We received the bids from the contractors. The bids were quite close for all 3 roads and the catch basins. They came in around $332K. This is about $54K more than we planned.
Key Impacting factors
- Crude Oil prices are up – a material required in asphalt
- Inflation with the economy
- Labour costs went up
When we put our planned budget in place for the roads, we took into account about 5 to 10% inflation. This is what was recommended by ETC, our engineering firm. This bid was much higher than any of us expected and we were warned that next year, the cost may go up another 20% or more.
Proposal from ETC firm
- 2022 – repair the 2 more damaged roads and the corresponding catch basins
- 2023 – repair the 3rd less damaged road and the corresponding catch basins
- 2023 – complete the joint sealing for the sidewalks
ETC specifically suggested we try to complete as much as we can this year to insulate us from the potential higher costs next year. With only 1 road remaining next year, we can lock in the labor costs for next year and only increase the materials. We also took into consideration the following:
- Increase in utilities costs – reducing monthly savings into Reserves, for the roads
- Contractors notified us of a fuel surcharge that could increase mowing and snow removal costs – potentially reducing monthly savings into Reserves, for the roads
- Possible increase in inflation for the next few years
Option moving forward
The Board decided to accept ETC’s proposal to complete the 2 more damaged roads in 2022 – Fox Glen Drive and Bridle Pass. Our intent is to have Santa Fe completed in 2023. This does mean that we have to make some changes to our spending and monthly dues.
- Cutting the spending
- For the rest of 2022, we will only have signed contract labor completed.
- For 2023, the beautification of our common grounds will be suspended.
- Tree maintenance
- Basin maintenance
- Increase the monthly dues effective January 2023
- Increasing the dues for 1 year in 2023 to be $390/month
By cutting some of the spendings and increasing dues for 1 year, it will give us the best shot of having all our roads completed by the Summer of 2023. After the roads are completed, we can reassess the dues and potentially bring them back down. Note: the 2023 budget will be finalized in November 2022. The Board may adjust budget line items, any reductions, and any dues increase based on the latest information available at that time.
Options Reviewed
| Options | Pro | Con |
| 1. Special assessment to pay around $1,100 per household before end of 2022 |
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| 2. Ask the two companies to allow up to pay in installments through June 2023 |
| Denied by both firms. They are not a bank or in the business of financing |
| 3. Borrow money |
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| 4. Defer for another 2 years |
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| 5. Accept the proposal to split the road work |
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Unless the underlying motivation is simply to fix the roads, AND, increase the monthly fee in itself, the decision is clear. We should pay the $1,100 assessment and move forward. An additional $600 per year forever (make no mistake about this) vs a one time $1,100, seriously? Neighbors, PAY ATTENTION.
No use talking about milk already spilled, but a few years ago, I suggested to John Antos that we borrow the money, and pay it back monthly with a KNOWN amount and time duration. I was rebuffed at that time. My recommendation was based upon the low interest rates at that time, but mostly due to probable cost increases. “Saving” for it not only delayed the road improvements, but also increased the cost substantially. Here we are.