Outragious Reserve Study

Started by WayneT2 • 14 replies • 844 views

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WayneT2 (North Carolina)
Posts: 1

Posted:

Our HOA just completed a reserve study and the cost elements are so over-inflated and unrealistic. Based on a review of historical aerials, it appears that construction of the streets and site improvements in the community were predominately completed between 2005 and 2007. The community includes a total of 182 members including 122 single-family homes and 60 villas. The asphalt paving appears to generally be of original construction and generally in good condition. Resurfacing would include milling and removing the top 1.5” of asphalt paving, completing full depth repairs of sections of asphalt paving as needed and installing a new 1.5” layer of asphalt paving over all the paved areas. We have approximately 18,000 SQYD of the road surface. The quotation for this was $394,800 US dollars. I feel this was a ridiculous estimate. Has anyone had their roads resurfaced? If so what was your cost and what was did they do?

Since the roads are in good condition I do not know why they would want to mill anyway!

If anyone out there had their roads resurfaced within the last few years please let me know how much we should pay for this project. SQFT? etc. Milled or not milled.

Thank you,
wayne

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That sounds kind of reasonable. I would call your local county to see what they pay to do a similar job. Do you know enough about how to pave a road to say that milling isn't required? Think would take a professional opinion on that.

Former HOA President

StacyH (NC)
Posts: 19

Posted:

Our reserve study done Nov. 2018 estimated resurfacing at $284,900. The cost is tied to petroleum so that may change when we get actual estimates. Our roads are falling apart so we can't avoid it but if yours were done a few yrs ago I can't imagine them needing this soon unless there was some wrong with the work.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Wayne

How many miles of road to be paved?

AugustinD
Posts: 5,144

Posted:

Proposed cost of milling and laying pavement = $394,800 / (18,000 yds^2 * 9 ft^2 / yard)
= $2.44 / ft^2

From googling, this seems like it's in the ballpark of what's currently being charged. Call around and see what companies in your area charge per square foot.

As I recall, at my former condominium, milling and re-paving the parking area was one of the top three most expensive capital components.

As for other costs you feel are over-inflated, I think competent reserve study analysts are happy to sit down with the board or their representative and go through every item, making adjustments. The competent reserve analysts try to use average costs for xyz for the location in which the condo/hoa is located.

NpS (Pennsylvania)
Posts: 4,216

Posted:

One of the best ways to test reserve study numbers is to get a quote from a local contractor and compare.

Sikubali jukumu. Read all posts at your own risk.

TimM11
Posts: 354

Posted:

My HOA had a reserve study a little over a year ago that included paving all of the streets, and IIRC it was somewhere between $200K and $250K, this for an association just under half the size of yours (and with no single-family homes, so it's likely quite a bit smaller from a physical standpoint). So, based on that, the estimate you got doesn't sound too far off.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Also like to point out that this may be a "Projected" expense. It doesn't say which year this has to be done. It may be a projected cost analysis what your HOA should have in it's reserves to cover the expense when it comes up. Don't sound like they recommended it had to be done. Just evaluated the cost of IF the project was to be funded.

Which reserve studies are for projected costs factoring in additional factors like cost of living and supplies increase. Reserves are funds to be used for large capital projects. Which typically don't happen for some time.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Last time I got a quote, the cost was $14 per square yard.
To give a buffer (as oil products costs are fluid), we used $16 per square yard in the study.

There were lower prices available. However, those who offered lower prices wouldn't do the work because it's too small of a job (10K sq yards).

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Well, this is a nationwide forum, so it only matters what it costs in your area. A paver in California isn't going to repave your roads in North Carolina so the numbers are not comparable. Tar obviously needs to be trucked in from somewhere local to you. That distance can vary along with labor costs, etc.

ND (PA)
Posts: 792

Posted:

At first glance I don't think the amount 'quoted' is all that outrageous.

The Reserve Study analyzes the components as they exist presently, determines the remaining useful life, and puts a cost on what it will take to repair and/or replace the component at some future date. Future costs usually account for inflation and other factors that may make prices seem high as compared to today's numbers.

In my experience resurfacing as you describe may be needed at a point prior to total removal and replacement of existing asphalt. But you should still have several years before resurfacing may be needed.

Do you have the actual reserve study? It should show when each component may need to be repaired/replaced in the future. It probably isn't saying that your roads need to be resurfaced immediately.

Best way to know what is reasonable or not in your area is to define the project that needs to be done and then solicit estimates from local asphalt contractors.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By WayneT2 on 08/14/2019 1:46 PM
Our HOA just completed a reserve study and the cost elements are so over-inflated and unrealistic. Based on a review of historical aerials, it appears that construction of the streets and site improvements in the community were predominately completed between 2005 and 2007. The community includes a total of 182 members including 122 single-family homes and 60 villas. The asphalt paving appears to generally be of original construction and generally in good condition. Resurfacing would include milling and removing the top 1.5” of asphalt paving, completing full depth repairs of sections of asphalt paving as needed and installing a new 1.5” layer of asphalt paving over all the paved areas. We have approximately 18,000 SQYD of the road surface. The quotation for this was $394,800 US dollars. I feel this was a ridiculous estimate. Has anyone had their roads resurfaced? If so what was your cost and what was did they do?

Since the roads are in good condition I do not know why they would want to mill anyway!

If anyone out there had their roads resurfaced within the last few years please let me know how much we should pay for this project. SQFT? etc. Milled or not milled.

Thank you,
wayne

Wayne,

The Reserve Study is a guidepost for which your HOA board should create a monthly savings plan. That's all. The Reserve Study must be weighed against actual property condition and common sense.

You'd likely never repave the entire road system at one time as it won't need it. But, the value of your roads is probably the near-$400,000 listed in the Reserve Study.

I can't recommend "saving money" by demanding revisions to the Reserve Study that are uncomfortable due to perceived high price. HOA expenses are sneaky high.

PestY
Posts: 128

Posted:

WayneT2
(North Carolina),

You own your own roadway(s).

Roads are in fact EXPENSIVE.

Now, go the wine room ................................................. and whine about it.

DonnaR5
Posts: 162

Posted:

Sounds like a realistic estimate. Make sure you understand what a reserve study is. It should be a guide for how much you will need at a point in time when the roads will need repair. Therefore, it tells you how much you need to put into a reserve fund every year. This is a good figure to have, because without that amount documented in the study, your HOA would not be able to collect extra funds year after year. So, your reserve study is a Good Thing.

GenoS (Florida)
Posts: 4,276

Posted:

Just to add another data point. A neighboring HOA milled and re-paved their roads 4 years ago in 2015. They have approx. 26,000 sq yds of pavement and they paid $8.00 per. That was 4 years ago and the price of asphalt DOES vary quite a bit according to the price of oil.

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