Do Our Governing Documents Limit Assessment Increases?

NOTE: This post was created by Joe Moore during his 2023 MCA Board member campaign.

Question: Is there a limit on how much our assessments can increase? When the Meadows was originally developed, the developers put a limit on assessments in our “Declaration of Maintenance Covenants and Restrictions on the Commons for the Meadows”. On page 9, number 14 (f), it states: “Except as hereinafter provided, the annual maintenance assessment, including funds for special improvement projects and for capital improvements, shall in no event exceed 3 mills of the assessed value of properties in The Meadows determined in the manner herein above set forth. This maximum may be varied from time to time hereinafter upon approval of 3/5 of the members of the Board of Directors of Meadowood.”

To understand what this covenant means, we need to understand what is meant by “3 mills”. By definition, one mill = .1% = .001. Assessment is simply a tax on the county assessed value of the property. Therefore, Our maximum assessment was set at .003 times the county’s assessed value of each homeowner’s property.

Until year end 2017 that 3 mill limit was followed and spending was controlled to adhere to no more than 3 mills. Beginning in year ending 2018 and for six consecutive years the MCA board has voted to exceed the 3 mill limit as shown in the following chart.

By exceeding the 3 mill cap, we have paid the MCA more that $4 million beyond what is considered the normal homeowner assessment limit.

In year ending 2022, the assessment was set at 5.68 mills, nearly twice the limit of 3 mills. Even though the Covenants set the limit at 3 mills, our board has voted to exceed that limit and appears that they plan to continue that practice years into the future with uncontrolled spending. In my opinion, if the board thinks the 3 mill limit should be exceeded so frequently, they should seek approval from homeowners by adding that question to the annual ballot they send out to select new board members. That would clearly give the board support by the homeowners to continue current spending practices.