(Updated May 10, 2022)
At the regular monthly meeting the Board of Directors reviewed two loan options offered by its bank. Option 1 is a 15 year loan with a lower interest rate for the first 7.5 years then a reset of the interest rate for the remainder of the loan term. When the interest rate would be reset, it would never go below 5% and there would be no cap, or maximum, that the interest rate could be set. Option 2 is a fixed interest rate for the entire term of the loan. The actual interest rate would be set on the day of the loan signing. You can see the exact terms offered by the bank by clicking here.
The Board felt that the risk of probable rising interest rates far outweighed the any possible saving of a lower interest rate for the first half of the loan term. The Board voted to accept Option 2 and directed the Treasurer to begin the application process. You can read the special meeting minutes by clicking here.
(Updated April 18, 2022)
Over 260 homeowners have returned their signed consent forms. With 245 signed consent forms required, the homeowners have thus authorized the Board of Directors to finalize the terms of an $800,000 bank loan and enter into agreement with the bank for the loan to replace our streets.
At a special Board of Directors’ meeting held at 6:30 PM on Friday, April 15, 2022, the Board of Directors accepted the bid from KE&G to replace our roads, contingent upon approval of the final acceptance of the bank loan. The KE&G bid was less than the $1,450,000 cap approved by the Board in a previous meeting. The Landscape and Roads committee are working with KE&G to save an additional $20,000 or so from the contract amount.
The end result is that our 45 year-old failed roads should finally be replaced before the end of this summer – without the need for a special assessment. Special thanks go out to Brian Bickel, Treasurer and Austin Wesnitzer, Chair – Landscape and Roads Committee for their tireless work in making this possible. You can read the minutes of the meeting by clicking here.
(Updated March 15, 2022)
The Treasurer continues working with our bank to finalize the terms of a 15 year loan. The not-to-exceed cost of the road replacement was set by the Board at $1.45 million. The HOA currently has $650,000 in available funds for the project. The maximum loan amount recommended by our Treasurer and authorized by the Board, $800,000, is needed to cover the difference and move the road replacement project forward. The Treasurer and the Chair of the Landscape and Roads Committee are reviewing the proposals that have been received from the paving contractors
At the February 2022 Board meeting, the Board voted to support the project and to request that HOA members approve a loan for the paving.
A Letter of Consent is being mailed to all homeowners the week of March 20th. The Board is asking that homeowners return the signed Letter of Consent no later than April 20th. Two thirds (245) of the homeowners must approve the loan request. With the consent of the homeowners in hand, the Board can quickly act once an acceptable bank loan is available and a paving contractor has been selected.
To see a flyer on the roads replacement project, click here.
To see a financial overview of the roads replacement project, click here.
To see a list of frequently asked questions, click here.
(February 15, 2022)
The year 2021 was significant because 75% of the homeowners approved an amendment to the bylaws that increased the Association’s borrowing limit from $50,000 to $950,000. Passing this amendment was a crucial first step in the Association’s efforts to replace its roads.
With this achievement in hand, the Board began to solicit bids and to develop a funding process to replace the roads. As of March 13th, this work continues. The recent move by Pima County to replace failing roads has put pressure on the available vendors. To be candid, there is such an abundance of work available from the county that paving contractors are not eager to competitively bid other projects such as ours. World events have also added an element of volatility to the price of oil, a key element in the cost of asphalt, so that contractors are further hesitant to bid a tight not-to-exceed price.
The Treasurer is also negotiating the terms of a specific loan package with our bank. A successful package will result when our Treasurer and the bank’s loan committee agree on a) the amount of the loan, b) the interest rate, c) the length of the loan and d) the amount of our cash reserves to assure “bullet-proof” performance by the Association to repay the loan.
We are fortunate to have a Treasurer with strong experience in corporate finance and a Roads and Landscape Chair who works for the City of Tucson streets department to negotiate these important steps in our street replacement program.
When a firm bid from a paving contractor is in hand and the negotiations with our bank are complete the board will present a plan for review and approval by the homeowners. Approval of the plan by two-thirds of the homeowners will be required for the plan to be executed.