Reserve Study - Private roads

Hello, we are a new community and have recently got our reserve study done and we were on track with the accounted expenses as part of the current list of items so far but our community roads are private and qualify for reserve budgeting which through the latest reserve study requires us to severely increase our allocation.

Wanted to check in and see what other communities with private roads are doing in this regard. Are they saving up for them through their reserves or is there another way to address the road replacement costs in the future. We are in MI and our road life is assessed to be around 18y including patch work and maintenance.

Thanks!

We have private roads, and our road maintenance is out of the Replacement Reserve. Our next big issue is what to do with our private streetlights.

My last Association had private roads.
When we did our first reserve study, it required a 20% increase in assessments.

For us, the main line was still maintained by the water company.
They simply had easements throughout the development (same as other utilities)

That is a very good point. We have not thought of that yet. Our roads cannot no through traffic as these are private roads that only circle through the community. We are also done with most of our construction work within the community but it would still be beneficial to add the weight sign for all vehicles entering the community. Thanks a lot for that tip!

Interesting. Thank you for that!

Our certified reserves specialist, does take local weather and other local factors into his estimate of remaining useful life (RUL) of a reserve component.

Such a specialist often will have two line items for a component, "replacement," say 20 years for your roads, and "repair," by which I mean the "periodic sealing" that Dean notes. A local certified reserves specialist will know these based on their comparisons with other local HOA's roads they've included in a study's list.

Everyone has given you great advice. We also use our reserve funds for the private roads. The best piece of advice I can give is when you are ready to replace the roads or think you are ready, hire a professional engineering firm to write the RFP and take core samples so you know the thickness of the current surface and what you need to replace. Once they write and put the RFP out for bid, they can evaluate the responses. They know what a reasonable price for asphalt is based on the current conditions, plus they usually have worked with all the vendors. Finally, they can supervise the installation.

A reserve item that is as expensive as roads should not be supervised by volunteers (unless they are engineers). It's a small expense compared to the issues that can happen if the resurfacing is done incorrectly.

We are in Wisconsin so have pretty much the same weather as Michigan. Our reserve study had a 40 year life for the roads. We are going on 25 years with our privately owned road. We budget each year as an expense for crack fill and repairs. Usually less than $2000.00. Our road is still in good condition. We anticipate it will be another 15 years before we will need to repave. We have increased our reserve contributions by quite a bit in the past 4 years.
at present time we contribute about 41% of dues to the reserves. We are in the process right now of replacing our roofs. Doing it over 5 years. Previous boards wanted to keep dues low and we've now gotten owners to understand this is not a good thing to do. At some point you are going to have to pay for the items in your reserve study and at least in our association they would rather pay more per month than get hit with a large special assessment. It took us 2-3 years to get the owners on board, but now that we are replacing the roofs they finally understand we have to have the money to pay for these items.

Kudos AnnS! It takes a lot of persuasion to convince owners that the reserves contribution from the budget is crucial for the heath of your HOA.

For others, your certified reserves specialist will be happy--at not cost-- to do a Town Hall presentation with owners to explain the importance of healthy reserves

In reality, your HOA would be repairing asphalt as those portions become depleted and likely would never 100% remove the private road in order to relay 100% new asphalt.

Nonetheless, you'll need to raise those dues and direct all the new revenue to Reserves. You, in fact, have discovered the paving dilemma VERY early in your HOA's life. Many communities don't realize this component is often missing from the reserve financial planning until it's time to replace the asphalt.

This is a good plan. The reality is that attempting to integrate future asphalt maintenance/replacement into a Reserve Fund that has never accounted for it is VERY painful to see on paper!