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Town Hall Meeting Q & A

On behalf of the Terrace HOA Board of Directors and our Property Manager, Eric Fordyce, thanks to all Terrace Community Members who attended and contributed to our Open Forum Meeting, held on Saturday, August 3rd.   There were approximately 40 attendees.  We were pleased to facilitate this discussion and provide detailed information regarding several community improvement projects we have identified and prioritized as requiring attention over the next 24 months. 


This meeting was the first of two or three open forum discussions to address the need for community improvement projects that cannot be funded within our HOA’s annual operating budget or reserve account.  Sometime before the end of the year, we will ask homeowners to vote on whether or not to approve a special bank loan/line of credit that will be necessary to fund any or all of the projects. 


Our goals are to:


  • Avoid ongoing higher costs of temporary repairs as they arise - slab and pipe leaks, pavement slurry seal and patching, etc.

  • Preserve and increase the resale value of all Terrace homes

  • Minimize increases in our monthly HOA dues


The HOA Board of Directors and Property Manager have identified and prioritized the following five projects.  These projects cannot be funded within our annual operating budget or reserve account, which means homeowners will pay for any or all of these projects through a special assessment.   These projects would be completed in 2020 and 2021.


Priority 1:  Re-pipe every condo
Priority 2:  Asphalt/Concrete replacement & repair (all Terrace driving and parking areas)
Priority 3:  Siding, trim, fascia and beam replacements
Priority 4:  Concrete pool deck replacement
Priority 5:  Wrought iron fence replacement


In order to keep all homeowners informed and to prepare you for the next meeting, please refer to the following information, included within:

  • Agenda for August 3rd Homeowner Open Forum - (1) Lists and prioritizes the five projects, (2) provides the costs to complete each project based on contractor estimates we have solicited, and (3) provides information on the special assessment to homeowners that would be required based on the amount of money we would need to borrow for any or all of these projects.  (Download Agenda)

  • Q&A from the first Town Hall Meeting - the answers to questions posed during the meeting (see below)


Please review this information and do not hesitate to send us any questions or concerns you may have so that we can address them during our next open forum homeowners meeting (Contact Eric Fordyce at 949-330-6350 or by email to  We want to ensure that every homeowner is fully informed and that we have a productive second Town Hall Meeting (to be scheduled). 

Thank you for your attention to these important matters in our community.

  • How will we pay for any or all of these projects?
    The HOA will need to secure a line-of-credit, which will require homeowner approval. We currently have bank approval for a line-of-credit of up to $2.5 million dollars. Once we open the line-of-credit, the HOA will have six months to tell the bank how much of the $2.5 million we will actually need/use based on the cost of the specific projects that homeowners and the board approve. The total loan amount will be repaid by homeowners through a special assessment, payable either monthly over a period of 10 to15 years or in one payment (for those that have funds available and don't want to pay interest over time). This special assessment would be separate from our normal monthly HOA dues.
  • Why can’t we pay for theses projects through our regular HOA dues or reserves?
    Our monthly HOA dues fund our regular operating budget which pays for things like common area landscaping, pool maintenance, water, electricity, general repairs (wood or siding deterioration, slab leaks), etc. In addition, a portion of the monthly HOA dues are set aside to fund a reserve account. The purpose of the reserve account is to pay for large capital repairs and maintenance projects of the common area property, at a scheduled time. According to our auditing firm’s analyses over the last several years, our reserve account balance should be over $3 million. However, our current reserve account balance is about $1 million - approximately one-third of the amount it should be. So in addition to the fact that there isn't enough in the reserve account to fund these current capital projects, using even a portion of it pushes us further away from the recommended funding level of $3 million (which can have an adverse impact on property values). Over many years, the reserve account has been eroded by project costs, such as siding replacement and repairs to individual condos (in large part because of the very frequent slab and pipe leaks we're experiencing). By taking out a loan for any or all of the approved projects, our monthly HOA dues will continue to be appropriately applied to the regular maintenance of the community and to re-build our reserve account.
  • How will homeowners know how the loan money is being spent?
    Loan funds will be specifically earmarked for the approved projects, and expenditures will be tracked and reported to homeowners through the completion of each project.
  • How will homeowner votes be tabulated?
    In order to approve any or all of the projects and loan, our CC&Rs, mandated by the State, require that at least 51% of our 152 Terrace Homeowners vote (77 homeowners), and of those 77 homeowners, at least 51% (39 homeowners) vote “yes.”
  • If homeowners vote to proceed, how will projects be scheduled?"
    These projects would be started in early 2020, and completed by the end of 2021. The re-piping and re-paving projects would not likely be scheduled at the same time in order to avoid as much inconvenience as possible to residents (roads closed off at the same time crews are working on piping creates quite a bit of havoc). However, some of the other projects being consider can potentially take place concurrent with the others.
  • What specific projects are being considered?
    Refer to section B in the agenda that was passed out at the first homeowner town hall meeting which lists all projects being considered, ordered by rank of importance/urgency as determined by the board. Note that projects #1 and #2 are essentially the same project - #2 represents an outside project management engagement to watch over the work being done by the re-piping company, conduct walkthroughs, work with the city, etc. Download the Agenda
  • Why do we need to re-pipe every condo? Why is it the #1 priority?
    The HOA Board and Terraces Property Manager have identified re-piping as the highest priority because of the high rate of slab and pipe leaks homeowners have experienced over many years, and the mounting cost of temporarily repairing them. Leak repairs have been paid for by the HOA as they occur, but repairs don’t solve the underlying problem - in fact, many homeowners have had multiple leaks in the same unit. A complete re-piping (rather than spot patching/fixing only the leaky area) would largely prevent leaks for the foreseeable future. Repairing a unit that leaks has historically cost the HOA anywhere from $2,500 to $5,000 each time, depending on the circumstances (how long it was leaking before being detected, whether there was mold damage, etc). Keeping in mind that many units have leaked multiple times, in some cases we (collectively as homeowners paying monthly dues) are paying anywhere from $5,000 to $15,000 to repair leaks in certain situations. Compare that to the estimated cost to re-pipe the entire unit for about $7,000 (based on current proposals). In the last 12 months, the HOA has paid out approximately $85,000 for these repairs. In the last 5 years, the HOA has spent well over $500,000 in leak repairs. Leaks occur due to a variety of reasons - old piping material, corrosion, earthquakes, normal shifting/settling of our homes over time. Even if your home has never experienced a leak so far (lucky you), your property may be affected/damaged by a neighbor’s leak in an adjoining wall. Many homeowners who have experienced leaks have had to personally replace flooring, wallpaper, paint, etc. (items not covered by HOA), paying for this directly or through their homeowner’s insurance. Re-piping will prevent future leaks and protect individual homeowners from leaks within their neighbors’ adjoining walls. Community-wide re-piping will not only give homeowners peace of mind, it's almost certain to enhance the value of their homes.
  • What will re-piping involve and how long will it take?
    Re-piping involves making 30 to 40 wall openings to access pipes behind drywall and kitchen/bathroom cabinets. The current pipes will be replaced by Pex piping. The openings will be patched and drywall will be replaced and textured. Crews will re-pipe one “pod” of 6 condos at a time. Initially it may take up to 8 weekdays for each condo for the entire process, but this will decrease to 5 or 6 days as the contractor gains familiarity with each condo’s design. Depending on the size of the contractor’s staff, the community-wide project will take between 6 and 12 months.
  • What costs might homeowners be personally responsible for in a re-pipe?
    Homeowners may be responsible for repainting where drywall has been replaced.
  • Will we have warranty for materials and installation on re-piping?
    Yes, all of the contractors we have selected will warranty materials for 25 years.
  • What happens if homeowners vote "no" on a loan for re-piping?"
    As mentioned before, the HOA does not have funds available for this major project. If homeowners vote no on a loan, it will likely result in an almost immediate increase in monthly HOA dues (up to approx. $100 additional per month which would not require homeowner approval) and/or special assessment, as needed. In addition, the HOA will continue spending thousands of dollars each month repairing leaks in the short term, while an alternative course of action (without loan funding) is determined by the board and implemented.
  • Why do we need asphalt/concrete replacement and repair?
    Previous boards - based on circumtances and funding at the time - have chose to slurry seal the pavement/driveways every few years. While we have slurry sealed many times in 33 years, it's intended as an asphalt top coat. However, it doesn't address the aging pavement and concrete that, over time, develop surface cracks and deep fissures. These cracks and fissures have been caused by three decades of traffic, normal degradation of asphalt as it ages, water intrusion as cracks develop, and weather. In some areas, water can be seen percolating from below the asphalt up through cracks, further eroding and destabilizing the pavement. Terrace asphalt is long overdue for replacement.
  • What will this project involve and how long will it take?
    The project will involve removing and replacing pavement and concrete, and repairs where needed. This process is far more labor intensive than slurry seal and will take longer. We’ve slurry sealed many times so we know this is always a temporary inconvenience involving parking away from your homes as work in your area is completed. We will work closely with our contractor to minimize disruption, communicate timely and often, and ensure residents and delivery/services vehicles have adequate access during the process. The project will be completed one circle at a time, leaving a lane open at all times. We will need to stay off newly paved and concreted areas for up to 72 hours to allow it to harden correctly.
  • How long will new asphalt and concrete last?
    25 years with regular maintenance which would include in later years, crack sealing and slurry seal as needed.
  • What are the other 3 projects for?
    We've discussed re-piping and re-paving in detail because, in the board's opinion and assessment, these are top priority and urgent projects. However, the board has also identified 3 other projects that will likely need to be addressed soon. If the board ends up taking out a loan/line of credit, we won't have that option again for another 10 or 15 years and these items will certainly need to be addressed by then: Siding, Fascia and Trim Replacement Continue and finish this project which has been ongoing for years, however not every unit has been addressed. Concrete Pool Deck Replacement The pool decks are showing signs of deterioration, in large part due to age and pool chemicals. Two of the proposals are to replace the concrete and look similar to what we have now. One proposal is for pavers which not only give it a different look, but are more resistant to pool chemicals and more easily replaced in small sections (rather than large swaths of concrete slab). Wrought Iron Fence Replacement Repair, replace and/or paint deterioriating fencing throughout the community.
  • What do the numbers look like?
    Here are a couple of spreadsheets that one of our fellow homeowners put together to "run the numbers" Loan-Assessment Breakdown (Page 1) Loan-Assessment Breakdown (Page 2) Note: refer to the Management Report that was handed out at the first town hall meeting on August 8, 2019 for details on estimated costs and proposals for the various projects which tie back to the spreadsheets above.

Questions or Comments?

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