Meeting Requested by Homeowners
On January 18, 2024, homeowners presented a petition with 86 signatures to the Board, well over the 37 that were required. The petition called for a special membership meeting with special guest Robert Browning, Browning Reserve Group. Browning has conducted Woodside’s reserve study for many years.
By law, within 20 days of receiving the petition the Board was required to set a meeting date and send out an individual notice to each homeowner stating the date, time, location, and meeting purpose. Some homeowners have stated they didn’t receive the notice. The notice failed to include the location, which was provided one week before the meeting, and the Board didn’t provide a virtual meeting option although it was requested.
Reserve Study Definition
A reserve study “provides a current estimate of the costs of repairing and replacing major common area components (such as roofs or pavement) over the long term” (California Department of Real Estate). California law requires the reserve study be reviewed annually with a visual inspection conducted every three years. Browning’s presentation was based on a visual inspection.
Browning’s Presentation
First of all, Browning was very clear that the figures he provided in the meeting were draft figures only. He had met with the Board briefly to discuss the study, but he hadn’t had a chance to answer their questions and there would probably be adjustments.
All the numbers provided below are based on the DRAFT reserve study and are subject to change. (Note: Our 2023-2024 combined operating and reserve budget was $4.5 million.)
For the fiscal year starting July 1, 2024, it’s estimated that we’ll need $5.7 million in repairs. This $5.7 million doesn’t include any of the underground structures. For those we’ll need to hire a subject matter expert to provide an estimate.
Browning noted that the SB 326 Balcony Bill inspection that cost us $19,000 has to be redone. The inspection must be completed by January 1, 2025.
To fund our repairs, Browning suggested we raise dues for the next two years for the full 20% that is allowed without requiring a homeowner vote. Of the 20%, 15% would go to the reserve fund and 5% would be left for the operating fund. In later years the dues should go up 2.5% annually with no more special assessments unless an unplanned need arises.
For special assessments, Browning recommended $2,750 per unit in the fiscal year starting July 1, 2024, and $700 the following year for a total of $3,550.
Note: California law allows a maximum 5% special assessment without a homeowner vote. The percentage is based on the annual gross budget. For a $4.5 million budget, the total allowed is $225,000, or $310 per unit (average). The special assessments suggested by Browning require a homeowner vote.
Browning’s recommendations are average assessments. The actual amount per unit would be according to the percentages set out in our CC&Rs.
Browning was asked about associations that took out loans. The collateral for HOA loans are the homeowner assessments. Browning thought there were only two defaults nationwide since he started his business in 1991. This is reassuring news in case we need to obtain a loan.
The Way Forward
It’s going to take a Board willing to do what’s needed to protect our financial investment in our Woodside homes. We cannot continue to allow our property to deteriorate. At the same time, we must soften the blow to our homeowners on fixed incomes. We have to find ways to spread the costs over many years.