Dear Homeowner Clients,
As treasurer, I’ve undertaken work with the board to help transform Heritage Place’s management perspective and approaches. As such all work will eventually be placed in this “Finance & Reserve Planning” tab of the website, for examination by any homeowner.
Some work was delayed this fall as we were able to arrange for a free Denver Water sprinkler 3 man 2 day audit which was followed up with a 5 year contract that could offer HP over $50,000 and no risk to HP. These items will be available below this letter on this webpage.
The 2010 budget was attacked next but not before our complete assets were inventoried and documented. No such records appear to have been completed before. The forecast work was continued and finished while the inventory report is still being completed. The forecast shows 2010-2015 revenues, operating costs, net income, and asset improvements. The work suggests that we can readily rehabilitate our current assets to new like condition over the next 2-5 years using our regular annual dues base. Different types of assets or a more rapid rehabilitation could require additional dues or an assessment. Right now the forecast has been started with the approval of the 2010 budget which includes:
1) full replacement of sprinkler controllers, standardization of nozzles/heads;
2) rehabilitation of 50% of Caley Fence (rest in 2011)
3) rehabilitation of 50% of Arapahoe Fence (rest in 2011);
4) caulking and painting of 100% of Quebec Fence;
5) construction of 2-4 earthen grassed mounds along Area F for erosion control;
6) start Dry Lay Wall Rock rebuilding (5-7 yr plan of 50-65% walls) for stability, re-stacking, back with soil, top off with rock, plant Englemann Ivy along top to facilitate stabilizing structure long term.
7) lamp post (steel) rust removal/painting
Any homeowner can follow the planned asset rehabilitation schedule and the reasons why. The rehabilitation is forecast to be completed with the existing dues structure and result in >$160,000 at the end of the 5 year forecast. Recommended total reserves cash is currently placed at $150,000-$250,000. Any greater reserves than $250,000 are recommended by the Treasurer to be spent on new or additional assets and improvements.
There are 3 critical concepts buried in this forecast. First, our greenbelt common areas were planned for massive surface flood waters which can’t be stopped but can only be accommodated. Second, assets don’t just wear out at some defined year period. They wear out based on the maintenance plan just like your house. Your house may have a 50 year life but when you remodel it in year 25 its life is extended. HP HOA is adopting a maintenance program nicknamed “PARPM” which stands for “Partial Asset Replacement Preventative Maintenance”. We will repair and replace a small portion of the asset each and every year so that the life of our assets will become indefinite. We’ll run the HOA asset like a business runs. Third, we are not doing asset cash reserve planning for catastrophes. Catastrophes are planned and paid for by insurance policies. We will increase our insurance coverage appropriately and therefore stop planning for the worst case scenario out of our cash reserves.
Input and assistance from homeowners is encouraged. Call me at 303-741-2556. We’re always looking for more help on a limited basis such as manage the fencing contractors/contract this spring.
Below you will find the 'Treasurer Reserve Budget - Forecast' completed by the Treasurer this Fall. The 3 past HP Reserve Reports and last year’s Board Letter Request for reserve funds are evaluated and also enclosed.
The 'Asset Planning 2010' document is broken down into each asset. As the inventory report is finished, the information will be repeated under each asset.
Regards,
Mitch Albert
HP HOA Treasurer 2009-2010
Updated History of Dues Assessments Dec 2009 by Mitch Albert, Treasurer
Asset Planning 2010 by Mitch Albert
Treasurer Reserve Budget - Forecast by Mitch Albert, Treasurer
HOA Reserve Report by Bradley Property Consultants (August 2009)
HOA Request for Increase Letter (July 2009)
HOA Reserve Report by Bradley Property Consultants (March 2009)