Proposed Village Declaration changes

According to the Village POA, one of the most important developments for the Village last year was the completion of our Strategic Plan which focuses, in part, on managing fiscal resources and preserving property values.

The new general manager, new chief financial officer and the POA board of directors endorse this plan and it is in the process of being implemented at the present time.

Part of this effort includes a capital project review and developing a capital finance plan. The new POA management and the POA board of directors believe additional financial flexibility is required to effectively manage the capital program.

In order to provide flexibility, a modification of the Declaration section dealing with special assessments for capital projects needs to be made.

Under the current declaration property owners can only vote to approve a special assessment lasting no more than one year. The POA management and the Board of directors believe that modifying this section to give the property owners the right to vote on specific projects, to be paid over a period of time greater than one year, will result in much more feasible funding options for capital projects.

This proposed change to the Declaration will allow for a longer time period for payment of special assessments. The specific project, the time, and the amount still must be approved by a majority of the property owners.

Proposed Declaration Amendment
Special Assessments for Capital Improvements with vote of members

What are the key aspects of the current Declaration on special assessments?
• Authorizes the Board to ask the membership for a special assessment.
• Limited in time to one year.
• Use restricted to capital improvements or additions.
• Must be approved by 51% of property owners.

What does the proposed Declaration amendment change?
• It removes the one year limitation and allows the property owners to vote on the finance of capital projects over a
number of years.
Why is changing the one year limit important?
• It allows the POA to spread out the cost for capital projects. Instead of a large monthly special assessment for one year,
the Board could ask for a more reasonable monthly special assessment over several years.
• The Hot Springs Village Strategic Plan identified the need for Hot Springs Village to make capital improvements and to
replace or improve basic infrastructure and recreational facilities as they wear out.
• The POA must identify the means to fund projects now that the developer is no longer active and providing funding for
infrastructure and amenity investments.
How does this help the Property Owners’ Association?
• It provides the new General Manager and Chief Financial Officer with the flexibility to finance capital projects approved
by the property owners while lowering the annual cost to the property owners.

Can the Board impose a special assessment without a vote of the property owner?
• No, and a vote for the recommended Declaration amendment does not change that requirement.
• Approval of this amendment does not cost the property owner any money.

How long has the special assessment been available in the Hot Springs Village Declaration?
• Since its inception in 1970.

How many times has it been used?
• None. The one year limit places a burden on property owners by requiring that all costs for capital projects be assessed
in a single year, rather than over a number of years.
What types of projects could be funded with a special assessment?
• The proposed Declaration amendment does not change the use of the funds. Projects would continue to be limited to
capital projects such as recreational amenities or infrastructure costs.
Does the proposed amendment have a time limit on special assessments?
• No. A single time limit is not set out in the proposed amendment.
• Any vote on a special assessment by the property owners will be tied to a specific capital project for a specific amount of
time.
What do these changes do for me?
• Protects property values through the maintenance and improvement of capital assets.
• Spreads the burden of cost across a greater period of time.

Proposed Language
Article X. Section 4. Special Assessments for Capital Improvements with vote of members.

In addition to the annual assessments authorized by Section 3 hereof, the Association may request and levy in any assessment year a special assessment limited in time and specifically, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of the water system, the sewer system, and the ways of access for vehicles and roads and streets within The Properties, even though the roads and streets may have been dedicated to the public, and also other capital improvements upon or additions to the Common Properties, including the necessary fixtures and personal property related thereto, provided that any such assessment shall have the assent of 51% of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all members at least 30 days in advance and shall set forth the purpose of the meeting, duration of the special assessment, and the specifics of the project. The Board of Directors of the Association may, after consideration of lack of improvements as to lots in a certain area, fix the actual assessment for any year as to these particular lots at a lesser amount.