FAQ Group: Financial
How does the HOA budget work?
Every year, based on past years’ expenses, the management company draws up a proposed HOA budget for the following year. The HOA Board votes to amend and, ultimately, approve the budget. The past year’s finances are reviewed and the coming year’s budget is shared with homeowners at the Annual Meeting every December.
The HOA maintains both an operating account, for regular maintenance and planned expenses, and financial reserves, for large, planned expenses (e.g., roof replacement). In the event of large, unplanned expenses, the HOA can draw on reserve funds to avoid taking loans or levying a sudden, special assessment on homeowners. Replenishment of reserve funds then becomes a budgetary priority.
Homeowners receive a WCP monthly financial statement listing HOA income (primarily from homeowner remittances), HOA expenses (both monthly and year-to-date), and the level of the HOA’s financial reserves.
Every three years, the HOA Board performs a Reserve Study to assess the adequacy of the financial reserves. Specifically, the board establishes a committee of WCP residents, which may or may not include board members, and hires a reserve study specialist, who calculates the reserves needed to pay for major planned and unplanned maintenance. These include items such as repairs and replacement to asphalt , pool and Jacuzzi equipment, and landscape infrastructure. The calculation is based on estimates of the lifetime of a particular component and of its replacement cost. The HOA has traditionally funded reserves at 85%, effectively underweighting expenses that are projected more than a decade out.
How is the monthly bill I receive from the HOA calculated?
All homeowners pay a flat monthly fee to the HOA, which is set by the HOA board when it approves the annual budget. The fee covers the cost of property management and maintenance, as well as scheduled repayments on the leak remediation loan, which increases by 5% each year until paid off.
Each homeowner’s monthly bill also includes water-related charges. There is a charge for the unit’s potable water use, which fluctuates due to variations in homeowner use and the interval between meter readings. There is also a meter fee, to cover the cost of reading/replacing the meters, and a sewer fee for disposal of that unit’s waste water. Finally, each unit is charged for its share of the recycled (non-potable) water used for irrigation. The recycled water bill comes as a lump sum, which is divided by 65, the number of units at West Campus Point, and charged to each unit.
What other charges are homeowners responsible for?
Homeowners who are active UCSB faculty have the land lease charge for West Campus Point taken as a deduction from their monthly pay checks. Homeowners who are retired UCSB faculty are billed by the university on an annual basis for the land lease.
Homeowners are responsible for their unit’s utilities: trash collection, gas, electric, and cable/internet. Homeowners are responsible for insurance on their personal property, liability, and contingencies such as burst pipes, natural disasters including earthquake, fire, and flood. The HOA carries insurance for the units’ exteriors and the common areas at West Campus Point.
Can I improve my unit and have improvements added to the base value of my unit?
Homeowners may request costs of capital improvements to the interior of their units (e.g., major kitchen or bathroom renovations) be incorporated into the base price of their unit if approved by the WCP Architectural Review Board. The form for homeowner applications to the ARB is available here.
Note that ordinary maintenance, such as painting or replacing carpet, is not considered a capital improvement.
Can I rent my unit?
As specified in the CC&Rs, you can rent your unit for no less than a month and no more than a year. Thus, you cannot use your unit for a rental business (e.g., via Airbnb) and it must be your primary residence. Following a one-year rental, you may be permitted to rent for a second year, but your request must be made to and approved by the UCSB administration. Your tenants are required to abide by the CC&Rs. You are urged to contact your insurance company to understand the conditions of your coverage when renting your unit.