What is the reason we save for infrastructure repairs? What happens if we don't save?
Infrastructure repairs are hugely expensive. The cost to replace the road and water line is over a million dollars. If an association does not set a side the money methodically each year, then the only way to get critical repairs done is with large special assessments; $1,000 - $3,000 range per owner.
It's not just about the money.
- it takes months to collect special assessments - many community members won't have that money on hand,
- with no money set aside, repairs will be delayed until something has to be done,
- unrepaired infrastructure often creates other damages - the washout from a longstanding water leak could cause foundation problems, for example,
- the city could condemn the property if the HOA does not act on their timeline.
Are we required to save for infrastructure repairs?
The community is legally required to save enough money each year to cover future road repairs, water line repairs, and other infrastructure repairs when they present themselves. Your deed (CC&R) requires this. Many lenders require this. Auditors require this.
How do we know how much to save?
The association is obligated to conduct reserve studies which use engineering methods to establish the appropriate savings rate. See the tabs on this page labeled "Reserve Studies" and "Savings Plan"
What are our biggest threats?
A concrete roadway has an average life expectancy of 40 years;
- The roads at Beverly Oaks were installed in 1981.
- There is 64,000 square feet of concrete
- The cost to replace is $12.00 per foot ($768,000)
- $50,000 in repairs were made in 2017 and more will be needed before 2025.
Water mains under the street have an average life expectancy of 40 years;