What is Working Capital, and Why Should it be Increased?

Roughly 300 homes are purchased, on average, within the Villages of Woodland Springs each year and every homeowner living within the association is required to pay assessments. These assessments are used to fund the operational expenses of the association.  Such as maintenance of amenities, landscaping, pools, playgrounds etc. 

When a home is purchased within VOWS the new homeowner is required to pay a Working Capital Contribution, also known as a Capitalization Fee, this fee is ONLY paid at the time of purchase and as a closing cost is typically the responsibility of the purchaser. 

This Working Capital Contribution is used to fund deficits for operational expenses as well as for amenity improvements.  Think improved fencing, security cameras, playground equipment as well as new amenities as determined by the association. 

 With The Current Working Capital Contribution, which is set at $100 and has been set at that number since the Association came into being more than 20 years ago, the total revenue garnered from home sales currently produce only about $30,000/year in revenue which is then applied to a budget of roughly $4,000,000.

 The proposed amendment would increase working capital revenue to around $450,000/year based on historical average home sales within the last 5 years. This money would be used to offset operational costs, typically paid by assessments allowing relief to the association and also contributing to the Association Reserve Fund.  This potential change in the Working Capital Contribution may also reduce the need for future assessment increases or special assessments as well.  

 Below are maintenance items that have been deferred due to a lack of funding.

 Landscaping - $552,349

Pools - $539,861

Common Areas (playgrounds, bathrooms, ponds) - $250,000 + per pond to dredge

Pool Safety - $259,239

  • Working Capital is charged to all new homebuyers at the time of closing. The Working Capital Contribution is used to supplement the operational fund as well as amenity improvements.

  • The Board of Directors has a fiduciary duty to protect and maintain the associations’ numerous aging assets. To avoid special assessments and continued assessments increases, the Board is proposing an increase to the Working Capital fee.

  • Working Capital fees are charged to all new homebuyers. The benefits will be felt by all, as the additional funds will allow the Board to move forward with deferred maintenance items and amenity improvements.

  • This increase is commiserate with other North Texas Communities Heritage HOA. As a closing cost, the responsibility typically falls on the buyer.

  • Should the working capital increase amendment not pass, there is the potential for continued assessment increases and a possibility of special assessments or reduced amenities.

  • The amendment requires a 50% + 1 vote of the membership of the association.