Beware of municipalities that low-ball your community association’s annual reimbursement under the Municipal Services Act

July 11th, 2019 | Community Association Law Blog

By Eric F. Frizzell, Esq.

Is your community association receiving the maximum annual reimbursement to which it may be entitled under the Municipal Services Act?

Under the Act, a municipality is required to provide a qualified community association with either snow removal from roads, street lighting, and collection of leaves, solid waste and recyclables, or annual reimbursement for the association’s costs to perform those services itself (but not exceeding the amount it would cost the municipality to provide those services).

Some municipalities will try to low-ball the amount of the reimbursement by wrongly including only limited categories of expenses in their calculations, such as the salary of snow plow operators and the gas for the plow truck. Instead, you should insist that the reimbursement include all of the municipality’s true costs, such as salt, indirect administrative cost allocation (e.g., office personnel, supplies, utilities), overtime, pension/health insurance benefit contributions for involved employees (including administrative support services), equipment maintenance and repair (e.g., oil changes, tires), equipment depreciation, insurance, and storage costs. After all, a well run private contractor includes all of these costs in determining the amount charged to your association for such services.

Accordingly, be sure to closely scrutinize the basis of the proposed reimbursement and insist that the municipality include a fair allocation of all of its costs.

Phone us at 201-612-5200 for more detailed information on how to maximize the reimbursement paid to your Association.