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HomeMy WebLinkAboutagenda.council.worksession.20150929 CITY COUNCIL WORK SESSION September 29, 2015 4:00 PM, City Council Chambers MEETING AGENDA I. Next Generation Interviews II. Next Generation Mentoring Program Proposal III. Residential Design Standards IV. HOA Capital Reserve Policy Update P1 I. P2 I. P3 I. P4 I. Aspen Next Generation Advisory Commission Annual Survey Report2014 P5 II. P6 II. Background & Methodology Results Table Of Contents Executive Summary.................................................1 Who We Are: Why We Survey...................................3 Introduction...........................................................4 Methodology, an Overview.......................................5 Findings Overview...................................................7 Trends and Takeaways............................................8 Our Participants...................................................10 Difficulties to Living In Aspen................................13 Difficulties to Working in Aspen.............................19 Contact.........................................................23 P7 II. Executive Summary Purpose The purpose of the survey is to better understand the challenges perceived by those in the 18-40 demographic that wish to live and/or work in the Aspen area (defined by the borders of the Aspen School District; hereafter “in Aspen”). During its fall work sessions, the Commission identified a list of factors it believes limit the younger demographic’s ability to remain in Aspen long-term. The survey is a tool to “ground truth” this list, identify gaps in the list, and prioritize factors based on their importance to the 18-40 demographic. Results Respondent Characteristics • Rooted in Aspen: More than 60% of respondents reside in Aspen; of these, 47% have resided in Aspen for more than 5 years. • Strong earners: Over 30% of respondents reported a household income of greater than $100,000. • Family focused: While nearly 80% of respondents do not currently have children, 65% of respondents indicated that they hope to have children in Aspen. 1 Methodology To participate in the study, respondents had to meet 2 criteria: (1) be 18-40 years of age, and (2) live and/or work in the Aspen area. The survey was 15 questions long, available in English and Spanish languages, and in electronic (Survey Monkey) and hard copy formats. The hard copy version of the survey is attached as Appendix A. The survey was designed and analyzed in collaboration with a local statistician. Spe- cific statistical methodology is discussed in the report. Of the 247 surveys submitted, only 150 were fully complete. Only two Spanish surveys were submitted (both online), but neither was fully complete. Multivariate statistics included complete surveys only. P8 II. Executive Summary Analysis • Residents and nonresidents agreed on the top 3 factors limiting their ability to live in Aspen. • Housing, Poor career/business opportunities, and low wages/benefits were se- lected by the greatest % of respondents for both “living” and “working” questions. • Notably, 18% of residents and 38% of nonresidents identified childcare in their top 3. • Given the opportunity 92% Aspen residents and 83% DV residents would like to live here long-term. 69% of current residents would like to have children and raise a family here. 64% of down valley residents who want to live in Aspen long term would like to raise a family here as well. Results Factors • Housing is the primary concern limiting ability to live in Aspen long-term. • Wages/benefits, poor career/business opportunities, and childcare are also im- portant limiting factors across individuals living and working in Aspen. 2 Final Observations Survey results are limited by the small sample size and under-sampling of the Spanish- speaking demographic and those working for seasonal and/or hospitality-based employers. Despite these limitations, respondents’ answers provide a strong indication that housing, economic sustainability, and childcare are among the top factors limiting our demographic’s ability to remain in Aspen long-term. P9 II. Who We Are Mission Statement Why We Survey To advance the policy interests of the 18-40 year old demographic who live or work within the Aspen area. A survey is one tool that can be used to effectively identify, understand, and prioritize policy issues. The Commission plans to periodically issue short, focused surveys to better understand the perspective of the 18-40 year old demographic on specific and topical policy issues. 3 Our Long-term Goal The most fundamental hurdle to realizing action in our demographic is apathy, the feeling that one’s voice has no impact and thus need not be spoken. In allowing a public survey to be a primary driver of our annual agenda, leading to tangible results, we hope to catalyze government participation. P10 II. Introduction Purpose The purpose of the survey was to understand the challenges perceived by those in the 18- 40 demographic who wish to live and/or work in the Aspen area (defined by the borders of the Aspen School District; hereafter “in Aspen”). During its fall work sessions, the Com- mission identified a list of policy issues it believed were important to its demographic. The survey was a tool to verify this list and prioritize the issues identified as most important. The survey focused on the following areas: 1. For those respondents living in Aspen: what factors limit their ability to live in the Aspen area long term? 2. For those respondents not living in Aspen, but wanting to live in Aspen: what factors limit their ability to reside in Aspen? 3. For those respondents working in Aspen: what factors limit their ability to work in As- pen long term? 4. For those respondents not working in Aspen, but wanting to work in Aspen: what fac- tors limit their ability to work in Aspen? Additionally, demographic factors were collected for each respondent for comparison against Census-based demographic data for weighting in the analysis, if necessary. 4 Scope/Qualifying Criteria We identified 2 key criteria for participation in the study: age and a significant connection to Aspen. To qualify, all participants were required to both: 1. Be between 18-40 years of age, and 2. Live and/or work in Aspen. P11 II. Methodology - Overview Survey Structure and Questions We developed the survey in collaboration with a local statistician experienced in survey design. We also consulted with the City of Aspen and several local employers during survey revisions. The survey was 15 questions long, including qualifying criteria and demographic data. It was available in two languages (English and Spanish) and in electronic (Survey Monkey) and hard copy formats. The hard copy version of the survey is attached as Appendix A. Primary questions focused on identifying, prioritizing, and contextualizing major policy issues affecting the 18-40 year old demographic’s ability to live and/or work in Aspen. Other questions gathered information on relevant demographics (e.g., town of residence, sex, income, children, years living in Aspen, years working in Aspen) and aspirational (e.g., wanting to live/work in Aspen long term, wanting to have children while living in Aspen) thought to have substantial impacts on responses. Survey Distribution In fall 2013, Commission members contacted representatives from large local employment sectors including hospitality (hotels and restaurants), skiing, education, and nonprofit. When permitted, we provided representatives with survey details and links, which they were asked to distribute to their employees. The Commission also offered hard copy surveys to attendees of its January 14th Meet & Greet Mixer at Aspen Brewing Co. The survey was open for approximately 2 months, starting on November 26, 2013 and ending in on January 14, 2014. 5 P12 II. Methodology - Overview Analysis To estimate the representativeness of the survey sample, data from the U.S. Census Bureau’s 2012 American Community Survey (ACS) matching demographic distributions assessed by the survey (i.e., sex, income, having children, duration in Aspen) were obtained. These distributions were obtained to allow for appropriate survey weights to be developed to account for a non-representative sample. Demographic data obtained from the survey sample and the ACS were compared by calculating simple differences among proportions and comparing against ACS survey error. To identify demographic and aspirational factors important in characterizing respondents’ identification of issues limiting their ability to work or live in Aspen, multivariate statistical procedures (including Permutational Multivarate Analysis of Variance (PERMANOVA) and Canonical Analysis of Principal Coordi- nates (CAP) Analysis) were used. Further analyses of single issues were con- ducted, including only those factors that played a role in response patterns. Single-issue responses were assessed using t-tests or Analysis of Variance to assess differences among factors identified by multivariate statistics. Where no differences were identified, data were pooled, and issues ranked by relative importance. Tukey’s range test was then applied on pooled data to identify differences among issue ranks. 6 P13 II. Findings Overwiew 7 P14 II. Trends and Take Aways Overall Conclusions l 92%(current residents) & 83% down-valley respondents would like to live in Aspen long-term l 69% (residents) & 64% (down-valley residents wanting to be in Aspen long-term) would like to raise a family here. l Amongst all respondent groups, Housing was the number 1 hurdle to living or working in Aspen l The vast majority of respondents would like to see more opportunity for business ventures and upward career mobility l There are a large cohort of down-valley residents who would like to live and work in Aspen given better opportunities l Emphasis on the importance of childcare increases greatly once a person has children 8 Transportation Other Affordable Workspace Education Healthcare Child Care Low Wages & Benefits Poor Career and/or Business Opportunities Housing Top Factors Limiting Ability to Live in Aspen: Residents & Non−Residents Percent of Respondents 0 20 40 60 80 100 P15 II. Trends and Take Aways 9 Transportation Education Child Care Healthcare Affordable Workspace Low Wages & Benefits Housing Poor Career and/or Business Opportunities Top Factors Limiting Ability to Work in Aspen: Residents Percent of Respondents 0 20 40 60 80 Education Healthcare Transportation Affordable Workspace Child Care Low Wages & Benefits Poor Career and/or Business Opportunities Housing Non−Residents Percent of Respondents 0 20 40 60 80 100 P16 II. Our Participants Positive Realities l Wide variety of demographics (e.g., sex, household in- come, etc.) agree on major issues l 247 respondents with 150+ complete surveys l Captured many Aspen “lifers” l With 47% of respondents have lived or worked in Aspen over 5 years, our sample is familiar with the challenges and working to overcome them Limitations l Small sample size due in part to incomplete surveys. Other factors that may have affected sample size: • Length and/or format of survey • Incompatibility of Survey Monkey with certain browsers, specifically version 11 of Internet Explorer • Holiday season – resulting in possible limited circulation across employers due to holiday season and/or limited time for employees to complete surveys l Sample was not representative of our demographic. The sample is unlikely to represent residents working in seasonal and/or tourism industries. Spanish-American residents were also under-represented. l Limited distribution of hard copy surveys. Representatives from employment sectors overwhelmingly preferred to distribute the survey electronically. Therefore, individuals with limited or no access to computers or smart phones were less likely to receive and complete the survey. 10 P17 II. Our Participants 11 Surveys Started Some Usable Data Complete Count of Surveys Started and Complete Su r v e y C o u n t 0 50 10 0 15 0 20 0 25 0 Female Male Sex Pe r c e n t o f S u r v e y R e s p o n d e n t s 0 10 20 30 40 50 60 <$30,000 $30,000 − $44,999 $45,000 − $59,999 $60,000 − $79,999 $80,000 − $99,999 >$100,000 Salary Percent of Survey Respondents 0 5 10 15 20 25 30 Aspen Basalt Carbondale El Jebel Glenwood Springs New Castle Old Snowmass Snowmass Village Woody Creek Location of Current Residence Percent of Survey Respondents 0 10 20 30 40 50 60 No Yes Currently Have Children Pe r c e n t o f S u r v e y R e s p o n d e n t s 0 20 40 60 80 No Yes Hope to Have Children in Aspen Pe r c e n t o f S u r v e y R e s p o n d e n t s 0 20 40 60 80 Demographic Data P18 II. Our Participants 12 Years In Aspen by Percentage of Respondents 0. 0 0. 2 0. 4 0. 6 0. 8 1. 0 Years Living in Aspen Years Living in Aspen Fn ( x ) 0.26 0.53 0.83 0.91 0 5 10 15 20 25 30 0. 0 0. 2 0. 4 0. 6 0. 8 1. 0 Years Working in Aspen Years Working in Aspen Fn ( x ) 0.27 0.51 0.85 0.97 0 5 10 15 20 25 30 l Horizontal axis represent years lived / worked in Aspen l Vertical axis represents the precentage of respondents who have lived / worked in Aspen for so many years l For exampe, 53% of respondents have Lived in Aspen for 5 years or less & 13% of respondents have worked in Aspen for 15 years or more P19 II. Living In Aspen 13 P20 II. 14 Amongt residents & non-residents those with kids & withoutMen & Women all agree that HOUSING is the biggest hurdle to living in Aspen “there are very limited op- tions between the $500K and $1 million within the afford- able housing program. This price gap leads to inequitable opportunities for this par- ticular dual income/profes- sional population in the com- munity and may cause this portion of the community to relocate; thus decreasing the potential quality of the year- round professional workforce and community. This gap is inconsistent with the Aspen Community Vision Plan” “Affordable, quality housing effects ones overall quality of life.” “affordable housing is a crap shoot, if you want to have a family you either get lucky in the lottery or move DV” “There are very limited options on afford- able housing options for families able to afford a home between $500k-$900k.” Living In Aspen Want to live in Aspen Long-TermResidents: 92%DV Residents: 83% Want to raise a family in AspenResidents: 69%DV want to be in Aspen: 64% P21 II. Living In Aspen 15 l These respondents currently live in Aspen l Each box explores individual impact of an issue on the ability to live in Aspen. for example: Has Children Fa c t o r I m p o r t a n c e Career/Business 10 9 8 7 6 5 4 3 2 1 Has Children Fa c t o r I m p o r t a n c e Child Care* Has Children Fa c t o r I m p o r t a n c e Education Has Children Fa c t o r I m p o r t a n c e Health Care 10 9 8 7 6 5 4 3 2 1 Fa c t o r I m p o r t a n c e Has Children Fa c t o r I m p o r t a n c e Housing Has Children Fa c t o r I m p o r t a n c e Wages/Benefits Has Children Fa c t o r I m p o r t a n c e Workspace* No Yes 10 9 8 7 6 5 4 3 2 1 Has Children Fa c t o r I m p o r t a n c e Transportation No Yes Has Children Has Children Fa c t o r I m p o r t a n c e Other* No Yes P22 II. Living In Aspen 16 l This is a summary of the previous graphs l These respondents currently live in Aspen l The graph shows the average importance rank given to each factor by respondents (where 1 = most imp & 12 = least imp). l Factors group into four importance categories, the most highly ranked of which was housing Relative Rank Fa c t o r I m p o r t a n c e ± S E NA 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 11 12 Career/Business Child Care Education Health Care Housing Other Transportation Wages/Benefits Workspace All Residents With Children No Children P23 II. Living In Aspen 17 Sex Fa c t o r I m p o r t a n c e Career/Business 10 9 8 7 6 5 4 3 2 1 Sex Fa c t o r I m p o r t a n c e Child Care Sex Fa c t o r I m p o r t a n c e Education Sex Fa c t o r I m p o r t a n c e Health Care 10 9 8 7 6 5 4 3 2 1 Fa c t o r I m p o r t a n c e Sex Fa c t o r I m p o r t a n c e Housing* Sex Fa c t o r I m p o r t a n c e Wages/Benefits Sex Fa c t o r I m p o r t a n c e Workspace Female Male 10 9 8 7 6 5 4 3 2 1 Sex Fa c t o r I m p o r t a n c e Transportation* Female Male Sex Sex Fa c t o r I m p o r t a n c e Other* Female Male l These respondents currently DO NOT live in Aspen l Each box explores individual impact of an issue on the ability to live in Aspen. for example: P24 II. Living In Aspen 18Relative Rank Fa c t o r I m p o r t a n c e ± S E NA 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 11 12 Career/Business Child Care Education Health Care Housing Other Transportation Wages/Benefits Workspace All Residents Female Male l This is a summary of the previous graphs l These respondents currently do NOT live in Aspen l The graph shows the average importance rank given to each factor by respondents (where 1 = most imp & 12 = least imp). l Factors group into three importance categories, the most highly ranked of which was housing l DV residents perceive housing to be the biggest factor preventing them from living in Aspen P25 II. Working In Aspen 19 P26 II. 20 Lack of upward career mobility & business creation is a primary concern for those Wanting to to make a life inAspen “I’m currently still working for my company in Palo Alto because even with part time work, their wages are almost double what I could make here” “The professional opportunities are too limited to offer attractive enough career growth for young professionals, outside of entrepre- neurial endeavors.” “living paycheck to paycheck” “i would like a more developed career. I feel i have had to switch my jobs a few times because of the lack of opportunity or growth” “If I don’t have a job, I can’t stay here.” “There are limited career opportunities in the valley to utilize my degree” “very limited employment options other than mindless, meaningless work” “Perhaps if I made more more I could afford housing, but that seems doubtful.” “Haven’t gotten to opening a store front yet, but I’m familiar with rent prices” Working In Aspen P27 II. 21 Working In Aspen Has Children Fa c t o r I m p o r t a n c e Career/Business NA 9 8 7 6 5 4 3 2 1 Has Children Fa c t o r I m p o r t a n c e Child Care^ Has Children Fa c t o r I m p o r t a n c e Education Has Children Fa c t o r I m p o r t a n c e Health Care NA 9 8 7 6 5 4 3 2 1 Fa c t o r I m p o r t a n c e Has Children Fa c t o r I m p o r t a n c e Housing Has Children Fa c t o r I m p o r t a n c e Wages/Benefits Has Children Fa c t o r I m p o r t a n c e Workspace Aspen:No Not Aspen:No Aspen:Yes Not Aspen:Yes NA 9 8 7 6 5 4 3 2 1 Has Children Fa c t o r I m p o r t a n c e Transportation Aspen:No Not Aspen:No Aspen:Yes Not Aspen:Yes City : Wants Children Has Children Fa c t o r I m p o r t a n c e Other Aspen:No Not Aspen:No Aspen:Yes Not Aspen:Yes l Each box explores individual impact of an issue on the ability to work in Aspen. for example: P28 II. 22 Working In Aspen Relative Rank Fa c t o r I m p o r t a n c e ± S E NA 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 Career/Business Child Care Education Health Care Housing Other Transportation Wages/Benefits Workspace All Respondants Want Children Don't Want Children l This is a summary of the previous graphs l These respondents currently do NOT live in Aspen l The graph shows the average importance rank given to each factor by respondents (where 1 = most imp & 12 = least imp). l There are 3 Primary tiers l When career opportunities and low wages/benefits are combined they are the largest issue ranked most important by nonresidents P29 II. Skippy Leigh Upton Mesirow ChairSocial Entrepreneur, Aspen Institute employee, AVSC Coach& Co-Chair ADI Christine BenedettiCo- ChairFreelance writer, Aspen Historical Society marketing director Jennifer BurnettTreasurer Mom, Broker Associate, Environ-mental Enthusiast, Artist Kimbo Brown-Schiracco Founding Member South Africa Native, works atObermeyer Asset Management,Former Springboard Chair Jill Teehan Founding MemberAttorney at Law Praxidice PCFounder ADI, London Schoolof Economics Grad Lindsey PalardyFounding MemberDevelopment Manager atAspen Youth Center, Law and Policy professional Summer Woodson-Berg Founding MemberPersonal Practice Lawyer & Owner of Portfolio Aspen properties. Buddy Program. Catherine LutzFounding MemberFreelance writer, editor, and photographer. Mother of two. Our Team 23 P30 II. AspenNextGen@gmail.com Chair Skippy Mesirow skippy.mesirow@gmail.com Co-Chair Christine Benedetti christinebenedetti9@gmail.com Contact 24 P31 II. Aspen Next Generation Advisory Commission Annual Survey Report2014 P32 II. Aspen NextGen 1 / 7 9 3.20 %96 6 .8 0%7 Q1 Do y ou think the m e ntorship program de scribe d w ould be a be ne fit to the Com m unity ? Answ ered: 103 Sk ipped: 0 Total 103 YES NO 0%10%20%30 %40%50%60 %70%80 %90%1 00 % Answ er Choices Re sponses YES NO P33 II. Aspen NextGen 2 / 7 Q2 If y our answ e r to que stion num be r 1 is NO, w hy is that and w hat w ould change y our m ind? Ans w ered: 6 Sk ippe d: 97 #Response s Da te 1 I don't bel i e ve a fee -b ased m e ntori ng progra m wi l l be of any ben efi t. T he kno wl e dg e i s here ; the re are other fa r l arger b arri e rs l i ke c ost o f d oi ng busi n ess/l a c k of appropri ate workforc e that are the l i m i ti n g fac to rs. 8 /25/2014 9:31 AM 2 M y answer i s YES, I d o thi nk tha t thi s m e ntorsh i p prog ram wou l d be a ben efi t to the c om muni ty and I en thusi asti c al l y sup po rt Next Ge n's vi si on and th i nk i t i s an exc i ti ng pro gram . Howe ver, a s desc ri be d i n the i ntro the p ro po sed stru c ture rai ses so m e c onc erns. Why wou l d the m e ntor vol unte er and yet th e m entee p ay? How d o you ensure that the b usi n ess rem ai n up and runn i ng for seve ral years to c om e p ost m entorshi p ? Is thi s prop ose d struc tu re a no np ro fi t or fo r p ro fi t ente rpri se? Woul d the m ente es fee s be payi ng othe r c osts oth er th an the di rec to r's sal ary? 8 /22/2014 11:0 9 AM 3 Seem s too c om pl i c ated a nd wi th too m any stri ngs for m entee.8 /22/2014 10:4 2 AM 4 transi ent p op ul ati on a nd bui l du p i s di ffi c u l t he re - the exi sti n g ge ne ra ti o n i s not tol erabl e or wi l l i ng to m e ntor 8 /19/2014 4:37 PM 5 M en torshi p i s not real wi th an ec onom i c be ne fi t l i ke th at you're p ropo si ng 8 /18/2014 8:02 AM 6 I fee l l i ke the Roari ng Fork Busi ness Resouc e Center provi des th i s servi c e to the va l l ey, to som e de gree . It's no t c al l ed a m en torshi p p rogram , but perhaps yo u shoul d work wi th the m . T here m i ght be so m e syn ergi es. 8 /15/2014 10:1 0 AM P34 II. Aspen NextGen 3 / 7 54 .00%54 46 .00%46 Q3 Would y ou conside r participating as a Me ntor? Answ ered: 100 Sk ipped: 3 Total Re spondents: 100 YES NO 0%10%20%30 %40%50%60 %70%80 %90%1 00 % Answ er Choices Res ponses YES NO P35 II. Aspen NextGen 4 / 7 6 0.82 %59 3 9.18 %38 Q4 Would y ou or any of y our e m ploy e e s conside r apply ing for Me nte e consulting? Ans w ered: 97 Skipped: 6 Total 97 YES NO 0%10%20%30 %40%50%60 %70%80 %90%1 00 % Answ er Choices Re sponses YES NO P36 II. Aspen NextGen 5 / 7 Q5 I think cre ating paralle l e conom ie s is im portant for Aspe n’s v itality and future ? *Paralle l e conom ie s, in this conte x t, m e ans broade ning and div e rsify ing the e conom ic base of Aspe n so that paralle l to the re sort e conom y are busine sse s running inde pe nde ntly but in conce rt w ith the re sort e conom y , e .g. artists, e ntre pre ne urs, cre ativ e com panie s, te chnology com panie s, e tc. The se busine sse s w ould add v itality , but NOT a phy sical im pact. Answ ered: 101 Sk ipped: 2 5 9.41 % 60 38.61% 39 0.99 % 1 0.99% 1 101 1.44 (no label) 0 1 2 3 4 5 Strongly Agree Agree Dis agree Strongly Dis agree Total Av e rage Rating (no l abel ) P37 II. Aspen NextGen 6 / 7 Q6 Do y ou be lie v e this program w ill cre ate a ladde r of opportunity for Aspe nite s to cre ate sustainable and local care e rs? Answ ered: 102 Sk ipped: 1 2 9.41 % 30 60.78% 62 6.86 % 7 2.94% 3 102 1.83 (no label) 0 1 2 3 4 5 Strongly Agree Agree Dis agree Strongly Dis agree Total Av e rage Rating (no l abel ) P38 II. Aspen NextGen 7 / 7 80 .39%82 19 .61%20 Q7 Are y ou in uppe r m anage m e nt or se rv e in a de cision m aking role for the busine ss? Answ ered: 102 Sk ipped: 1 Total Re spondents: 102 YES NO 0%10%20%30 %40%50%60 %70%80 %90%1 00 % Answ er Choices Res ponses YES NO P39 II. Incubator Portal Subscription Schedule P 4 0 I I . Donor Agencies / Government Consolidated impact & output monitoring, evaluation & reporting. Collaborate with programme managers. 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They can also submit feedback after attending a coaching session or training event, improving our quality assurance processes. If you’re looking for a system to assist with client administration, monitoring, evaluation and reporting requirements then we can definitely recommend the Incubator Portal Michael Reddy, CEO of Furntech and African Incubator Network FEATURES INCLUDE P 4 5 I I . www.theincubatorportal.com E: info@incubatorportal.com T: +27 11 759 4095 Tools for Startups & Small Business: Standard Toolkit PRICING GUIDE The SME Portal Standard Edition is perfect for non-founders / business owners who still need access to key features contained in the SME Portal, but not the more specialised lean startup and business operation management tools. Our products and services Business prole, vision, mission Team Member proles Company Prole Builder01. Events calendar (individual / team / all upcoming events) Waiting list function Specialised training requests Post Training Feedback Training and Events04. Online Support Requests Document Management Activity Management Messaging Report Studio Other Features05. Expert Network Resource Library Questions and Answers Community Platform06. Incubation Roadmap Stage Goals and Objectives Workplan (Activities) 02. Mentoring My Mentors Mentor Network My Mentoring Session Schedule Mentoring Session minutes Mentor Feedback 03. OR $17 PER month $9 per user/MONTH billed annually FEATURES INCLUDE P 4 6 I I . www.theincubatorportal.com E: info@incubatorportal.com T: +27 11 759 4095 Tools for Donor Agencies & Programme Managers PRICING GUIDE The Programme Management Portal analyses and compares data from multiple business incubation programmes and presents the data in a meaningful, interactive formats. Link activities to outputs, with associated budgets Assign activities to individuals with deadlines Online status reports / after action reviews Gantt Charts and automated progress reporting Workplan Implementation01. Mentoring Applications received Interviews Mentor Network My Mentoring Session Schedule Mentoring Session minutes Mentor Feedback Activity Narrative04. Events calendar (Individual / Incubator / Consolidated) Training and Events05. Online Support Requests Document Management Activity Management Messaging Report Studio Other Features06. Monitoring, Evaluation & Reporting Programme (Consolidated) level performance review Site level performance review Report Studio 02. Client Proles Stage Goals and Objectives Workplan (Activities) Client Proles 03. OR $179 PER month $119 per user/MONTH billed annually FEATURES INCLUDE In a search for an effective and comprehensive incubator management system I compared the all the systems available internationally and have concluded that the Incubator Portal is definitely the best of breed. It offers an incredibly wide spectrum of functionality required by incubator managers and programme managers which no other system can come close to matching. Leon Lourens, CEO of Incubation Institute P 4 7 I I . www.theincubatorportal.com E: info@incubatorportal.com T: +27 11 759 4095 PRICING GUIDE Data Migration 01. If you have existing client data stored in Microsoft Excel or any 3rd Party system we can assist with migrating the content into the Incubator Portal - so you won’t need to recapture anything. Report Customisations02. Customise the look and feel of the reports generated by the Incubator Portal so that they match your exact requirements, meaning you'll never have to manually compile a report again. Site branding and personalisation 03. Ensure the Incubator Portal is branded to match your existing corporate identity. Integration with 3rd Party Systems and Windows Active Directory 04. We can integrate the Incubator Portal with your existing 3rd Party ERP/- nancial systems and Windows Active Directory where necessary Onsite Training05. A range of instructor-led onsite training options are available, ranging in duration from 2 to 5 days. All onsite training includes user-guides and post-course assessments. Online Training and Master Classes06. We schedule regular 90-120 minute online training sessions focusing on specic system modules, at both introductory and advanced / master-class levels. Train the Trainer / Avnon Certied Consultant (ACC) 07. The premier Incubator Portal certication, equipping you with all the skills you need to support and congure the software and train end-users. Training and Support Services P 4 8 I I . Chris Field: Hi Jill, Skippy and the rest of the Mentorship team, I wanted to let you know that Curt Strand and I got together for lunch this week. We had a great time getting to know each other on a personal level as well as discussing both of our careers. Curt is already passing down advice and wisdom from a very successful career with Hilton International. I attached a photo of Curt and I at lunch. We will be getting together again sometime soon. Thanks again for putting this program together. Regards, Chris Curt Strand - mentor DEAR ORGANIZING TEAM: My mentee is Chris Field. We have held five sessions, always at lunch which provides a relaxing environment. We talk about issues involving his business which involves internet marketing and is conducted with a partner out of an office in Aspen. The staff are independent contractors. We discuss issues of individual effectiveness, possibilities of paid staff, partnerships, discipline, plans, goals, a possible restructuring. Chris has many questions relating to my experiences as a CEO of a hotel company with about a hundred operations in sixty countries. What worked, what did not. We round out our meetings with some Music Fest and Aspen Institute events, also his birthday party at his home Chris has sent you a photo after our first meeting in May. I enjoy our relationship and feel it is mutual, but he can speakfor himself. Warm regards, CURT STRAND Adam Nelson: I wanted to let you know that Tony and I met for lunch yesterday at the Cantina. I think the fit is very good in a number of ways, and I am looking forward to meeting again. I think we have a lot in common, and Tony's experiences are just what I was looking for in a mentor. For our first meeting we got to know each other better, as well as discussed why both P49 II. of us were interested in the program, and what we would like to get out of the program. We have not set another meeting, but I imagine we will meet again sooner than the 2 month goal. Thanks again for setting us up, and I look forward to continuing in the program. Regards, Adam Nelson, Vice President, RM Dan Perl: Hi there, I just wanted to give a quick check in about my mentor. I've met with Diana twice since our initial lunch and I think we've got a good fit for now. We both work in the same field, and actually have some opportunities to potentially work together on a project, which has been interesting to explore. We don't exactly have a typical mentor relationship, we have more of a partnership at the moment. What I wanted out of a mentor was to help me find more sustainable work with people with disabilities, though, so this project definitely meets those goals. I'll update you as we move forward, and if we find that this partnership doesn't pan out, I'm sure I'll have more feedback on our relationship. Thanks, Dan Kate Linehan I just wanted to check in after my first meeting with Lady. I'm thrilled to have met such a dynamic, focused, and succesful businesswoman willing to mentor and offer me guidance! It really feels like a gift, so thanks to all of you for organizing this program.Best, Kate and a 2nd email! The Aspen Mentorship Program has truly been a gift for me and my business. I couldn't have imagined a better mentor for the current state of my business and where I hope to take it. The encouragement, insight and support I have received has been invaluable, as well as providing great accountability for actualizing the steps to help my business succeed and grow. Hopefully, one day, I too will be able to return the gift of such useful mentorship! Thanks to all the organizers of The Aspen Mentorship Program and to my mentor!! (not sure if I should mention her? Lady Fuller!:-) Thanks,Kate P50 II. Ashley Perl Hi Jill, Thanks for checking in. I am currently working with the City’s HR department to create a better internal mentor program, so I am tempted to see that through and give it a try. If that turns out to be something different then I would definitely be interested in meeting Tim. Dave is one of my supervisors, so it seems Adam or Tim would be a better fit. I think the mentorship lunch was a great idea and extremely valuable to the community. I know my husband saw a lot of value in it and I’ve heard the same from other local professionals. I think it might be harder to match City and County employees with mentors because we are probably looking for someone with knowledge of local government, but not someone who we work with all the time. Keep up the good work! Ziska Childs Sadly, no contact from MENTEE: RACHEL BURNMEISTER P51 II. P 5 2 I I . The First Year • Greatest Barriers • Why? Because it’s integral to our character and success as a community P 5 3 I I . How did we set priorities for 2014-15? • Extensive community outreach and stakeholder meetings • Internal meetings, work sessions & summits • We conducted a Survey of 247 18-40 y/o’s • 47% have lived in Aspen 5+ years • 92% (Aspen) & 83% (DV) want to live in Aspen “long term” • http://aspennextgen.com/#!/survey P 5 4 I I . • This brain-drain leads to a dissolving of the social fabric that binds Aspen together and has shaped our character for so long. It is to the community’s detriment. Economic Sustainability? P 5 5 I I . What are we building and who for? • Creative, tech, environmental, design, & more • Transition: from ski bum to a professional • Add vitality to the valley & community • Return of local businesses • Support entrepreneurs P 5 6 I I . You already recognize the need • Mr. Mayor, this is the same philosophical underpinning of your ‘Uphill Aspen’ initiative • Mr. Frisch, this too is very much in line with your attempts to rezone the SCI zone • Mr. Daily and Mrs. Mullins, this mirrors your efforts to bring an incubator space to town • Mr. Myrin, this is an opportunity to bring local business back to Aspen P 5 7 I I . The Mentorship Program • Goals: – Aid in business & professional development – Create an economic engine for the city – Be a community asset – Integrate existing community resources – Fill professional gaps – Achieve a revenue neutral balance sheet – Insist on accountability and transparency P 5 8 I I . Where did we start? • We researched success stories from around the country and the world • A model city in Brevard, NC • Retiree Resource Network (eventually rebranded as SCORE – Service Core of Retired Executives) P 5 9 I I . What did we find? • Leveraging the time and expertise of older community members to mentor younger Aspenites • Aspen Professional Mentorship and Community Networking Program: – 1 year, 2 events, 130 attended, 60+ mentor / mentee pairs. P 6 0 I I . “I wanted to check in after my first meeting with Lady. I'm thrilled to have met such a dynamic, focused, and successful businesswoman willing to mentor and offer me guidance! It really feels like a gift, so thanks to all of you for organizing this program. The Aspen Mentorship Program has truly been a gift for me and my business. I couldn't have imagined a better mentor for the current state of my business and where I hope to take it. The encouragement, insight and support I have received has been invaluable, as well as providing great accountability for actualizing the steps to help my business succeed and grow. Hopefully, one day, I too will be able to return the gift of such useful mentorship!” - Kate Linehan (Menteee) P 6 1 I I . “Curt is already passing down advice and wisdom from a very successful career with Hilton International.” - Chris Fields (Mentee) “We discuss issues of individual  effectiveness, possibilities of paid staff, partnerships, discipline, plans, goals, a possible restructuring. Chris has many questions relating to my experiences as a CEO of a hotel company with about a hundred operations in sixty countries. What worked, what did not. We round out our meetings with some Music Fest and Aspen Institute events… I enjoy our relationship and feel it is mutual.” - Curt Strand (Mentor) P 6 2 I I . We had some shortcomings • Relationships were loosely defined • No one to keep the program going • Focus almost entirely on networking – ACRA will take on basic mentoring function • Not focused on professional development – We need this to keep our young population P 6 3 I I . We demonstrated a need • 130 attended, 60+ mentor mentee pairs. • This need was confirmed by city staff and local real-estate developers • ACRA member and public survey confirms the need P 6 4 I I . Time for Act 2 • Professionals, entrepreneurs and existing business owners 1. Apply 2. Evaluate 3. Pair 4. Plan 5. Execute 6. Track P 6 5 I I . Who are the Mentors? • Top talent • Volunteers • Older (may be retired) • Invested in their community • Looking to build legacy • Wanting to shape their community • Trained by director • Empowered by tools P 6 6 I I . Who are the Mentees • Locals! Businesses must conduct business in Aspen • Young or ‘young at heart’ professionals • Serious and committed • Desire to grow or move in their career • The best interest of RFV & World • Entrepreneurs, business owners, creatives, artisans P 6 7 I I . Who Pays? • Revenue Neutral • $200 Application fee • Paid back on a sliding scale • 5 Year local commitment requirement – tax and job generation • Based on basic VC success rated; will be tracked and adjusted by Director • Those with a advancement focus can “pay back” their hours with community service with dedicated partner organizations P 6 8 I I . 10 consulting hours @ $200p/h = $2,000 Total Cost * 1 hour community service owed per 4 hours mentorship received for basic career advancement $0 $500 $1,000 $1,500 $2,000 $2,500 $0-$10k $10K - $20K $20K - $40 K $40K + Leave Aspen Amount Paid Total engagment cost $200 Initial Investment 100% 75% 50% 25% 0% P 6 9 I I . What This Can Do • Keep talent, idea and families in Aspen • Bring the younger and older generations together • Fill the “missing middle” • Strengthen our sense of community and small town appeal. P 7 0 I I . Partnership Matters • Eliminate redundancies • Support each other • Share best practices • Work towards common goals • Amplify our voices • Serve the community P 7 1 I I . Our Partners • Executive Service Corps (ret) • Start-Up Weekend • Business Resource Center (ret) • The Aspen Institute • Aspen Business Luncheon • Roaring Fork Leadership • The City of Carbondale • Colorado Mountain College • Office of Economic Development of Colorado. • The Aspen Community Foundation • Isaacson School of New Media • Sponsoring Partner: Rotary Club of Aspen • Supporting Sponsors: The Elks Club • Supporting Sponsors: ACRA Aspen • Hopeful Sponsor: The City of Aspen P 7 2 I I . P 7 3 I I . Marketing • Speak with one voice • Drive anyone who wants to “create” something to one central resource • Tell a story, foster the idea P 7 4 I I . The Website • www.CreateRFV.com • Built on ACRA back-end using Incubator Portal code – a $1,500 in-kind grant • Secured funding from our partners for the build P 7 5 I I . What do we need? •  1.The Director •  2. A guaranteed 1-year operating budget – Program Director salary – Office supplies – Incubator portal software – Web development & hosting (gifted by ACRA) • We expect the program to fund itself, but we need to ensure the funds are there. This is a guarantee, not a check. P 7 6 I I . Director Role • Pair Mentors and Mentees • Set Goals • Oversee Engagements • Track Outcomes • Adjust Programming • Mentor Training • City Reports P 7 7 I I . Incubator Portal • Cloud Based • 5 “Layers” of users providing appropriate access for Director, Interns, Mentors and Mentees • Manage Finance including e-commerce • Contact, email, scheduling, targeting • Oversight of relationship including milestone setting, auto alert, online interactions and meeting, built in feedback loop, and detailed tracking •  Automatic report generation • Flexible pricing • Great support P 7 8 I I . How Does it Run? P 7 9 I I . Interns • 1-3 CMC Interns • Credit program • Offer support to Director • Help with outreach P 8 0 I I . NextGen to Launch – Set up an maintain website – Lead marketing and PR push – Take lead on press exposure – Work with valley partners – Train the director and applicants on Incubator portal P 8 1 I I . Our Expectations • Program will: - Have 5 applicants per month - Be revenue neutral • Expected business outcomes: - 1-2 home-run ideas per year - 10 successful outcomes per year - 50 failures per year - 25+ community/professional growth applicants - Benefit the community P 8 2 I I . In Summation • Help us help the community • Support Aspen’s vitality • Re-invest in the Aspen Idea • Give opportunity a chance P 8 3 I I . The Rotary Partnership • $10,000 commitment • Guaranteed Mentor Pool • Support and guidance • First right to acquire in 1 year P 8 4 I I . 1 Year Pilot Program • Re-Evaluate for merit in 1 year • Rotary First right of acquisition • No ongoing entitlement • Demonstrable need • Evidence for success • The only way to fail, is to fail to try P 8 5 I I . The Budget • Director Salary $35,000 • Office Supplies $3,600 • Web Development $3,000 (partner grant) • Web Hosting $1,480 (ACRA In-Kind Donation) • Incubator Portal $6,660 (@ 5 businesses & 12 active mentors) • TOTAL BUDGET $49,140.00 • Rotary Commit $10,000.00 • ACRA Commit $1,500.00 • Elks Commitment $1,500.00 • Total City Ask $36,240.00 • Expected Application Fees $12,000.00 P 8 6 I I . Thank you! P 8 7 I I . Page 1 of 3 MEMORANDUM TO: Mayor and City Council FROM: Justin Barker, Planner THRU: Chris Bendon, Community Development Director Jessica Garrow, Long Range Planner MEETING DATE: September 29, 2015 RE: Residential Design Standards Update REQUEST OF COUNCIL: The purpose of this work session is to provide City Council with an update of the Residential Design Standards (RDS) updates. Staff is also requesting feedback on the direction of the proposed RDS updates. BACKGROUND: As part of the 2015 budget, City Council approved $25,000 for updates to the City’s RDS. The purpose of the updates are to organize, streamline, and provide minor modifications to the existing standards in order to better serve the community and provide attractive, compatible development. The City of Aspen Residential Design Standards were first adopted in 1995 as a way to maintain design quality and compatibility with historic features of the community. Since then, minor amendments have been processed to add additional standards and create a variance process. Earlier this year, staff selected a consultant (Winter & Co.) through an RFP process to assist with the updates. Under the approved scope and budget, this update provides a comprehensive clean- up and clarification of the current standards with a focus on standards that are often confusing to designers and property owners, but is not a complete re-write. During City Council’s review of the RFP, City Council directed staff to pursue the updates with the proposed scope plus an additional $5,000 to update the graphics. DISCUSSION: The proposed updates focus on improving the review process, better organization of the standards, and general cleanup for loopholes and confusion for individual standards. Staff and Winter & Co. have been working with an advisory committee comprised of six local architects from various firms around town. The role of the committee is to represent the design community by providing input on current issues, reviewing draft updates, and participating in focused group discussions with staff and the consultant. The most common issues with the current standards as identified by the committee were: P88 III. Page 2 of 3 • Lack of clarity in the administrative review process • Lack of flexibility in the existing standards These are discussed in more detail below. Administrative Review: The current administrative review process has proven to be challenging. A project is only required to submit an application if a variation is required. This is typically determined by the planner of the day or staff collectively. This process can often lead to a substantial amount of time spent discussing a required variation, or some needed variations being missed because they are not discussed. This often leads to projects that do not meet the RDS getting delayed in the building permit review so they can submit an application for a variation. This can place a building permit on hold for several months. Under the proposed changes, all residential development would be required to submit an application for either RDS exemption or “compliance review”. An application would receive in exemption if no variations from the Residential Design Standards are required. In compliance review, staff will review each project for any applicable standards and the project’s compliance with the intent of those standards. If compliance is achieved, the applicant will be given an approval to be submitted with the building permit application. If compliance is not achieved, the applicant would have an opportunity to discuss with staff how the project does not comply and make changes accordingly. If the applicant decided they do not want to make any changes, the applicant would have the opportunity to have P&Z review the application. Any decision made by P&Z is final unless appealed under the regular city appeal procedures. No building permit would be accepted without either an exemption or compliance approval (administrative or P&Z). This process would help reduce or eliminate the number of “missed” variations required and provide applicants with a level of assurance when submitting a permit that any RDS issues have been resolved. Standard Flexibility: Currently, a residential project must meet all of the standards as written (with some exceptions depending on the location or specific site constraints). Staff recognizes that some standards are not always of critical importance or are difficult to meet, even if they apply to a certain project. For example, building orientation on a curvy street is difficult to achieve and is not as important as building orientation on a traditional townsite block. Similarly, prohibiting a lightwell on the front of a building is less important for a building that is 100 feet from the street than one that is 10 feet from the street. In response to this, staff has identified three design features that are the most important and should be included in every residential project in town. These are: 1. A visible and accessible front entrance. This standard would require a front porch or other entry feature, include a front door, and a pedestrian path leading to the feature. 2. Reducing the appearance of garages from the street. This standard would require garages to be accessed off the alley where one exists. Where an alley does not exist, garages would be required to be set back from the front façade of the building. P89 III. Page 3 of 3 3. Articulation of massing to reduce perceived scale. This standard would require a secondary mass or other building articulation. These are also the standards that staff least often grants administrative variations. Under the proposed RDS update, all residential buildings would be required to meet these standards. If an applicant requests a variation from these standards, a P&Z review will be automatically required. In an effort to provide some flexibility, the remaining standards would be evaluated on a case- by-case basis through the administrative compliance review. Projects would be required to meet the letter of the standard, or provide “alternative compliance” meaning the project meets the overall intent of the standard. This allows the architects more flexibility for varied design styles and the ability to more directly work with staff to create an agreeable design without requiring constant variation applications. For example, a design may include an entry door that is 11 feet back from the front-most wall of the building, but is highly visible from the street and opens onto a front porch that meets the standard. The door does not technically meet the standard (max. 10 feet from the front-most wall), but it meets the intent by providing street-facing architectural details, enhancing the walking experience and reinforcing local building traditions. This design feature would most likely be permitted under alternative compliance. Other updates: Staff has also been working with Winter & Co. and the advisory committee on other updates. These include reorganization of the RDS chapter to make it easier to read and understand, adding definitions for often used terms, and updating and improving graphics. FEEDBACK: The advisory committee has been involved in the process since the beginning and continues to provide valuable feedback that has helped dictate the current proposed changes. An open house will be held on September 29 from 2pm – 3pm in Sister Cities to obtain feedback from the broader community of the proposed updates. Invitation to the open house was provided through the Community Development newsletter, which reaches almost 600 professionals including contractors, architects, attorneys, and planners. Staff will provide a summary of the open house at the work session. Staff will also meet with P&Z to gain their input prior to the adoption process. This is expected to occur in early-to-mid-November. NEXT STEPS: Staff will continue to work with Winter & Co. and the advisory committee to finalize the proposed updates over the next month. Staff anticipates the updates will be ready for City Council review as a code amendment in late-November or early-December. Staff will be requesting supplemental monies to enable the consultant to participate in the Policy Resolution hearing. Question for Council: Does Council support the direction of the proposed RDS updates? CITY MANAGER COMMENTS: P90 III. Page 1 of 12 MEMORANDUM TO: Mayor and Council FROM: Barry Crook, Assistant City Manager Mike Kosdrosky, APCHA Executive Director Chris Everson, Affordable Housing Project Manager DATE: September 25, 2015 MEETING DATE: September 29, 2015 RE: Update on Capital Reserve Policy and Discussion REQUEST OF COUNCIL: Receive the update and determine if the conversation is on the right track in terms of working towards a proposed policy solution. PREVIOUS COUNCIL ACTION: Council has for several years indicated a desire to formulate a policy that addresses the understood shortfall in capital reserves across the deed-restricted HOA community. For a long time, the policy discussion was deferred until a “solution” could be found to the issues that confront the Centennial homeowners – with those solutions informing the development of a policy for the entire community. Those communications, which were broken off by the Centennial HOA for some period of time, have recently been restarted. Council now prefers that a broad policy be developed and adopted, with Centennial being allowed to participate under the terms of that policy. BACKGROUND: In the 2011-2012 Council Top Ten Goals was an effort to conduct a review of capital reserve issues. That resulted in an effort partially funded through APCHA to allow HOAs in the deed restricted community to conduct capital reserve studies and ascertain how they needed to address this critical need. Provided in Attachment A is the excerpt from the 2012 Housing Summit regarding capital reserves and the results of those studies. P91 IV. Page 2 of 12 State Reserve Fund Laws (September 2013) Many states have enacted legislation dealing with community association reserve and operating funds to protect owners from fiscal problems and financial hardship. More states may enact similar legislation as community associations continue to gain popularity. Attachment A contains a summary of each state reserve fund law. Reserve Studies are required in the following states: California, Delaware, Hawaii, Nevada, Oregon, Utah and Virginia. Washington statutorily encourages associations to have a reserve study performed every three years unless doing so would impose an unreasonable hardship. COLORADO The unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 38-33.3-302. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves DISCUSSION: There are four areas we wish to cover today and two more we will list, but want to defer to a more in-depth discussion: 1. What is the problem? 2. Why does the problem exist? 3. Why it is necessary to fix the problem? 4. Who pays? And in brief – with detailed discussion for another worksession: 5. How do those stakeholders pay their share? 6. What are the pathways to implementation? What is the Problem? The issue – as illustrated above – is that HOA capital reserve accounts are underfunded. There is a conversation to be had about how much these accounts should have in cash, how much could be left for loans, and how much could be left for on-demand cash assessments – but for now we are working on a principle that 70% of the capital reserve study amount should be held in a reserve account. It is unlikely that all of the capital reserve study amount would be needed at any one point in time, and even if it is, most HOAs would have some capacity to borrow from a lending institution or make a cash call from their owners for the remainder. As indicated in the 2012 Housing Summit Briefing Book excerpt, underfunding of HOA capital reserve accounts is a universal phenomenon – it is not simply people acting in a hopeful manner. P92 IV. Page 3 of 12 Most people would prefer to defer accumulating reserves to take care of future needs that they may not be party to or benefit from. They are betting that nothing catastrophic will happen while they are owners and that they can defer the expense of repairs or accumulating reserves and pass off those costs onto the next generation of owners – all without impacting the value of their property or the re-sale price they might command in the marketplace. Usually this bet works – but not always. So for our system there is – by estimation – some $15 million or more of reserve shortfall. As we have seen at Centennial, this is a problem for the housing system and for those how benefit from the system. It is appropriate for the City Council, the BOCC and the APCHA Board to work together to solve this problem and get our deed-restricted housing stock on firm footing so that it works for today’s owners and for those who will follow them tomorrow. Both the community and the workers who purchased these units have heavily invested in the system and need to ensure it lasts into the future. There is some urgency to this issue because units are changing hands on a weekly/monthly basis where sellers are receiving full value and new owners are ending up owning the capital deficit. The problem needs to be addressed to ensure the future viability of the system and to ensure equity among the various stakeholders. Why Does the Problem Exist? The problem exists because people are rational economic actors. They want to avoid current expenses if they can and prefer to defer those expenses to the next generation of buyers who might benefit more from those investments. They do this in the deed-restricted marketplace and the free marketplace. There is a difference however in in the two markets – at some point in the free marketplace, decisions made about deferring maintenance or not investing in your property sends an economic signal to prospective purchasers that reduces the price the marketplace puts on your property. Let the property deteriorate too much and the sales price reflects that. Invest in the property and the marketplace reflects that decision into a higher price you could command for your property. This is seldom the reaction in the deed-restricted marketplace. The “APCHA guaranteed maximum price” is almost always the floor, not the ceiling on the sales price. It is almost guaranteed that if there are two or more bidders on a property, the guaranteed maximum price will be the sales price. Our deed-restricted marketplace does not reflect a lower price for the unit if owners fail to invest or to accumulate capital reserves. So both buyers and sellers act rationally in terms of their economic decision-making. Any solution to the problems that exist within the system must address the economic signals sent and the incentives for both buyers and sellers to “do the right thing” for the future of the system. P93 IV. Page 4 of 12 Why is it Necessary to Fix the Problem? The long-term health of the workforce housing system that the community and owners have invested in demands that capital reserves be accumulated and that proper investment in the system be made. Too much public and private money has been invested to allow the inappropriate price signals to continue to incentivize behavior that, while rational to those in the system, puts in jeopardy some 1500 units and millions of investment. The future workforce and future taxpayers demand that we not shirk our responsibilities. State law continues to evolve around condominium ownership and the responsibilities of common owners. It already exists that state law requires HOAs to formulate a policy regarding capital reserves – however neither law nor policy requires an HOA to actually fund capital reserves. Many think that will change over time. The problems with deferred maintenance or repairs from inadequate design/construction are highlighted at the Centennial ownership units. They require some $3.5 million to repair their buildings. Similar problems cannot be allowed to come into existence at other complexes in the system – the cost of major reconstruction/repair must be ameliorated by prudent consideration of reserves and investment. The nature of the problem and the need to fix it long-term suggest that all the stakeholders in the system – the community, current owners and future owners – must collaborate to fix the problem and solve it for the future community of taxpayers and owners alike. Who Pays to Fix the Problem? There are really only three groups of people who stand to benefit from fixing the problem and who therefore have a stake in seeing the problem fixed. They should all contribute in some fashion to finding a solution and contributing monetarily to fixing the problem. The Community Taxpayers and the community have long invested in creating affordable workforce housing – either directly through taxes paid and the subsequent development of housing stock, or through the requirements for mitigation placed on development that then develop that workforce housing. Their investment needs to be conserved so that the benefit is preserved for future generations. Therefore it is appropriate for the community to make an investment in existing properties and to ensure that it doesn’t have to repeatedly continue to make that investment in the future. Current Owners No one should seriously argue that current owners of property do not have a responsibility for maintaining property they own and use. Current owners need to recognize that the cost of home ownership includes more than mortgage, taxes and HOA dues to provide current services. Maintaining an investment is a cost of home ownership that needs to be recognized and if P94 IV. Page 5 of 12 necessary required by the community who has created or caused to be created the housing stock now in private hands. Future Owners In the free marketplace a future owner would pay a higher price for a well-maintained unit that reflects a current owner’s continued investment in their property. They would pay a lesser price for those units that do not reflect that investment. The market place would send a signal to both buyer and seller regarding the condition of the unit – so in that sense the future buyer is contributing to the ongoing capital investment in common areas and in the condominium ownership areas. They often contribute a “transfer fee” of some kind at sale – a contribution that either goes to the HOA’s capital reserve of reimburses the seller for a part of their investment in the capital reserve account. There is no reason similar conditions cannot exist in the deed-restricted marketplace. We believe that any policy adopted should reflect a contribution from each of these stakeholder groups and should reinforce the kind of marketplace dynamics that would exist outside of the deed-restricted marketplace. Council might want to defer the following areas of discussion for another time and place – but I wanted to outline some of the issues associated with the policy considerations you will have to decide. How do Those Stakeholders Pay Their Share? The Community There is growing sense that a per unit contribution from the “community” is appropriate – setting that dollar amount and determining what “strings” go with accepting taxpayer money need to be determined. So the city council and the other partnering bodies will have to determine what that amount is and how to raise that contribution.  What is meant by “community”? There are really only a few choices about how the government would pay its share of the funding solution:  The city could pay it all  The county could pay it all  The city and the county could each pay half of the required contribution  APCHA could pay it through the Administration Fund – which means the city and the county would pay it on a 50%/50% basis, as the fund balance could not absorb the money contemplated.  APCHA could pay it by using its statutory authority to ask the voters for a tax increase. Under Colorado law, a housing authority may impose: P95 IV. Page 6 of 12 a) a sale/use tax at a rate not to exceed one percent, upon every transaction or other incident with respect to which a sales or use tax is levied by the state, excluding the sale or use of cigarettes; or b) an ad valorem tax at a rate not to exceed five mills on each dollar of valuation for assessment of the taxable property within such area. In return for accepting that contribution, we believe that a system of “carrots and sticks” should be adopted that address the inappropriate economic signals being sent under the current system and prevent the problem from growing or reoccurring in the future. The Current Owners Current owners will have to realize that their cost of home ownership must include investment in their property and the setting aside of funds for future capital investments. Establishing that dollar amount and making sure current owners participate in funding repairs and capital reserves would use some of the “carrots and sticks” approaches outlined above. Some of their investment would be offset by a “return” of some sort for that investment from the next generation of buyer for their property. Future Owners Using some of the approaches above, future owners would contribute to the capital reserve/common investment dilemmas outlined. They might pay slightly higher prices and/or be required to provide more funds at closing, but would be assured that they are buying a unit that has experiences sufficient investment so that their future use is guaranteed and that they would not inappropriately left “holding the bag” for a failure of past owners to adequately invest in the property. What Are the Pathways to Implementation? These changes can be imposed on the system via changes to:  The Housing Guidelines  Deed Restrictions  Declarations and Covenants for each HOA How long each of these pathways take, the legal footing the governments (city, county, APCHA) might have to impose these changes, and the pushback from each approach is something that will have to be considered before choosing a pathway to follow – or choosing a combination of each. RECOMMENDED ACTION: If Council believes this approach is the one they want to pursue, we can continue to put more and more details together, returning for more in-depth policy discussions. We have held focus groups with some HOA Board Presidents, had conversations with the Housing Frontiers Group, P96 IV. Page 7 of 12 and discussed internally the various options for several years now. We have considered the impact these policy options would have on the ability of the Centennial owners to make their repairs and have had conversations with their representatives. The Housing Frontiers Group has had hours and hours of conversations about the nature of the problem and the various pathways to solutions. The APCHA Board has likewise considered the issues. As council begins to provide a direction, we can return to these stakeholder groups and see what their reaction is to staff ideas and council direction. At some point we will need to engage the BOCC in this conversation if they are going to participate in both setting the policy and in funding the solution. Attachment A: Excerpt from 2012 Housing Summit Briefing Book on Capital Reserves Attachment B: Summary of State Capital Reserve Laws (2013) from the Community Associations Institute P97 IV. Page 8 of 12 Attachment A Excerpt from Housing Summit Briefing Book The purpose of a capital reserve fund for a condo or homeowners association is to fund and plan for the inevitable repair and replacements costs in the common areas of a community. From roofs to sidewalks, from shutters to gardens, repair and replacement is part of any property owner's task list. When done properly, an audit or capital reserve study will collect information on property condition, and project a useful life and repair and replacement costs. When projected out over a 15 or 30 year period (allowing for inflation), a study can provide a board with a roadmap to follow for the funding, replacement, and repair of the association's common areas. According to the Community Associations Institute (CAI), at the end of 2009 the total amount of money held in reserves (accumulated reserves) by all HOAs and condominiums in the U.S. is approximately $35 billion dollars. When divided by the total number of homes within these HOAs (24 million) we can see that the average accumulated reserves per household are a paltry $1,458! Under a cost sharing agreement with APCHA, Capital Reserve studies for maintaining existing housing stock are in various states of progress – some associations have rough estimates of need; others are still compiling assessments of various capital items and continue to develop their financial situation. However, from what data currently available, an underlying truth exists – that being there is a shortfall in capital reserves for the affordable housing developments in Aspen and Pitkin County, as there is for almost every HOA in the free market world. The following table notes that of the associations already reviewed, aggregate funded status for capital reserves stands at roughly 22%, or the equivalent shortfall of around $7.4 million. If the additional associations and total of ~1500 units were extrapolated from those which were the subject of the studies – and had a similar average shortfall per unit – the potential shortfall for the entire affordable housing environment could be as large as roughly $14.2 million. Table 9 # of Units Starting Capital Reserve Targeted Reserve Funded Percent Shortfall per Unit Aggregate Capital Shortfall Associations Reviewed 778 $2,050,018 $9,428,246 21.7% ($9,484) ($7,378,228) Minimum 91 $130,000 $82,481 158% $522 $47,519 Maximum 92 $500,455 $3,301,170 15% ($30,443) ($2,800,715) Source: Aggregated data from Housing Frontier’s as of July 2012 P98 IV. Page 9 of 12 Looking at the across the distribution of associations who have participated in the study effort, first from the perspective of the total reserves needed and the gap between current reserve amounts and the recommendations: You can see that the vast majority of the gaps are less than $500,000 per association. When looking at the gap on a per unit basis the majority is less than $10,000 per unit. What is clear is that there are a few associations who have significant (> $1 million per association, >$20,000 per unit) funding problems to address. Of course, the shortfall above assumes reaching -$3,000,000 -$2,500,000 -$2,000,000 -$1,500,000 -$1,000,000 -$500,000 $0 $500,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 -$35,000.00 -$30,000.00 -$25,000.00 -$20,000.00 -$15,000.00 -$10,000.00 -$5,000.00 $0.00 $5,000.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 P99 IV. Page 10 of 12 full funding for replacement of all capital items – a benchmark not typically achieved by homeowner associations whether deed restricted or free market, especially following recent economic conditions. In fact, most homeowner associations never target a full funding scenario but instead opt for other common threshold levels as described below:  Baseline funding: Simply maintaining a positive balance in the reserve account – any amount is sufficient, so long as the balance does not fall below zero.  Threshold funding: Similar to Baseline funding, this method targets a specific dollar amount to maintain in reserves (other than zero).  Statutory funding: Uniquely defined by individual localities through statute, if such law exists in the location of your property, defining a minimum necessary reserve percent. Note that while some states prescribe specific funding requirements for HOAs in rule or law, Colorado is not one of these – Colorado’s only requirement is to have a replacement plan established, funding is not mandated and the reserve study may even be performed internally and not by an independent, third party. With multiple perspectives held by vastly different individual governing groups and the unique circumstances and regulations surrounding each development being managed, it is ineffective to relate the status of capital reserve funding shortfalls for Pitkin County affordable housing developments to other groupings. Rather, given the diversity that exists, instead of focusing on the state of the universe for current reserves, it is better to look at the implications of low reserves and how that affects the development. It is more beneficial to focus on individual unit sales and ability to secure lending as the basis for determining appropriate reserve levels, and given today’s economic environment, reserve levels in the 70%-80% range appear favorable when considering lending options and real estate transactions. While there is a sizable gap between the desired 70%-80% benchmark and the current 22% reserve funding percentage in affordable housing units in the Valley with governing associations, given the number of units involved and potential to spread the shortfall over multiple years, the problem does appear to be more manageable. Many experts have recommended a 5-10 year plan to bring reserve levels up to the study- recommended amounts. Using the average shortfall per unit of $9484, and assuming a 70% target and a ten-year amortization period for all 684 units, the average temporary monthly increase would be less than $53/month per unit (assuming a 1% interest earned). Our HOA communities – and especially their board members – have to recognize the need to be responsible owners and create a plan to properly fund their reserve amounts at a higher level than is the current norm. If we look at a hypothetical Category 3 buyer of a 2-bedroom unit in 2000 who paid around $130,000 for the unit, and who, under the guidelines, could sell that unit today for $187,000, they would have $57,000 of appreciation. How much of an investment would be appropriate to secure that gain? It appears to be a reasonable expectation to invest $10,000 (the average capital reserve shortfall per unit) over those 10 years ($1000 per year) to realize their gain P100 IV. Page 11 of 12 of $57,000, certainly the counterpart in the free market would see that as a very reasonable cost of home ownership. When faced with the need to make a repair and actually spend money, the following are ways that an HOA can budget those expenditures: 1. Reserves: If you’ve set aside reserves for the type of project you’re facing, dipping into the reserves is an obvious option. “Unfortunately, associations aren’t reserving anywhere where they should be,” says Lisa A. Magill, a shareholder and association attorney at Becker & Poliakoff PA in Fort Lauderdale, Fla. “In Florida, owners can vote down the association’s funding of any reserves. Continually, you’ll have owners who aren’t in a position to pay any assessments. So if an association is collecting reserves, it’s usually only about 10 percent of what it should be collecting. When projects come up, they’re either paid for by a special assessment or some other means, usually a loan.” 2. A special assessment: A special assessment is a common fallback option for HOAs that need money immediately and have no other or better way to raise it. 3. A loan: “An institutional loan usually entails pledging as collateral the HOA’s lien rights in terms of collecting assessments,” says Andrew Lewis of Eisinger, Brown, Lewis, Frankel & Chaiet PA in Hollywood, Fla., who specializes in representing community associations. “Lenders look at all kinds of factors when considering HOA loans,” explains Magill. “Are you capitalized? Do you have reserves? What’s your percentage of delinquencies? What other maintenance items have to be performed? For example, with the loan, are you funding only one of 10 projects that need to be done? They also look to make sure you have all the appropriate insurance, which associations should have, anyway, but sometimes don’t. But really, the delinquency rate is the most important thing. Some lenders won’t approve a loan if your HOA has 7 -8 percent delinquencies, but the benchmark is 15 percent.” In our conversations with local lenders, they indicate they are making these loans and are willing to make these loans to deed restricted HOAs. Obviously, a combination of these three options is the most likely way that our deed restricted communities will fund major maintenance/repair work, given the general condition of their capital reserves. P101 IV. Page 12 of 12 Attachment B P102 IV. Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 Summary of State Reserve Fund Laws (September 2013) Many states have enacted legislation dealing with community association reserve and operating funds to protect owners from fiscal problems and financial hardship. More states may enact similar legislation as community associations continue to gain popularity. The following is a summary of each state reserve fund law. Reserve Studies are required in the following states: California, Delaware, Hawaii, Nevada, Oregon, Utah and Virginia. Washington statutorily encourages associations to have a reserve study performed every three years unless doing so would impose an unreasonable hardship. Please remember that community associations are governed by state law, which can vary widely from state to state. This information is intended for general educational and informational purposes only; it may not reflect the most recent developments, and it may contain errors or omissions. The publisher does not warrant or guarantee that the information contained here complies with applicable law of any given state. It is not intended to be a substitute for advice from a lawyer, community manager, accountant, insurance agent, reserve professional, lender, or any other professional. ALABAMA The unit owners’ associations may adopt and amend budgets for revenues, expenditures and reserves and impose and collect assessments for common expenses from unit owners. Section 35-8A-302(2). Sellers must present buyers with an offering statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement, and a statement of any other reserves. Section 35-8A-403(5). There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. ALASKA The unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 34.08.320(2). A public offering statement must include assumptions concerning the calculation of the amount of reserves certified by a certified architect or engineer; the amount included in the budget as a reserve for repairs and replacement including the estimated cost of repair or replacement cost and the estimated useful life of the asset to be repaired or replaced; and a statement of any other reserves. Section 34.08.530(5). P103 IV. 2 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. ARIZONA For condominiums, unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 33-1242(2). The resale disclosure statement must include the total amount of money held by the association as reserves. The purchaser must also receive a copy of the most recent reserve study of the association, if any. Section 33-1260. For planned communities, resale disclosure statement must include the total amount of money held by the association as reserves. The purchaser must also receive a copy of the most recent reserve study of the community, if any. Section 33-1806. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. Section 10-3830 requires directors of nonprofit corporations to discharged duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interests of the corporation. ARKANSAS There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. CALIFORNIA On a quarterly basis common interest development boards of directors must review reserve accounts and compare reserves to the previous year. At least once every three years, boards must conduct a competent and diligent visual inspection of the property that the association is obligated to repair, replace restore or maintain as part of a study of the reserve account requirements. The board is to annually review this study to consider and implement necessary adjustments to the board’s analysis of the reserve account requirements. See more detailed information in California Civil Code Sections 1365 and 1365.5. COLORADO The unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 38-33.3-302. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P104 IV. 3 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 CONNECTICUT Condominium associations shall provide in the proposed budget for the condominium adequate reserves for capital expenditures. Section 47-88e. Common interest community executive boards, at least annually, shall adopt a proposed budget for the common interest community for consideration by the unit owners. Not later than thirty days after the adoption of a proposed budget, the executive board shall provide to all unit owners a summary of the budget, including a statement of the amount of any reserves, and a statement of the basis on which such reserves are calculated and funded. Section 47- 261e. Resale disclosure statement must include the total amount of money held by the association as reserves. Section 47-264(5). There is no statutory requirement to conduct a reserve study. DELAWARE Condominiums must contain within their declaration provisions that mandate that the association create and maintain, in addition to any reserve for contingencies, a fully funded repair and replacement reserve based upon a current reserve study. Section 81-205(14). Condominium disclosure statement must include the current balance in reserves and the most recent reserve study. Section 84-409. DISTRICT OF COLUMBIA The unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 42-1903.08. Disclosure statement shall include the amount, or a statement that there is no amount, included in the projected budget as a reserve for repairs and replacement. Section 42-1904.04. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. FLORIDA Condominium financial reporting rules must include, but not be limited to, standards for presenting a summary of association reserves, including a good faith estimate disclosing the annual amount of reserve funds that would be necessary for the association to fully fund reserves for each reserve item based on the straight-line accounting method. Section 718-111(13). Annual budgets shall include reserve accounts for items such as, but not limited to, roof replacement, pavement, painting and other items with a replacement cost exceeding $10,000. Funding for the accounts can be waived by a majority vote at a duly called meeting. Section 718.112(f)(2). Homeowner associations may adopt a budget that includes reserve accounts for capital expenditures and deferred maintenance for which the association is responsible. If reserve accounts are not established, funding of such reserves is limited to the extent that the governing documents limit P105 IV. 4 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 increases in assessments, including reserves. Associations may waive reserves with proper notification in their financial statement. Section 720.303(6). There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. GEORGIA Condominium resale disclosure statement must include the estimated or actual operating budget for the condominium for the current year’s reserves. Section 44-3-111. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. HAWAII Condominium budgets shall include the amount of money in reserve, future reserve estimates based on a reserve study performed by the association, an explanation of how reserves are computed and the amount to be collected for reserves in the year ahead. The association shall compute the estimated replacement reserves by a formula that is based on the estimated life and the estimated capital expenditure or major maintenance required for each part of the property. The estimated replacement reserves shall include: adjustments for revenues which will be received and expenditures which will be made before the beginning of the fiscal year to which the budget relates; and separate, designated reserves for each part of the property for which capital expenditures or major maintenance will exceed $10,000. Parts of the property for which capital expenditures or major maintenance will not exceed $10,000 may be aggregated in a single designated reserve. Section 514B-148. IDAHO There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. ILLINOIS The Common Interest Community Act requires the board to give each owner a copy of the proposed annual budget which shall provide for reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements. 765 ILCS 160/1-45. The Condominium Act requires the board of managers to adopt a budget that provides for reasonable reserves for capital expenditures and differed maintenance for repair or replacement of the common elements. To determine the amount of reserves appropriate, the board shall take into consideration the any independent professional reserve study which the association may obtain. Any association without a reserve requirement in its condominium instruments may elect to waive in whole or in part the reserve requirements by a vote of 2/3 of the total votes of the association. 760 ILCS 605/9. P106 IV. 5 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 Disclosure statement shall include a statement of the status and amount of any reserve or replacement fund and any other fund specifically designated for association projects. There is no statutory requirement to conduct a reserve study. INDIANA All sums assessed by the association of co-owners shall be established by using generally accepted accounting principles applied on a consistent basis and shall include the establishment and maintenance of a replacement reserve fund. The replacement reserve fund may be used for capital expenditures and replacement and repair of the common areas and facilities and may not be used for usual and ordinary repair expenses of the common areas and facilities. Section 32-25-4-4. There is no statutory requirement to conduct a reserve study. IOWA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. KANSAS There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. KENTUCKY The Horizontal Property Law requires all co-owners to contribute toward the expense of maintaining a replacement reserve fund for repairs and maintenance of the general common elements. Section 381.870. Condominium unit owners’ associations may adopt and amend budgets for revenues, expenditures, and reserves and impose and collect assessments for common expenses from unit owners. Section 981.9167. The resale disclosure statement must include the total amount of any reserves for capital expenditures, if any, and of any portions of those reserves designated by the association for any specified projects. Section 381.9203. There is no statutory requirement to conduct a reserve study. LOUISIANA Associations may adopt and amend budgets for revenues, expenditures, and reserves and make and collect assessments for common expenses from unit owners. Section 9:1123.102. Public offering statements shall include an indication of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement. Section 9:1124.102. P107 IV. 6 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. MAINE Unit owners associations may adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. Section 1603-102. Public offering statements must contain a statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and a statement of the amount and purpose of any other reserves. Section 1604-103. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. MARYLAND Councils of unit owners have the power to adopt and amend budgets for revenue, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 11-109. The level of reserves is required to be included in the annual budget; however, there is not a required level of reserve funding. Section 11-109.2. Resale certificate must contain the current operating budget of the condominium including details concerning the reserve fund for repair and replacement and its intended use, or a statement that there is no reserve fund. Section 11-1350 There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. MASSACHUSETTS All condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds. Section 183A-10(i). Managing agents shall be responsible for rendering, in no case less frequently than quarterly, a written report to the trustees or the managing board of the organization of unit owners detailing all receipts and expenditures on behalf of the organization, including beginning and ending balances and copies of all relevant bank statements and reconciliations for the replacement reserve fund, and maintain a separate and distinct account for the replacement reserve fund. Section 183A-10(f). There is no statutory requirement to conduct a reserve study. MICHIGAN Condominiums must have a reserve fund for major repairs and replacement of common elements shall be maintained by the associations of co-owners. The administrator may by rule establish minimum standards for reserve funds. Section 559.205. P108 IV. 7 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 The state administrative code requires the co-owners’ association to maintain a reserve fund which, at a minimum, shall be equal to 10% of the association’s current annual budget on a noncumulative basis. The funds shall only be used for major repairs and replacement of common elements. Additionally, the following statement shall be contained in the bylaws: “The minimum standard required by this section may prove to be inadequate for a particular project. The association of co-owners should carefully analyze their condominium project to determine if a greater amount should be set aside, or if additional reserve funds should be established for other purposes.” Rule 559.511. There is no statutory requirement to conduct a reserve study. MINNESOTA The common interest ownership act requires an association to include in its annual budgets replacement reserves projected by the board to be adequate, together with past and future contributions to replacement reserves, to fund the replacement of common elements. The act also requires the association to reevaluate the adequacy of its budgeted replacement reserves at least every third year after the recording of the declaration creating the common interest community. Section 515B.3-1441. Unit owners associations have the power to adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. Section 515B.3-101. Communities must distribute an annual report with a statement of t he asso ciation's total r eplacement rese rves , t he co m po nent s of t he commo n i nte re st comm unity f o r wh ich the re se rv es are set aside, and th e amo unts o f th e reser ves , if a ny, that t he board ha s allocated for t he replacem ent o f eac h o f t h ose c o m ponent s. Sec t io n 515 B.3 -1 06. D isclo sure statem e nt s m us t include the amount i n t he budget as r e plac e ment re se rv es and a st atem ent o f a ny o th er r es erve s. There is no statutory requirement to conduct a formal reserve study. MISSISSIPPI There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. MISSOURI Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 448.3-102.1. Resale certificates must provide the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects. Section 448.4 -109.1. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P109 IV. 8 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 MONTANA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. NEBRASKA Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 76-860. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. NEVADA The common interest ownership act requires an association to establish adequate reserves, funded on a reasonable basis, for the repair, replacement and restoration of the major components of the common elements. Section 116.3115. Additionally, the executive board of an association is required to conduct a study of reserves at least every five years, review the study to determine if reserves are sufficient, and adjust reserves, if necessary. The statute specifies how the study is to be conducted. Section 116.31152. A public offering statement must include a budget which has a statement of the amount included in the budget as reserves. Section 116.4103. NEW HAMPSHIRE Public offering statement must include the status and amount of any reserve for the major maintenance or replacement fund and any portion of such fund earmarked for any specified project by the board of directors. Section 356-B:58. NEW JERSEY The association may levy and collect assessments duly made by the association for a share of common expenses or otherwise, including any other moneys duly owed the association, upon proper notice to the appropriate unit owner, together with interest thereon, late fees and reasonable attorneys' fees, if authorized by the master deed or bylaws. All funds collected by an association shall be maintained separately in the association's name. For investment purposes only, reserve funds may be commingled with operating funds of the association. Commingled operating and reserve funds shall be accounted for separately, and a commingled account shall not, at any time, be less than the amount identified as reserve funds. Section 46:8B-15. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P110 IV. 9 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 NEW MEXICO Unit owners of a condominium association may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 47-7C-2. Disclosure statements must make a statement of the amount or a statement that there is no amount included in the budget as a reserve for repairs and replacement and a statement of any other reserves. Section 47-7D-3 and 47-7E. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. NEW YORK Condominium bylaws may contain provisions governing the payment, collection and disbursement of funds, including reserves, to provide for major and minor maintenance, repairs, additions, improvements, replacements, working capital, bad debts and unpaid common expenses, depreciation, obsolescence and similar purposes. RRP Section 339-V. Co-operative corporation directors must periodically set aside reasonable sums for reserves. CCO Section 72. There is no statutory requirement to conduct a reserve study. NORTH CAROLINA Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 47C-3-102 and 47F-3-102. Public offering statements must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and a statement of any other reserves. Section 47C-4- 103. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. NORTH DAKOTA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. OHIO Unless otherwise provided in the declaration or bylaws, the condominium unit owners association, through the board of directors, shall adopt and amend budgets for revenues, expenditures, and reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, provided that the amount set aside annually for reserves shall not be less than 10% of the budget for that year unless the reserve requirement is waived annually by the unit owners exercising not less than a majority of the voting power of the unit owners P111 IV. 10 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 association. Section 5311.081. P112 IV. 11 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 Planned community owners associations, unless otherwise provided in the declaration or bylaws, through its board of directors, shall annually adopt and amend an estimated budget for revenues and expenditures. Any budget shall include reserves in an amount adequate to repair and replace major capital items in the normal course of operations without the necessity of special assessments, unless the owners, exercising not less than a majority of the voting power of the owners association, waive the reserve requirement annually. Section 5312.06. There is no statutory requirement to conduct a reserve study. OKLAHOMA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. OREGON The declarant, on behalf of a homeowners association, shall conduct an initial reserve study, prepare an initial maintenance plan and establish a reserve account. A reserve account shall be established to fund major maintenance, repair or replacement of all items of common property which will normally require major maintenance, repair or replacement, in whole or in part, in more than one and less than 30 years. The board of directors of the association annually shall conduct a reserve study or review and update an existing study to determine the reserve account requirements. After review of the reserve study or reserve study update, the board of directors may, without any action by owners adjust the amount of payments as indicated by the study or update and provide for other reserve items that the board of directors, in its discretion, may deem appropriate. Section 94.595 and 100.175. Following a turnover of power from the declarant to the association, the board of directors at least annually shall adopt a budget for the planned community and include moneys to be allocated to the reserve account. Section 94.645 and 100.412. However, the board of directors, with the approval of all owners, may elect not to fund the reserve account for the following year. Section 94.595 and 100.175. PENNSYLVANIA Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 3302 and 5302. Disclosure statements must statement of the amount or a statement that there is no amount included in the budget as a reserve for repairs and replacement and a statement of any other reserves. Section 3402 and 5402. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P113 IV. 12 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 RHODE ISLAND Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section34-36.1-3.02. Public offering statements for condominiums must disclose a budget detailing the amount of reserves sufficient for painting exterior surfaces, replacing roofing, resurfacing roadways or other items subject to declaration. Must also disclose itemized life spans for common elements and expected impact on assessments. Section 34-36.1-4.03. There is no statutory requirement to conduct a reserve study. SOUTH CAROLINA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. SOUTH DAKOTA There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. TENNESSEE Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 66-27-402. Disclosure statements must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacements, and whether or not any study has been done to determine their adequacy, if a study has been done, where the study will be made available for review and inspection, and a statement of any other reserves. Section 66-27-503. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. TEXAS Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 82.102. Resale statements must include the amount of reserves, if any, for capital expenditures and of portions of those reserves designated by the association for a specified project. Section 82.157. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P114 IV. 13 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 UTAH Condominium management committees must cause a reserve analysis to be conducted no less frequently than every six years and review and, if necessary, update a previously conducted reserve analysis no less frequently than every three years. The management committee may conduct a reserve analysis itself or may engage a reliable person or organization, as determined by the management committee, to conduct the reserve analysis. An association of unit owners shall annually present the reserve study and provide an opportunity for unit owners to discuss reserves and to vote on whether to fund a reserve fund and, if so, how to fund it and in what amount. Section 57-8-7.5 and 57-8a-211. There is no statutory requirement to fund reserves. VERMONT Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 27A-3-102. Public offering statement must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and statement of any other reserves. Section 27A-4-103. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. VIRGINIA Associations must conduct a reserve study at least once every five years to determine the necessity and amount of reserves required to repair, replace and restore the common elements or capital components. The board of directors must review the study at least annually and make adjustments as the board determines to keep the funding of reserves sufficient. The statutory provisions on reserves also include requirements for the contents of the association budget if reserves are determined to be a necessity. Section 55-79.83.1 and 55-514.1. Resale certificates must include the current reserve study report or a summary thereof, a statement of the status and amount of any reserve or replacement fund and any portion of the fund designated for any specified project by the association. Section 55-79.97. WASHINGTON Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners, and establish and administer a reserve account and prepare a reserve study. Section 64.34.304 and 64.38.020. The decisions relating to the preparation and updating of a reserve study must be made by the board of directors of the association in the exercise of the reasonable discretion of the board. Such decisions must include whether a reserve study will be prepared or updated, and whether the assistance of a reserve study professional will be utilized. Section 64.34.388. Associations are encouraged to establish a reserve account to fund major maintenance, repair, and replacement of common elements, including limited common elements that will require major maintenance, repair, or replacement within 30 years. Unless doing so would impose P115 IV. 14 Community Associations Institute (CAI) | 6402 Arlington Blvd., Ste 500, Falls Church, VA 22042 | www.caionline.org | (888) 224-4321 an unreasonable hardship, an association with significant assets shall prepare and update a reserve study. The initial reserve study must be based upon a visual site inspection conducted by a reserve study professional. Unless doing so would impose an unreasonable hardship, the association shall update the reserve study annually. At least every three years, an updated reserve study must be prepared and based upon a visual site inspection conducted by a reserve study professional. Section 64.34.380 and 64.38.065. The public offering statement shall include copies of the association's current reserve study, if any. If the association does not have a reserve study, the public offering statement shall contain the following disclosure: “This association does not have a current reserve study. The lack of a current reserve study poses certain risks to you, the purchaser. Insufficient reserves may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair, or replacement of a common element.” Section 64.34.410. WEST VIRGINIA Unit owners associations may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. Section 36B-3-102. Public offering statement must include the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement and statement of any other reserves. Section 36B-4-103. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. WISCONSIN An association may, with the written consent of a majority of the unit votes, create or terminate a statutory reserve account. Section 703.163. There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. WYOMING There is no statutory requirement to conduct a reserve study and no statutory requirement to fund reserves. P116 IV.