Analysis Complete for Substitute Senate Bill 5302

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SB 5302, titled AN ACT Relating to the creation of an office of the homeowners' association ombuds, 10 year analysis complete.

The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		Annual Fee
2020		$ 1,500,000
2021		1,530,000
2022		1,561,000
2023		1,592,000
2024		1,624,000
2025		1,656,000
2026		1,689,000
2027		1,723,000
2028		1,757,000
2029		1,793,000
Total:		$ 16,425,000

AGO activities in FY 2021 and in each FY thereafter for the new Office of the Homeowners’ Association (HOA) Ombuds are assumed funded with Homeowners' Association Ombuds Account dollars and assume a 2% increase each year assuming the population will continue to increase.  

Nevada charges a fee of up to $4.25 per unit annually to fund their Ombudsman.  Nevada has 3,048 HOA with an average of 170 units per HOA to make up their $2.2M annual budget (3,048 divided by $2.2M divided by $4.25). Nevada provides multiple education and trainings, reports, has a website and works on the complaints.  Nevada has a higher per capita HOA's due to the transitory population.  We based our assumptions from the information from the Nevada Ombudsman website as a starting point.

Assumptions:

In our initial assumptions Washington would need $1.6M to operate the program and 8 FTE, this also includes $500,000 for training, education and materials and development of website.

Based on limited research we found that Washington has 1,357 HOA's.  To support the program, the HOA fee per unit could be as high as $5.90 if the average number of units per HOA is 200.  If the average is 500, the fee could be as low as $2.36 per unit.  We do not know the number of units in Washington at this point.

Washington's population is double Nevada's and this estimate could vary based on units per HOA and the demand for the Ombudsman program.