The HOA Board signed the 5-year bulk internet-only agreement with Frontier on July 31, 2020. The install is estimated to begin on November 1, 2020 and will take about 4 months to complete. According to the agreement all 3450 homes will be installed by March 1, 2021 and that is when the 5-year term will begin.
To recap the basic provisions of the Frontier plan:
- It is a 5-year internet-only plan.
- It is $12 per month (with a 5% increase per year).
- All residents will have to participate and pay the $12 per month. There are no opt-out provisions for any resident even if they do not use the Frontier internet service.
- The internet speed is 500 upload and 500 download. This is the fastest speed available.
- Contract includes a wireless router/modem and there is no install fee to the resident.
- You may install at a later date at no charge.
- TV plans are available if residents want to purchase TV plans directly from Frontier.
- Phone line is available and is purchased directly from Frontier.
- Resident may purchase any TV plan from any provider. It is not required to purchase TV plans from Frontier.
This process began over one year ago with many people that helped to bring this project to its conclusion. We need to take a moment and say thank you to all these volunteers for more than a year of hard work. We started with the Bulk Cable Committee consisting of Linda Aasen as Chair, Gene Gonzalez, Steve Aasen, Jurgen Gross, Wally Barbour, Rich Rodeman, Armando Gomez, Rick Stohr, and Robert Israel. Once we decided on which company, and we entered contract negotiations a few more people stepped up to make sure the HOA was proceeding responsibly by reviewing all the contract terms before a final decision was made. So, we also need to thank Bill Wethe, the Chair of FAC, and attorneys Bob Jester, Bob Israel, and Fera Mostow who helped guide us through the maze of legal terminology. Thanks to all of you for spending so much time.
We will be sending out a schedule of when you will call for an install appointment. As you can imagine, we cannot have 3450 homes all call on the same day. So, we will send you a schedule of when to call for your install appointment.
I have asked the FAC to review and recommend for next year’s budget a onetime price increase for the Frontier contract to begin on January 1, 2021. It will cost the HOA more money if we increase dues during the year. The most efficient method of implementation is to have one price increase in January, so the dues are the same all year long. Although the installation process will begin by November 1 and finish by March 1, we need to start the dues increase in January so we have the same dues each month all year long. Otherwise we will have increased costs to change the dues amount during the year and increased costs in printing and distributing new coupon books. There would also be increased confusion for auto payments if the dues amount changed in January and then changed again in March.
Assuming Frontier completes the install by March 1 here is the calculation for monthly dues to cover your monthly Frontier internet service. You will notice that you are not paying any more money than if we started billing on March 1:
- If we start billing on March 1, that will mean $12 per month for 10 months, March thru December. That totals $120 for the year.
- If we start billing in January at a rate of $10 per month that equals $10 x 12 which equals $120 for the year. Notice that this is exactly the same amount of money.
Besides the monthly costs, the HOA must pay $36,600 for the installation. This can come from contingency, it can come from operations, but it must be paid by the HOA. One option is to put a line item in the budget for $36,400 for next year. This would mean an .89 cent increase to the monthly dues (in addition to the $10 explained above).
There will also be the cost to the HOA of communicating by mail with the residents about the installation schedule. This cost is estimated to be .24 cents per month per home to let residents know what is going on and when they will be installed by a schedule. This cost is estimated to be $10,000 ($2.90 per home for the year or .24 cents per month per home). The resulting total monthly cost to the homeowner for next year’s budget is estimated at $11.13 ($10+ $.89+ $.24) with this scenario-Frontier finishes by March 1 and we start dues increases in January.
The above calculations assumed that Frontier would finish by March 1. If, however, Frontier finishes by February 1, we must pay $12 per month beginning in February. This calculation results in the paying $132 ($12x11) for each household during the year. The resulting total best estimate for monthly cost per Homeowner under the scenario if Frontier finishes by February 1, 2021 is $12.13 ($11+ $.89+$.24).
It will mean some homes will be installed before the dues increase begins and some homes will be installed after the dues increase on January 1, 2021. This was the only way to finalize the terms of the contract given the limitations of our governing documents in not charging different prices to different homes. So, to have a smooth transition all year no matter what happens, starting the dues increase in January is exactly the same cost no matter when a person is installed.
Hopefully, this answers the basic questions as we move forward with the Frontier internet bulk cable contract installation. It will be good for the HOA to have locked in a $12 rate for internet service for the next 5 years. A savings to each homeowner of about $50 per month.
Stay safe and healthy.