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Funding Future Maintenance of Vista Lakes Facilities

 

The cost of major maintenance projects at Vista Lakes is estimated by our consulting engineers to approximate $18,661,000 to be spent over the next 30 years. The projects include common areas, roads, curbs and sidewalks, mailboxes, park fences, gazebos, irrigation systems, playground equipment, pond aerators, tennis courts, decks and docks, the Residents' Club and pool elements. For gated communities, projects include maintenance of roads, curbs, driveway aprons and sidewalks.

All Vista Lakes homeowners share the common area project costs while each gated community must pay for its own projects.

In order to accumulate the funds needed to pay for the maintenance projects when the time comes to have them done, amounts are included in the annual assessments. When the amounts are received, they are segregated from funds received for the more regular annual operating and maintenance expenses. The segregated major project reserve monies are invested in bank certificates of deposit and earn interest income until they are needed.

Every few years, the consulting engineers are re-engaged to update the reserve study to take into consideration actual expenditures, actual interest earned, projected future interest earning rates, projected future costs of projects, etc. Based on their study, they recommend to the Vista Lakes Community Association (VLCA) Board the amounts to be included in the annual assessments for major project cost reserves.

As reported in my memorandum covering the annual budget as prepared by the Finance Committee for the year 2008, the Committee felt, based on its review of the consultants’ report, that significant uncertainty existed with respect to:

a. the projected life expectancy of the assets to be maintained,
b. the assumed inflationary increase in the projected costs of maintaining or replacing assets,
c. the assumed earnings on the reserve deposits,
d. ongoing negotiations with the developer regarding their responsibility for initial funding of the reserves, and,
e. the advisability of imposing substantial reserve assessments given the current state of the economy.

Since the next update of the reserve study by the consultants will be done in either 2009 or 2010, the Finance Committee decided to adopt a more gradual approach to the increased reserve assessments rather than to impose the significant increase all in one year. By the time the next study is received and adopted, at least some, if not all, of the variables will have resolved into more reliable quantities and an improved, analysis-based more reasonable reserve assessment schedule can be adopted.

Arno Zeyn
Former Vista Lakes Board Treasurer
(written while Treasurer)

 
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