Dues, Savings, and Future cost of our community. Looking ahead!

Congratulations on your decision to examine our community’s future outlook.  As you well know, it takes time, effort, and discipline to save for the future. Yet the challenge does not end there. We need to be prepared for the future by a continued effort to review our asset and income. We want to ensure we can meet our community’s maintenance, needs, and potential improvements for years to come.

Some commons questions you might, may include:

  • Will our community have sustainable sources of income for future needs?
  • Will our community have enough money to maintain current assets?
  • Can our community afford any future capital improvements?

The 10-year analysis may help you to determine answers to these questions.

The analysis provided is a projection based on revised assets from our Reserve Study. Ultimately, the reserve study should be used as a guidepost for our community. This revised study only projects 10 years. Some less relevant assets were removed and highlighted assets had their useful life extended. Our revised report is a information tool intended to review our current situation while highlighting the need to fund our reserve account. The term “analysis,” when used, does not imply that a recommendation has been made to implement one or more actions. Nor does the analysis or report provide legal, accounting, financial, tax or other advice. Rather, the report and illustration are intended as educational tools to assist you in understanding the future cost to maintain our community. It is important to compare the information on this report with the reserve study conducted in 2013.

Why did we do this? It was suggested by a few homeowners that our dues were too high and our reserve was overstated. As you review this report, we beg this question with you: “What is the ultimate cost of keeping monthly dues low? Are you willing to pay a future cost of several thousands of dollars for maintenance in exchange for a low monthly due today? We understand that our community can defer maintenance to keep dues low, but only for a short period of time, after that our community’s liability greatly increases. Board members also have a fiduciary role and responsibility to attend to these items in a prudent and responsible manner.

Here are a few important notes:

  • Our reserve account was at 10K a few years ago, it is now at 55K
  • The due increase in May, from $145 to $175 went directly to our Reserve account. Money in the reserve account can only be used for reserve items.
  • Keeping dues at $145 would mean a certain assessments in the future.

Revised Projection can be found here!

Revised Projection notes:

  • Page 1: Revised reserve Items for the next 10 years. Crossed out items have been removed from my analysis and highlighted items have been modified by the number of useful years left.
  • Page 2: A list of my revised reserve items and their associated cost. I spoke with a roofer regarding are cost, the estimate by square foot. The roofer gave me an estimated amount which was close to our projected cost based on asphalt shingle, pitched roof, and inflation. The roofer informed me that supply cost are rising significantly and he warned me that cost may be higher in the future. I have a couple resources regarding stucco painting and maintenance that provide an estimate by square foot. We can review them, if needed.
  • Page 3: A projection based on the revised reserve items (page 2) and monthly dues per unit at $145 with $14.50 of that going into the reserve account.
  • Page 4: A projection based on the revised reserve items (page 2) and monthly dues per unit at $175 with $44.50 of that going into the reserve account.
  • Page 5: A projection based on the revised reserve items (page 2) and monthly dues per unit at $175 with $44.50 of that going into the reserve account with an annual 2% increase to reserve contribution based on the prior year’s reserve contribution amount

Our two big ticket items are Roofing and Stucco (painting & repair), here are some resources for you:

Roofing
http://www.angieslist.com/articles/what-average-cost-replace-roof.htm
http://www.roofcalc.org/

Stucco Painting
http://www.homewyse.com/services/cost_to_paint_stucco_house.html
http://www.homeadvisor.com/cost/painting/paint-a-home-exterior/