Small Small HOA - Reserve

I assume you mean you are re-sealing, not resurfacing, the roads every 5 years. To me that indicates you are responsible for road maintenance, repair, and eventual replacement. That is likely your big-ticket item that you are reserving for years down the road (pun intended). Figure out remaining useful life of your road. Then estimate cost of repairs over the years and then eventual milling and replacement at end of that remaining useful life. That will tell you how much you should have at some point in the future which will tell you how much you should be regularly saving. What may seem like a lot now will very quickly be gone when your road needs to be replaced to the tune of, let's say . . . $100k.

Chris,

You should do a reserve study to determine how much to set aside each year.
For information on reserve studies (and links to sites on how to do your own), see the following thread on this forum:

Subject: Reserve Studies/Funds 101 Note earlier links in that thread may be broken but corrected later in the thread.

I also live in a self managed Association with private roads.
Road sealing and milling/paving is based on square yards.
Prices vary by area.
In our area, the quotes we have been receiving are around $14 per square yard.
Our reserve study is based on $16 per square yard in order to account for varying prices of oil.

Once you know how many square yards you have, contact local companies, explain that you are updating your reserve study and ask what their price is per square yard. Most companies are willing to assist.

Hope this helps,

Tim

Why do you think that is too much? Be specific.


There are industry-standard and widely accepted ways to analyze reserves. None of them produce a number of years as output.

You're small enough that getting a professional Reserve Study done should be relatively inexpensive. I think you should consider doing that instead of re-inventing the wheel. Or, you can find plenty of Reserve Studies online that have been done for other communities. You could study those and figure out how they were done, and then put together your own using the correct terminology and calculations. I'd still prefer a professional to do it the first time, however. Reserve studies have to be updated every few years.

Roads can be problematic. There are different ways to resurface a road. Periodic sealing is a controversial topic for some people. Asphalt costs are hard to predict since it's tied very closely to the price of oil. An asphalt overlay can last anywhere between 15 to 25 years depending on the quality of the installation work and doing proper maintenance. If you ask questions about those things you'll get 10 different answers from 10 different people.

We've been carrying our roads in our reserves planning using a 25-year useful life. They were last done 12 years ago and starting to show alligator cracks in many areas. They were never sealed after the new asphalt was laid down. Some of us feel the lack of re-sealing every 5-6 years is shortening the life of the roads. Others think re-sealing is a waste of money and who wants to get that seal coating on their tires anyway?

We're planning to have a Reserve Study done next year and we'll rely on what the professional preparer tells us. They're supposed to be familiar with local practices, pricing trends. The Florida sun is brutal on asphalt and we'll carefully consider what the reserve study has to say regarding an estimated Remaining Useful Life. It's really the one reserve component we have very little clue about ourselves. I wouldn't trust anyone here to come up with a good plan and estimates. Heck, I wouldn't trust myself to do it.

Also make sure you don't have any other responsibilities for thing like street lighting, retaining ponds, retaining walls or anything else that does not need maintenance on a regular schedule but may need to be replace one day.