The following letter was sent to all 82 homeowners on September 7, 2006:
Date September 7, 2006
To: Kenthill Townhomes Owners
From: The Board of Directors
Nancy LeMay, Property Manager
Re: Kenthill Townhomes Current and Long-Term Budget Planning
Enclosed please find the Executive Summary (with Table) from Association Reserves of Washington, LLC
Dear Kenthill Townhomes Homeowners:
Kenthill Townhomes was built in the mid-1970’s [The joint access and easement agreement was signed in 1973]. Our buildings therefore are over 30 years old. They are starting to show their age in many ways. It has been difficult to predict and budget how much funds to set aside for the various problems and projects that our condominium complex faces. Each year not only have we had to do maintenance, but we have had to do large repairs to some part of our property.
As you may know, the yearly budget is composed of two parts. The first part is the "Operating Account", in which funds are placed to address monthly billings, utilities, etc., as well as maintenance issues such as lights, landscaping, etc. The second part is the "Replacement Reserves" Account. Everyone's value of their unit has risen over the past several years. It is reasonable to "reinvest" a portion of that increase in value back into the buildings which contain everyone’s individual unit. We do not need to try to make Kenthill Townhomes into a luxury condominium complex. On the other hand we cannot continue to allow the buildings that we each own in common continue to deteriorate. We must maintain them at reasonable level. To do otherwise, in time, when the day arrived for each one of us to sell our unit, we would not nearly obtain the price we might otherwise have received.
In order to better address the long term problems and projects that require our attention, the Board of Directors commissioned a Reserve Study to be done for Kenthill Townhomes. The study is only a guideline, but hopefully it will be of great value. This study will help the current Board as well as future Boards in prioritizing these projects over the years to come. Acquiring a Reserve Study has been long overdue, and also brings us into compliance with generally accepted principles of condominium management, as mentioned in every one of the yearly audits performed by the current and former CPAs which have handled Kenthill Townhomes.
Statistics show that inflation has been approximately 3% for many years. However, that number encompasses the broad market, covering everything from clothes and food to higher cost products. The services we require for condominium upkeep reflect a much narrower characteristic of this information. In fact, the figure is typically closer to 5%, especially when the rising cost of utilities are considered, and most notably as contractors add fuel surcharges to the costs of their estimates.
And so we face two challenges simultaneously, one, rising costs as documented in the media and others sources, and two, the need to address the larger, long-term projects that a condominium complex the age of Kenthill Townhomes is. Homeowners are respectfully encouraged to reflect on these things when planning for their own yearly budgets in the years to come, as we begin to deal with these current and future challenges together as a community.
Sincerely,
The Kenthill Board of Directors
