H ARBOR
CRESCENT
HOMEOWNERS’
association
OPTIONS FOR MAINTENANCE OF ROADS
CONVEY TO CITY OF NEWPORT OR KEEP AS PRIVATE ROADS
At the March 8, 2008 Homeowners’ meeting, the Board of Director’s were instructed to
investigate the options and attendant assessments relating to the possibility of
conveying the roads within the Subdivision to the City of Newport or to keep them as
private roads; and to report back to the membership at the next meeting scheduled for
June 14, 2008. The following contains our current findings as of May 12, 2008 and is
intended to provide the HOA membership with information to help them in preparation to
vote on this issue. Any additional information that we obtain in the interim will be
presented at the June 14, 2008 meeting.
SUMMARY OF OPTIONS
Status Quo: Continue with the existing program of no annual assessments for the
Future Maintenance Program, and repair and maintain roads on as-need basis with
Special Assessments. There would not be a formal plan to complete preventive
maintenance activities.
Convey roads to the City of Newport: Officials of the City of Newport have placed a
set of conditions on the conveyance of the roads which includes preparing a set of as-
built drawings for the water & sewer systems and completing a 2 inch asphalt overlay
on the roads. The total costs could reach $100,000 ($32,000 for the as-built drawings)
and every lot owner would be levied a $3,225 Special Assessment.
The useful life expectancy of the roads would be extended by 15-20 years. Future
repair and maintenance of the roads would be the responsibility of the City, but the City
has a poor track record in this area. The HOA would still have to fund a Future
Maintenance Program for the repair and maintenance of the remaining improvements
within the common areas (retaining walls, parking areas, etc.) The HOA would still have
to maintain general liability insurance for the remaining common area and
improvements. All of the roads would be open to the public and there may be future
parking issues as lots and adjacent areas are developed.
HOA maintains the roads: The Future Maintenance Program as addressed in the
Declaration & By-Laws would be implemented and funded with annual assessments. A
Reserve Study would be completed to establish useful life expectancy and costs for
short-term / long-term repair and maintenance of common area improvements.
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Preventive maintenance work (crack seal/seal coats) would be completed to extend the
useful life of the road; with an assumption of completing a $60,000-$80,000 2 inch
overlay approx. 8 years in the future (the price of oil could drive up the cost substantially
above this estimate). Annual assessments for the road portion of the Future
Maintenance Program would be in the $450-$500 range (undeveloped lots would be
assessed 1/3 the amount). The HOA would not have to pay $32,000 for as-built
drawings as is the case for conveying the roads. There is not much difference in the
cost of general liability insurance whether we have the roads or not. The roads would
be private and the HOA would have more control over future parking issues.
A second option for the pavement overlay is to complete it now as a $55,000-$60,000
Special Assessment of $1,800-$1,950 per lot owner with expectations that the road will
have an extended useful life expectancy of an additional 15-20 years with little or no
maintenance requirements. The HOA would then continue the Future Maintenance
Program to concentrate on the repair and maintenance of the other improvements
within the common areas.
Road Maintenance Options & Assessments
Convey to City Keep & Maintain Keep & Maintain (b)
Description Repair cracks/pot- Extensive repair of Repair cracks/pot-
holes, complete 2” cracks/pot-holes; holes & complete 2”
overlay; and as-built seal coat; complete overlay in the short
drawings. (2009) 2” overlay in 8 yrs term (2009)
Total Cost $75,000-$100,000 $68,500-$91,500 $55,000-$60,000
Special assessment -
Developed lot $2,419-$3,225 $00 - $00 $1,800-$1,950
Undeveloped lot $2,419-$3,225 $00 - $00 $1,800-$1,950
Annual assessment
Developed lot $00 - $00 $450-$500 $00 - $00
Undeveloped lot $00 - $00 $150-$167 $00 - $00
Other Assessments
Annual assessment
for maint.of retaining walls,
storm drains, etc.
Developed lot $175 - $250 $175 - $250 $175 - $250
Undeveloped lot $58 - $83 $58 - $83 $58 - $83
Annual assessment for
general operation of HOA
Developed lot $100 $100 $100
Undeveloped lot $100 $100 $100
Notes:
The costs for conveying the roads are fair-to-high estimates; the costs for keeping the roads are “ball
park” estimates and need to be adjusted when the Reserve Study is completed.
Annual assessments are based on the current mix of 18 developed lots and 13 undeveloped lots; 13 lots
at 1/3 assessment = 4.34 full assessments + 18 = 22.34 full assessment lots.
Additionally, there is an assumption that all 31 lot owners will participate; amounts will be higher if not all
participate.
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Background Information
As part of the original Planned Unit Development for the Harbor Crescent community,
the roads within the subdivision were not conveyed to the City of Newport, but were
kept as private roads for the benefit of the property owners and the HOA. The
Declarant established a mandatory Future Maintenance Program for the specific
purpose of repair, upkeep and maintenance of improvements within the common areas
that included roads, retaining walls, gutters, storm sewers, utilities and similar items.
Additionally, the Declarant established assessments for the funding of the Future
Maintenance Program in the amount of $30 per month for each developed lot and $10
per month for undeveloped lots. The intent of the assessment was to build a Reserve
Fund adequate to repair and maintain all of the improvements on into the future.
It is not known if any of the assessments were ever made to the individual property
owners to start a reserve fund for the Future Maintenance Program as required by the
Declaration and By-Laws starting in 1986. However, at the first HOA meeting of
property owners on December 1, 1990, they voted unanimously to delete the reference
to an initial $30 per month per lot maintenance program assessment in its entirety from
the Declaration and leave the Future Maintenance Program unfunded. They had also
voted unanimously to explore the possibility of conveying the roads over to the City of
Newport, which the City accepted in concept during a City Counsel meeting on March 4,
1991. The Board of Director’s and City officials established requirements to make the
transfer of the roads which included completing as-built drawings of the water and
sewer utility systems. $3,875 in assessments was collected to fund the necessary
survey work but it was never completed, and no other follow-up was completed in the
road transfer process with the City of Newport.
The roads within the Harbor Crescent have remained as private roads to the current
time and no repair or maintenance has been completed. A typical asphalt pavement
road is expected to last between 15 and 20 years without maintenance; the asphalt
pavement roads within our community are 18-20 years old and are beginning to show
signs of wear; surface raveling, longitudinal and fatigue cracking (pot holes) and some
road edge failure.
The condition of our roads are now at a point were preventive maintenance is required
with crack seal and minor pot hole repair. There are some questions as to the
effectiveness of a seal coat application, but this may also be an option for preventive
maintenance of the roads. The Board of Director’s are in the process of establishing the
current condition and useful life expectancy of the roads which will give us a time frame
for when a 2 inch asphalt overlay would be required. (We have attached a short guide
about Asphalt Pavement Repair Options that provides additional detail.)
Reserve Study for Future Maintenance Program
The Declaration and By-Laws for the Harbor Crescent development require that a
Future Maintenance Program be established and that assessments be levied to fund
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the future repair, maintenance and replacement of improvements with the common
areas of the community. Oregon Statute strongly recommends that Planning Unit
Developments established prior to 1999, complete a Reserve Study to ensure effective
funding is in place for asset replacement programs.
Completing a Reserve Study will provide members with additional information on
evaluating the costs of long term assessments for the upkeep and replacement of
improvements such as the roads; as balanced against the costs of turning over or
conveying the roads to the City of Newport.
Typical Reserve Studies are comprised of two parts, the physical analysis and the
financial analysis. The Board of Directors is in the process of obtaining technical
assistance from professionals in road maintenance and retaining wall design and
construction so that we can develop a current condition analysis of the road and
retaining walls. The physical analysis will be used to complete a condition assessment
and useful life expectancy evaluation of the improvements within the common areas of
the Subdivision. The second part of this process involves establishing costs for repair,
maintenance, and replacement of these improvements over a 30 year span.
It is our intent to use the overall Reserve Study to help us to develop the proper level or
amount of assessments for the Future Maintenance Program that will ensure adequate
funding. Unfortunately, 17 years has already gone past in this process when the
members of the first HOA meeting eliminated the original assessment for the Future
Maintenance Program.
The current Board of Directors recognizes the original $3,875 of assessments levied in
1991 as the beginning funds for the Future Maintenance Program or reserve account.
(We have attached a listing of improvements that are contained within the common
areas of the HOA, and which entity is currently responsible for maintenance and repair.)
Status Quo Option
This option is basically a “continue to do nothing” scenario that would not establish an
assessment for a Future Maintenance Program and only complete repairs on an “as
needed” basis. The costs of repairs would be funded by Special Assessments as
addressed in the Declaration and would only be used for that specific repair item/action.
Pros:
There would be no annual assessments for the Future Maintenance Program.
Cons:
Assessments for repair and maintenance would occur on an as-needed basis
and could be a substantial amount.
There would not be a formal plan to complete preventive maintenance activities.
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Convey Roads to the City of Newport Option
The Declaration allows the Association to sell, convey or subject to a security interest
any portion of the common areas upon an affirmative vote of owners representing eighty
percent of the lots or more within The Harbor Crescent. To convey the roads to the City
of Newport, the action would need 25 or more lot owners for approval (31 lots x 80% =
24.8 lots).
Initial negotiations have already been started with City officials with the Community
Planning and Public Works Departments. They have reviewed our past efforts from
1991 and stated that they would recommend accepting our roads to the City Council
(the official entity that would have to approve the conveyance process). The City
currently has responsibility for the water (including fire hydrants) and sewer systems
within the road and common areas.
Transfer of the roads to the City could be handled in two ways: 1) as a formal
conveyance of a public road; or 2) as a road and utility easement. The Director of the
Community Planning Department thought that an easement would work better for our
subdivision. He also stated that there would be no other fees to HOA members (such
as a Service District) for future maintenance if the City accepted the roads.
Conditions that the City would impose for a conveyance:
The City would accept the current road widths plus one (1) foot additional on
each side.
The City has no interest in taking responsibility for maintaining the retaining walls
which are in the common areas.
They would not require additional curbing to be installed along SE Harbor
Crescent Drive.
The City Council might require sidewalks to be installed. If this was the case, the
Community Planning Department would recommend 5 foot wide sidewalks from
Bay Blvd along SE Harbor Crescent Drive (adjacent to Bock 1 Lot 1 /6400) to the
intersection of SE Crescent Place. Once installed the maintenance of sidewalks
will be the individual lot owner’s responsibility.
The Public Works Department would require that the road surface be repaired
(pot holes and possible crack seal) plus application of a 2 inch asphalt pavement
overlay that meets their specifications.
Storm Drains are part of the road system and currently responsibility of the HOA.
If taken over by the City as part of the conveyance, they would require
verification that storm drains are clean and clear of obstructions and in good
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condition. There may be a need to video tape the interior of pipes or conduct a
water test of inflow vs outflow.
As was the case during the 1991 effort to convey the roads to the City, the Public Works
Department would require as-built drawings to be completed by a professional survey
company. The City would require the following for as-built drawings:
Location of all roadways with slope and elevations.
Location of main sewer lines (including manholes) with slope and elevation plus
stubouts and lateral locations to individual property lines. Location of the sewer
main that connects Harbor Crescent system to the Embarcadero system near the
Harbor Crescent Trailer Village.
Location of water lines to meter boxes, plus fire hydrants.
Location of Storm drains with slope and elevation.
They do not need the location of Electric, Gas, and CableTV.
The current water and sewer system is constructed of pvc pipe and the City did
not require that a tracer wire be installed (the City now requires that all pvc
waterlines have tracer wires). The Public Works Department indicated that
locating the water system will require numerous inspection holes be dug in the
roadway to confirm water line locations and depths.
We have obtained initial cost estimates on completing the above conditions and
requirements to convey the roads the City of Newport. The estimate costs are based on
bids from 2-3 months ago and have not been updated for higher oil prices or inflation.
Additionally, the road repair and pavement overlay bid was intended to give as a “ball
park” estimate of what we were up against in determining our costs.
Road and Driveway Co. provided a 30 day bid to sweep, tack and overly an area of
39,000 sq. ft. (without base prep, utility adjustments, traffic control, etc.) for $ 37,355
(dated 03/06/08).
Denison Surveying Inc. provided a wide range estimate of the as-built drawing portion of
the conveyance cost. They recommended a three phase project; 1) DSI to locate/tie
existing “visible” utilities and prepare a Map of Locates; 2) HOA would arrange for a
independent company to locate utilities not found by DSI (inspection hole digging for
water lines); 3) DSI would make survey ties to new locates found in phase 2. Phase 1 &
3 estimate is $12,000 - $17,000 and phase 2 may be $10,000 - $15,000 (dated
2/15/08).
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Cost estimates of conveyance:
$ 4,000 Repair cracks and damaged areas (including road prep)
$ 40,000 Asphalt pavement overlay of road…2 inch thick
$ 4,000 Utility adjustments, traffic control, etc.
$ 32,000 Survey for as-built drawings (possible sharing of expense)
$ 15,000 Sidewalk 300 feet 5 ft wide (may not be required)
$ 5,000 Legal & Recording fees, misc. costs
$100,000 High-end case scenario total ($25,000 possible reduction)
There is a possibility that the City of Newport may share in the costs of providing the as-
built drawings. The original developer, Bill Buchanan of Harbor Construction Ltd, did
not submit adequate as-built drawings to the City during the late 1980’s. There are
questions as to the duo diligence of the City to require Mr. Buchanan to comply; and
there may be some room for negotiations with the City in sharing the cost of completing
the as-built drawings.
Pros:
The HOA would be relieved of future responsibilities and costs to maintain the
roadways.
The useful life expectancy of the roads with repairs and overlay would be
approximately 15-20 years.
Any liability issues relating to the roadways would be the City’s responsibility.
Cons:
Survey work for as-built drawing may cost as much as 40% of the total
assessments; and may have been a duo diligence issue of the City
Obtaining 25 lot owners approval may be difficult.
Conveyance would require a $3,200-$3,500 special assessment to every lot
owner.
Special assessments would be levied equally to all lot owners, whether
developed or not.
Some lot owners may refuse to pay the special assessment and require
enforcement actions from the HOA.
The City has a long track record of not maintaining roads in a timely fashion.
The roads would be open to use as public roads and there may be future parking
issues within the development.
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Conveying the roads would not eliminate the need of the HOA to carry general
liability insurance (there will still be other common area for the HOA to manage).
Maintain as Private Roads Option
This option is fully contained in the Declaration and By-Laws as the Future Maintenance
Program. It is intended to provide annual assessments to establish a fund for repair,
upkeep, maintenance, and the possible replacement of improvements within the
common areas of the Harbor Crescent Subdivision.
The amount of annual assessments for this option is dependent on completing a
Reserve Study that established the remaining useful life of the roads and a
maintenance plan for preventive and repair work. Short-term minor repair costs for the
next 2-3 years are currently within the proposed annual operating budget at
approximately $300 per year for pot-hole repair and limited crack fill. Full-depth pot-
hole repair would require professional work and be more costly in the $1,500-$2,500
range.
Short-term (2008-2009) preventive maintenance would consist of a $3,000-$5,000
extensive crack seal & fill project that would include cleaning out vegetation and dirt
from cracks, routing out larger cracks, and professional application of heated liquid
asphalt (often some form of rubberized polymer-modified asphalt). Sealing cracks in a
road will prevent damage to the roadway base from water entering from the top and it
extends the useful life of the pavement structure. Reported average performance life
ranges from about 4-8 years.
As was previously mentioned above, there are some questions as to the overall
effectiveness of seal coating, but typical application does rejuvenate the flexibility of the
road material and prevents water penetration. Reported average performance life
ranges from about 2-3 years, but may last long since our roadways experience lower
traffic volumes. Other types of sealing, such as slurry sealing provide extended life
expectancy.
We have received an estimate bid from Allen & Sons, Inc. to crack fill and resurface
approx 38,192 sq. ft. of roadway with XLR8 seal coating for $ 6,742.64 (dated
11/13/07). This bid gave us the total area of the project, but may not have included the
dead-end parking area on SE Harbor Crescent Drive.
Long-term maintenance would include a 2 inch asphalt pavement overlay at a point
near the end of the roads useful life expectancy (6-8 years from now). Estimated cost
would be $60,000-$80,000 based on information that Road and Driveway Co. provided
in their bid and projected out 8 years for inflation. Our roads are 18-20 years old and at
the “typical” end of useful life expectancy. The length of extended useful life of the
roads is dependent on the timing and quality of short-term preventive work. A 2inch
overlay may be required much earlier then our current estimate of 8 years.
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A second option for the pavement overlay is to complete it now at $55,000-$60,000 as a
Special Assessment of $1,800-$1,950 per lot owner with expectations that the road will
have an extended useful life expectancy of an additional 15-20 years with little or no
maintenance requirements. The cost of paving is directly proportional to the cost of oil,
and completing an overly soon will be substantially less than 6-8 years from now.
Cost estimates for Maintaining Roads (these figures will be updated as we receive more
accurate estimates during the Reserve Study and information from professionals):
$1,500-$2,500 Full-depth pot-hole repair
($3,000-$5,000) Extensive crack seal/fill project
- or -
$7,000-$9,000 Extensive crack seal/fill project plus seal coat
$60,000- $80,000 2 inch asphalt pavement overlay
$68,500-$91,500 Funds that would be collected by annual assessments for
the road portion of the Future Maintenance Program
It should be noted that the above costs for maintenance of the roads is only one of the
items that needs to be addressed in the Future Maintenance Program of common area
improvements. The other large cost will be maintenance of the retaining walls and to a
lesser extent the storm drainage system. One alternative to maintaining the wood
retaining walls is to systematically replace them with large interlocking cement blocks.
There has even been some discussion on making it a community project to hold down
on the cost. The point being made is that completing the Reserve Study will be critical
in establishing a maintenance plan and setting the proper level/amount of annual
assessment.
Pros:
Assessments are made on an “installment plan” format of smaller increments
over an extended period.
Undeveloped lot owners will be levied at 1/3 the rate of a developed lot.
The HOA has more control over future parking issues.
Annual assessments for the road portion of the Future Maintenance Program
may be in the $450-$500 range assuming that we can get 8-10 years of useful
life on the road before doing a pavement overlay. This amount will be 1/3 for
undeveloped lots.
There is not much difference in the cost of general liability insurance whether we
have the roads or not.
Cons:
We will retain responsibility to maintain the roads into the future.
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We need to complete a Reserve Study to establish the useful life expectancy of
the roads and to establish the funds necessary to provide the maintenance.
We may find that there is only 3-5 years left of the useful life for the road before
we have to do a pavement overlay and have to make additional Special
Assessments to cover the cost beyond what has been collected at that time.
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