By Jim Welch, Executive Director
In an effort to cover as many Members questions as possible regarding MPRHOA financials, amenities, construction activities, etc., I’ve included my October 2024 Annual Meeting speech in an effort to more elaborate on our community.
Mountain Park Ranch HOA
“State of the Association”
2024
Executive Directors Address:
My name is Jim Welch, I’m your Executive Director of Mountain Park Ranch HOA, and want to thank you again for attending the 2024 Annual Meeting. You may have questions regarding the Association and we will have time for a Question and Answer period shortly. I do want to stress to wait all year until an Annual Meeting to present questions is unnecessary. We maintain an Open-Door policy year-round, we can be contacted at the:
We have opened up the lines for communication to make it as convenient as possible for anyone to contact us, so no one has to wait until an Annual Meeting to ask a question. This is just one of the advantages of having an on-site office and staff.
Right now, though I want to take you on an HOA journey, including helping educate and updating you on past, current and future projects contributing to the value of MPRHOA.
We continually add fresh granite and rock to MPRHOA drainage washes and areas in the community needing attention to prevent further erosion damage to deter future cost. In addition, we also inspect and clean the cement drains behind some homes that face hillside preserves. This is done continuously to assure proper water flow, mainly during monsoon season, in an effort to prevent possible flooding.
Iron Rail Project Completed
We finished our community wide iron rail/view fence maintenance project last year, which included refinishing, repairing and replacement of iron rails in the community, where needed. Iron rails are located throughout the property, mainly behind homes on top of walls that back to the hillside preserves. This was completed on schedule, and is done every 5 years to maintain consistency. Again, continued maintenance such as this, protects our assets.
Overseeding of the common areas and greenbelts:
Every year we overseed the grass areas at our recreation centers,
greenbelts, and around the ponds, among other areas of grass.
This year, just like last year, we cut out around $5k in cost and will not overseed a few greenbelts. This was initially done as a test to see how we could properly save on seed costs and on water usage consumption without greatly effecting the community aesthetics and green belts. Our efforts in doing this was to also proactively plan for the future, in case we encounter greater water rationing sanctioned by the City of Phoenix, the State of Arizona, or some other entity. Then at least we will have an idea where to cut back in areas that least effect our community.
Landscaping:
Over 5 years ago we changed landscape companies to ProQual Landscape Company. My job is to bring the best contractors to this property to do the work in a professional, competitive and cost-efficient manner as you would expect from me. ProQual has newer and updated landscape equipment, and equipment needed to streamline landscape performance on our property such as, motorized palm tree trimmers, sump pump machines for rapid water evacuation, heavy duty gator carts to traverse our property, among other standard tools used in the landscaping industry to meet our needs. ProQual offered what we were looking for; that being the latest technology, including the newest software to GPS all our irrigation time clocks, satellite-based water saving devices and backflows, all which were more user friendly then what we were previously offered. By the way, we have all our common area watering on satellite-based clocks. The clocks are all controlled by an individual command center which can be activated off a laptop or even a cell phone for immediately response. This is something other HOA’s either; don’t have, or lack the resources, mainly money, or they don’t have the proper education or training to operate. Again, MPRHOA leads the way in water saving technology, we are in the forefront of other HOA’s, and appreciating a savings in water usage cost, by simply comparing historical water usage from prior years, which in turn, this savings, pays for our new clocks. Again, with the proper management we incorporate, it’s a win-win situation.
ProQual also uses a simplified navigation system for our tree inventory database, updated landscape equipment, including advanced safety equipment for our property with newer trucks, better warning lighting, and reflective gear for their employees, while they are working on our streets to keep us all safe. They are located close by in Tempe, several ProQual staff live close by, and drive this property almost daily giving it a more personal approach. As we anticipated ProQual has been committed to our standards. Being introduced to a property our size and magnitude takes time and fine tuning and we evaluate these objectives daily by working closely as a team with ProQual’ s crews and supervisors.
Pickleball Courts:
We added pickleball courts (now totaling 6 courts) to Recreation Center 1, located off Ranch Circle South and Mountain Parkway. These courts are permanent and exclusive for pickleball only at this Recreation Center. Tennis can be played at the other 6 tennis courts located within MPRHOA. There are 4 tennis courts located at the other 2 recreation centers, and 2 additional tennis courts (totaling 6 altogether) located at Sun Ray Park on Ray Road. We had many open Board meetings on this change and decided in the best interest of our members and the fact that this sport was gaining in popularity, not to mention the overwhelming amount of pickleball players we would see at the courts, when they were only temporary courts, which made it an easy decision to upgrade to our current full courts. However, there is always an adjustment period whenever you make a change like this, especially if you’re a tennis player. So far, the courts are being used just as we figured, very heavily.
Playground Equipment
Last year, during one of our routine playground inspections, which we conduct at all recreation center play grounds by certified playground inspectors, included; recommendations on equipment repair and replacement, safety checks, sand cleaning, adding fresh sand, among other maintenance and safety items.
All Recreation Centers playgrounds and volleyball courts were recommended to have the playground sand tilled (cultivated) and refreshed. Tilling the sand evens it out, fluffs and smooths it, creating a better playing area. We also do all the volleyball court sand in the same manner, and at the same time, to save on costs.
It was recommended that the playground equipment located at recreation center 3 (Thunderhill Place near Ray Road) which is our most used equipment, to be replaced due to wear and tear, out of code/outdated parts, among other recommended changes. So, we followed the recommendations of the playground specialist and replaced the equipment.
Please also note, since we properly planned ahead many years ago, and followed our Reserve Study, we had funds already allocated, saved and available, for replacement of this playground equipment. You see, that’s my job, to properly plan ahead and protect us from large expenses, as you would expect from me. So far, our Members (especially the kids) and their guests are enjoying the new playground equipment.
These are just some of the improvements and savings put in place or completed for year 2023-2024.
Contractors:
Speaking of contractors though, let’s dig a little deeper on not just landscape or playground contractors, but a variety of contractors we hire for this property. Why? Because our members need to know, be informed and to be confident that your HOA is utilizing proper methods and industry standards when hiring outside contractors.
Our goal and philosophy for MPRHOA has always been to bring in the best contractors, mainly local contractors, where internal control procedures such as oversight, availability, logistics and production is not limited and out of our hands. Not doing so can costs us valuable time and add unnecessary procedures, when in many of our services “time is of the essence”. It doesn’t matter if you’re a landscaper, a painter or a printing company. Choosing the right contractors protect our association. We seek out contractors that maintain the latest in technology, have a reputation in the field as being the best by researching their work prior, touring their facilities, and listening to others who have done business with them, making certain they aren’t a one-person show working out of their spare bedroom calling themselves a big company. We seek contractors who service large scale associations like ours, so when contracts are established, we can rely on efficient production, a quality product, an equipped staff, and can incorporate “just in time” type manufacturing of materials if needed, in an effort to handle our needs and timetables. This, along with contractors who have adopted HOA software applications compatible to our software in an effort to protect member’s information, control data integrity and securitize our databases, especially in calendar controlled environments that we have to adhere with to properly streamline and produce for instance; the mailing of our assessment notices, or our annual meeting mailers, which in some cases also includes our newsletters, all considered time sensitive materials.
Occasionally we encounter contractors who try to push their inferior products or services on us. They tell us they can do a service cheaper, faster and better while ridiculing a current contractor we are using, when in reality they are only in it for their own personal gain and enrichment using our association as their meal ticket. My job is to eliminate these types of people.
Contractors like this put our association at risk. Just another reason we only work with contractors who have high reputations in the industry, maintain proper liability insurance, workers compensation insurance and State of Arizona licensing requirements to work on this property. Our belief hiring contractors in this manner allows our HOA to utilize true professionals to maximize member value, by creating services of greater scope, scale and increased diversification that personalizes and delivers efficient, powerful and innovative options and solutions for our association, now and going into the future.
This thorough contractor selection procedure we follow should be words of wisdom to our member’s, since we hear all so often how our homeowners get misled by contractors peddling their inferior products. My recommendation, is to be knowledgeable who you talk to and hire, do your homework first, ask friends and neighbors who they use, make certain the contractors you use are properly insured for your protection, because the bad ones are out there.
On the other side of that spectrum, and now speaking of good and honest workers, we have our own in-house maintenance. Our maintenance supervisor Preston Burt and Ken Morris work here 7 days a week 362 days per year (Thanksgiving, Christmas and New Year’s Day they are off to be with family). They regularly inspect each amenity, be it a pond fountain motor, pool spa heater, or bathroom sink, and maintain these amenities in the consistent manner to obtain the longest useful life out of them. This is where our on-site maintenance steps up to the plate to ensure these components are constantly inspected and maintained to obtain longevity, thus avoiding unnecessary future cost and expenditures. Please say hello to Preston and Ken when you see them on the property.
Year 2024 has brought us more erosion controls measures, street corner renovations to conserve on water by introducing more xeriscape, continued maintenance at all recreation centers, stronger safety measures, and better communication efforts working with the City of Phoenix to maintain their areas in MPRHOA, among other improvements enhancing the community.
Financial Health of our HOA:
In a few minutes you will be hearing from the outside Auditor, Paul Hansen, of Butler Hansen CPA Firm, stating the current 2024 MPR Budget is around $2.6 million, with over 1.3 million in reserves for future use, totaling together with all combined around 5 million, while holding under a 1% delinquency rate.
Yes folks, under a 1% delinquency rate, which is unheard of in other HOA’s.
Several people have inquired if our annual HOA dues will go up for next year. The short answer is yes. The budget and finance and landscape committees, along with the board of directors (about 15 people all together, and all members of our HOA) reviewed each line item expense for next year and agreed that a $1.67 per month increase was warranted to keep the property maintained in the manner it was intended, and to steer clear of any future special assessments, due to being underfunded, which many other HOA’s are experiencing, not us though. Matter of fact, these occasional assessment increases and with proper budgeting in the past 20 years, have kept us running smoothly. In the past 20 years we’ve only had 5 assessment increases. To break that down we’ve only gone up $6 a year, not $6 per month, but $6 a year, for 20 years, that’s unheard of in an HOA.
Recent times have changed for everyone, as we all know, and many of the goods and services we utilize have increases that are out of our control, but are for services necessary for our community to operate in the manner people expect. Take for instance; pool chemicals, fertilizer, water, fuel for landscaping, insurance costs, have all gone up, and these products are what maintain the aesthetics around our community. Adjusting assessments, in tandem with these necessary goods and services, maintain appreciation in home values, add safety and security to our community, and keep us above water with current economic conditions. If we didn’t follow this protocol and not adjust for increases, it could cause adverse problems in the future for our community, kind of like a “kicking the can” type scenario. However, and as mentioned, the finances of our HOA and our financial health exceeds standards. We consistently keep over 70+% funding in our reserve accounts at all times. This is something unheard of in other HOA’s. What this means is if something on the property goes wrong, needs emergency repairs and/or replacement, the money is already there, because we have pro-actively put monies aside each year to fund for any expected and unexpected repairs. By having this proactive ongoing savings account, not only protects our members from special assessments, but at the same time any potential new owners looking to buy in MPRHOA can be assured our HOA is well funded adding value to our community and giving them a piece of mind that we are financially secure.
We believe the following has contributed to our financial health:
We managed to keep assessments lower than other communities by proper budgeting, staying within budgetary line item amounts, and proactively planning and mapping out future expenses before they materialize. For example, proactive erosion control to deter damage to our property, GPS time clocks for our sprinkler systems to save on watering costs, being properly insured for adverse monsoon weather like we had in the past, we reduced overseeding in certain common areas not utilized as frequently as other common areas, we reduced pool monitors at the recreation centers during hours that have the least number of problems, we even bought a used scissor lift, so our maintenance guys can replace items such as, hard to reach tennis court and parking lot lights, in an effort to not farm out for these services, as we did previously. Matter of fact, with the savings of buying a used scissor lift, and not farming it out to an outside contractor, we calculate the lift will pay for itself within two more years, that’s called smart purchasing. We did the same with a paint sprayer machine. If for instance, we find a small wall needing paint, or graffiti to cover up, we can do the work in-house without farming it out. These are the type of smart buying practices we incorporate for equipment that pays for itself over time, thus saving the HOA money. Yes, there are some items necessary for our community we have tried to save money on and the outcome has not been so positive, like for instance mutt mitts (doggie bags) for cleaning up after pets. In this case, we found a cheaper deal on doggie bags and purchased them, but then we found out that saving on certain products, like cheaper doggie bags, doesn’t always produce the results we anticipated. Bags were smaller, not as durable, and people were noticing the poor quality, thus complaining, so, even when we try to be conservative and cut costs on certain products, it doesn’t always produce positive results. But at least we gave it a try.
So as a recap, year 2024 has been a real challenge financially for our HOA and other businesses. Inflation is over 10%, restaurants, landscaping companies, grocery stores, retail outlets, all have had price increases, not to mention companies having a hard time finding and or even keeping staff. For us, the price of pool chemicals, seed for our common areas, fuel for landscape equipment, irrigation PVC piping that is passed to us by landscaping companies and manufacturers, trucking cost to get our granite and erosion rock delivered, and other normal supplies for our day to day operations, all have substantially increased in the last few years.
Ask any real estate agent or broker around, we have very low assessments compared to other HOA’s that have fewer amenities than we do. Speaking of real estate agents, I often read positive write-ups in their news articles about our association compared to others. For instance, we have pools, tennis courts, hot tubs, playgrounds, pickleball, volleyball, large common areas and greenbelts, water fountains, in addition to, top-notch landscapers, maintenance staff always here to help, who treat this property like their own, and an on-site positive administrative staff, that works for you. In addition, the Board of Directors and all Committees make prudent and professional business decisions for our community, including proper bidding, researching contractors, and using contractors that are licensed and insured, all for the protection of MPRHOA, and only utilizing contractors when absolutely needed.
We budget appropriately and conservatively to meet these new increases that we’ve been handed, and at the same time keep up with services for our property that our Members expect, and as we have done in the past, we have to be cognizant and avoid future shortfalls by budgeting accordingly.
Staff, along with the landscape and budget & finance committee and board of directors, took several months of budget review, and the outcome was to increase $1.67 per month from the current $396 to $416 to keep us more compatible with the current state of inflation, ever changing economy and future uncertainty on services we use. Not doing so would be a financial oversight and miscalculation, and not fair to our members who expect our amenities and the property to be in quality shape.
There are other HOA’s out there with assessments even going higher, mainly due to the fact they are not as financially attentive like we are to changing economic conditions, and they historically didn’t exercise good budgeting practices, unlike the way MPRHOA has done in the past. One day they wake up, and find out their HOA didn’t properly plan their future assessments accordingly with the market, and the only way around catching up is to levy a special assessment. Not us though. Again, it’s not only the board of directors contributing to all the decisions, it’s the Committees too, making it a combined, transparent, and unified effort. That’s what I like around here, it’s not a single or a few people making decisions, it’s a whole team of people (all MPRHOA members) looking out for all of us. With our Board of Directors, our Landscape and Budget and Finance Committee Members and Staff, all reviewing expenditures, budgets, monthly financials and being aware of any big ticket expense items, makes a special assessment scenario very unlikely to ever happen to us.
How Do We start Our Initial Budget Each year?
Emma our controller and myself start our initial line-item budget review in late Spring each year, looking at present and future contracts, historical figures, cost from utility companies, among other sources. After gathering this information, we put those draft numbers together along with justifications for each and every line item so when it’s first presented to the 10 plus landscape and budget and finance committee’s members (all homeowners) for them to review, they have a good solid format and understanding to make their budget decisions. After their review, it then goes to the board of directors (which is 5 more MPRHOA members) for review and to give final approval on all costs and expenditures which now have all been justified so the board can make logical and prudent decisions to approve the budget. In addition, and this is another safeguard we have incorporated for advanced transparency, is all up to date expenses are available for a designated Board member for their review, by Emma our controller, so that Board member can review current expenses, in an effort that everyone knows what is being paid in real time and not waiting for month end financials to arrive. That’s teamwork, that’s disclosure, and more importantly that keeps full transparency on our budgetary line-item expenses making our members feel comfortable and at ease that their assessments dollars are being utilized properly, effectively and
consistent with the manner the association was intended.
How is our Safety and Security at the rec centers and common areas?
Vandalism and pool safety are real concerns for communities. We have Recreation Center and common area security patrols that are scheduled randomly during the night. Because of this
monitoring we found that there are fewer problems compared to
years ago. How do I know our patrols are effective? Because on occasion I get calls from other HOA’s outside of MPRHOA. They
ask if we are having any vandalism issues, because they are.
What I believe is the vandals know we have random security patrols whereas other HOAs do not, making those HOA’s an
easier target and more vulnerable.
An improvement that also has been implemented for security is monitoring the use of the electronic key system for pool access and for the ability to check, if needed, who has come into and left
the pool areas, and just a few years ago, the electronic keys
have been upgraded to do the same verifications at the tennis
courts. If there are any issues in the pool areas and/or tennis courts, we can more effectively identify who was causing problems. In most circumstances that individual or individuals
will be given a warning to correct the situation and will be told
that their recreation center privileges could be revoked if
continued. In addition, to ensure member and guests safety and
reduce liability to MPR, we sometimes double the number of
pools monitor at the recreation centers on weekends and Holidays in an effort to mitigate problems or issues before they
can happen.
Speaking of pool monitors, they work the recreation center pools mainly from Memorial Day thru Labor Day weekends, and we
stagger them throughout the year and on occasion during school fall and spring breaks and some known holidays. They are not lifeguards, their duties include, administering and enforcing the
established pool rules, mainly to make sure our members and their guests are enjoying the pool and amenities, as they should.
We also offer the pool monitors a CPR training class hosted by the
Phoenix fire department and we continually update their job duties with in-house education and training, such as working with and treating all our members and their guests equally, fairly, and
with the upmost respect.
Self-Management: No outside management company!
Are there advantages to being Self-Managed and not Management Company controlled? You bet, here’s why:
We have an office on site where we are accessible and available during and after normal business hours.
Homeowners do not have to drive distances to an office staffed with people they may not know, or an office where the staff turns
over frequently. Each Staff member here focuses on you the MPRHOA member.
Members are able to come into the office to have their questions
answered, HOA documents explained, and other various issues reviewed and discussed. Our staff is cross-trained and can
answer a variety of questions that a management company
person wouldn’t be able too. And if we can’t answer your question, we will research it and get back to you timely.
Members can review and pick house paint and front door colors, look at the latest styles of roof tiles, pick out window awning designs, choose from a range of garage doors, discuss
architectural guidelines, obtain recreation center keys and feel that they are being attended to.
If a member comes to us with a concern, we have an aerial map
of the community and can look at exactly where and what they
are talking about and review the concern first hand. This gives members confidence that their HOA is working for them and their questions and concerns are being addressed.
As a self-managed association, we are able to keep certain fees in-house including home sale transfer fees, late fees and
assessment fees. This is a source of revenue to our Association
rather than a loss of money to an external management company.
Accounting and financials, which includes items such as; invoices for the month, vendors who have done work and were paid, general ledgers, income received, all of this is done in-
house, and reviewed monthly by your budget and finance committee and your Board of Directors, minimizing the risk of
outside discrepancies. Plus, we also have implemented an extra
layer of financial security. Here how it works. The board chairperson of the budget and finance committee who is also the
board treasurer is provided a copy, at their request, of the general ledger and can choose any invoice or invoices, at any given time, and our controller Emma will retrieve the documents from our files and make them available for review right away.
Maybe that explains why you read about other HOA’s that are in the news regarding upset members who feel their manager,
management company or Board of Director’s are either unapproachable or non-attentive to their needs and questions. In my mind this non-transparency and non-communication cause’s
suspicion, and suspicion cause’s questions, you won’t find that here at MPR with our full transparency approach.
Management companies tend to have high turnover and layers and layers of what they call Vice Presidents, and are more often
less connected with their members, not us. As your Executive
Director I live here in Mountain Park Ranch, I am part of the association and watch our community all of the time.
Lastly, a management company would have MPR as one of many of their associations and a manager that has multiple properties and not truly dedicating their time or efforts to one property, like we do.
Having served in management companies for many years has provided me this knowledge. As mentioned earlier, we always maintain an open-door policy and welcome Members to our office.
So, with that said, we, as a staff, are very dedicated to you and our community, and that of course comes with long hours and hard work, but the payoff each day of our due-diligence to be
able to come back to our members and to show and exhibit top notch landscaping, resort style recreation centers, and financial
stability unlike other HOA’s of our age, makes working for our members and community a more satisfying and fulfilling experience for all of us.
We thank the Board of Directors, the Committees, staff and all our Members for working with us as a team so we can make this all happen.
Before I introduce CPA Paul Hansen our outside Auditor, I have one other note. Our association’s financial records are fully audited annually and our taxes done by Paul Hansen and his staff. Their CPA firm specializes in HOA’s. In the past 19 plus years that I have been here, the auditors have always given MPRHOA’s financials and our financial oversite excellent reviews. They consistently confirm we are financially secure, meaning we are very well managed and funded.
Paul and his associates also advise our office staff on proper protocol with internal office controls, the proper handling of
monies and finances, the safeguarding of HOA funds, among
other financial protection measures.
End
Questions regarding Annual Assessments & Maximum Annual Assessments:
An assessment history can be found by clicking below on the annual assessment chart
The manner in which the MPRHOA documents are set up is to allow for an annual assessment and a maximum annual assessment. Let me define both, because there is a difference between the two:
The Annual Assessment
The Maximum Annual Assessment
Since MPRHOA is well funded, and we do not anticipate that changing anytime soon, my goal is to educate and set policy with this board and future boards regarding Maximum Annual Assessments and setting a policy, which we do, that if these funds were ever needed, they would only be used in a crisis situation, where any reasonable person would acknowledge their need. With this in mind, we are all working together as a team to properly address and have resources for future and unpredictable adverse events. This makes good business practice.
FROM MPRHOA – CC&R’s
Section 4. Maximum Annual Assessment. The Annual Assessment to be established by the Board my not exceed a certain amount, hereinafter referred to as the “Maximum Annual Assessment”, which Maximum Annual Assessment shall be determined and shall vary in accordance with the following provision:
(a) Until January 1 of the year following the recordation of the first Tract Declaration, the Maximum Annual Assessment against each Owner or Lessee shall be $12.50 per each Membership.
(b) From and after January 1 of the year immediately following recordation of the first Tract Declaration and during such year, the Maximum Annual Assessment may be increased effective January 1 of each year without a vote of the Membership by five percent (5%) or by an amount equal to the rise, if any, of the Consumer Price Index as hereinafter defined, whichever is greater. Any rise in the Maximum Annual Assessment based on the Consumer Price Index shall be computed by reference to the statistics published in the Monthly Labor Review by the United States Department of Labor, Bureau of Labor Statistics, designated “Consumer Price Index – U.S. City Average for Urban Wage Earners and Clerical Workers, 1967 Equals 100, All Items”, hereinafter called the “Consumer Price Index”. For Purposes of identification only, the Consumer Price Index for January 1984 was 302.7. An adjustment in the Maximum Annual Assessment on the basis of the rise in the Consumer Price Index shall be computed by the following formula:
X = Consumer Price Index for September of the year of the first Annual Assessment.
Y = Consumer Price Index for September of the year immediately preceding the calendar
year for which the Maximum Annual Assessment is to be determined.
( plus 1.0) multiplied by the initial Maximum Annual Assessment figure = the Maximum Annual Assessment for the year in question.
If the Bureau of Labor Statistics shall change the method of determining the Consumer Price Index, the formula for determining the Maximum Annual Assessment shall be altered or amended, if possible, so as to continue the base period and base figure, but in the event it shall be impossible to do so, or in the event the Bureau of Labor Statistics shall cease to publish the said statistical information and such information is not available from any other source, public or private, then and in any such events a new formula for determining the Maximum Annual Assessment shall be adopted by the Board.
(c) From and after January 1 of the year immediately following the recordation of the first Tract Declaration, the Maximum Annual Assessment may be increased above the Maximum Annual Assessment otherwise determined under Subsection (b) above by a vote of two-thirds (2/3) of each class of Members who are voting in person or by proxy at a meeting duly called for such purpose.