During the recent Finance Committee meeting on June 14, OVA President Steve Spanier sat in for Finance Committee Board Liaison Tom Kendrick.
The Agenda included the Treasurer’s Report, Capital Fund expenditures of the East Rec Center and the recently completed physical inspection for the 2019 Reserve Study Report.
Several members of the community were in attendance and joined in the conversation regarding the 2019 Reserve Study. Answering a question as to whether the Reserve Study will include realistic costs for the Berger Remodel in 2020, OVA Manager Kevin Hubred stated that if accurate costs for the Berger remodel were included we would have a negative funding percentage and this would look very bad for prospective buyers of Oakmont homes.
OVA Treasurer Elke Strunka countered Hubred’s statement, saying that including this accurate accounting will make it clear that a loan would be necessary and that a line should be included showing loan proceeds as the funding source. Hubred held to his view of not including the costs for Berger since they were estimates and not hard costs. It was then pointed out that best estimates are what we have and they must be included in the Reserve Study accounting.
Nordby Construction provided OVA an official estimate of $4 million in costs for the Berger remodel. To retain the current Reserve Study cost of $250,000 would result in a false funding percentage. An audience member pointed out that savvy buyers and current homeowners want to see a true reflection of OVA’s financial health and to provide a materially inaccurate report is a misrepresentation of the Association’s financial health.
Strunka went on to note that a considerable number of items scheduled to be repaired or replaced in 2018 have not been completed. Hubred and Facilities Manager Rick Aubert were to meet the following day, June 15, to be updated on the Reserve Study report.
It was also reported that OVA’s new Reserve Analyst Robert Browning has completed the required 3-year visual inspection of OVA assets and is processing this information. Hubred said that the final version will be available for interested OVA members to view in July.
The next Finance Committee meeting is scheduled for July 12. Ms. Strunka said she is conducting an analysis and will report the details of a possible loan to cover maintenance and remodel expenditures, with the understanding that interest rates are likely to be lower in 2018 than in the future.
During the May 1 OVA board meeting Strunka mentioned that the issue of such a loan had come up at the Finance Committee meeting in April. She added, “If the board would like me to consider some different financing scenarios I would look into it and prepare an analysis for the next (i.e. June 19) board meeting.” Strunka said she was waiting for the completion of the Reserve Study visual inspection for more accurate numbers.