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Crown Harbor Homeowner Association

Reserve Study Committee

The monthly dues are divided between two types of expenditures.


Operating Account

The operating account covers monthly expenses of the association. This includes items such as:
  • Property and earthquake insurance
  • Landscaping contract
  • Plantings and tree trimming
  • Utilities such as electrical, water, and trash disposal
  • Management fees

Reserve Account

The reserve account covers long term expenses of the association. The reserve account is used to fund the maintenance and repair of all items that do not come out of the operating budget. This includes items such as:
  • Roof replacement
  • Siding replacement
  • Plumbing/sewer repair
  • Pest/termite repair
reserve study

Reserve Study

Every 3 years Crown Harbor commissions an independent company to complete a reserve study for the association.
  • A reserve study includes an assessment of the condition of the existing assets (e.g. roofing, siding, street surface) and the expected remaining life of those assets.
  • Based on the remaining life of each asset, a projected date as to when it needs to be replaced is determined.
  • Based on a projected date of replacement, an estimated cost for replacing it (at that time) is computed.
  • Based on the costs for when the various assets needs to be replaced, a profile of how much money the association will spend in future years is derived.
  • The numbers in the reserve study are debatable. Some may be too low. Some may be too high. The time to question these numbers is when the reserve study is received, before payment is made to the company providing the study, not in subsequent years when the reserve study is being used to craft an annual budget.
  • It is not appropriate for the Board to ignore the advice of experts who craft the reserve study and substitute its own numbers. Most associations adopt the recommendations in the reserve study itself rather than analyzing the data and forming their own plan. For years that are between new reserve studies, the Board can substitute an estimated value for asset replacement for a known value when there is a proposal to replace the asset from a professional on hand.
reserve study review

Reserve Study Review

The Reserve Study Committee takes the most recent reserve study and analyzes it for the coming year. The goal is to make sure that the dues and assessment for the coming year are in alignment for what is recommended in the reserve study.
  • The purpose of the Reserve Study Review is to have a second set of eyes look at the reserve study and make a recommendation to the Treasurer.
  • The Treasurer then takes the recommendation into account when proposing a budget for the following year.
  • The recommendation in the review is not automatically adopted simply based on submission to the Treasurer.
reserve study update review for 2016

Findings from the Reserve Study Update Review of 2016

  • The 2016 reserve study update was provided by Associa. The first version of the full report was published on June 14, 2016. The current version of the full report was published on July 22, 2016. The cost for this update was $375, far less than the ~$2,000 for a brand new reserve study.
  • The reserve study includes costs for maintaining existing items as well as replacement.
    ItemReplace in
    Fence at Crab Cove entrance2017
    Street signs and posts2017
    Crown Harbor entrance sign2017
    Irrigation to drip system conversion (1st third)2017
    Sewage ejector pump (1 of 2)2017
    Irrigation to drip system conversion (2nd third)2018
    Roadway resealing2019
    Sidewalk repairs2019
    Irrigation to drip system conversion (3rd third)2019
    Seaside pathway resealing2020
    Entry gate intercom panel2020
    Rip rap reinforcement2020
    Paint entire complex and major siding repair2020
    Sewage ejector pump (2 of 2)2021
    Flag pole2029
    Automatic vehicle entry gate opener2031
    Exterior light timers2031
    Flat walk-out roof replacement2032
    Street lights and poles2039
    Sloped roof replacement2045
    There are several smaller items in the reserve study, but these are the easily recognizable ones.
  • The big change was adding the cost of a 3 year project to replace the irrigation system and drought tolerant vegetation to be in compliance with the California Model Water Efficient Landscape Ordinance (WELO) ordinance by the year 2020.
  • The recommendation for a reserve contribution of $166,914 for 2017 was accepted at the August 10, 2016 board meeting. This is a 3% increase from the reserve contribution of $162,052 for 2016.
  • See the 2016 page for the work of the committee.
reserve study review for 2015

Findings from the Reserve Study Review of 2015

  • The 2015 reserve study was conducted by Associa. The third version of the full report was published on July 17, 2015 and accepted by the Board.
  • The recommendation for a reserve contribution of $162,052 for 2016 was accepted.
  • See the 2015 page for the work of the committee.
reserve study review for 2012

Findings from the Reserve Study Review of 2012

  • This reserve study led to the special assessment for the roof replacement project.
  • The 2012 reserve study was conducted by Association Reserves of San Francisco, LLC. The executive summary and full report were published on February 20, 2012.
  • See the 2012 page for historical information.
nuts and bolts

Nuts and Bolts of Monies Collected

The strategy behind the reserve account is to collect for the replacement of an item over the life of the item. For example, if a sprinkler system costs $5,000 to replace and should last 5 years, the association should collect $1,000 per year for 5 years. The $1,000 per year would be collected as $1.10 per month ($1,000 divided by 76 units with 12 payments per year).


Here's another example. Take the new landscaping at 556 / 548 Kings. The cost was $8,049. How could the association pay for that?
  • One way would be to just divide the cost by 76 and have each owner write a check for $105.91 and be done.
  • Another way would be to spread out the cost by dividing it by 12 and increase the monthly dues by $8.83 for the next year.
  • The fairest option is to cover the cost from the reserve account and replenish the reserve account by raising the dues $0.29 (29 cents) per month for the next 30 years — the expected life of the new landscaping.


Each month collected money is transferred to the Reserve Account. At the time the sprinkler system is replaced, money is pulled from the Reserve Account to cover the cost.

In the case of the sprinkler system, the cost is evenly distributed across all of the units. Per the CC&Rs (page 21), the items that are funded according to the variable per-unit-type ratios include Insurance, Exterior Painting/Maintenance, and Roof Repair/Replacement. Hence, the cost for some items, such as siding, varies by unit type based on the rates defined in the CC&Rs. As an example, replacing all of the siding is projected to cost $2,245,770. This cost would be collected per month over a 30 year period per those rates.


Whereas the sprinkler system is a fixed cost per unit, the siding is a variable cost item based on unit type.

One Monthly Dues Payment applies to Both Accounts

Simply put, the dues collected each month vary by unit type because these ratios are applied to a portion of what is collected. The dues are a single payment that reflects each unit's contribution to the fixed and variable portions of both the operating and reserve accounts. The ratios are applied when the money is collected based on the practice that when it is spent, the costs will be in line with those ratios.

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