INFORMATIONAL MEMBER MEETING – June 19,
2010
Member Q&A
June Informational Meeting Minutes
Q & A – Bridge Design, Schedule, & Budget
Q: Who bears the cost of moving the utilities from the north side of the old bridge to the south side of the new bridge?
A: We will.
Q: Why doesn’t the utility company participate – that provides an added amount of security for them. You’d think they’d be signing up along with us and sharing some of that cost.
A: We’ll try. It’s a valid point. We will be asking and we can hope we could get them to do it.
Q: I think they should because they hang their utilities for free on our bridge.
A: That’s a good point. One other thing while we’re talking of utilities, all of the utilities will be moved to the south side of the bridge. There will be spare conduits put in. There will be provisions made to accommodate a pressure line for a sewer system should that ever be required. I think one of the other things that will be up to the membership would be to install the provisions or at least the controls to have cameras put on the bridge for security purposes.
Q: My question has to do with the effects of drilling on the well. If you are drilling that close to the wellhead, well #1 is practically an aquifer; in fact it’s only about 50 feet deep where it’s drilled right now. So, has that discussion come up?
A: Yes, it has. We have asked that question of the engineers and the Department of Health and there was no concern. [Showed picture] This is the end of the existing bridge and here is the well building. The first piles will be driven to a depth of 35 feet almost 4 (existing) bents away from the shoreline.
Q: If you break that well, then you will have to dig another well.
A: Right. We’ve had those discussions and quite frankly, it would be less expensive, if we ran into that, to move the well and drill another because we don’t really have any other option.
Q: Is the elevation of the new bridge pretty much the same as the elevation of the old bridge as far as road level?
A: Yes. Maybe on the east end it changes a little, but it will follow it. If you look at this drawing up here, it’s tucked right under the existing deck. The bents come in and approach under it. It will follow it, but it will be about 6 inches lower when it’s done. For all practical purposes, the bridge has the same profile and the same height off the water. The Corps of Engineers and the Coast Guard don’t care about the elevation, but from our perspective we want the same profile. We don’t want someone from Allyn challenging us in a lawsuit because we cut off the access through there. Since the bents will be 51 feet apart, the access under the bridge will actually be easier.
Q: A couple of meetings ago we had talked about partnership with the state of Washington to try and get specific grants and possibly funding. Has that been looked into?
A: It has been looked into. As a matter of fact last Monday when we met with the Department of Agriculture, they just said there are no grants. We have searched; there have been members of the Board that have searched. We’ve looked at several different funding options, but even if you found a grant it would be a very small percentage of this. The Bridge Financing Committee has been looking for financing and Dan will be speaking about that.
Q: It looks to me like when the bridge is completed and the old bridge is taken out, there’s a very good possibility the bridge could be widened to 2 lanes at a later time. Is that possible?
A: The bridge is designed for 2 lanes plus walking, but that is a question that will go back to the membership. The question will probably be security on the island. If you stripe it with 2 lanes and take the stop lights down, will people just blow on to the island? That’s a decision that can be made later. It is designed to be 22 feet clear and what’s driving that is Mason County requirements and life safety for fire trucks. The county requires the width, but they don’t care if it’s striped for one lane or two.
Q: The design you’ve shown us today looks great. I’m curious to know if the Board considered any other, or made any other requests for comparison purposes or is this the only design that has been pursued?
A: The Board did ask for different types of bridges and we discussed it at a board meeting with the engineers, all the way from cable-stay, to suspension, to floating, and to going to a hundred foot spans. It’s a function of money and basically if you look at comparative costs of these other structures, it drives us out of the park, but yes we did look at that. We did not go through the preliminary designs; we know the basic parameters – it’s an 800 foot bridge and its 24 feet wide - and what’s the most economical way to get across the water.
Q: With respect to tying in with the existing road abutments on the west and east end, is the curvature for getting off the island going to be the same or improved any?
A: Actually it’s improved and that was one of the driving elements when considering the north side of the bridge - it became impossible plus you’ve got to move the utilities. Yes, it will be better.
Q: I’m assuming we’ll get a copy or opportunity to view the budget structure that you have there on the large print out behind you.
A: Yes
Q: I understand that piling has to be installed from the water – barge, crane, pile driver, etc. – will the bridge decking also be installed from the water?
A: Most of the work will be done off the water. I won’t say all, but all the heavy construction will be done from the water. All your concrete planks and pile caps, I’m sure they’ll barge them in from Tacoma. They don’t want to handle them twice. It’s planned so all the major things will be coming off the water. Our bridge itself won’t support a concrete truck – they’re not going to build it 3 yards at a time.
Q: In follow-up to that, I’m wondering if the bridge deck sections were trucked in if there was a place for a lay down and if that would save us any money?
A: No, because again you’ve got the same problem - you can’t bring trucks onto our existing bridge. They’re too heavy to set down. I’ve had these discussions with Quigg Brothers and the limiting factor, the thing we’re trying to stay away from, is the need for large equipment. I don’t know if you remember the size of the cranes that they had out there and their floating platform or barge – I know many of you have seen the big ones that General Construction uses. We’re trying to stay in a range where most of the components of this bridge can be handled with smaller cranes and smaller barges. Everything is planned – there may be a lay down area. That would probably be over at the marina (that’s what the contractor used during the bridge repairs). But I’m sure all the piles will be barged in and they only want to handle them once, the same way with all your major components.
Q: Does the cost estimate include the removal of the existing bridge?
A: Yes it does. The estimate to remove the existing bridge is about $166,000 to $200,000.
Q: You were talking about the storm water – we have to save it and.....
A: Basically, the state regulations for storm water and storm water management are requirements that you have to meet. This is new construction so you have to collect it and treat it and in some instances you have to detain it and meter it out. We won’t have to detain it.
Q: Do we have this in existence right now?
A: No, but this is a new structure and on a new structure you have to come up to full compliance.
Q: Would it be more reasonable if we just put in drains and let it just drain back into the water?
A: It is more reasonable, but the state doesn’t see it that way.
Q: In the future it’s inevitable that the sewer has to go through over the bridge. Would it be cheaper if you would somehow put the pipe in right now?
A: We’re making provisions for that. I commented earlier that we’re making provisions to put in a future pressure line – it would be a pressure sewer line, probably 8 inches; whether we put it in now or structurally we have accommodated for it, that is part of the bridge design.
Q: Could we put the pipe in and cap it at both ends?
A: We could and that’s one of the things we may consider. Either way, the provisions will be there for a future pressure line off the island.
Q: The water is really shallow around there. Are you going to do any dredging to get the equipment in?
A: No that’s up to the contractor to figure out how to do it at high tide. It’s the same thing they did when they repaired. I don’t know if you watched them, but they timed their work areas according to tides and they won’t let us dredge anyway.
Q: What is the effect on the sandbar to the north of the bridge?
A: None.
Q: How do you know that? Will it get bigger, smaller, stay the same?
A: We’ve done a hydrology study and have a report about this thick. I don’t believe there will be any significant or noticeable effect.
Q: Even though the pilings are going to be three times as far apart?
A: They’ll be three times as far apart but there will be 1/3rd of the number of them.
Q: Beginning next year and for the next couple of years there is going to be a lot of construction in Belfair. Is it going to be OK for our project to go on at the same time?
A: I don’t see any reason why not.
Q: I guess I mean there’s going to be massive traffic backups there and is it just going to be the contractor’s problem to get his people there?
A: I don’t think his crew size on this will be that big. I don’t see this project at any one time as having more than 8 to 10 guys there. They’ll be working off of a barge.
Q: A few years ago we had three concepts by Art Anderson. Was it last November that we decided to build a whole new bridge?
A: Yes, it was approved at the Special Member Meeting in November at which the members approved to go for the bridge and they also approved Phase I Engineering.
Q: Will all this information be available on the web site so we can review it - the charts and the drawing and that kind of stuff?
A: We can get most of it on there. Some of the reports are pretty extensive so I’m not sure how much of that can be posted.
Q: Is there any validity to some comments I heard floating around about us needing to purchase some land on the west side?
A: No. What you’re referring to is our property ends right here at the end of the concrete abutment on the bridge. Where this came up was at the Mason County pre-development meeting. We need permission from Mason County to extend the bridge on to their right-of-way. The alternative is to shorten the bridge, but actually that creates other problems because the Corps of engineers and Dept. of Fisheries want the beach restored. Mason County said they’d make it work, but would prefer to vacate the property to us and charge us for it. (I reminded them that the Club had vacated it to the County for $1.) But, there is a state law relevant to if public property comes down to and abuts to a beach, the county can’t vacate it. There was some discussion by attorneys as to whether this is public access or not because of where our property stops. Mason County recently sent word that they will grant an easement so there is no problem there.
Q: Earlier you mentioned something may happen when we’re getting ready to tie into the east end on the island with respect to the wellhead and potential drilling. When will we know if that is a true reality?
A: The east end isn’t a problem. It’s the west end where the road curves in. The east end will come in straight and we have addressed the issue with the well. We’ll encroach about 9 feet on the well site. But the situation in that area will be improved because all the water coming down the hill that goes onto the grass will be directed to a vault and treated.
Q: So what was the issue with potentially having to drill another well?
A: I think the question came up asking if we had considered the encroachment, or how close we would be to the wellhead, and if we had to drill a new well. The engineers and state have looked at this and don’t consider it a problem.
Q: Didn’t Exeltech say that instead of putting the first set of piles next to the well they were going to pour the concrete instead of driving piles?
A: Right. The first piles are 50 something feet out – there’s nothing being driven close to the shore. Actually, the first piles will be about 80 feet away from the wellhead and presently we have them right up against the end abutment. Those will all be taken out of there so all of the creosote piles that are presently there are going away.
Q: Could you address the demolition of the old bridge and what happens to that debris – in other words, where is it going?
A: The demolition will begin after we get the first phase of the bridge in. Second item, I’ll call it phase 2, is to tear out the old bridge. So they have to take the concrete decks off, the rails, and remove all the piles and cross bracing and all of the creosoted material. All the creosoted materials have to be hauled off to a specified site controlled by the state of Washington.
Q: What are they going to do with the concrete?
A: They will probably take the concrete to get it recycled. They grind it up in Tacoma.
Q: Is the water treated at the McClane Cove bridge?
A: I would bet it is – it’s a new structure. You may not notice them because some of the vaults they use look like catch basins with canisters in them.
Q: I’m wondering about the reinforcement at the middle of the bridge, of the piling where the flow of traffic goes under the bridge. Some of those people on the water really drive recklessly. I wonder if that could be reinforced.
A: Well, they will be reinforced. If someone hits that it’s not going to move – they’re 3 foot in diameter, filled with concrete in a steel casing. They wouldn’t make a dent in those.
Q: There should be a speed limit for a certain distance from the bridge from shore to shore.
A: Well right now it is supposedly a ‘no wake’ zone just on the south side of the bridge and it probably should be extended to the north side of the bridge.
Q & A - FUNDING
Q: Has there been any thought given to issuing bonds and selling bonds to some of the residents?
A: That was briefly talked about but we really haven’t explored that too much. You have to go through the registration and the attorney’s expenses and all of those things. It’s certainly something that’s still on our short list, but I think we’re trying to determine probably a cleaner way to do it and to get it done quicker, but we’ll keep that on the list. That was one of the reasons we were also thinking about using the municipality where they could use their bonding capacity and then those bonds could be sold as well.
Q: We all pay county taxes of course and I go for walks all the time – I walk over on Stretch Island and I say what a fine bridge this is and my tax dollars at work no doubt. I’m wondering why the county won’t participate in a bridge that’s going to this island here where there’s probably more people than what Stretch Island has?
A: I don’t have an answer to that. I know some of the others may have talked to some of our elected officials. Maybe they have more input than I do on that question. I think it goes back to us as well in retaining the private structure versus do we want to go away from having it be a privately owned structure to allowing access to anyone that wants to use it.
A2: The County is not interested in taking over that bridge until that bridge is brought up to county standard. We would have to go ahead and pay the $5,000,000 to have a new bridge built and then the county would be willing to take the bridge over, if they can take over the roads also. There are still some catches there. They won’t take over our bridge – Stretch Island is more of a public island.
Q: Those people who cannot afford this increase of payment, how could they ....just walk away without losing too much?
A: I think the question is what happens if the membership votes to go forward with this bridge. Let’s assume for a moment that it’s $5,000,000 and let’s assume for a moment that’s about $20,000 per lot and our assumption would be that we would be financing that, so there would be more dues that would be required. The two lenders that we’re talking with right now see the world a little bit differently. The USDA mainly cares about having the collateral of the bridge. The other, Mutual of Omaha, doesn’t care about the bridge as collateral; they care about you and they care about your property and their ability to lien your property, and if you don’t make your payments, foreclose and sell it. That’s pretty cold I know, pretty straight forward, but I think that’s the answer to your question.
The Board will be trying to figure out ways for those who may need some financial assistance, but at the end of the day I think it’s going to come down to each of us as property owners if we vote to go forward. I’m assuming that it’s not going to necessarily be a one-time assessment, although that could be the option. It’s probable that our annual community club dues are going to go up to service the debt and pay it off over either 15 or 40 years. What happens to those that can’t afford it is unfortunately going to be kind of an individual case; either sell your lot or potentially, maybe in the financing structure, there will be some kind of a facility available for those that can’t pay, but I think that’s going to be pretty difficult to do personally.
Q: Will there be an option to prepay – rather than paying over the 40 year term?
A: We’ve talked about that at the meetings as one of the options that could be available; for those of us who don’t want to pay it off over time, that we could pay that roughly $20,000 and get it behind us. A word of caution that I would have for any of us to do that is that ultimately the association is going to be responsible for the debt; that still makes us all responsible for the debt. So, my concern would be that you may choose to make your $20,000 payment, but someplace down the road, if the Club defaults and we can’t get enough money to make those payments, they’re probably going to come after us as individuals and then have the ability to lien all of the properties. We will be hiring attorneys and we’ll look at all those options. So in answer to your question, I think one is yes, but I think we all want to think that through before we say we want to do that. A lot of that will come down to how we are able to structure it and what the loan looks like and those kinds of things.
Q: I’m mainly coming from a prospective of if the property changes hands. In other words if you want to sell your property, this ongoing payment is going to be an issue.
A: One of the things that lenders look at is the amount of the dues. The lenders were concerned when we talked with them that our dues are so low here. All of a sudden the financial expenses are going to go up quite a bit. I mentioned that at a 15 year term, it would cost about $2,000 per property each year compared to the current $450, so that’s a big jump. They did say they would waive that concern as long as the payment, the dues, would be less than $3,600 a year per property.
My assumption would be that if somebody were to buy your property, in the disclosure they would have this payment of dues that would be required.
Q: I understand what you’re saying – you’re saying that the Treasure Island Association is the one that’s taking out the loan and that we recoup by assessments on a monthly basis. The loan doesn’t go directly to the individual property owners. My question is that I think our bylaws provide that if somebody is in arrears for assessments, they are then subject to foreclosure. Does the Board have the fortitude to follow that through? That would certainly discourage people from standing aside and not paying their assessments.
A: Right. But that is one of the key things that the lenders want to look at. They want to make sure – especially Mutual of Omaha as I mentioned – they cared more about the cash flow from us than they cared about the bridge. They just want to verify that that’s true, that we have that ability to foreclose, and then the assumption is that the Club could then not only lien it, but could foreclose if needed.
Q: Could you discuss the rest of your schedule, kind of dove tailing it with the construction schedule?
A: Basically, November 14th, 2009, at our Special Meeting, members gave us the authorization to move forward with Phase I – this just tells all the activity. • June 15th for permits – we are in actually, or at the end of next week, we will be in on all our environmental and what they are is long term permits. • July – provide order of magnitude or cost estimate; we already have that. • Annual Membership Meeting – present final bridge design concepts, which we’re doing at this meeting; present project budget which we’re doing. Bridge and environmental update – we’re trying to do that at this meeting but if there are questions at the Annual Meeting we certainly will address them. Authorization to proceed with Phase II engineering and permit documents – that’s going to be requested if the membership wants to keep this thing on track. The Board will put it out for approval from the membership if they want to go to Phase II. Phase II keeps the engineering going. If you don’t vote to go ahead, the project stops. The environmental permits will go on, we’ll conclude those, but everything will stop beyond that. Provide Finance Options – I think at the annual meeting we’ll probably be further along because we have two applications in. Omaha has actually responded and given us a response to our application asking for more information. I think with the Dept of Agriculture our target date is July 15th to be in on that application. A requirement of that (we met with a representative from the Dept of Agriculture last Monday) is that because it’s public funds, we have to advertise in the paper and we will have to hold an informational meeting for anybody that wants to attend. I think what Dan was talking about, what it means for public access, we do know that we’d have to take down the No Trespassing sign and you couldn’t gate the community; beyond that we really don’t know. This is something the attorney would have to tell us – we’d still own the bridge but there is public access on a lot of communities, they fund things, and this is just something that we have to find out. We think we’re OK but we don’t know. Provide Finance Options and Approve Concepts – in other words the concept drawings that we’ve gone with. The Board actually has approved the concept drawings – I think it was at the May meeting. • November – actually if you authorize the Phase II engineering, in November we will be into permits. We’ll probably be in for final permits. These are construction documents – these are the final permits to go to Mason County like you’re building a house. Those will be in and we’d be in a position because once we have those documents in February of 2011, we would advertise for bids from general contractors, go through the selection process, and in March we would be in a position to select a contractor – and again this is contingent upon two things. One, that you approve of going to the next step to keep the engineering going; if not, again, we stop. • In March there would be another meeting called and there may have to be one before that. If we get the financing in position, Mutual of Omaha has a 6 week turn around once we get our final documents in – so for the Board to accept any proposals from Omaha, the membership would have to approve. That isn’t listed here, but that could occur in August and I’ll talk about that in a minute. • April 1st would be our target date, if the membership approves to go forward, to have a contractor on board and award a contract. Again, March 15th to June 15th they can’t work on the water but he can be working to get his materials, get everything ready so he’s off and running June 16th. • June 16th Commence construction in water – we figure 9 months so March 2012 the bridge is done.
Just one comment in terms of some of the discussion that the Board has had, Dan wasn’t involved in these discussions, but the question about it being possible to prepay….we haven’t got the attorney in this thing yet. It would have to be that if you prepaid that you’re out of the deal. But, if that happens, you won’t be able to prepay until the bridge is done because you won’t know the final cost – that’s the time that you would be doing that. The Dept of Agriculture is a long term loan; they will not do construction lending so that’s why we’re still talking to Omaha about a construction loan. So at the end of the construction, when you have all your costs on the table, you would convert to a permanent loan and if there were people that prepaid, the loan amount would go down by that amount.
Q: If the association is the one that’s taking out the loan and we, all of the members, are responsible for it uniformly and equally, those who paid in advance would have to in fact share in the interest and costs for the long term financing.
A: If someone were to pay (and let’s just use round numbers) $20,000, would they still be liable – as I mentioned, we don’t know yet. That all has to be determined on what the lender will allow and what we can structure. I just raised that as a cautionary thing. Obviously before I would write a check for $20,000 I would want to make sure that I would be excluded. That would have to be disclosed so you would know up front what the rules were.
Q: We don’t have any insurance on the current bridge. Are we going to be able to get insurance on a new bridge and is it required?
A: Different lenders have different requirements. In the case of the Mutual of Omaha, they’ve only told us they don’t really care because they’re going to look to the association and the property values and ultimately those payments. And so I know that one lender said they don’t care that much.
A2: We could get insurance on the current bridge except it would only be insured for about a million dollars because it’s a wood bridge and in very poor condition. It’s rated as a two type bridge in the state of Washington and the only lower scoring is a one, so the insurance companies did not want to write a policy on a replacement cost basis. What we’re going to have is a concrete bridge and yes, I believe we will be able to get insurance on the new bridge.
Q: It seems to me the USDA loan would be a better deal in some ways but my concern is with all the changes in banking and real estate laws and all the concerns that you mentioned that they’re concerned about non-profits and all that. It has even affected our abilities as individual homeowners to get a loan because I was told because of the first lien rights of the association that I can not get a home loan.
A: It changes. That’s all I can tell you. I think one of the benefits of the USDA is it’s a 40 year loan and that would keep the payments low. There’re two schools of thought. One is let’s pay it off as fast as we can – those are going to be issues that we’ll have to deal with as a membership. But I will tell you, banking laws are subject to change.
Q: I’ve consulted attorneys about this and they say the laws have changed and perhaps the language should be changed in your Homeowners Association Laws (and even suggested a language change). But then I’m told nothing could change because of the precedence of the bridge. Of course your loan comes first, but it impacts all of us because we have to have the bridge or we can’t get here, but if we can’t get loans we can’t buy or sell.
A: What are you referring to?
[First lien rights - She’s saying that she can’t get a loan because the Club has to retain first lien rights on assessments.]
A: That’s up to the lender quite honestly. I’m not aware of any national law that came into effect that you mentioned – I think it’s more of a lender issue.
A2: Those are legal issues and we will be checking into those further with our attorneys. Mutual of Omaha gave us the names of some attorneys in Seattle that specialize in the practice of Homeowner Association Law. We want to make sure that all the questions are asked and answered. We’ll ask your question. It does affect all of us and we need to be aware of what the situation is – we will bring your issue and all the other issues up with the attorneys.
Q: With a vote coming up in July as to whether to continue with the new bridge construction or not, I think there is a financial issue. Can you tell me please, the $20,000 per lot cost over 40 years – what does that $20,000 become roughly?
A: About doubled - $40,000. If we were able to get the 4.25% from the USDA, that’s about $1,041 per year so that times 40 years would be about $40,000.
Q: So some people might think ‘why would I want to pay $40,000 and burden my family that will continue on with the property afterwards, when I can get rid of that for $20,000’. So if you tell me I can’t do that, I’m going to vote against continuing with the bridge because it will cost me an additional $20,000.
A: The idea is to provide all of the flexibility that is possible for all of the owners.
Q: We’ll have a new bridge at some point and it will require some maintenance in the future and currently it has to be insured. I’m wondering why it’s in our best interests to retain ownership of the bridge so that we have a private property sign and the capability to gate it and I don’t see that happening. So if the county were to take the bridge, could they not maintain it and insure it.
A: That’s an issue that we can address when the bridge is built. Currently, the county will not take over the bridge that we have. So after we finish construction, then as members we can all vote and say if we want to give it to the county and what are the catches that come with it – the roads, the water – and we decide as a group how we’re going to handle that.
A2: The other issue with that is if they were to take it – they don’t want it at this point – it wouldn’t be just the bridge. It would be all the roads on the island and they would increase the right of way to 60 feet – its 40 feet now – and that becomes problematic. You’d probably have to open up the dock to public use. So, the discussions have occurred and right now it isn’t even an option on the table because the county doesn’t want to talk about it.
Q: If we vote on the additional Phase II what would the assessment for the property owners be to finance this?
A: The assessment for $206,000 is about $800 per lot and what the board has discussed is to propose a payment of $400 in October and $400 in January. That would cover Phase II engineering. It would put all of our permits in place and if for some reason financing got deferred, permits are extended out for two years and you can get extensions on those.
Q: Would that be an addition to the assessment that we had for Phase I?
A: The assessment for Phase I is gone – you’d have to vote on another assessment to do Phase II.
Q: If the alternative with funding, if we get funding assistance, puts individual homeowners who are willing to pay their assessment up front but they still have possibly some risk that they’re still going to be liable if the association defaults. Do I understand it correctly that maybe we shouldn’t even be considering that – that it should be a requirement that it is a mandatory assessment of the homeowner and everybody is on their own – you get your own financing. That’s the alternative that I see.
A: I think it’s a little early to make that call. I think we made an assumption from the annual meeting last year that probably most people did not want to go out and get their own $20,000 loan – that we’d be better off allowing those that chose to do that have that option and then the rest would probably be financed through the association and be on the annual or monthly or quarterly assessment.
Q: But what I hear you saying is that if I do go out and get my own loan and I want to pay it up front that I might still be liable for the association.
A: Right and that’s – we don’t know the answer to that yet. I only raised that as a caution that it’s just something that we have to resolve so that we would know that so you could make a decision.
Q: I will not be in a position to vote for this to move forward unless that answer is known.
A: We understand that
Q: One thought I had – Roger just lightly touched on it and we’ve been talking $20,000 per lot, but that’s really from what I understand the way you’ve put the numbers together Roger – that’s a not to exceed. What we could be assessed could be something significantly less with the 20% with the bids coming in and contractor’s efficiency so….
A: This is an order of magnitude estimate and I’m not going to say that I’m right – I’m not going to sign it in blood. You know we’ve done everything possible to tie down the number and hopefully we can improve on it.
Q: I know that, but moving out today is a lot smarter than moving out a year from today – this cost is going to go up.
A: Well not only the cost of the bridge is going to go up, but if you look at the projections on the maintenance of the bridge it’s going to start escalating not in $5,000 or $10,000 increments, it’s going to be hundred thousand dollar increments and that’s moving at us from the back side. I think I commented in November that if we don’t do anything in 5 years you won’t be able to bring a fire truck across, propane trucks, garbage...and it’s going to go downhill from there. Probably in ten years, if we don’t do anything, get golf carts. The bridge is in serious condition and I think the acceleration on this with the window of opportunity we’re talking about – the other benefit is we’re not trying to spend any significant dollars on the bridge. Each year this is going to come up and we’re trying to keep it safe.
Q: I’m making an assumption that contingencies are definitely built in, that’s obvious, and you mentioned up front that the current construction, a lot of the construction projects that you were talking about that you compared with have come in under budget because things were a little favorable. So I’m making the assumption that if we did get to a situation where we prepaid and we came in under budget, either there would be an agreement that unused budgeted amount goes into the general fund or the phasing assessment period and covers other things for the association, or the agreement would be made up front at the time of the vote that the monies would come back somehow calculated out. We need money for our construction right?
A: Let me walk you through that. You don’t know the number for the assessment – let’s say you want to make it in one payment as long as you’re not responsible for the rest of us. But you don’t know what that amount is until we’ve completed the project. So the way it will work, hopefully, is that we get a construction loan; the construction loan will have interest expense built into it, so we won’t have to actually assess the membership. Hopefully, that’s what I’m shooting for, that will be part of the expense of the construction phase. So we get all done and everything floats to a permanent loan; then we take that total amount and divide it by 251 lots into whatever that amount is – then your payment would be $17,242 or whatever that amount is.
Q: So a lender will give us the money and let us do our nine months of construction before we have to collect a dime from the association
A: That’s the way it has always been in the past – right now the only reason I’m cautionary is because again lenders aren’t collecting that as much as they used to – but its pretty typical because they’re still looking to us; the association is going to be on the hook during the construction phase, but no that’s pretty typical - that’s the way a construction loan usually works.
END
June Informational Meeting Minutes | Bridge | TICC Board | Home