Villas of Carillon Special Assessment Q&A
June 14, 2024
Dear Homeowners,
As of June 14th, we have received questions from a handful of residents regarding the upcoming Special Meeting of Members and vote on June 20, 2024. We would like to take this opportunity to provide answers to a few common questions.
How did the Board arrive at the dollar amount for the barrel tile roof replacement?
As stated in the June 6th letter, reserve planning for capital improvements is based upon reserve studies completed by qualified professionals. The 2023 reserve study estimates total roof replacement at $6.0 million and takes into consideration an estimated average annual inflation rate of 2.5%.
Additionally, the Association is aware of original developer construction defects related to the fascia, gutters, and downspouts. This was not accounted for in the 2023 reserve study but must also be addressed at the time of the roof replacement. The extent of underlying damage resulting from these defects (rotted plywood decking, rotted fascia, rotted sub-fascia, and rotted rafter tails) has been observed throughout the community but cannot be accurately quantified until the roof replacement begins. Therefore, the Board agreed that it was wise to add a contingency to account for these defects when replacing the barrel tile roofs. This contingency amounted to 25% of the initial recommended Reserve study amount, or $1.5million. This contingency (budgetary estimate) is intended to reduce the likelihood of an additional assessment resulting from the known original developer construction defects and unknown scope of underlying damage.
If the actual project costs are less than the assessed amount (or anticipated to be less), this Board or a future Board may opt to terminate the special assessment early and/or reduce the reserve contribution from monthly HOA dues (currently $116.67/month or 20% of $575) until it is appropriate to do so no longer. On the other hand, if the project costs exceed (or are anticipated to exceed) the assessed amount, the future Board may need to increase the assessed amount. The Board tried its best to aim for the former, not the latter.
Several residents have expressed concerns regarding the condition of their landscaping. Many landscaping complaints are the result of failures in the aging irrigation system or the age of the landscaping itself (exceeding lifespan of the plantings). For the reasons stated in the June 6th letter, the Board appropriated approximately 6.3% ($500,000.00) of the assessment to replace the aging and failing irrigation infrastructure, aging landscaping throughout the community and to appropriately address the ground level drainage.
The Board has a fiduciary responsibility to care and act. This includes ensuring that the buildings are properly maintained and that there is available funding to do so. The Board understands that the level of granularity and/or specificity related to the “long-term” roof project totaling $8.0million ($6.0million + $1.5million + $500,000) provided above may still give some Homeowners pause when considering committing to one of the options that earmarks funds for that purpose. This is the reason why the Board provided Option 3 to the Homeowners.
The Board also has a fiduciary responsibility to act in good faith, in the interest of, and for the benefit of the entire community. We realize that news of this assessment came as a shock to you and in some cases has evoked feelings of concern, doubt, and even anger. These are many of the same emotions felt by the current Board, who are not immune from the impact of this assessment. Nevertheless, the Board’s duty was to educate the Homeowners regarding the risk of becoming uninsured due to the age/condition of the roofs and that continuing the community’s long tradition of underfunding the reserves could result in serious consequences for the Community/Homeowners.
As stated in the June 6th letter, the fact is Villas of Carillon Homeowners could be forced to replace the tile roofs any time between years 2025 and 2029 to remain insured. While we hope this doesn’t happen and that the community can wait until 2029 to replace the tile roofs, if funding is delayed until then, the financial hardship to some of the Homeowners could be devastating. This is why the Board provided options that plan for the best-case scenario, spreading the cost over 8 years (through the anticipated completion of the roofing project in 2032), while attempting to educate you on the potential risks associated with each option.
The Board felt it would be irresponsible not to educate you on that fact that if Option 3 is selected, the likelihood of a one-time assessment to replace the roofs becomes more probable.
The Board also believes that it is no longer appropriate to allow residents to use these roofs without contributing to the funding of their replacement. 60% of the community members who served on the Board of Directors over the last 10 years no longer live in this community. The current Board has lived in the community for an average of 12 years and rather than selling their properties before notifying the community of this assessment is standing side by side with you voting for one of the same four options that you are and is willing to accept the decision of the majority.
Why can’t we choose a different style roof? I don’t like this style anymore. Aren’t there less expensive options? Shouldn’t the community have a say in the type and color roof we want rather than the opinion of 5 people?
Regarding the roofing materials, the Board is aware that there are different options available such as clay tile, concrete tile, dimensional architectural shingles, etc and that each has their benefits and their drawbacks.
This Board agrees that any major changes to the appearance of the community should not be decided by the Board alone. This should require a vote of the community held in a Special Meeting. At this time, the Board is not in a position to obtain competitive bids as it is not the objective to begin the replacement of the roofs until 2029 or until forced to do so by the insurance company to remain insured should that happen sooner. Until that time, the assumption is that the same style, material, etc will be used. This does not mean the Board has decided for the community. It is an assumption that starts the funding plan. That plan can and should evolve as we approach the time of roof replacement. At the time of execution, whatever Board is in place, should consult the community and hold a vote to agree on material, design, color, etc. As stated previously, if the project cost based on the vote is anticipated to be less than the assessed value, changes can and should be made by that future Board to the special assessment and/or dues to reflect those changes.
I’m tired of the paint colors. I thought we were told we were going to change the colors. Now I’m being told that the colors will remain the same. This should not be decided by 5 people.
The Board agrees and is not sure where this information is coming from. In March 2023, the Board voted unanimously that “Two (2) color options will be provided to the community for a vote...” Each option will include three (3) main body color options, one (1) trim color (same color as garage door), and one (1) decorative accent color and one (1) front entry door/trim color.” This information is recorded in the March 7th, 2023 meeting minutes.
This color selection process hasn’t officially begun, but it will begin soon as painting will immediately follow balcony and flat roof repairs. We are excited to hear from a few that there are Homeowners who are interested in supporting the Board in the color selection process. As a result, the Board will be forming a committee to assist in this capacity. If you would like to be a part of this committee, please notify James Grant (jgrant@mgmt-assoc.com). At an upcoming board meeting the Board will appoint the committee members and discuss next steps with the appointed members.
We would ask, in the future, Homeowners consult the meeting minutes which are available online at FrontSteps and on the Villas of Carillon website or contact James Grant (jgrant@mgmt-assoc.com) to avoid unintentionally spreading misinformation to other community members.
How could this have happened? Why weren’t we notified about the Assessment sooner? I have no confidence in the Board.
As stated in the June 6th letter, the current reserve funding situation is the direct result of the previous Boards’ budget planning practices and the communities’ general sense of complacency in allowing volunteer Board members to act on their behalf with little interest or attention from the community on long term financial preparedness for major capital expenses. This is all well documented and available to the community in the form of recorded meeting minutes, community communications, and letters which are all available via FrontSteps and the Villas of Carillon website should you wish to review them.
In November 2017 and April 2018, the Board, at that time, sent notices to the community urging the membership to attend the 2018 budget planning and annual meetings to vote to fully fund the reserves. Unfortunately, despite that attempt, the reserves were not fully funded thus contributing to and continuing this longstanding problem. Again, at this time, the reserves were already in a significant deficit based upon on decisions made by past Boards to underfund the reserves. Later in 2018, the community was assessed $1,000 per household which was the last attempt to “patch” repair flat roofs and repair balconies on an “as needed” or “priority” basis.
As stated in the June 6th letter, when this Board took over in 2022, the Board learned that 50% of the balconies were in a major state of disrepair. This was due to the lack of an appropriate inspection and maintenance plan for the community balconies, as well as a lack of reserve funding available to adequately maintain all 165 balconies and keep them in a healthy condition. The cause of this issue is directly attributable to previous Boards’ decisions to shift the responsibility for maintaining the balconies from the Association to the individual Homeowners. This Board is, for the first time in over a decade, attempting to “right that ship” by repairing and waterproofing all 165 balconies at one time and getting them on the required inspection and re-sealing/maintenance plans, in accordance with the Governing Documents and to ensure compliance with the manufacturer warranty. This will ensure the longevity of these balconies and mitigate these unnecessary and historically repeated major repairs going forward.
Also in 2022, this Board, based on the long and well documented history of continuous patch repairs on the flat roofs which had reached their end of life, voted to replace all flat roofs in the community. This project began with 17 in the first phase, and the remaining flat roofs will be completed this year.
Every year Management & Associates prepares a draft proposed budget for the Board to review. The proposed budget includes, among other recommendations, reserve funding
recommendations based upon the current reserve study available at the time. This Board agreed to fully fund the Reserves at the $231,000 level as recommended in the 2016 Reserve study and agreed to commission the new study to obtain a clear fiscal picture moving forward. This Board was the first to fully fund the reserves based upon the 2016 Reserve study and to go a step further to request an updated study which was received in June 2023.
Why did the Board hold the dues at $575 in 2024? How come you didn’t advise the community of the assessment when you had the Reserve Study data in 2023?
It would have been irresponsible for the Board to raise the 2024 dues or to present an assessment without understanding the projected balcony repair, flat roof repair, and painting costs, which were received in mid-April 2024. The motions to approve these costs were approved by a unanimous vote of the entire Board at the April 24th board meeting. It was at that meeting that the Homeowners in attendance were first made aware of the $1.9 million approved budget for these 2024 projects and the upcoming need to replace the tile roofs within the next 5 years based on the Reserve Study. This is documented in the April 24th meeting minutes.
One month prior, at the March 18th Board meeting, the Board learned that two insurance carriers declined to bid on property insurance for the Villas of Carillon. It was at this time, the concerns regarding the conditions of the tile roofs and becoming uninsured (as mentioned in the 2023 Reserve Study Report) became a real possibility and concern to the Board. Once all of this information was available, the Board moved swiftly to plan and communicate the assessment to the community. This was accomplished between May 7th and June 5th when the entire Board met and unanimously agreed to approve the June 20th Special Meeting notice, agenda, community letter and limited proxy form/options to be mailed to the community.
Clearly stated, there is no basis in fact to support any claim that this Board has been or is negligent or fiscally irresponsible with the funding of the Reserves or in promptly communicating with the Community. In fact, this was the first Board to fully fund the Reserves in over a decade and members of this Board worked diligently with Management & Associates and the Association’s attorney over a very short period of time to provide the Homeowners with all of the information available to the Board to ensure complete transparency.
We hope this helps clarify any concerns and we look forward to seeing you at the meeting on June 20th, 2024. Please remember that the meeting will run from 7pm to 8pm. Please submit any questions specifically pertaining to clarifying the assessment and the four options to James Grant at jgrant@mgmt-assoc.com in advance of the June 20th meeting to ensure they are answered as there may not be enough time to answer all questions at the meeting.
Sincerely,
James Grant, LCAM
Community Manager
On behalf of the Villas of Carillon Board of Directors
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