Roads and Reserves

Kerry suggested a new thread on roads and reserves because many HOAs like mine have few amenities and roads - are a relatively massive reserve expenditure. Below is information from my own experience in my HOA. Not comprehensive by any means. But it describes the issues that we are thinking about. Here is a list of questions that we and maybe you should consider if you have a similar situation.

Questions:

1. Is there still a chance to dedicate the streets?
2. Is there anything under the streets or alongside the streets that should be done at the same time?
3. Are there any grading issues that should be addressed when the streets are done?
4. Are there any easements that should be investigated before repaving?
5. What to do about seal-coating?
6. Where is everyone going to park while the work is being done?
7. Should we accelerate re-paving because of the current price of oil?

Our situation.
Independent reserve study update completed Jan 2014.
Total replacement cost of all components: $431k.
Individual components:
Paving. Replacement cost in today's dollars $192k. Age 25 yrs. Est Remaining Life 2-4 yrs (half of streets in 2 yrs and half in 4 yrs). Typical Life 20 yrs.
Curbing. $55k. Age 25 yrs. ERL 15 yrs. TL 30 yrs.
Storm Sewer. $21k. Age 25 yrs. ERL 12 yrs. TL 30 yrs.
Water Mains & Pits. $100k. Age 25 yrs. ERL 23 yrs. TL 40 yrs.
These 4 items combined total $368k - Everything else is only $63k.

Now to the questions:

1. Is there still a chance to dedicate the streets?

Prior boards attempted to have streets dedicated twice and were rejected. Benefit we have is that we can see some of the flaws in what they did. We will take a different approach than they did but we still think that we have less than a 10% chance of being successful. We know that to be successful, we will have to turn over streets that are pristine. We will probably have to get an engineering study done to satisfy the township - an expense that we would not have if we just went forward with repaving. Also the township might demand that we redo curbing, storm sewers, and/or water mains and pits at the same time that we repave. We would have to figure out how to finance all at once. But if we could figure out how to put the streets on the township, as you can see, we would slash our reserve expenses dramatically.

2. Is there anything under the streets or alongside the streets that should be done at the same time?

First something very important to know. I believe that most reserve studies do not include water mains and pits. Reserve Specialists do not typically have the means to assess remaining useful life and leave it off - the justification is that items with more than a 30 year life are typically excluded from reserve studies. To be conservative, we had him include our water mains - as you can see, he gave them a 40 year typical life - which would have resulted in exclusion in a typical reserve study.

IMO, water main breaks are the least prepared for event in an association like ours. We have had a couple incidents where the saddle clamps at the junction where the water main meets the water lines to a house broke. Repair involves cutting huge chunks of asphalt and patching. We are concerned about having to patch a newly paved road.

Our storm sewer system is under our streets. Our curbing is alongside our streets. You can see from the above list that everything has a different remaining useful life. The question we need to answer is whether it would be more cost efficient to do some things at the same time as the repaving by doing them earlier than the reserve study calls for.

3. Are there any grading issues that should be addressed when the streets are done?

We have one row of homes that are below street grade. When it rains, there is no runoff to the other side of the street so all the water goes to that one side. We plan to do some minor changes to the contour of the street surface but it won't do that much to help. We can attempt to alleviate some of the problem by modifying the curbing (creating a bump between the street and the driveways) and/or adding a storm drain to a low point before we repave. This is a cost that was not planned for in the reserve study. So we need to decide whether the affected homes should pay an additional amount for these changes.

4. Are there any easements that should be investigated before repaving?

All of the utilities have an easement. Typically they cut and patch driveways when they lay underground lines. But there are situations we know of where streets were cut. We intend to notify all the utility companies in advance of any paving.

5. What to do about seal-coating?

There are mixed opinions on whether seal-coating accomplishes anything. A prior board started doing it about 10 years ago and we now look like a patchwork quilt. About 3 years ago as we knew we were getting close to re-paving, we decided to save our money and let the roads go without any more seal-coating. Important to have good relations and communications with homeowners who might be unhappy about it.

Part of the reason we decided to let the streets go is that the layer of asphalt that the builder put down originally is quite thin and the stone base below is also thin. We don't think that there is much to protect. We will need to decide what to do about seal-coating after the streets are re-paved.

6. Where is everyone going to park while the work is being done?

Too soon to be dealing with it, but when we do re-pave, we figure that streets will be inaccessible for 3 days or more. Timing and homeowner communications become important.

7. Should we accelerate re-paving because of the current price of oil?

Asphalt is an oil by-product and the cost of re-paving will be affected. We are wondering whether we should accelerate the re-paving to take advantage of current prices.
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Please feel free to comment or add questions that you think are relevant. Our HOA has many questions and, so far, not enough answers.

Hi Allison

How thick is the seal-coat? Do you think it will last 5 years?

When we had it done, it lasted less than 2 years.

And what would be your estimated total cost for paving/milling?

You quoted the paving in dollars per square yard and the seal-coating in total job cost. So I was looking to be able to make an apples to apples comparison.

Thanks Tim.