Special Meeting and Vote for Fence

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Dear Sterling Heights Homeowners,

 As requested at the last homeowners meeting the board has been working to address the issue of the upcoming replacement of our perimeter fencing. We have collected all needed information for the homeowners to make a decision.

Included:

 

  • FAQs

 

  • Special Meeting notice: Wednesday April 20th 2011 at 9521 E Caley Cir, 7pm

 

  • Ballot and return envelope due by April 30, 2011

 

  • Loan letter of intent and information from Citywide bank

 

  • Legal review of documents findings

 

  • Copies of all variations of estimates collected prior to presenting this option

 

  • Photo examples of contractor work

 

What option is the board presenting for the vote?

The board is presenting a vote to the homeowners of yes to replace the perimeter fence around all sides of Sterling Heights with a brick wall OR no to not replace the fence with a brick wall.

A Yes-vote would be voting for the following:

 

  • New brick entry way and signage

 

  • New 6 ½ foot perimeter brick wall with 8 foot columns

 

  • New signage

 

  • New fire gate

 

  • Decorative caps for columns

 

  • Landscaping repairs per household required due to new fence

 

  • Legal review

 

  • Increased insurance protection for Sterling Heights

 

  • Approximately $8,200 per household, or financing of $95 per month

 

A No-vote would mean the following:

 

  • Board of directors and fence committee will present similar assessment vote for a wood-type replacement fence

 

  • Approximately $6,400 per household, or financing of $75 per month

 

Why is the only option yes or no for brick and no other materials?

The board is presenting a new brick fence for $8,200 per home, with financing offered (see below). If any of the homes are unable to pay we would not be able to complete – or even begin the project. Bank financing of the entire project allows for all homeowners to be able to pay over time but requires an 80% vote yes – if we were to present more than two options it is unlikely that any one option would ever have a high enough percentage to pass our by-laws (66%) or pass for the bank loan (80%) –resulting in no action regarding the fence in the next 1 – 2 years.

Should this vote NOT pass the board will present a special assessment plan to replace only the wood portion of the fencing (with wood or wood-like eco product) at the cost of approximately $6,400 per home (see estimate attached).

Brick is virtually maintenance free and would eliminate maintenance and painting assessments.

Why would the interior homes pay the same as an exterior home when an interior home gets less benefit?

The board of directors hired Hindman-Sanchez Colorado HOA law firm to review our documents and give an opinion based on current Colorado law and our by-laws (legal review results attached in appendix). The resulting legal opinion is that the perimeter fence IS a common element and must be covered equally, and an amendment to change is not recommended.

Increased home value?

A dilapidated fence that faces the public roadways adversely affects the aesthetic appeal of all our homes and affects our values and length of time on market required to sell.

Some of us have experienced vandalism, littering, and loitering due to the poor design of the fire gate. This gate would be replaced with a tall gate with a spiked top, and operating heavy latch, and would alleviate the issue of people cutting through our neighborhood that do not live here to and from the apartments and the lightrail. A substantial brick fence creates the façade of a gated community to help keep unwanted visitors out.

Annual HOA Dues and reserves:

Currently all Sterling Heights homeowners pay $800 per home in March of every year to cover operating expenses and maintenance of common areas as well as to slowly build our reserves.

If the vote passes each home would owe an additional $96 per month July through December in 2011, and dues totaling $163 per month beginning in 2012. The monthly dues from January 2012 and forward would replace the $800 single annual charge each home currently pays.

Payments can be made either through automatic withdrawal or can be mailed to a specific box at the bank, due the 1st of every month

The additional amount per household would last for 10 years until the loan is paid in full

If a homeowner sells their home prior to the 10 year completion, the additional dues can convey to the next owner

Exact monthly costs may be slightly adjusted based on materials chosen and final construction costs

Costs of project:

 

  • Materials and Labor: $304,000

 

  • Legal Review budget: $1,000

 

  • Printing and postage $400

 

  • Contingencies – Unforeseen: $16,000 (approx. 5%) budget

 

  • Additional insurance required

 

Total Budget: $322,700

Less $35,000 reserves down payment leave us with $287,500 needed

Divided by 35 homes: $8,200 per home total before financing and interest charges (as low as $7,808 per home minimum could be met if there are no unforeseen issues)

After engineering planning and materials choices finalized, complete assessment amount will be adjusted to match best estimate and later final costs (estimates attached)

Payment Summary for Yes-Vote:

 

  • 2011: Each home has already paid $800 in March 2011 for standard dues

 

  • 2011: Each home will pay $95 per month in July, August, September, October, November, and December to cover the HOA loan payments for 2011

 

  • 2012: Each home will pay $163 per month for standard dues AND to cover the HOA-fence loan payments

 

  • 2012: $800 in March is eliminated and covered in the monthly payments above

 

Financing and Reserves:

Our total reserves are at $52,000. We will use $35,000 as our required capital into the project leaving $17,000 in reserves

Sterling Heights is pre-approved for a loan from Citywide banks to cover the remaining amount up to $300,000. (see attached letter)

  • Interest rate: 7% for first 5 years, adjusted for following 5 years for a total of a 10 year term

 

  • The additional dues do become part of each homes annual dues and therefore is transferable if an owner sells their home to the next owner, until the 10 years has past

 

  • Additional annual budget reviews may increase dues to cover standard maintenance increases

 

  • Loan amount would be adjusted at 5 years, and payments may be adjusted up or down accordingly to reflect 2% over prime

 

  • Our bank accounts would need to move to Citywide bank as a condition of loan

 

  • There is no prepayment penalty on the loan in part or in full

 

  • If a homeowner chooses to pay their assessment amount in full, their portion of the total amount would be removed from the bank loan amount and would not be subject to the interest rate and bank fees and the remaining $800 annual dues could be paid monthly at $67 per month

 

  • A homeowner may also choose to pay off their balance when selling their home to lower their homes HOA fees for the next owner owing no additional interest or loan payments from then on

 

This loan would be made to the HOA itself, and would NOT appear on any person’s individual credit score and would NOT be subject to any individual homeowners’ credit ratings. No credit scores will be pulled and no mortgage companies contacted

The HOA Board of Directors would file all delinquencies in accordance to CO law in order to maintain lien status just after mortgages and taxes. This would be a function of the board of directors and would have to be closely monitored to avoid the homeowners covering a home’s assessment with no reimbursement even after foreclosure. If guidelines are followed closely, the HOA will maintain its place in order of a bankruptcy and foreclosure, eventually recovering all payments covered and late charges.

Contractor Selection:

We have selected Danburry Construction for this job (estimates attached) after references checked. The owner, Mark Wrucke, will be available at the special meeting for questions and to share samples within our proposed budget.

About Mark Wrucke: Colorado business registration ID: 20101279616, Service Magic seal of approval, licensed in Colorado, no complaints on BBB, insurance verified through Service Magic, References checked (3) for brick walls in our area, photos attached

Handling contractor payments and liens:

The board will work with the general contractor, and bank as well as the fence committee to review all work as it is signed off on and to ensure we as an HOA are released from all contractor and sub-contractor liens

Demolition, temporary fencing, easements:

All of the items associated with the new perimeter fencing and entryway will be covered as part of the assessment and is accounted for in the estimate, as well as a contingency amount for unforeseen problems

 

  • Our contractor will be working with the county on permits, any encroaching issues and using easements as needed

 

  • Our contractor will repair any damage to homes landscaping and sprinklers that are directly caused by construction

 

Sterling Heights Drainage and sprinkler update:

The board has looked into simultaneously replacing all of the sprinklers and fixing our drainage issue near the mailboxes as part of this project. The estimated cost to replace the sprinkler and correctly fix the drainage was over $30,000. The board has decided to not replace these items, but to more proactively monitor the sprinkler system, and to address drainage overflows and pooling right away if needed. The cost for management rather than replacement is already part of our current budget and should not increase dues

Legality

Included in the costs is a review of our HOA documents, as required by the bank to be in compliance with current Colorado law prior to any down payments made

Color choices:

If vote is passed options for color, signage and other aesthetic options will be displayed with live samples for a time at Amanda Jones’ home. Each home will be asked to vote for their preferred look of material options offered at our estimated price point. All feedback would be tallied to decide on final materials and styles.

Traditional brick, a heavy duty yet decorative fire-gate, and new Sterling Heights brick cut-out signage have been budgeted for, however final material choices would be determined after all feedback collected.

Timing:

  • Special Meeting Notice: Wednesday April 20th 2011 at 9521 E Caley Circle

 

Amanda Jones home at 7pm to ask questions and to discuss concerns

 

  • Ballots due: April 30, 2011 – mailed or delivered to same address. Return envelopes included

 

  • If vote passes with 80% majority, color choices and voting to take place in June 2011

 

  • $95 per month payments begin July – December 2011

 

  • Architectural planning would occur over the early summer

 

  • $163 per month payments and assessment dues begin January 2012 (replaces $800)

 

  • Work would commence in early August and will take approximately 10 weeks

 

  • Detailed timelines would be shared if/when vote is passed and engineering and planning underway

 

 

 

Board Members

 

 

  • Catherine Bazil, catherinebazile@yahoo.com

 

  • Lansing Ermentraut, Trout398@msn.com

 

  • Bunny Cole, gene_cole@comcast.net

 

Fence Committee