CA - Reserve Study

We send out our reserve study with our operating budget and the rates increase every year via snail mail and also post on website. We do full study every three years and updates each year. I think we are doing a good job of making the information available. Please let me know if you disagree.

But, should homeowners be consulted before our next full study this year, or is it enough to offer a meeting to discuss the results and implications after the study is complete. Obviously, if we are talking about +20% dues increases or a SA then we will need to get homeowners to vote etc. Am I reading the requirements of Davis Sterling properly? Thanks, Sue

I think you should hold a special meeting every time you get an updated study - generally, that would be done every 5-7 years anyway. That's when you could bring in the reserve specialist to present tge findings and homeowners could ask questions.

Homeowners should be reminded the study does factor in inflation, but depending on how well you've done in following previous recommendations and what else has happened since those studies, there's not a 100% guarantee a significant increase won't be necessary down the road. They should expect some increases because the price of everything has increased, but tge board will do what it can to avoid 20% increases.

Meanwhile, you welcome suggestions on vendors the association might hire to control routine costs- and homeowners must be willing to prioritize what services are essential. You dontvalways get what you want and adding things like a hot tub or two in the clubhouse might sound nice, but people have to be willing to pay for it, and all the maintenance costs that come with it- and they won't always be at 2024 prices.

Between studies, you should keep homeowners aware of how well the community is following the funding recommendations. For example, if you had an unexpected major repairs to the common area, such as a fire causing extensive damage to the clubhouse that insurance might not cover completely, you may need to pull some money out of reserves to cover it. That may reduce what you deposit that year.

There is no such legal requirement. Is there another reason you think perhaps owners should be consulted before the next full study? E.g. is the Board trying to facilitate owner "buy-in" once the study is complete and the study recommends an assessment increase? Or is it possible the board believes that with all the eyes and ears the owners have, they may have some intel to offer regarding the condition of infrastructure and amenities, resulting in owners proposing that the reserve study analysts take a special look at ___, ___, or ___?

Yikes. You mentioned roofs. I assume this is a condo or townhome, and the association is responsible for significant infrastructure and amenities.

Please confirm: "Percent funded" when it comes to reserves has a very exact mathematical meaning. How do you know the figure is 30%? Who told you it is 30%?

Reminder: "Percent funded" is not simply the total amount in the reserve account / the total cost to replace all infrastructure and amenities.

IMO planting mental seeds has a lot of value. Given the dire straits of the reserves, I do not think I would run a meeting with just say the owners and board or the owners and the president. Bring in a reserve study specialist before the reserve study to talk about the study in general terms. Suggest to the specialist that she emphasize the 30% funded figure (assuming this number is correct).

I hope you have read this article, about a board that had to get quite tough and radically raise the assessments:

https://www.sarasotamagazine.com/home-and-real-estate/an-unlikely-heroine-steps-in-to-save-crumbling-dolphin-tower

Thank you both. The 30% funded figure comes straight from the Reserve Study. Our Board votes every Board meeting to place 50% of the dues collected into our reserve fund, the rest remains in the operating budget to pay for ongoing expenses. Yes our HOA is responsible for the roof, the roof underlay, the exterior painting, the front yard landscape, the roads, the lighting etc. etc. And yet people still complain about paying $379 per month in dues! Fortunately we don't have pools, clubhouses, and large expanses of land to pay for. Being without a clubhouse we meet via Zoom every other month. The annual meeting has traditionally been held in the Chairs garage (I'm stuck with that!). Hope this fills out the picture for you. Sue

Cool.