Change in streetlight utility could mean higher fees for townhome owners
Townhome and condo owners will likely see an increase in the amount they pay in association dues next year, thanks to a decision by the Farmington City Council Monday.
The change came as a surprise to at least one management company that runs four townhome associations in the city.
On Monday, the Farmington City Council changed the way the city bills townhome and condo associations for the contributions they make to the city's street light utility fund. It's something council members have discussed at a workshop level, city finance director Teresa Walters said, but Monday's meeting was the first time it was brought to the council table at a regular meeting.
In 2009, council decided to move streetlight utility expenditures from the city's general fund to a new account known as an enterprise fund. In order to pay for the utility, council incorporated a fee of $6 per utility bill, which was collected quarterly.
The city started charging the fee in 2010. Later that year, the fee was increased to $6.90 per bill, per quarter, to pay for utility needs in 2011.
According to Monday's agenda item, the utility fee being paid now should cover the amount of operation in 2012, but it does not make any headway in paying an existing deficit in the fund.
That's why Walters and city administrator David McKnight proposed the change.
Townhomes and condos
As the system was initially set up, townhomes and condos were included in the system, but the associations that govern those units were charged for each building in the association, not the individual units within those buildings.
The proposal before council Monday changed the billing system. Instead of billing the management company for each building, effective January, 2012, each unit will be charged $6.90 per quarter.
In the case of one development, the Tamarack Ridge townhome project, the city of Farmington is currently collecting approximately $414 from Tamarack's management company, Gittleman Management Corporation. Under the new system, the city will collect nearly $3,700 from Gittleman, just for the Tamarack development. Gittleman also manages the Charleswood Crossing and Charleswood Town Homes developments.
Overall, the city will increase the number of payments from townhomes and condo developments from the current 309 to 1,225. That's an increase of 916 payments, which will bring the amount paid by associations from $8,528.40 in 2011 to $33,180 in 2012.
While the move will help to ensure that all homeowners are chipping in to the streetlight utility fund, it comes as a surprise to Tamarack Ridge homeowner association manager Kate Standal.
According to Walters, the plan was to notify the association managers of the change after it is approved. The timing, she said, should allow the association managers time to notify their members of the increase before the beginning of 2012. The new system will be in effect as of Jan. 1.
But the notice will come just a little too late for Standal. Gittleman Management has already completed their budgets for the coming year, and residents in her development are already going to see an increase on their 2012 association dues.
"This isn't going to go over well," Standal said. "We haven't even been notified of this, and that's a huge increase."
Standal said the move means the company will have to go back and increase those dues again.
Council members passed the increase with very little discussion Monday, other than to acknowledge the move would make things more "fair" among homeowners in the community.
"It's a city-wide asset," council member Julie May said.
Other units impacted
The change is not limited to townhouse and condo associations. On Monday, Walters provided an addendum to the council listing additional units that will be impacted by the change - duplexes, triplexes and apartments in Farmington.
Under the list collected by Walters, the city will get additional funding from the addition of 27 duplex units, 12 triplex units and 25 apartment buildings in the community.
Apartment managers will also be notified of the change, Walters said.