Third Mutual President Robert Mutchnick recently reminded members that the condo board is due to renew its property insurance premium June 1.
“As you know, our property insurance premiums have jumped each of the past few years because of the reevaluation of property, our separation from United [Mutual] and the large insurance increases demanded by the insurance industry,” Mutchnick said during a meeting of the board March 15.
The company AJ Gallagher will be brokering the insurance deal, he said.
Luckily, Mutchnick said, things may be looking up: “As for the good news, Third believes … we have enough in the operating budget to cover the cost of insurance and therefore believe that insurance will not have any additional impact on the [assessment] fee for 2023.”
At the start of this year, Third residents experienced a 20% increase of $93 – the “maximum” legally allotted amount an HOA is permitted to increase assessments in one year – in monthly assessments. The average Third member now pays $777.12 per manor per month.
Occupancy fee
Third board members agreed to a new rule that will charge a $50 occupancy fee, per manor per month, for each additional occupant beyond two people. Officials said the operating budget is based on two-person households, so additional people need to be accounted for.
Both the Golden Rain Foundation and United Mutual already have additional occupancy fees in place, charging $100 and $50 respectively.
The additional fee will be used to mitigate expenses related to the additional occupants, such as increased utility rates – particularly water – and wear-and-tear of common areas, according to a Village Management Services staff report.
An estimated 73 condos in Third Mutual house more than two non-lessee occupants. As proposed, the occupancy fee is projected to generate about $43,800 per year.
Of the 67 live-in care providers in Third Mutual, 26 are third or fourth persons of residence. If applied to those 26, the fee would generate an additional income of $15,600.
The total of these two sums estimate an additional annual income of $59,400 for Third.
Director Annie McCary said there has been overwhelming feedback from residents, in-person and via email, in favor of the resolution. The board unanimously approved the resolution. It takes immediate effect.
Alteration fee schedule
On second reading, the Third board members tabled a resolution that would have implemented a revised manor alteration fee schedule and raise several fees. Alterations are optional modifications to a unit that require Third’s consent, as defined in a staff report.
As proposed, the charge a member pays upon variance request was scheduled to increase by $20 – jumping from $50 to $70.
Furthermore, the Basic Variance fee would have been set at $380, the Complex Variance fee at $662, the Unauthorized Alteration fee at $350, and the Resale Inspection fee would have increased from $115 to $220.
Director Jim Cook said many of the fees are antiquated. He said the schedule may have once served a purpose – to regulate alterations within the Village before Laguna Woods became a city – but in the 23 years since incorporation, inspectors are no longer sparse.
“We are duplicating services that are done by the city,” he said. “Most of [the alteration fees] should be eliminated.”
He added that many of the variances listed should be recategorized as mutual consents. “I’m going to vote no on this until we revise what we require variances for.”
Third member Judith McCourt, who said she once served as a deputy director for a large Orange County organization and still works full-time as president of a corporation, coined Third’s schedule a “double-fee system” that up charges four to five times city rates.
For example, a standard variance fee to install a new central HVAC in Third costs $662. This would be paid in addition to the city cost of $141.
Staff had projected $83,000 in additional revenue from the proposed alterations fee schedule.
Resident Lisa Mills, a former city council member and former CEO of Orange County Transportation Authority, pointed to the lengthy process of variance approval.
“This system is very broken,” Mills said, listing the various stops, double fees and number of months a resident must wait.
“On the outside,” Mills paid one fee and made one stop – at city hall, she said. “Residents here – who are older, maybe more frail – are asked to go through a very tough process.”
Board members sent the fee schedule back to the committee level for discussion.
COVID-19 update
The adjusted daily case rate in Orange County has continued to fall, on Tuesday reported at 3.7 new cases per 100,000 residents, according to the OC Health Care Agency.
The testing positivity rate — the number of swabs and spit tests that return positive the coronavirus – stands at 1.9%.
The health equity rate – the test positivity of disproportionately impacted neighborhoods – follows at 2.3%.
In the city of Laguna Woods, public health officials reported 1,057 COVID-19 cases as of Tuesday. Laguna Woods has now had 75 coronavirus-related fatalities reported.
Resale report
The average resale price for a unit in Third Mutual in February was $507,520, up from $396,818 in February 2021, according to a VMS staff report. Resales year to date numbered 76, up from 71 the year prior. Sales volume in February was $12.7 million compared with $12 million in February 2021.
