Wellington Farms Homeowners Association (WFHA) Fence Forum

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Wellington Farms Homeowners Association
(WFHA)Fence Forum

• September 16, 2008
• WFHA Board of Officers and Directors
• Deanna Kaufman, President

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Agenda

• Project Background
• Statistics and condition of current fence
• Contributing causes of deterioration
• Proposed project
• Frequently Asked Questions
• Fence Focus Group
• Objective and timeline
• Replacement options considered
• Wood, brick, and brick entryway bids and budget
  estimates
• Frequently Asked Questions
• Financial Considerations
• Estimated all-up budget, wood and brick
• Sample financing over 5 years (ESTIMATE)
• Financing vs. saving up
• WFHA Revenue/Expense (FY05-FY07 actual FY08
  budget)
• WFHA Savings Allocation (FY05-FY07 actual FY08
  budget)
• Use of existing savings
• How homeowners might be assessed
• Frequently Asked Questions

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Project Background

• Statistics
• Our fence is more than 6,100 linear feet (Thats
  more than a mile!)
• Encompasses north and south side of Wolf River
  Blvd. and the north side of Shelton Rd. around
  phases 4, 5A, 5B and 6-10
• Condition of current fence
• Rotted
• Misaligned
• Not properly attached to posts and columns
• Damaged by storms, wear and tear, and unintended
  abuse

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Project Background

• Contributing causes of deterioration
• Age
• Weather events (Hurricane Elvis etc.)
• Landscape maintenance of common areas
• Homeowner causes
• Yard drainage
• Lawn mowers/weed eaters
• Landscaping
• Improper use (hanging items on fence, allowing
  other objects to rest on fence)
• Pool installations

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Project Background

• Proposed project
• Replace existing fence, at least in kind, as soon
  as necessary
• If fence project proceeds, include two pairs of
  missing brick entryways planned but not built

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Project BackgroundFrequently Asked Questions

• Why does the fence have to be replaced?
• The current wooden fence has deteriorated over
  the years due to age, normal wear and tear,
  weather events, and some unintended abuse. At
  some time the fence will have to be replaced in
  its entirety.
• Why not replace the fence bit by bit rather than
  try to replace it all at once?
• The Town of Collierville strongly recommends
  replacement of the entire structure at once to
  maintain a uniform appearance for a subdivision.
• Replacing the fence bit by bit saves financing
  costs but the trade offs are higher prices due to
  inflation and lower purchasing power (buying less
  fence at one time).

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Project BackgroundFrequently Asked Questions

• How can we make a new fence of wood last as long
  as possible?
• All homeowners share in the responsibility to
  keep our common assets in good repair to ensure
  the longest possible life. To that end,
  homeowners who live directly on the fence must
  pay particular attention to
• Refrain from fixing drainage problems by routing
  water that then stands at the fence, quickening
  rot
• Resolve any current standing water situation
  caused by attempts to fix drainage problems
• Use care with lawn mowers and weed eaters to
  lessen damage to fencing
• Control landscaping so that features do not rest
  on or against the fence (trees, shrubs, garden
  soil, rock features, etc.)
• Avoid using the fence in improper ways (hanging
  items on the fence, allowing objects to rest
  against the fence indefinitely)
• Not remove fencing to facilitate building
  additions or pool installations

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Fence Focus Group

• Objective Conduct unbiased fact-finding with no
  preference given to wood or brick
• Review options for fence replacement
• Solicit bids using standardized request for
  quotation
• Complete apples to apples comparison (normalize
  bids ensuring valid comparison)
• Consider funding options
• Timeline
• November 2006 Community volunteers solicited at
  annual homeowners meeting to form focus group
• Summer 2007 Options reviewed and bid
  solicitation
• Fall 2007 Service provider presentations to
  focus group and board
• Winter 2007-2008 Bid normalization/confirmation
• Spring 2008 Financing options explored

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Fence Focus Group

• Replacement options considered
• Wood
• with new style cap as requested by Town of
  Collierville
• Brick

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Fence Focus Group Bids/Budget Estimates
Please note that these are ESTIMATES only for our
information, no contracts have been signed to
proceed and given the age of the proposals would
require another request for quote.
WOOD FENCE QUOTATIONS Vendor A VendorB Vendor C
       
Cost Quoted 159,701.40 139,044.60 145,410.00
Measured Linear Feet 6,140 5,722 6,550
Cost Per Linear Foot 26.01 24.30 22.20
       
Average Linear Feet 6,137 6,137 6,137
Average Cost per Linear Foot 24.17 24.17 24.17
       
Estimated Wood Fence Budget 148,331.29 148,331.29 148,331.29
Vendor names can be released to interested
homeowners upon request. We are not publishing
vendor names at this point to keep bidding fair
and not give any vendor the impression we are
starting work since no decisions to proceed have
been made.
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Fence Focus Group Bids/Budget Estimates
Please note that these are ESTIMATES only for our
information, no contracts have been signed to
proceed and given the age of the proposals would
require another request for quote.
BRICK FENCE QUOTATIONS Vendor D Vendor D Vendor E VendorF
         
Cost Quoted - Brick Fence 646,600.00 646,600.00 625,720.00 Unconfirmed
Measured Linear Feet 6,140 6,140 6,140 Unconfirmed
Cost Per Linear Foot 105.31 105.31 101.91 Unconfirmed
         
Average Linear Feet 6,140 6,140 6,140 6,140
Average Cost per Linear Foot 103.61 103.61 103.61 103.61
         
Cost Quoted - Brick Columns 22,980.00 24,000.00 24,000.00 Unconfirmed
         
Average Brick Column Cost 23,490 23,490 23,490 23,490
         
Estimated Brick Fencing Budget 659,655.40 659,655.40 659,655.40 659,655.40
Vendor names can be released to interested
homeowners upon request. We are not publishing
vendor names at this point to keep bidding fair
and not give any vendor the impression we are
starting work since no decisions to proceed have
been made.
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Fence Focus Group Bids/Budget Estimates
Please note that these are ESTIMATES only for our
information, no contracts have been signed to
proceed and given the age of the proposals would
require another request for quote.
MISSING BRICK ENTRYWAY QUOTATIONS (2 Pair) Vendor D Vendor E Vendor G
       
Cost Quoted 73,560.00 58,000.00 93,236.00
       
Estimated Entryway Budget 74,932.00 74,932.00 74,932.00
Vendor names can be released to interested
homeowners upon request. We are not publishing
vendor names at this point to keep bidding fair
and not give any vendor the impression we are
starting work since no decisions to proceed have
been made.
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Fence Focus GroupFrequently Asked Questions

• How will the safety of my children and pets be
  ensured while the fence is torn down for
  replacement?
• The service providers responsible for installing
  the new fence are required to provide temporary
  fencing in the interim for the brief period of
  time the fence bordering your home is down.
• Please note that the fencing is not durable and
  you will need to exercise care to be sure your
  children and pets are protected and do not leave
  your yard unattended.

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Financial ConsiderationsEstimated all-up
budget, wood and brick
  Wood   Brick
Quoted Costs      
Main Fence Replacement (based on averages) 148,331.29   659,655.40
Install Missing Brick Entryways (based on averages) 74,932.00   74,932.00
  223,263.29   734,587.40
Estimated Additional Costs      
Inflation (10 over Costs Quoted in 2007) 22,326.33   73,458.74
Signage 12,000.00   12,000.00
Architect/CAD/Permits 5,000.00   30,000.00
Landscaping treatment (required for entryways) 5,000.00   5,000.00
New lighting (required for entryways) 10,000.00   10,000.00
Arborist/Tree Restoration (required for brick) 0.00   20,000.00
  54,326.33   150,458.74
       
Estimated Reserve for Cost Overruns (10) 27,758.96   88,504.61
       
Total Estimated Budget (SUBJECT TO FINALIZATION) 305,348.58   973,550.75
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Financial ConsiderationsSample financing over 5
years (ESTIMATE)
  Wood   Brick
       
Basic Terms      
Amount Financed (SAMPLE) 325,000   1,000,000
Loan Length in Months 60   60
Interest Rate (quoted by BankTennessee) 7.5   8.5
  Note higher financed amount carries more risk and results in a higher rate of interest      
Homeowner Impact      
Monthly Note Payment (Principal and Interest) 6,011.40   20,516.53
Monthly Homeowner Cost (375 homeowners) 16.03   54.71
Annual Homeowner Cost (375 homeowners) 192.36   656.53
       
Cost of Financing      
Total Paid out Over 5 Years 360,684.00   1,230,991.80
Interest Paid 35,684.00   230,991.80
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Financial ConsiderationsFinancing vs. saving up

• Financing
• Can implement replacement project on shorter
  notice if needed
• High turnover neighborhood considerations
• Contribute as little as necessary for time here
• Conveys benefit of use while part of community
• Incurs cost of financing as a trade off to secure
  lower project costs (due to inflation)

• Saving up
• Delays project until all funds are available
  regardless of need
• Neighbors here for a short time contribute but
  may not get use of new fence
• Avoids financing costs and increases fund through
  interest on savings but incurs higher project
  costs (due to inflation)

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Financial ConsiderationsWFHA Revenue/Expense
Revenue / Expense Type 05 Actual 06 Actual 07 Actual 08 Budget
         
Receipts 53,762.72 53,546.00 59,926.12 63,750.00
Interest 610.53 689.00 900.64 1,000.00
         
Total Revenue 54,373.25 54,235.00 60,826.76 64,750.00
         
Common Area Upkeep 29,920.98 39,055.00 40,418.13 45,050.00
General Administrative 9,323.92 5,669.00 6,198.36 6,734.44
         
Total Expenses 39,244.90 44,724.00 46,616.49 51,784.44
         
Year Over Year Expense Increase   14.0 4.2 11.1
         
Cash Additional 15,128.35 9,511.00 14,210.27 12,965.56
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Financial ConsiderationsWFHA Savings Allocation
WFHA Savings 05 Actual 06 Actual 07 Actual 08 Budget Cash Balance
           
Cash Balance 50,987.98 60,498.98 74,709.25 87,674.81  
           
Required Reserve (Bylaws)       10,000.00 11.4
           
Full Year Expenses (Average last 4 years)       45,592.46 52.0
           
Remaining Available Toward Fence Replacement/Repair       32,082.35 36.6
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Financial ConsiderationsUse of existing savings

• At end of FY08, estimate 30,000 free savings
  (not allocated to mandated reserve or one years
  expense)
• Contributing all or most of savings to project
  may increase risk of missing note payments due to
  slow collection of fees
• Some level of savings should be held in reserve
  against slow collection to guard against
  default/penalties in case financing is sought

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Financial ConsiderationsHow homeowners might be
assessed if community elects to proceed

• Suggest an annual assessment annually in March
  (Spring) for entire years worth of fence
  payments concurrent with start of any fencing
  project (year TBD)
• Annual assessment of loan payments
• Ensures collection can be done in a timely manner
• Provides further protection against default other
  than WFHA savings
• Are placed at opposite time of year from annual
  maintenance fee assessments to spread out
  financial burden

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Financial ConsiderationsFrequently Asked
Questions

• Why do the homeowners have to pay for the fence
  to be replaced?
• Collierville, TN neighborhoods, particularly
  those developed in the last decade, are primarily
  organized into associations for the express
  purpose of maintaining their communities. As
  such, the association is responsible for capital
  assets such as the fence that surrounds our
  phases and the brick entrances located at most of
  our entrances. These assets belong to the
  Wellington Farms Homeowners Association to which
  you belong if you reside in phases 4, 5A, 5B or
  6-10 of Wellington Farms.
• Can those homeowners directly on the fence line
  pay for all of it?
• Bylaws for homeowners associations require that
  all homeowners are treated the same all
  homeowners must be assessed the same as others
  for expenses or capital improvements done in
  common for the good of the neighborhood.
• Individuals may be charged separately for
  repairs for any damage done to common property
  such as damage to our irrigation system when a
  pool is installed.

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Financial ConsiderationsFrequently Asked
Questions Revised Based on Community Feedback
from Fence Forum

• How will the decision be made on material and
  funding?
• Decisions regarding the management of the
  homeowners association is delegated to your
  representatives by you and your fellow homeowners
  when they are elected at our annual meeting in
  November.
• Because of the sensitive issue associated with
  the costs of any kind of capital project to
  replace the fencing, the board members suggest
  that in 2009 the issue be put to community vote
  on a variety of options, including doing nothing
  to replace the fence itself, with results to be
  published on the homeowners association website.
• The current (2007-2008) board further recommends
  that subsequent boards conduct similar periodic
  votes with regard to capital projects and post
  results for the communitys review before
  proceeding.
• What happens if I dont want to pay special
  assessments associated with a fence replacement
  project?
• All homeowners are required to pay both the
  annual maintenance fees as well as any special
  assessments levied by the homeowners association.
  If a replacement of the fence is undertaken and
  financed a special assessment would be required
  to meet financial obligations.
• When some of your fellow homeowners do not pay
  their annual maintenance fees, and after a
  reasonable collection effort is made, a lien is
  placed on their home until the monies are
  collected. When a lien is filed, the costs are
  increased to include the fee, late fees, and any
  legal costs incurred. Lifting the lien requires
  payment of the entire lien amount.
• The same process of placing liens will be
  followed for non-payment associated with any
  capital project like fence replacement.

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Comparison Wood vs. Brick Replacement

• Wood
• Pros
• Cost
• Offers upgraded appearance for some period of
  time
• Cons
• Requires more frequent replacement
• Weathers quickly
• Vulnerable to damage (storms, people)
• Higher annual maintenance (approximately
  3,000/year)

• Brick
• Pros
• Longevity/sturdier
• Lasting upgraded appearance
• Reduced maintenance costs
• Cons
• Requires new foundations which in turn requires
  architect and arborist
• Cost

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Suggested Next Steps Revised Based on Community
Feedback from Fence Forum

• The current board suggests that 2008-2009 board
• Undertake a community survey (vote) via mail to
  determine the will of the community in this
  matter, providing various questions and options
  for consideration
• Conduct the survey using postage
  paid/pre-addressed return envelopes to drive as
  far as possible to 100 participation
• Publish results of survey for community review
  and act accordingly
• If based on the communitys will the board
  proceeds with fence replacement, specific steps
  to complete a project of this nature would need
  to be undertaken including but not limited to
• Soliciting the community for a project manager
  who has expertise in this area
• Re-confirming quotes and selecting providers
• Determining final budget
• Determining how project will be funded
• Proceed with work, with expected time to do a
  replacement project in its entirety estimated at
  2-3 months
• If based on the communitys will the main focus
  of replacing the fence itself is not undertaken
  at this time the following actions be followed
• Re-survey the community from time to time
  (annually for example) to determine will of
  community in the matter
• Review and make recommendations on what
  beautification projects might be undertaken
  funded solely out of current savings

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