How are HOA's funding road repair/replacements?

We are an HOA with 9 families that are looking at replacing our paved road sometime in the next 5 years or so.

Our dues are currently set to cover normal expenditures and increase our assets by around $8k per year.

We are getting estimates of somewhere between $100K and $200K to replace the road.

How does anyone make something like this happen?
We are playing catch up from years of not planning for the future. The road is around 15 years old.

I can't imagine a loan being a good solution and a special assement may force some families to getting a personal loan which doesn't seem like a good solution.

Are grants available for HOA's?

Any ideas? Increase dues? Investments? Bake Sale? OK, forget the last one.

By the way, I can't seem to do any kind of search at this site. Any ideas?

Thanks
Mark

Change "play" to "plan".

Thanks for your candor.

Its not a great position to be in but your suggestions are something to base a plan on.

Mark

My COA is doing similar, except we are 126 units & we are having to replace roofs at the same time.
We got a revolving credit loan. Told the homeowners about it all at lease 6 months ago. Both projects are being worked now.
It's a financial traumatic event, but there's no other way (at least for us).

Have you conducted a reserve study? You have a young HOA and it sounds like people didn't realize that folks driving on the roads at varying speeds day in and day out would eventually require repairs and replacement. A savings account for this (aka reserve fund) should have been established, but developers have a nasty habit of not educating new HOAs about any of this stuff, and then homeowners are surprised that eventually the common areas do require major repairs and THEY are responsible for paying for them.

If the roads are your own asset, you'll need a plan for maintenance and major improvements such as repaving, and a reserve study can help you will determining what you'll need over the next 20 years or so and how much to save for. A reserve study specialist can do the first one and you might be able to handle the updated ones (usually every 5 years) on your own. But first, some education is appropriate. I usually suggest people go to the CAI website to get some of their educational resources on HOA issues, but Googling reserve funding sheet might help you find some templates. You still need some education so the template makes sense and you can use it for budgeting.

By the way, are you sure the roads are the association's only asset? Better read your documents to see if there's anything else the association is responsible for because that may also need to be included in your reserve study so you don't have this conversation again in the next 10-20 years.

There are also a lot of older conversations on this website about reserve studies and funding reserves, and some discuss DIY reserve studies. A few of the older posters might be able to post links to what they did, and you can learn from that. In any event, read a few of the older conversations, but bring your questions back to this one so you'll get updated information. Good luck!

Mark,

We did our first reserve study ourselves. Wasn't great, but it was better than no study.

For our second study, we hired a reserve specialist.

Roads are calculated in square yards. Once you have that number, you can get a good ball park over the phone from most paving companies.
HOAs are small and not quick repeat customers. Therefore, prices at typically higher.
Management Companies tend to get lower quotes because they could be a yearly repeat customer (depending on how many Associations they represent).

10-12 years ago we were getting quotes of $14 and $16 per square yard (that was in northern VA).
Prices also adjust based on the price of oil.

If you want, I'll send you what we had.
You can use it as an example or a starting place for your own study.

Email me: [email protected]

I will say that after we did our first study, annual assessments had to be increased by 20 percent to fully fund.
Therefore, the more explanation and the earlier the explanation to the community the better chance of increased assessments being supported.

Tim

An assessment is the only thing to help. Maybe try to get a loan and assess for the payment of the loan. This is why I am the proactive one. You have to stay at least 5 years in front. I've been trying to get off the board for a year now. I'm the one who can do all and figure it out. Only way I will escape the board duties is to move out. That's my plan. I cant keep holding these babies hands anymore. I call them my foster kids. Its ridiculous. But if I did not do what I did in the past 10 years. We'd be in your situation. Its all about planning and raising those fees. Insurance industry for Condos is the main killer right now. The cost of insurance. If you didn't plan for insurance increases. That's what puts a lot of people in your situation.

What does your reserve study say the cost to replace the road would be? Does it need to be replaced?

I would start raising assessments year over year and put that money in your reserve account
and when you are ready to replace the road then levy a special assessment, this way it will lighten the blow.