Raid Reserves for unneeded repairs??

Started by KerryL1 • 13 replies • 962 views

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KerryL1 (California)
Posts: 14,550

Posted:

AT our board's open meeting tonight, the Finance Committee recommends we get two more bids for replacing all of our 300 balconies in our 17 y.o. rise and "commit" today to spending $1m on the work. That's about 1/4 of our reserves funds.

We have one estimate of $825,000 for all and $275k for those that show 40% or more needs for repair--they inspected half our balconies, which generally show loose ceramic tiles, which indicate the underlayment/waterproofing is damaged.

I agree we need more proposals and will vote for that. I do NOT agree all need to be repaired NOW. My own balcony, for instance, is in perfect condition and I'm sure I'm not alone.

Background of Fin. Comm. members: none have any background in construction or the trades or crafts. They all were prof./white collar salaried folks, are 70-82 y.o and are very nervous about everything. 4 of the 7 are current or former treasurers of our HOA.

The only arguments I can think of are (1) that balconies are like roofs. Generally we don't replace roofs till they leak. (2) The vendor who gave us his written estimate does recommend replacing about 1/3. Anything else? Or am I being too casual about this?

Related tonight: The Fin. Comm. also recs that all raised planters that haven't been dug up to have their waterproofing replaced, be replaced now. They want three bids. They want this work done by the same vendor who'll do the balconies. These planters also are "roofs" mainly over underground garage, but also over some commercial office suites. I estimates there's about 3,500 s.f of planters some of which have tall mature palm trees in them.

I don't think the same firms that waterproof planters waterproof balconies, but I could easily be wrong. In addition, NONE of these leak. the cost is sort of estimated at $160,000. Any help for opposing this use of HOA funds??

They also want our PM to have all bids collected by mid June (!!) AND they want our treasurer to assess the RFPs before they go out, a task for which he's simply not qualified.

I must leave here at 5pm for ex. sess, but thanks if you pick this up and have a minute to reply.

AugustinD
Posts: 5,144

Posted:

The dollar amount and percentage of the Reserve Fund involved are huge. You are not being too casual about this.

Good that the vendor said to do a third. If possible, start with the third or so in need of immediate repair. Re-evaluate every year.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would ask how many need immediate repair. Make a list and break the project up. For example let's say 25 were inspected and deemed unsafe. How about pricing out and hiring a contractor with those funds set aside for the overall project? You may be able to kill a few birds with this. You can see how the contractor does.

Start a list to break up the project a bit more. Everyone will be addressed based on the timeline of need.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

I happen to be a James Bond fan and there is a line in his most recent movie where James says to M, "You're right, sir. You do have a tricky day ahead."

Having seen the building some years ago while at a convention it is a tough call. I am not an expert in those kind of balconies as I never managed a high rise property, but you may have to do more than you like because of the cost of putting up scaffolds to complete the project. Off the top of my head I would do this in sections and replace/repair what is truly needed and inspect and repair those not seriously affected.

As far as the peole making the decision, well that is a potential problem. You need much more qualified people when dealing with those kind of dollars.

KerryL1 (California)
Posts: 14,550

Posted:

Good point Augustin—I’ll start with the one vendor’s rec. He, Melissa, made a list & chart of half—the number they inspected— and exactly what each needs, in their opinion. I agree we CAN do some an tun have a schedule over a few years for the rest.

The good news, Richard, is that no scaffolding is needed. They’ll do the work from the balconies themselves, so we don’t have to do sections, but whichever ones need to be done. But, I’d agree we must have a project manager for this and they aren’t cheap. We’re having our entire exterior painted right now—which DOES require scaffolding, & the proj. mgr. is about $38,000.

Thanks for your support—I’ll let you all know what happens.

KerryL1 (California)
Posts: 14,550

Posted:

As expected and though I tried hard, a majority of the Board voted to have all of both projects done at one time. A couple of Owners did complain at our 2nd Open Forum, but no one on the board offered to rescind the decisions.

My hope is that when the reality of the new bids sinks in, there'll be a modification of last night's decisions.

You know, Richard? We have had other Fin. comm & board members over 70 (though not 80!) who've been productive. But they've had backgrounds in bids & negotiations for everything in a large school district, another was a civil engineer, another was an architect who'd been a construction site manager AND a property manager.

The current group--2 attorneys, a retired professor, a retired commun. coll. math instructor, a retired MD, tow retired securities analysts and a retied relator/investor know nothing about anything mechanical, etc. The prez's spouse is on the Fin. Comm and they're both good friends of the treasurer, who chairs the Fin. Comm. Another man--81-- wants those to like him so he always votes with them on the Fin. Comm & on the board. Our new younger attorney on the board isn't impressive at all tho' he's served on other condo boards.

It's after a 2-1/2 hour open meeting like last night when, like Tim, I don't want to seek election in Oct. BUT the current group doesn't understand our finances and I (of all people!!!) do. I'd worry too much about their paranoid delusions that our towers will fall down unless we pump 100s or 1000s or $$ into them.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By KerryL1 on 05/30/2018 6:01 PM

I'd worry too much about their paranoid delusions that our towers will fall down unless we pump 100s or 1000s or $$ into them.

Welcome to the club

KellyM3 (North Carolina)
Posts: 2,239

Posted:

If those balconies (or their condition) can reasonably raise questions of replacement, due to age AND if the planter waterproofing infrastructure is 17 years old (and that's "old" for such infrastructure), then spending 25% of the reserve fund on that scale of work doesn't seem off base.

It sounds like a HUGE job. Your report suggests there enough needs to warrant the discussion of a replacement project. And you still have 75% of your existing reserves after the work is done.

The decision, and it should be debated, comes down to the resident demands since you're not risking insolvency. Sounds like your owners are very conservative and replace things before they break. I actually prefer replacing HOA infrastructure before noting failure if we know the infrastructure is at, or near, its end-of-service life.

Many HOAs would kill to have such a debate over preventative building and property maintenance.

JoyceR2 (Virginia)
Posts: 156

Posted:

Might be worth the cost to have a certified professional engineer inspect all the balconies & provide a report. You can then decide if you need to do all or some over a period of time, which ones need to be done first etc. & request bids based on the inspection results.

KerryL1 (California)
Posts: 14,550

Posted:

Good points, Kelly. Our balconies were estimated by our reserve analyst to have a remaining life of 13 years. But some surely are failing while others are perfect so far as our project management firm can tell. Though not engineers as Joyce advises, they are architects who specialize in high rises. Their assessment is the same as the vendor who might do the work.

A big difference though is in about 1/2 the problem cases, the architects advise that we pull and reinstall the existing tiles. We, have, for instance, balconies that maybe need 4 tiles replaced and their waterproofing is fine. We have other balconies that need new caulking at the door sills, etc. We have others where the slope is off, so several tiles would be pulled, the slope repaired and the tile reinstalled.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By KerryL1 on 06/14/2018 7:24 PM
Good points, Kelly. Our balconies were estimated by our reserve analyst to have a remaining life of 13 years. But some surely are failing while others are perfect so far as our project management firm can tell. Though not engineers as Joyce advises, they are architects who specialize in high rises. Their assessment is the same as the vendor who might do the work.

A big difference though is in about 1/2 the problem cases, the architects advise that we pull and reinstall the existing tiles. We, have, for instance, balconies that maybe need 4 tiles replaced and their waterproofing is fine. We have other balconies that need new caulking at the door sills, etc. We have others where the slope is off, so several tiles would be pulled, the slope repaired and the tile reinstalled.

I see. Well....if the goal is 100% functionality and not 100% replacement of amenity, then wholesale repairs are in order - especially if it's reasonable to assume another decade of service in the aggregate. Every resident deserves 100% functionality and protection against water intrusion. That seems to be the goal. I would trust architects.

KerryL1 (California)
Posts: 14,550

Posted:

Very reasonable, Kelly. at present we have 100% functionality and no water intrusion. The Architectural firms agrees with the many often minor issues with some balconies identified by the vendor.

The first line of the Conclusion of the architect's 88-page report (many are photos) is: "Most of the problems can be corrected with routine maintenance such as replacing the caulking in the control joints and clearing debris from the scuppers [a type of drain off the balconies}."

The few instances of rust that they could see on balcony ceilings (floors of balconies above) "...should be looked at right away with intrusive testing."

I entirely agree that ANY structural issues should be dealt with ASAP. But tearing up every balcony tile and replacing all underlayments and then replacing all tile with new tiles is, imo, is beyond prudent and, in fact, contradicts our CC&Rs & Rules & Regs, which make owners responsible for tile replacement (EXCEpt if die to structural problems that cause cracked tiles.)

And blocked scupper drains are the fault of the Owner not the HOA.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

I see. Well, my perception of your project changes.

If it's a maintenance matter, then maintenance needs conducting and that's it, including advising homeowners of their duties.
It now seems as if there is a push for replacement so that owners can sidestep personal investment in the decks. But, I'm cynical like that.

KerryL1 (California)
Posts: 14,550

Posted:

I think you're right, Kelly. Two of our seven Board members have very large condos with several balconies. And they're the ones pushing the hardest for all new tiles. 80% of us have a balcony that's about 100 s.f.

Our HOA does have a s.f. assessment variance for condos but it does not include some obvious features of larger units like balconies, numbers of windows

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