Answers to questions posed about the repair process and possible amendments to the HOA documents

Q 1: The Vote Proxy seems to only allow passage of BOTH amendments, or NONE (and we go the special assessment route).  Can we separate the votes on each of the amendments ?

A1: The requirement to obtain a loan for the community will require both documents to be amended. The simple fact is that banks will not consider a loan for the community unless we have the ability to repay the loan.

Q2: Will there be a discussion of the annual assessment at the the annual board meeting?

A2: Yes. That has been the case with most of the boards through the years but it is up to the board to review the expenses and revenues of the HOA to determine the dues for the upcoming year. Any votes by the board can only be held at meetings that homeowners can attend and a proposed budget is required to be presented to the HOA 30 days before the annual meeting for review.

Q3: How are capital improvements defined?

A3: The board decides on capital improvements and amounts. The money collected with the proposed increase would go into the general operating fund and could be moved to the reserve fund.

Q4: If a home is purchased would the homeowners need to pay the capital improvement fee?

A4: Yes it has been that way since the beginning of the community. We are proposing to increase the fee from $200 to $1,700 to build the general fund of the community. At the current rates 4 or 5 homes purchases would equal the total amount of a 5% increase in HOA dues over the course of a year.

Q5: What is in the 2024 Reserve Study? Do we have to abide by the study? – View the 2024 Reserve Study

A5: Yes, we do have to abide by the study unless there is a required board vote each year to adjust the annual reserves for that particular year.

I don’t want to read all 46 pages. What are the key points of the reserve study?
Key Findings

Community Overview:

• 116 single-family homes, built in 1998.
• 16 reserve components evaluated.
• Inspection date: October 2, 2024.

Funding Goal:

• Maintain reserves above an adequate threshold, avoiding both underfunding and overfunding.
• Major reserve demand years: 2025 and 2045 (asphalt repaving).
• Target $1,057,200 in reserves by 2054 to cover the next post-2054 repaving.

Current Financials (as of Aug 31, 2024):

• Reserve Fund: $200,367
• 2024 budgeted reserve contributions: $33,000
• Risk of deficit by 2025 if current contribution level continues.

Recommended Contributions:

• Increase to $431,000 in 2025 (≈ $309.63/month per owner) to cover repaving.
• Drop to $68,500 in 2026.
• Apply inflationary increases 2027–2045.
• Contribute $126,700 annually 2046–2050, then inflationary increases to 2054.

30-Year Reserve Expenditures:

Total projected: $3,097,133

Largest items:

• Asphalt pavement mill & overlay (2025, 2045) – $441,000 each
• Vinyl fence phased replacement – $264,000 total
• Sidewalk and gutter repairs – ~$750,000 combined
• Playground replacement – $55,000
• Pond erosion control, aerator, gate system, irrigation, sport court, and masonry wall repairs.

Major Recommendations

1 -Fund Reserves Adequately

• Adopt the cash flow funding plan with the 2025 contribution spike to avoid special assessments or loans.

2 – Plan for Asphalt Repaving in 2025

• Use mill and overlay method with patch repairs.
• Perform patch repairs every 3–5 years between full repavings.

3 – Catch Basin Maintenance

• Inspect annually; perform capital repairs alongside repaving.

4 – Concrete Surfaces (Gutters, Sidewalks)

• Inspect and repair major cracks/trip hazards annually.
• Replace ~25% of gutters and ~20% of sidewalks over 30 years.

5 – Vinyl Fences

• Replace in phases; inspect annually for damage and vegetation clearance.

6 – Gate & Security Systems

• Maintain monthly/annually; budget for replacements in line with life expectancies (10–20 years).

7 – Other Structures

• Gazebo: budget for eventual full replacement; maintain finishes.
• Playground: inspect annually for safety; replace every 15–20 years.
• Sport court: maintain surface; replace basketball goal and color coat via operating budget.

8 – Water Features

• Pond aerator replacement every 10–15 years; erosion control every ~15 years with plantings/stabilizations.

9 – Perimeter Masonry Walls

• Inspect every 8–12 years; perform repointing and coping replacement as needed.
• Update with site visit every 3 years to adjust for inflation, project shifts, and condition changes.

10 – Reserve Study Updates

• Update with site visit every 3 years to adjust for inflation, project shifts, and condition changes.

Q7: Can we replace the pipe instead of repair it?

A7: Possibly. but several companies have decided not to even bid because of the complexity of all the utilities running over the pipe near the road.
There are several other factors in replacing the pipe as compared to lining the pipe.

• The 250′ hole that is 12′ deep has to be supported on both sides
• The close proximity of the houses.
• The large oak tree at the street would have to be removed
• The whole line would have to be dewatered to install the pipe (pumps lowering the groundwater level to work at that depth)
• The amount of dirt to be dug and replaced would be enormous.

The actual pipe may be cheaper but the process would be more difficult and costly. However, we are still investigating options.

Q8: The amendments refer to personal property, does that mean a homeowner’s property?

A8: No, that refers to the property of the HIOA. For example, if we had a clubhouse with a pool table, that would be the personal property of the HOA.

Q9: In First Amendment, Article IV, item D Can you please explain this. It seems contradictory. Why remove the 2/3 vote only to add it back?

A9: This relates the assignment of lien rights which a bank will require. Any actual property or land would still need the vote of 2/3 of the community.

Q10: Can we change the wording of the amendments to protect the homeowners from decisions of future bords?

A10: After a lot (a whole lot) of discussion during and after meetings, individual conversations, and an additional meeting with the HOA lawyer, we are staying with the language as offered in the amendments. Adding limitations of time or cost or specifics may undermine the board’s ability to handle future situations – for example repairs after a storm or additional unknown infrastructure repairs. Any changes to the amendments would also delay the process by a month.
Contrary to belief by some folks, the board is very limited in what it can do – even with these amendments. Nothing can happen without a board meeting where all HOA members can be present. The board cannot increase dues for the next year without providing an annual proposed budget which members will have 30 days to review.
If you have concerns about future boards do two things:
1 – Vote for board members you trust
2 – Involve yourself. Go to HOA meetings, check the posted financials, better yet, become a board member. We are all owners of this community.

Finally, you as a homeowner group have the control. An HOA board can be recalled by a vote of the community if the simple majority of the community feels the board is not acting in the community’s best interest.

Q11: Why is the amendment for capital improvements needed for a loan

A11: It is not required for the loan but it is the board’s decision to increase the commencement fee to join the HOA to defray the cost for established homeowners. The amount we are considering is to raise the fee from $200 which has been the same amount since the beginning of the HOA, to $1,700. This extra $1,500 per new home purchase would surpass the current maximum increase in annual HOA dues. Currently, and unusually, four homes are for sale with another home to enter the market shortly. The $7,500 generated would be more than a 5% dues increase which is $6,600 in total for the whole community.
The board is working on ways to defray the costs of the community repairs.

Q12: What happens if the amendment passes, we get a loan for the HOA, and people don’t pay?

A12: This is no different that owners not paying their current dues. There are fines and penalties for not paying. Eventually liens and possible foreclosure. This is a worst case scenario that no one wants. An addition to adding stress and anxiety, the process is expensive and messy since it is handled by lawyers.

Q13: What happens if the amendment does not pass, there is an assessment, and some owners don’t pay?

A13:Very similar to question 12 – fines and penalties. Owners need to be aware that any funds paid to the HOA will go towards assessments first and then the HOA dues, Money will only be paid to quarterly dues after the assessment is paid which means the fines add up rapidly and there is 12% interest on the unpaid amount.

There is the possibility of an additional assessment of all the homeowners if a large amount is unpaid by a minority of homeowners. The infrastructure repairs are not layaway plans. We have to pay the contractors that we hire to repair our community.

Q14: What about the roads, are we pushing back the date for repaving the roads?

A14: We are moving forward with the repaving of the road as planned. The roads are 10 years overdue for repaving and two different engineers have stated that the roads need to be repaved immediately before the road base becomes damaged. Road base repair will be much more expensive than just the asphalt replacement. Our documents require the roads to be repaved every 15 years, the new county rules require paving every 12 years. That timeframe can be extended with an annual engineer’s report approving the road condition without repaving.

When we repaving the roads, the new asphalt should be approximately 50% thicker and the roads should last longer than the projected 12 or 15 years but an annual report will be needed at that time.

The process for an additional assessment for roads will start shortly after the decision for financing the pipe repair. If the amendments are approved, the loan will cover both the pipe and road repairs.

Q15: What is the status of the rest of the drain pipe in the community?

A15: That question is the big unknown right now. We will have contractors cleaning and viewing the rest of the neighborhood at the same time as the lining of the pipe. The same type of equipment is needed – plugs and pumps, vacuum trucks, and water jet cleaning – to clean the lines for inspection. If there are urgent situations we will have to address them. If there are non-urgent repairs, we will work to create a phased schedule (ideally over multiple years) to repair any areas of concern.

Q16: What will the dues be next year?

A16: That answer depends greatly on the financing of these repairs for the drain pipe and repaving of the roads. The board will have to review the needed reserves and present the budget to the community before our annual meeting and it will be a point of discussion in quarterly meetings.

Q17: What is the situation with the sidewalk on Windermere Chase Blvd where the concrete has caved in?

A17: That is something we are working on. On 8/20 Orange County evaluated the area and homes for a sewage pipe leak. They did find a crack in the sewage line pipe but it not in the same location as the depression. There is no sprinkler line or water drain line in that area either. It is an additional issue we will have to quickly address but we don’t have an answer, yet.

Q18: If needed, will the assessment cover the pipe repair and also replace the reserves we have spent so far on the pipe repair?

A:18 If the amendment does not pass, and an assessment is required, this assessment will replace most of the reserves spent on the pipe repair. Another assessment will be needed to fund the rest of the road repair.