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Crown Harbor Homeowner Association

Reserve Study from 2015

The reserve study from 2015 will be used to set the dues for 2016, 2017, and 2018.

reserve study
Reserve
Study
of
2015

Findings from the Reserve Study Review

The Reserve Study Committee started with a report that depicts income, expenses, and their effects on the reserve account.
  • For 2015, the amount transferred from the operating account to the reserve account is $157,332 ($13,111.02 per month for 12 months).

  • For 2016, the revision 3 of the reserve study recommends that the amount transferred from the operating account to the reserve account as $162,052 ($13,504.35 per month for 12 months). There is a 3% increase in contribution to the reserve account.

balance

How much to fund?

  • This latest reverse study forecasts 30 years of expenses.

  • This reserve study calculates that the reserve account is only 37% funded.

  • If a reserve account if 100% funded, there would never be a future need for a special assessment because all of the necessary money is collected over the years.

  • Banks look at reserve account balances. If a reserve account is too under-funded, they turn down loan applicants because they fear the applicant will be hit with a large special assessment and not be able to pay both the special assessment and the loan payment. This can affect property values.

  • Even though banks look at reserve account balances, potential buyers rarely do. Instead, potential buyers look at how much the dues are. So the goal is to set the dues high enough to collect enough money to fund the reserve account to satisfy banks, yet not so high that potential buyers are scared off by overly high monthly dues. The task is to find the right balance. Funding the reserve account sufficiently minimizes the sizes of special assessments for all Owners.

reserve study
Reserve
Study
Analysis
for
2016

Impact on Dues

  • The 2016 dues are based on the operating budget for 2016 as well as a finalized reserve study.

  • The percentages of fixed (equally divided per unit) and variable (based on unit type as prescribed in the CC&Rs) determines the actual dues amounts for 2016 and going forward.

  • The 2016 budget will not be finalized until much later in 2015.

  • The work in progress spreadsheet for the reserve study review is reserve_study_analysis2015v3.xlsx.

reserve

Reserve Study Line Items

The reserve study from 2015 has 97 line items that need to be collected for:

Equal Per Unit Type
ROADS (OUTSIDE THE GATES)
1Asphalt Sealing
2Asphalt Repair Allowance
3Asphalt Replacement
ASPHALT STRIPING AND
CURB PAINTING
(OUTSIDE THE GATES)
4White Striping
5Public Shore Parking Designations
ROADS (INSIDE THE GATES)
6Asphalt Sealing
7Asphalt Repair Allowance
8Asphalt Replacement
ASPHALT STRIPING AND
CURB PAINTING
(SITE)
9White Striping
10Slow Designations
ASPHALT PATHS
11Asphalt Sealing
12Asphalt Repair Allowance
12Asphalt Replacement
13Asphalt Curbs
CONCRETE
14Decorative Concrete Repair Allowance
15Walk/Curb Repair Allowance
ENTRY SYSTEMS
16Entry Intercom Panel
17Key Pad Entry Panels
18Automatic Gate Opener - Man Gate
19Auto Gate Motors
20Auto Gate Vehicle Loops
ENTRY GATES/IRON FENCING
2116' Auto Gates
226' Man Gate
234' Man Gate
24Iron Fencing at Entry
FENCING AND
RETAINING WALLS
25Wood Fence at Property Line (Good Neighbor)
26Cyclone Fence at Property Line (Good Neighbor)
27Iron Fence at Property Line
28Wood Fence at Property Line
29Iron/Wood Fence at Shoreline
30Lattice Fence at Sewage Pumps
31Wood Fence at Units
32Wood Retaining Walls at Sewage Pumps
EXTERIOR LIGHTING
3325 Foot Lightpoles
34LED Pole Lights
3525 Foot Lightpoles
36LED Pole Lights
37Bollard Lights at Pathway
38HID Spot Lights at Flagpole
39Monument Sign Spot Light
40Unit Lights - Globe
41Address Number Lights
SIGNAGE
42Monument Sign
43Miscellaneous Sign Replacement Allowance
44Sign Post Replacement Allowance
45Street Signs
46Street Sign Posts
IRRIGATION AND
LANDSCAPING
47Irrigation Controller (Install Smart Controller)
48Submit Irrigation Upgrade Plan for Permit
49Irrigation Distribution System Renovate/Remod
50Backflow Preventer
51Irrigation System Repair Allowance
52Tree Care Allowance
53Planting Replacement Allowance
MISCELLANEOUS SITE
IMPROVEMENTS
54Wood Benches
55Trash Receptacles
56Wood Bollards
5720' Flag Pole
58Shoreline Rip Rap Repair Allowance
59Mail Boxes
60Mail Box Standards
SEWAGE PUMP SYSTEM
61Sewage Ejector Pumps
62Pump Controller
63Tank
64Lateral Replacement
EXTERIOR PAINTING
78Paint Auto Entry Gates
79Paint Man Entry Gates
80Paint Iron/Iron and Wood Fencing
81Paint Light Poles
82Paint Flag Pole
83Paint Mail Box Standards
87Varnish Unit Entry Doors
88Paint 16' x 7' Garage Doors
89Paint 8' x 7' Garage Doors
BUILDING EXTERIOR
REPAIR ALLOWANCES
94Termite Repairs (1 year out)
95Termite Repairs (5 years out)
Percentage: 64%
Variable Per Unit Type
RESIDENTIAL BUILDING
EXTERIOR
65Composition Shingle (Sloped) Roof
66Built Up (Flat) Roof
67Gutters
68Downspouts
69Chimney Caps
70Spark Arrestors
71Balcony Railings
72Balcony Resurface - Elastomeric
73Balcony Resurface - Wood
74Balcony Repair Allowance
75Stair Railings
76Stair/Stair Landing Resurface - Elastomeric
77Stair/Stair Landing Repair Allowance
EXTERIOR PAINTING
84Paint Wood Siding/Trim
85Paint Gutters
86Paint Downspouts
90Paint Balcony Railings
91Paint Stair Railings
BUILDING EXTERIOR
REPAIR ALLOWANCES
92Siding Repair Allowance
93Trim Repair Allowance
ROOFING LOAN
REPAYMENT
96February 2016 Payment
97February 2017 Payment
Percentage: 36%


Items 96 and 97 are not included in the calculations since these are paid for by the special roof assessment. The budget for 2016 does not need to cover these items.
operating

Operating Budget Line Items

Insurance, building repair, and gutter repair are also calculated according to the ratios, but those come out of the operating budget. Funding the reserve account based on the reserve study is one of the line items of the operating budget. A table for the proposed 2016 operating account similar to the one for the reserve account looks like:

Equal Per Unit Type
Administrative
5025Collection Charges
5050Emergency/OnCall Service
5075Committee/Meeting Expenses
5100Record Storage
5105Reserve Study
5195Other Administrative Services
Communications
5200Community/Social Events
5210Printing & Copying
5215Postage
Utilities
6000Electric Service
6025Water Service
6035Trash and Recycling Service
6050Telephone Service
Landscaping
6100Grounds & Landscaping - Contract
6150Seasonal Color/Plantings
6160Tree maintenance
6199Landscape Other
Landscaping
6200Irrigation Repair & Maintenance
Contracted Services
6434Pest Control
6495Other Contracted Services
Repair & Maintenance
6560Fence Repair & Maintenance
6600General Repair & Maintenance
6640Lighting supplies/Repair & Maintenance
6670Mechanical Systems Services & Supplies
6695Plumbing Supplies/Repair & Maintenance
6745Signage Repair & Maintenance
6795Other Supplies/Repair & Maintenance
Professional Services
7000Audit & Tax Services
7025Legal Services - Collections
7040Management Fees
Taxes
9000Federal Income Tax
9005State Income Tax
Percentage: 68%
Variable Per Unit Type
Insurance
5400Insurance Premiums
Repair & Maintenance
6515Building Repair & Maintenance
6620Gutter Repair & Maintenance
Percentage: 32%
Equal and Variable
Other Expenses
910564% of the Budgeted Reserve Transfer
910536% of the Budgeted Reserve Transfer


The 64%/36% funding of item 9105 is based on the percentages from the reserve study as to how that money will be spent. 64% will be on items where the cost is divided evenly. 36% will be spent on items where the cost varies per unit, e.g., insurance, roofing, siding.
questions

Questions and Answers

Here are some questions that arose during the evaluation of reserve study. The answers were provided by John E. Ceragioli, Director of Community Solutions, Associa Reserve Studies. The item numbers (98 of them) are based on revision 2 of the reserve study. The current revision has 97 items as the old item 41, carriage lights, has been deleted.

General

  • Why did we go from 39 line items to 98 line items? I guess the answer is it gives us more detail but do we need or want that much detail for outside the gate or inside the gate? Because the Useful life and Remaining Life are the same I believe they could be combined.

    The Davis-Stirling Act requires that all major components be in the reserve study, with the definition of major component being "any component that the association is required to replace, repair, renovate or remodel, that has a remaining life of less than 30 years."

  • Smaller cost items, such as line numbers 4,5,10,38,39, and 83 should be annotated in the reserve study without the estimated cost entering the financials. The timing of repair/replacement could be "as needed" and the funding could come out of our operating budget.

    Same as the item above.

  • The Reserve Study Committee should seek a policy statement from the Board concerning low dollar value repairs/replacements. Namely, "It is the policy of Crown harbor Association to consider items with an anticipated total cost that is less than $500 as non-major components, repairs/replacement will be as needed and the funding will come from the operating budget."

    We discussed this at length and decided to:

    • Keep the reserve study as it is to remain Davis-Stirling compliant.
    • Adjust the operating budget to pull finds from the reserve account as needed to avoid assessing owners twice for the same item.
  • Our Reserve Contribution for 2016 is $173,065. From what was provided I can't determine how that figure was determined. Any help here?

    It was determined by (attempting) to get your balance in year three close to the minimum threshold balance. It is still too little to do that. Also it was chose to show your association getting to full funding by the end of the study. This calculation neglected to include the funds from the special roof assessment. Once those were taken into account, the reserve contribution was reverted to $157,332.

  • Expense shows Roof loan repayment; income does not show special assessment income in 2015 and 2016 to fund that payment. Including the income may offset the need for a 10% increase in Reserve Contribution in 2016.

    This has been done for revision 2 of the reserve study.

  • How different is the 2015 reserve study from the 2012 study?

    Scott Sheppard: Compare the values in the 2012 reserve study to the 2015 study to see if anything has been omitted or drastically changed. Report back to the committee. Due to time constraints, this was not done.

  • Projected Percent Funded. At the end of the study we are now projecting to be 110% funded. We should change the 2016 contribution or the 3% yearly increase after all changes are made.

    John Ceragioli: Revision 3 of the reserve study should end up as 100% funded in 30 years. Revision 1 ended at 110%.

    Percent Funded. Year 30 lands as it lands, it is 98% in revision 3.

  • Were we able to leverage our actual expenses from the past, or did we just use Davis-Stirling averages?

    John Ceragioli: Have the actual costs from our bundled contract for siding and painting been used in the calculations for the reserve study?

    Leverage actual expenses — answer is yes, this reserve study takes into account past expenditures.

1 Asphalt Sealing
6 Asphalt Sealing
11 Asphalt Sealing

  • Do we really need asphalt sealing every 5 years? seems like an overkill. I have not seen the City of Alameda seal any of their streets. What is the basis for the reserve study to arrive at a 5 year useful life?

    The expected life on the asphalt sealing and repair allowances is 5 years, which is the industry standard. The asphalt replacement has an expected life of 60 years. This is industry standard, which I am required to include in the reserve study. The Board of Directors can do as they wish as long as they complete a disclosure statement as to why they are deviating from the reserve study (this is as required by the Davis-Stirling Act).

  • Asphalt Sealing. Year new was not changed in revision 1.

    John Ceragioli: Change the date for the asphalt seal to 2015.

    Asphalt — changed to 2015. It was not completed during our walk through.

2 Asphalt Repair Allowance
7 Asphalt Repair Allowance
12 Asphalt Repair Allowance

  • We did asphalt work ahead of schedule in 2014. We shouldn't need it for 5-7 years. That should have been obvious during the visual inspection. That makes me skeptical of the thoroughness of the walk-through.

    John Ceragioli: Our asphalt was resealed in 2015. Revision 3 of the reserve study should reflect that.

    Asphalt — changed to 2015. It was not completed during our walk through.

3 Asphalt Replacement
8 Asphalt Replacement
13 Asphalt Curbs

  • We do not have our original asphalt.

    Scott Sheppard: Check with long-time residents to see if they recall what year we replaced the asphalt. We believe it was after 1994 but before 2009. This affects the remaining life on the asphalt.

    Hi Scott. I talked to Gene and Peggy about the review study concerning the roads in Crown Harbor. I have been here since 1992 and Gene and Peggy 1994. We both remember the roads being totally redone sometime in the late 90's - the asphalt and the cement. Shortly after a cable company came through to lay there cables, and that is why you see the line in the cement. The reserve study line for new roads needs to be removed. Assuming it was 1995, Crown Harbor should not need asphalt replacement until 2035.
    Thanks,
    Roseanne

    Scott, we've been visiting the Jordans this weekend. Carole was the Board Member, Treasurer, and President in the '93-98 timeframe. She assures me we DID grind off and resurface the street in that time. It's just a tidbit for the reserve study.
    Gene

    John Ceragioli: Change the date of the last asphalt resurface to 1995.

    Asphalt Resurface — changed to 1995. Previous reserve study showed different date.

16 Entry Intercom Panel
17 Key Pad Entry Panels
18 Automatic Gate Opener - Man Gate
19 Auto Gate Motors
20 Auto Gate Vehicle Loops

  • We have never replaced our entry gate. It is 36 years old.

    John Ceragioli: For items 21 to 24, we have never replaced the entry gate. Revision 3 of the reserve study should forecast replacement based on the life expectancy of a gate of or make and model.

    Entry Gate is now shown as original. Items 16- 20 have been replaced per your financial records.

29 Iron/Wood Fence at Shoreline

  • What is item 29?

    John Ceragioli: We do not understand what item 29 is. Please provide clarification.

    Item 29 — see the photograph.

34 LED Pole Lights
36 LED Pole Lights

  • Our LED lights have a warranty and 10 year bulbs. Why would we need repairs in 2019? Why are we budgeting to change exterior lights in 2019 when they belong to the home owner?

    John Ceragioli: Change the date for the next time new light bulbs are needed to 2025.

    This item is for the fixtures themselves and not the bulbs. For example, item 36 has a 30 year useful life.

37 Bollard Lights at Pathway

  • Item 37, Pathway Bollard Lights. I thought we upgraded almost all of them?

    Based on my inspection, nothing has been done with these. If that is not the case, please provide backup information.

    We have 3 lights in the front that have been replaced. We have 28 that are the originals.

    John Ceragioli: Revision 3 of the reserve study should reflect 3 new bollards and 28 that are original.

    Bollard lights — revised.

    The unit cost was increased from $375 to $1,150 to include installation.

40 Unit Lights - Globe
41 Unit Lights - Carriage

  • Let there be light. Line items 40 and 41 identify 652 unit lights that need replacing in 2019. I sure don't know where we have 652 lights. What are Globe and Carriage lights? Are these the lights on the side of our house like the ones you had replaced?

    Globe lights are the round lights and carriage lights are the ones on the front and side of the garages.

  • Should we have the Association take ownership of all of the external carriage lights so that, in the event of replacement, all of the lights will look the same?

    We discussed this suggestion and decided to leave the external light fixtures as is with:

    • The external fixtures that are not controlled by switches in the units will remain the responsibility of the Association.
    • The external fixtures that are controlled by switches in the units will remain the responsibility of the Owner.
    • Items 40 and 41 will be zeroed out in the reserve study.
    • When the Association replaces its external lights, it will give Owners the option to purchase matching lights for the other fixtures on their units. See the external lighting for the light specifications.

    John Ceragioli: Zero out items 40 and 41 in Revision 3 of the reserve study as these light fixtures are Owner responsibility.

    Unit lights — removed.

42 Address Number Lights

  • Item 42, Address Lights. The study identifies a quantity of 76 needing replacement in 2019. We have less than 76 address lights. Need a recount.

    You have 76 units with distinct addresses, hence the 76 lighted address lights.

    John Ceragioli: The quoted price for replacing each light is $450.00 which is documented on the exterior lights page. Revision 3 of the reserve study should use this figure.

    Address lights — price revised.

43 Monument Sign

  • The expected life on the monument signs seems too long.

    John Ceragioli: Ensure that line 43, monument signs, includes all 5 signs: Kings/Queens, Queens/Crown, Crown/Kings, Crown Harbor sign out front, and the realtor placard out front. Some of the ones we have need replacing now. Reflect this in Revision 3 of the reserve study.

    Signage - #42 is for the one monument sign, #43 for all others.

48 Irrigation Controller (Install Smart Controller)

  • Crown Harbor has a different water reduction plan than what is reflected in the reserve study.

    John Ceragioli: With regard to line 48, the Association will never install smart controllers. Our plan is to hire a landscape architect to do a design and replace all of our irrigation lines with drip. Revision 3 of the reserve study should reflect that. To get the 10% reduction by 2016, our plan is to manually manage our watering. Dave Eck does a great job at this now.

    Irrigation Controllers — The State has MANDATED that all irrigation controllers MUST be Smart controllers after 2015. Sorry, this component can not be changed.

49 Submit Irrigation Upgrade Plan for Permit
50 Irrigation Distribution System Renovate/Remod

  • Given the mandates regarding water usage, we should include an estimate for a landscape architect to design a new space for the community and replacing all sprinkler lines with drip systems. As presented, the study has ~$17,000 of irrigation costs prior to 2020. How much would it cost to replace what we have rather than maintain it?

    Line item #49 is to provide a plan. Currently the code only mentions the replacement of sprinkler heads from a misting type head (low efficiency) to one that is more of a droplet type (higher efficiency), that is line item #50.

    John Ceragioli: Update Revision 3 of the study to reflect the Association plans for landscaping.

    Irrigation systems. State has mandated the components we show, sorry this can not be changed.

53 Tree Care Allowance

  • In 2016 the Reserve Study is scheduling the use of reserve funds in the amount of $7,875 for Tree Care Allowance (Line Item 53). Our 2016 budget, line item 6160, has identified $4,896 for Tree Maintenance. This appears to be a duplication.

    The Davis-Stirling Act requires that all components be included in the reserve study, trees are a component. The operating account is for tree trimming. The reserve account is for tree replacement.

59 Shoreline Rip Rap Repair Allowance

  • There are no plans to replace rip rap.

    John Ceragioli: Regarding line 59, we have never spent any money on rip rap and have no plans to ever do so. Reflect this in Revision 3 of the reserve study.

    Rip Rap — you are responsible for maintaining so it must be in reserve study.

65 Lateral Replacement

  • Why is there no line item for sewer lateral testing that was mandated by the city of Alameda?

    The Davis-Stirling Act does not allow for items in reserve studies that are not visually inspectable. However, this does not mean this component can not be in the study. The association merely needs to provide hard contractor costs on that item.

  • What is the life expectancy of a sewer lateral?

    John Ceragioli: We have never replaced any laterals. What is the life expectancy of a lateral? That should be factored into Revision 3 of the reserve study.

    Sewer laterals. Local laws determine this, you need to talk to your local officials. They can not be in the reserve study until they have been camera inspected by a contractor and actual costs determined.

66 Composition Shingle (Sloped) Roof

  • It looks like they estimate our new roof will last 40 years. No way. It's only 25 year shingles, at best and our history is poor. 20-25 years max. It could be a less expensive overlay at that point.

    John Ceragioli: Please account for 25 years of roof life starting in 2015. Is it possible to do an overlay that would be less expensive? Reflect this in Revision 3 of the reserve study.

    Sloped roofs. You are installing a 40- year guarantee roofing system. We have changed the life expectancy to 30 years.

67 Built Up (Flat) Roof

  • Item 67, Built Up Flat Roofs which were replaced in 2012. This Reserve Study identifies a useful life of 15 years while the last Reserve Study assigned a useful life of 30 years. Big difference, we need to get the "useful life "of flat roofs revisited.

    Based on my conversation with Dan Poe, we have extended the life to 20 years based on the roofing material guarantee.

  • We did flat roofs (not walk-outs) in about 2012 with a 7-10 year life expectancy. Draeger was the roofer; Dan Poe was the Construction Lead. Flat roofs should be showing up in the 2019-2020 timeframe.

    John Ceragioli: Please account for the flat roofs needing replacement in the 2019-2020 timeframe. The walkout roofs were resurfaced last year, the flat roofs were done in 2012, and the landings on the stairways were done in 2014.

    Flat Roofs — I was told that the roof you installed was a single ply membrane roof — this has a life expectancy of 20 years.

68 Gutters

  • My understanding is we are replacing gutters as part of the roof project. If so, why do we have $2,550 budgeted in 2016 for gutter repair (item 6620)?

    The reserve study does show the gutters being replaced with the roofs. This has been removed from the 2016 operating budget, so there will be no duplication.

73 Balcony Resurface - Elastomeric

  • Item 73, Balcony Resurface Elastomeric. Weren't the balconies not resurfaced in 2013 or 2012?

    John Ceragioli: Change the date as to when the balconies were resurfaced to 2012.

    Balcony resurface in 2012. Reserve Study always showed that.

82 Paint Light Poles

  • We are in the process of replacing the front 3 light bollards. Revision 3 of the reserve study should reflect that.

    John Caffall: Please provide John Ceragioli with the front bollard replacement invoices so he can incorporate that into Revision 3 of the reserve study.

    Bollard lights — revised.

  • Light poles were not painted in bundled paint work because they (A‑One) claimed they are anodized and don't get painted. Ask Dan Poe about this. We paid for "paint all painted surfaces." We obviously don't need to paint the bollards outside the front gate.

    Dan Poe: We are under the impression that light poles are not painted. It is our understanding that our light poles are black anodized aluminum. If this is true, please let John Caffall know so that he can tell John Ceragioli to zero out those figures in Revision 3 of the reserve study.

    Light poles need painting. Even aluminum deteriorates when raw.

85 Paint Wood Siding/Trim

  • 2020 may be too early to paint. Paint work in 2014 should last 7-10 years. Not too early to budget siding and trim repair. Are 2014 actuals considered in the work with inflation?

    John Ceragioli: We painted in 2014. Shouldn't the next time we need exterior painting be at least 2021?

    Date updated to 2014.

93 Siding Repair Allowance

  • The siding repair estimate seems low.

    John Ceragioli: Please look at the projected siding expenses. We have never changed the siding only patched. We spent over $50,000 in patches last year, so it is unlikely that we will get away with only $40,000 in one year before we paint. We may need to forecast yearly partial-replacements. Reflect this in Revision 3 of the reserve study.

    Siding — changed the numbers.


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