Special Projects don't always require Special Assessments
Hello Brookside homeowners;
Last Tuesday
night (on the 1st) we finally found out the Board of Directors plans on
re-building and financing the special project-garage parking and tennis
courts at their first Town Hall Meeting on this issue. Town Hall
Meetings are suppose to promote a project in a friendly, communal
process that relays information to the community in a transparent,
two-way communication that also gathers information from the community
on what the community wants and feels about the project. None of that
has happened; the Board has just forged ahead over the last two years
and made decisions. Decisions that now effect all of us.
Well, the structure will be completely demolished (except for one existing
retaining wall) and then rebuilt to much the same appearance and
footprint as the present structure, only there will be a new handicap
ramp for the upper level and a fire sprinkler system installed in the
lower level. The projected 6 month project will cost approximately
$2.13 Million dollars, all of which the cost burden is on the
homeowners. The Board has already signed off on the plan to assess current homeowners $2,500.00 each (or $962,500) and borrow the
remaining $1,167,500.00 from our Reserve Funds. The financial burden
of this Special Assessment effects the sale-ability of our property now
and the burden is magnified over the next few years because the borrowed Reserve
Funds have to be paid back to the Reserve account because the structure
was never an amenity that had been reserved for, (which makes the funds
used actually borrowed against amenities that have been reserved
for over the years of your ownership). The pay-back period (whatever
that is as determined by the Board) risks that our regular monthly
assessments will also be raised each year to pay back the borrowed
funds. Make sense? No !
You may have
noticed in very recent unit sales, the deteriorated condition of the
structure has had little to no effect on the FMV of the units recently
sold. In turn, a new structure will have little or no effect on the FMV
of units to be sold. Therefore, I introduce an alternative financing
plan, as I had proposed in 2013, that is much more
friendly to the homeowner base, especially considering that not all
homeowners use the tennis facility nor park in that garage. I had once
proposed the Association take a mortgaged revolving credit construction
loan for as little as $500,000 at the best competitive rate available in
today's low market and capitalize on the Association's excellent credit
rating. (Alternatively, if the loan were to go up to $1 Million dollars
it could include the final phase of the streams project and the
preventative maintenance required on the upper level parking structure
as well.) Just the minimum loan amount of $500,000 would cut our
Special Assessment in half, making it more affordable to most homeowners
to pay in full and avoid the 10% processing fee charged by Horizon
Mgmt, benefits by our burden.
There is no downside to a
loan for a project like this. Commercial banks and large general
contractors arrange financing like this all the time for HOA's. In
fact, there is a mortgage banker sitting on our Board right now who has
been strangely silent about this issue. I don't think the current Board
has thoroughly thought through all of the options available to our
Association.
It is our Association and your voice is
needed to make this Board of Directors re-think the financing plan for
this project with consideration for the community as a whole. Voice
your opinion in person at their next Board Meeting on the 15th or send
emails and letters to the Board of Directors (c/o
jacquie@horizonmgmt.com) before their next Town Hall Meeting on Sept
17th.
Thank you for your time and hope you have a great Labor Day weekend.
Mike Sukey
