Wood Rot Repair, Painting & Renovation ALTAMIRA 4 HOMEOWNERS - PowerPoint PPT Presentation

Wood Rot Repair, Painting & Renovation ALTAMIRA 4 HOMEOWNERS ASSOCIATION TOWN HALL MEETING – SEPTEMBER 16, 2017

ü This Meeting is Being Recorded ü Information Provided is Subject To Change ü Images May Not be Representative q Silence Phones q Quiet q Web Address/Copies at End q Slide Copies Differ Slightly 2

WHAT WE’RE GOING TO PRESENT § Project History § Q&A With Experts § Options Considered § Next Steps § Project Scope § Project Cost/Funding 3

AM4 Board of Directors § Ann Ekland, President § Kate Lister, Vice President § Barbara Beeby, Treasurer § Shawn Burns, Secretary § Bill Braude, Member at Large 4

Brendan Concannon, V.P. Kirby Hady, Founder Regional Account Executive Pacific Western Painting PWP) Mutual of Omaha Bank Laurie S. Poole, Esq., CCAL Adam Rohrbaugh, AIA, NCARB Peters & Freedman, L.L.P. Architect, Founder A7 Group, Inc. Raini Gordy, Realtor Carrington Real Estate 5

Evaluation Team 6

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The Problems 8

Operating Budget vs. Reserves $ Annual Income (from dues, tennis, etc.) - Annual Operating Expe nses (regular maintenance, utilities, management, etc.) = Addition to Reserves (future painting, renovations, street sealing, large landscape projects, etc.) 9

Stuff Happens • Clubhouse Dishwasher Leak • Pool Heater Quits • Landscape Drains Plugged • Storm Damage • Vandalism 10

AM4 – Reserves Reserve Study (2017) 100% Funding $1,755,000 41% - Includes 1.2M for Exteriors Actual Reserves* $727,000 Percentage Funded 41% * 6/30/17 11

Assessments are not unusual “A 2013 survey by the Foundation for Community Association Research found that 1 in 5 Associations issued a special assessment in the previous 5 years, to cover necessary expenses that were not funded by reserves. Another one-third significantly increased monthly assessments to pay for major repairs and replacements.” From IndependentAmericanCommunities.com 12

Our HOA fees are below average. Altamira 4 2008 to 2015 2015 Increases have Up 10% $225 not kept up. About 7% 1992-2008 Source: Article by Independent American Communities January 2016 13

Project History The Cave of Altamira Santillana del Mar in Cantabria, Spain 35,000 years ago 14

Project History 2015-2016 January 2015 – New Board Installed Began to look at wood repair project in earnest Interviewed Professional Service Firms Separate inspections/evaluations of property Chose architect (A7) October 2015 - Town Hall Meeting Presentation of concept by Architectural Firm. Informal indication of interest to pursue broad renovation project estimated to cost $1.2 to $2MM Mid-2016 - Solicited 3 Bids to Paint Unit on Fuchsia Lane as Prototype Approximately $10,000/lot Best Value Bidder (PWP) Selected to Bid Full Complex Full Complex Bid with various scenarios/scopes per Infrastructure Committee 15

Project History 2017 Three New Board Members Installed Reviewed and reconsidered scope and re-bid as matter of due-diligence A7 Coordinated Re-Bid of Fuchsia Lane Prototype (3 Bids) PWP again chosen as best value bidder Architectural firm agreed on choice of PWP Board Agreed on Scope Management Company, Advisors, Committees, and Board Members Worked with PWP to Refine Cost for Full Project Examined Various Funding Models Board Agreed on Model to Present to Membership 16

Infrastructure Committee/Board Focus • Fiduciary responsibility • Address wood rot problem • Reduce future maintenance • Homeowner financial impact • Cost to value analysis • Increase home value 17

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Options 1. Spread repairs over a period of years Considered By Infrastructure 2. Replace wood with HardieBoard Committee and Board 3. Patch and paint (all at once, wood for wood) 4. Replace with stucco where possible 5. Replace with stucco plus value enhancements 19

1) Spread the Project Over Years • Decay curve • Materials costs • Fiduciary responsibility • Cheap $ • Economy of scale • Funding § Painting alone: $400-$500K • Fairness § No repairs • Unforeseen problems § Due now • Labor costs • Potential litigation § Minimum wage law • Home values § Skilled labor shortage • Sales issues 20

2) HardieBoard • Future Maintenance • Installation Issues 21

3) Patch & Paint – All at Once • Decay can go deep inside/spot treatment is often ineffective • Hard to spot on painted surfaces (like tooth decay ) • Spreads like cancer – increasing exponentially with time • Can’t see how big the problem is • Recurring wood maintenance 22

Options 4 & 5 1. Spread repairs over a period of years 2. Replace with Hardie Board 3. Patch and paint (all at once) 4. Replace damaged wood with stucco & paint exterior 5. Above plus value enhancements 23

Value Enhancements /Modernize 24

Value Enhancements Rejected Lighting = = $250,000 Savings Doorbells 25

What it Might Look Like Paint Scheme and Colors are Not Final 26

What it Might Look Like (Really, Sorta) 27

Two Story Mock-up 28

Garage door and garage wall - real paint Window surround, fascia, gutter and down spout – photoshop color conversion 29

• Remove and replace damaged fascia • Replace wood on siding areas and deck walls with stucco Project Scope • Replace wood window frames with architectural Includes: foam • Remove and replace existing gutters & downspouts • Replace chimney caps • Repaint all wood & stucco surfaces including: • Door frames (entry & garage) • Window trim • Garage doors • Dryer & attic vents/louvers • Install new address numbers 30

Does NOT Include (Quoted as Options): • Entry doors Project Scope • Security or screen doors Does Not • Owner-installed patio covers/decks Include: • Lighting fixtures • Existing ones will be removed and reinstalled • Installing gutters (if none there) • Painting garage doors installed after project Homeowners will be responsible for removing plants and objects that will obstruct work. 31

Financial MATH AHEAD Analysis REMAIN CALM 32

Estimate* Project $1,227,823 Project Cost Project Management $126,000 Reserve Funding Contingency (20%) $270,765 Loan Costs & Fees $10,500 = Total Project $1,635,088 Less Reserve Funds Used $424,588 = Net Total $1,210,500 Per Lot (137 Lots) $8,835.77 * All estimates subject to change; some numbers are rounded 33

Funding /Cash Flow Model • Minimize Homeowner Burden: • Build Reserves (through year 15) • Repay Loan 34

Total Cost Including Financing & Monthly Payment if Spread Over Time If Paid Over Time (10 Years) Estimate* Net Total $1,210,500 + Interest Costs $390,945 Remaining Cost $1,601,445 ÷ 137 Lots = $11,689.38/Lot ÷ 120 Months = $97.41/Month * All estimates subject to change; some numbers are rounded 35

Cost Savings if Paid Upfront Total with Financing Cost $11,689.38 Total w/o Financing Cost $8,835.77 Savings if Paid Upfront $2,853.61 36

Breakeven Based on $97/Mo./Lot If you sell your home in: You breakeven if the value is higher by: 1 year $1,164 5 year $5,820 10 years $11, 640 37

Board Next Steps If Approved by Owners: § Mail Results to Homeowners Next Steps § Negotiate Contracts - If Approved § Re-Apply for Bank Loan § Execute Contracts Provide Homeowners with at least 60 § Days Notice of Assessment Due § Set Start Date 38

Board Options Board Options If Not Approved: - If Not Approved • Increase Annual Assessment Up to 20% per Year • Add Special Assessment of Up to 5% of Annual Budget per Year 39

Voting Process: New Ballot Will Be Mailed • You Will Be Voting To… • Requires Approval of Majority of Owners • 30-day Voting Period (may be extended) • Ballot Count at Open Meeting • Notice of Ballot Results Mailed • Important Sign outside of ballot envelope Must be received by 10/24/17 40

Q & A Project Team 41

Questions for Architect/Contractor Kirby Hady, Founder Pacific Western Commercial and Residential Painting (PWP) Adam Rohrbaugh, AIA, NCARB Architect, Founder A7 Group, Inc. 42

Questions for the Realtor Raini Gordy Realtor, Carrington Real Estate Realtor for Highest Value Property Sale in AM4 (to date) 43

Questions for the Banker Brendan Concannon Regional Account Executive Mutual of Omaha Bank 44

Questions for the Attorney Laurie S. Poole, Esq., CCAL Peters & Freedman, L.L.P. 45

Questions for the HOA Board/Experts 46

Visit http://altamira4hoa.org to: - View presentation slides - View cash flow analysis - View Q&A - View images - Ask a question Email: Board@Altamira4HOA.org 47