Sitting by a warm fire or having a snowball fight on a snow day can be fun for the whole family. However, when you have to get around, the snow quickly becomes a hassle. If your area frequently sees snowfall, the HOA may be considering snow removal contracts. Check out these pros and cons of contract options.
Flat Rate Pros:
Flat rates have one major advantage: they make it easy to budget. When you know how much you’ll pay year to year, the HOA can budget accordingly. They don’t have to analyze weather predictions to know how much snow the area may see. This also makes it easier for HOA members because they don’t have to wonder if the HOA will suddenly charge a special assessment because there isn’t enough money in the budget to pay for snow removal on a heavy year. Another advantage is that providers who rely heavily on flat-rate fees usually have more reliable income, so they hire more employees. This is extremely important when everyone is calling to have snow removed.
Flat Rate Cons:
One possible disadvantage to choosing a flat rate is that the provider isn’t as desperate to provide service. They don’t have to hurry and remove your snow, so they can quickly move on to the next client and earn their money. You may not get service as quickly as you’d like. However, if the company has too many delays, you may be able to argue for a lower flat rate the following year.
Per Occurrence Pros:
The biggest benefit of choosing a per-occurrence rate is on light snowfall years, the association saves money. For example, a flat-rate fee may assume you’ll need their service five times a year, and they charge you accordingly. If you end up needing their service seven times, you got a great deal, but if you only need their service once, the HOA wasted a lot of money. Had you paid per occurrence, you would have saved money.
Per Occurrence Cons:
The first disadvantage of per-occurrence contracts is that if there is a lot of snowfall for the year, you may end up spending a lot more than had you chosen a flat rate. Of course, this is really only a disadvantage if you live in an area that doesn’t see much snowfall except every few years. If you live in an area that sees a lot of snowfall, the provider will budget that into the flat rate.
A snow removal contract is a great idea for your HOA because it allows you to keep your streets clear. However, the HOA needs to decide if a flat rate or per occurrence rate is the better option.