that the Board has considered a reduction in gate staff services and last year altered the pool heating schedule in response to exorbitant energy costs. The Finance Committee has reviewed these and other potential short term adjustments, calculated the potential savings and determined the impact on future dues.

Looking ahead to the long term, a large percentage of our current operations budget is allocated to the contracted work related to landscaping and pool maintenance. Our first step needs to be an evaluation of the scope of work associated with these contracts. We need to assess whether it is essential to maintain all current activities/tasks or if there are opportunities to revise the contracts while maintaining our satisfaction levels. Additionally, we should explore investments that have the potential to improve long-term cost efficiency. Furthermore, it would be prudent to consider avenues for generating additional income.

One strategy that has already been put into action is the reduction of insurance costs by transitioning to a higher deductible. Here are some additional examples that we will be considering:

• Can we reduce the frequency of lawn cutting or pool cleanings to reduce labor and costs?
• Are there savings available if we undertake a project to reduce grass in favor of desert landscape in some sections of the community?
• Can we reduce irrigation maintenance by investing in upgrades to the system?
• Can we include cost incentives in our contracts?
• Can we stabilize costs by having all inclusive contracts?
• Can we establish a facilities fee/charge for all rentals (family members excluded)?
• Should we have another vote on the "reserve replenishment fee”?
• Should a solar system be considered for the clubhouse?
• Should solar/battery for pools be installed to eliminate/reduce charges?

If you have any other suggestions or feedback, please use the

feedback@ssrchoa.com email address. Thank you.

Your Board of Directors is committed to ensuring the fiscal well being of our community. It is important that everyone understands the challenges that we face and the decisions that are made. We hope that this series of communications regarding our finances has been helpful.