BTHA Reserve Study

Following our March 2015 Annual Meeting, the Balboa Terrace Homes Association (BTHA) Board set up a committee which reviewed possible consultants and selected Reserve Analysis Consulting LLC to provide a Reserve Study as mandated by California’s Davis-Stirling Act. The consultants provided their results in a report during September 2015. A summary of the report’s conclusions are provided in the following paragraphs. A copy of the full report can be obtained here. The report identifies the community-owned property we are responsible for maintaining, and a 30-year budget for providing this maintenance. The report is to be updated annually. The Board voted to accept and choose the $93,000 initial funding that the consultant’s provided during its October 5, 2015 meeting.

The study identifies the major areas which BTHA is responsible for maintaining including 1) Asphalt Driveway Easements; 2) Concrete Sidewalks; 3) Irrigation, Landscaping & Trees; and 4) Site Components (including entry portal, light and the Bus Stop). The Asphalt Easements need periodic sealing, striping and minor repairs; after 20 years they need major overlay and/or replacement. The Sidewalks should have sections replaced as needed on an annual basis. Irrigation, Landscaping and Trees should be maintained or replaced as needed on an annual basis. Finally, the Entry Columns (next to the Christian Science Church) should be repaired or refurbished as needed, but with replacement or major repair on a 25-year basis. The Entry Portal and Bus Stop should receive regular paint and concrete maintenance, with a replacement or major repair every 8 years.

Table 6.00 of the report identifies the expenditures anticipated over each of the next three years: these are $21,176, $48,273 and $22,466 respectively. Asphalt sealing and repair are the major reasons for the increase in the second year (FY 2016/2017). This three year total is almost $92,000, averaging approximately $31,000 per year.

Table 4.00 provides a 30-year funding plan with recommended annual contribution increases to support the planned expenditures.  It indicates that if we start with a fund balance of $93,000, the fund remains positive for all 30 years (with assumptions including an annual contribution of $23,175 in 2016, rising annually thereafter) while avoiding the need for one-time “special assessments.”

The consultant anticipates annual contributions to the reserve fund should increase by 3% in 2016 and also in 2017 but 7% annually thereafter as an estimate of potential inflation.  This suggests a lower necessary annual increase in our dues than has been the case in recent years although our dues will need to reflect any inflation or changes to our operating expenses (beyond the necessary contributions to our Reserve Fund).

I wish to thank our neighbor Dr. George Wu for leading this committee and keeping this process moving to completion.

Gerald W. Bernstein
President
Balboa Terrace Homes Association