Date: July 9, 2025
To the Board of Directors,
As a concerned homeowner and stakeholder in the financial health and long-term sustainability of the Poudre Overlook Homeowners Association (POHOA), I am writing to bring to your attention a critical omission in both the 2020 and 2025 Reserve Studies: the exclusion of the concrete stormwater drainage infrastructure.
Following the standards established by the Community Associations Institute (CAI), reserve components must meet four inclusion criteria:
- Common Area Maintenance Responsibility
- Limited Useful Life
- Predictable Deterioration
- Above Minimum Cost Threshold
The concrete drainage tile clearly meets all four:
- It is POHOA’s responsibility (as confirmed by Director Hammond and not maintained by PID).
- It has a predictable, finite lifespan (~50 years).
- It is already showing signs of deterioration (12 feet currently damaged).
- It has a total replacement value estimated at approximately $792,000, far exceeding any threshold.
Reserve Requirement Calculation
Using industry-standard straight-line funding methodology:
- Useful life: 50 years
- Estimated cost: $150/linear foot × 5,280 ft = $792,000
- Age of system: 21 years (2025)
- Proportion of funding needed to date: 42%
Required reserve for drainage in 2025 = $792,000 × 42% = $332,640
Total Reserve Requirement (including existing assets):
- Existing reserve target: $405,257
- Drainage allocation: $332,640
- Combined target for 2025: $737,897
Current reserve balance (2025): $93,103.29 Total shortfall: $644,794 Per-unit shortfall (87 units): $7,411
Recommendations:
- Immediately revise the reserve study to include the stormwater drainage infrastructure in accordance with CAI standards.
- Commission an engineering evaluation to assess the full condition of the concrete drainage system.
- Adjust budget forecasts and homeowner contribution schedules to reflect a realistic funding trajectory.
- Ensure future reserve studies apply CAI inclusion standards consistently.
The current omission represents both a financial planning failure and a governance risk. The board has a fiduciary duty to plan for foreseeable repairs to common elements. This duty includes transparent and objective application of reserve funding standards.
I respectfully request that this letter and attached calculations be entered into the official record of the July 9, 2025 Board Meeting and that a written response be issued acknowledging the Board’s position on this matter.
Sincerely,
Andy