Budgeting - Part II - Driveways

I've completed the analysis of finances for roofs and for driveways. I have begun an analysis for garage floors.

Prior to the election, a letter was issued by myself and two other candidates, to the ownership of BLMH.

That letter was the first notification to the owners of the magnitude of the projects for roofs and driveways. I had done an analysis of the finances and I was concerned by the total costs of the projects, and the ability of the association to raise the required finances in a reasonable amount of time.

I have now had the opportunity to do a more thorough financial review. How did I do as compared to that September letter?

I'll provide some information for driveways, first.

We have about 84 driveways. These vary in size, but are generally "Small", "Medium" and "Large!" Not sufficiently precise for me. So, I took a tape measure and physically measured about 25% of the driveways to the nearest inch, and calculated the area in square feet. I then used aerial photos and with computerized technology, measured the driveways in the photos. I then compared some of the photographs to the actual measurements I had made, to see if the aerial method was sufficiently accurate. It was.

Here is photo which is typical of the ones I used. I've added some information, such as the street and numbers. This and the other photos I used, had sufficient resolution for my purposes, and you can see it is sufficiently detailed and scaled, to make the necessary measurements:

What Percentage of Driveways, based on Area, were completed in 2010?
One of the questions I asked the board at the annual meeting was this: "What percentage driveways, based on the total area of driveways, has been completed in 2010?" This question was prompted by the information presented by the board at the meeting which stated that "53.5% of paving reserves was spent on driveways in 2010."

I need to clarify one thing. At the time of the annual meeting and as of today, I do not know the actual price for the work. I am not aware of the final bills, which included fill and haulage; these could vary.

So, how much did we actually spend? We spent 53.57% of the paving reserves on 14.59% of the driveways,  as based on area of all driveways and the area of the contract driveways.

I estimate the total cost of this project, using 2010 prices, to be $917,813.00. That price will probably increase over the life of the project, due to inflation. The price DOES NOT include several small parking areas on the property; for example, the one across from 1760 Plymouth. Including these areas will increase the total price.

What is the Estimated Total Price of the Project?
To complete the driveways will require an additional $783,873. At the current rate of funding ($60,000 annually) of the "paving reserves" this project could require 13 years to complete! However, paving reserves are also allocated to streets and cul-de-sac parking areas.

The reserve study states that our asphalt drives are in "fair" condition. "Replacement of all driveways was indicated as a project scheduled for completion within (6) years."

To do so, will require doubling of the amount allocated to "Paving Reserves" each year, for the next 6 years.

"Methinks we have a problem!"

Comments, Corrections, Omissions, References, Miscellaneous News
Note 1. I'll provide additional details to the board, for use at the budget workshop. I'll recheck all of my numbers, calculations and projections prior to formal presentation. There is a possibility of error in any endeavor such as this.

Note 2. An owner asked me if the driveways include the access roads, such as these in this photo at 1737-1739-1741 Harrow. Yes, they do. I consider only named streets to be "streets." All others are included in driveways, and the calculations of the driveway areas. These particular driveways were measured with a tape.

Note 3.  The reserve study also states that "replacement of deteriorated asphalt drives should be a priority..." The work begun last year begins this project. The study states that asphalt driveways have a "effective useful life" of 15 years. Ours are at or approaching the end of their useful life.

Note 4. The reserve study recommends sealcoating in order for driveways to reach their full, useful life. Such sealcoating of the new driveways could commence in 2011, but not later than 2012. That would require funds in addition to those included in this post.

Note 5: We must also be building reserves for street repairs and replacement. The anticipated balance of the "paving reserves" will be about $116,067 on 12/31/10. I would suggest to the board that these funds be allocated to streets. I would also suggest that the "paving" fund be split into two parts; one called "driveways" and one called "streets". These could be co-mingled, but for the purpose of properly growing the funds for streets and driveways, and to assure the necessary funds are available for Lakecliffe repairs, etc. in the future, it would be best to assure that "street" funds are not spent on "driveways" and vice-versa.

Note 6. The photographs are reproduced here at low resolution. The actual digital photos I used were much higher resolution than the one here, and much larger. The screens used were a 22 inch wide angle and a 32 inch wide angle; both high resolution LCDs. There was sufficient detail and resolution for my purposes.