SPECIAL ASSESSMENT

• Aging components

  Roofs, siding, trim, balconies, walkways, and related systems are at or past expected life. We are seeing real deterioration, leaks, and exposure risk.

• SB 326 balcony law

  Mandated inspections are complete. Items identified must be addressed within a reasonable period. That obligation remains regardless of this vote.

• Fire, roofing, and insurability expectations

  Current California standards (Chapter 7A) and insurer expectations commonly include Class A fire-resistant roofing and ember-conscious detailing at vents and gutters. Aligning our assemblies and details supports safety and insurability.

• Reserve Position

  The Association currently holds $533,155.35 in reserves and transfers $17,994.48 per month to reserves. At this level, it is not realistic to save into multi-million-dollar projects on a timely schedule.

• Cost of Delay

  Construction and insurance costs have risen. Known work usually costs more later and causes more disruption when deferred.

• Replacement of aging roofs with Class A fire-resistant assemblies and appropriate related components

• Repairs or replacement of deteriorated siding, trim, and exterior elements where there is water, dry rot, or insect damage

• Repairs required to comply with SB 326 findings for balconies and other exterior elevated elements

• Gutters, downspouts, and drainage improvements to move water away from buildings and reduce long-term damage risk, using debris and ember-conscious detailing

• Limited related paving and access work required to complete construction safely and maintain proper drainage

• Lender-required contingency of about $780,000 for concealed issues discovered during construction

• Professional services for engineering, construction management, architectural review, testing, and permits to ensure proper design, competitive bidding, oversight, and documentation

These items have been seen as “non-essential.” The Board’s position is clear.

• They are not driving the $8.6 million figure.

• They are not guaranteed.

• They are secondary to the essential scope.

If approved, essentials are funded and completed first. Any placeholder amount for improvements can be reassigned to essential work if hidden issues are discovered once roofs and walls are opened. Only if essential work finishes within budget and contingency remains adequate would the Board bring any limited enhancements back for notice and open discussion. The priority is protection, not cosmetics. Placeholders reduce the chance of a second assessment.

Based on the adopted budget, each monthly assessment of $631 is allocated approximately as follows:

• about 26% to reserves for future major repairs and replacements

• about 23% to insurance

• about 19% to utilities such as electricity, gas, water, and trash

• about 13% to common area repairs and maintenance, including pool operations

• about 11% to landscaping and irrigatio

• about 9% to management and administrative costs, including TSG property management, legal, audit, mailings, elections, and related services

The Association is currently transferring $17,994 per month to reserves. The present $631 assessment funds operations, insurance, routine maintenance, and reserves. It does not generate the multi-million-dollar capacity needed for the defined work on a reasonable timetable.

(Note: budget allocation percentages and month-to-month reserve transfers can differ due to timing of expenses and contributions. Figures above are provided for transparency and scale.)

Owners have asked to see a plan. This is the roadmap that will guide work if the Special Assessment is approved. Dates are ranges because final timing depends on lender terms, contractor availability, permits, material lead times, and weather.

• Phase 0. Funding and mobilization, weeks 0 to 8

  Finalize loan terms and member payment options. Engage independent construction manager. Confirm scope, priorities, safety and access plans, and communication cadence. Prequalify contractors.

• Phase 1. Design and permit set, weeks 4 to 18

  Contractors prepare detailed drawings and technical specifications for roofs, exterior repairs, SB 326 corrections, drainage, and site logistics. Submit permits.

• Phase 2 Construction, approximately months 4 to 18

  Work proceeds building by building, grouped for efficiency and minimal disruption. Owners receive a 30-day look-ahead, 7-day start notice. Quality control includes city inspections and progress inspections by the construction manager. Payment controls include progress billing, lien waivers, retainage, and Board approval for change orders above a threshold.

• Phase 3. Closeout and warranty, approximately months 18 to 24

  Final inspections, punch lists, warranty documentation. Project accounting closeout and a final report to owners summarizing costs, variances, and warranty coverage.

• Communication commitments

  Quarterly project updates during Phases 0 to 1, then monthly during Phase 2. Building-specific notices before work begins and during construction

The problems do not go away. The legal and safety obligations remain. What changes is how and when you pay, and how much control you have.

• You lose the payment plan. Without member approval, the Association cannot secure the long-term loan. Costs then arrive through short-notice special or emergency assessments with much shorter due dates. Fixed-income owners have fewer options to spread payments.

• You trade a known monthly amount for unpredictable bills. Instead of one defined program you can plan for, expenses show up when a roof leaks, wood rot is opened, or an SB 326 item must be corrected. There is no schedule you can budget around.

• You increase total cost risk. Piecemeal and emergency work usually costs more per incident. You pay repeated mobilization and premium rush pricing and miss economies of scale a coordinated project captures.

• You accept greater pressure on dues. Chronic emergencies and underfunded reserves tend to create upward pressure on regular dues and repeated smaller special assessments. Saying no is not a decision to keep dues flat.

• You invite resale and refinancing friction. Buyers, appraisers, lenders, and insurers review association minutes, inspections, reserves, and vote outcomes. Documented issues with no funded plan often translate to price discounts, tougher loan conditions, longer escrows, or lost buyers.

• You concentrate risk on whoever is unlucky. Without a funded plan, costs fall on whoever owns when the next failure occurs. That can be you, even if a neighbor benefited from prior repairs.

Bottom line

A “no vote” does not avoid paying. It changes the timing and increases the risk that you will pay more, with less control, and at the worst moments. The Special Assessment converts a scattered, emergency-driven future into a defined program with known numbers and a payment structure people can plan for.

If members approve the Special Assessment and the Association secures a loan:

• Each unit will be assigned its share, about $50,000 per unit

• Owners can expect a lump-sum option and a long-term payment option through the Association loan.

• Preliminary modeling suggests a 15-year plan on about $50,000 results in an added monthly payment of approximately $400 to $450, subject to final loan terms.

Final loan terms will be obtained and disclosed after approval of the Special Assessment authority and before any owner must select a payment method.

If financed, a unit’s remaining obligation does not automatically disappear at sale. In most escrows, either the seller pays off the remaining balance at closing or the buyer agrees in writing to assume the remaining payments. This is standard and will be documented clearly.

If approved, funds are restricted to authorized purposes under the financial institution and Davis-Stirling. The Board follows statutory budgeting, reporting, and record-keeping rules. Owners retain the right to inspect association financial records, contracts, and invoices within legal timelines. Competitive bidding and professional oversight are used for major work

This is not about luxury features. It is about how The East Nine chooses to handle documented needs that affect safety, stability, and long-term value. Approving the Special Assessment provides a defined plan and funding to address critical roofs, exteriors, SB 326 items, drainage, and related risks. It reduces the likelihood of disruptive emergency assessments and crisis decisions, supports insurability and financing, and gives owners a more predictable framework. If it is not approved, the same obligations remain and are addressed with fewer tools and less leverage, increasing the risk of higher long-term costs and more volatility for individual households.