Planning began in 2020 to replace the plumbing in the building serving the individual units; this continues in 2021. At this time we await bids on replacing one vertical stack, and the expectation is that getting through this first step will provide useful real-cost information. For now, staff has suggested conservative pricing which is used to provide a basis for financial planning.
Because the plumbing category of the reserves is high-cost, on a different timeline that the standard 30 year reserves and also likely to change as more is known, it is presented as a stand-alone category.
The standard 30-year reserves statement covers all reserves items except for the plumbing. The goal of the reserves over the next few years is to increase the percent funded to a widely recommended 60-70%.
Work is planned on the fire alarms. If we can find parts for our current 120 volt system, costs should be relatively small. If we must change to the more modern lower volt system, that may need to be added in at an estimated cost of $65,000.
The 2021 HOA dues contribution to the standard 30-year reserves statement represents a 3% increase from 2020 and totals $82,400. The dues that apply to plumbing only is in addition to this amount and will be set by the budget committee.
There is quite a bit of guessing about the cost of the plumbing project, though we expect a better understanding once the bids for the first riser come in.
When the unit risers are replaced, some unit walls will need to be opened up. At this time, the funding for reconstruction of these areas is not addressed.
We have developed two different scenarios for funding the plumbing project.
In this plumbing category scenario- the 15% solution- future contributions to the HOA (dues) increase at a compounding rate of 15% per year.
While the result shows a negative % funded as the years go on, it is believed that our conservative guess-timating plus a lowering of cost with experience will mitigate this.
Note: The plumbing reserves increase for 2021 over 2020 is 3%, from $96,000 to $98,800. Were the 2021 dues to reflect a 15% increase, the total would be $110,400, which would increase the average monthly dues per unit an additional (approximate) $11 per unit over the proposed amount.
In this plumbing category scenario- the 1.5% funded solution- the contributions more or less match the amount needed for that year’s work. This is not so different from paying as we go with special assessments.
Here is the the Oregon Condominium Law regarding a Reserves Study and board responsibility.