HOA Takes Next Step To Road Maintenance RID
On Tuesday, March 23, 2021 homeowners participated in a zoom meeting with the HOA Board to discuss the creation of a Rural Improvement District to provide funding for subdivision road maintenance. James Nickelson, RID Project Engineer, with Morrison Maierle Engineering presented information regarding the proposed RID.
The HOA Board is in support of establishing a Rural Improvement District for our community roads. In order to move forward, we have to receive a yes vote from 51% of our homeowners. We are reaching out again with the RID information so you can make your final decision. Ballots will be mailed out from Morrision-Mairele Engineering by the end of May so you can cast your vote.
Our streets are 18 years old. Asphalt pavement typically requires some surface treatment in 16-24 years. Based on an on-site evaluation, the current road will require a pavement overlay in 2028 or 2029. The estimated cost for pavement overlay is $819,045.64. Annual ongoing costs are approximately $20,000 to maintain the streets. This includes snow plowing, pavement preservation maintenance, and right of way weed spraying.
With this in mind, homeowners will decide how to fund the maintenance. There are two options:
The first is self-managed by the collection of reserve funds through a special assessment and management of required maintenance through the HOA.
The second option is to partner with the County and create a Rural Improvement District (RID). This must be voted on and approved by the membership. If approved, starting in November 2022, each lot would pay $635 annually. In 2030 that number would decrease to about $250.
What is a RID?
A Maintenance Rural Improvement District (M-RID) is a legal funding mechanism through which a subdivision can raise reserves for on-going maintenance and improvements. The RID program provides planning, management, engineering services, and administration of the fund. For more info please click on the links below.
What are the Advantages of a RID?
Scheduled Maintenance: The RID program develops a maintenance schedule and funding to ensure that our roads have good maintenance to extend the service life well into the future.
Competitive Bidding: Each year multiple RID improvements are competitively bid to qualified contractors. These bids are lower than those received on smaller projects due to the increased volume of work bid out for the combined RID projects. The HOA Board cannot take advantage of these savings, so must assess much higher amounts.
Tax Deduction: Most accounting firms consider the assessment a tax deduction so there is an advantage to fund road maintenance with RID funds vs. HOA funds.
Scheduled Maintenance: The RID program develops a maintenance schedule and funding to ensure that our roads have good maintenance to extend the service life well into the future.
Competitive Bidding: Each year multiple RID improvements are competitively bid to qualified contractors. These bids are lower than those received on smaller projects due to the increased volume of work bid out for the combined RID projects. The HOA Board cannot take advantage of these savings, so must assess much higher amounts.
Tax Deduction: Most accounting firms consider the assessment a tax deduction so there is an advantage to fund road maintenance with RID funds vs. HOA funds.
Interest Accrual: Funds in the account do accrue interest comparable to the market for secure investments.
Savings: Implementing this RID will save us at least $20,000 a year on annual expenditures to maintain the roads. We will be able to allocate those funds towards much needed improvements in the community that we would like to see done. We currently do not have the extra funds to make those improvements. Plus we will be able to keep our HOA dues at an affordable price!
What if we don't approve the RID Project?
If we do not implement a RID, the only option is to create a special assessment per lot. This amount will probably be at least $1,000 per lot, per year over the next three years or more to accumulate enough funds to repair the road. The special assessment funds collected will only be allocated for road repairs and will not be available to use for normal operating expenditures.
Please note, per the HOA governing documents, a special assessment must also be voted on and approved by the membership.
If a special assessment does not pass, once the roads deteriorate the County will step in and create a SID tax that all homeowners will be responsible to pay. The cost will be much higher than the proposed RID or special assessment.
Concerned About Water Rates?
If you are concerned about the water rates charged by the Landmark Water Company please complete the Public Service Commission complaint form and send it to Luna Properties via mail or email.
MAIL TO: Luna Properties, 40 East Main St., Suite 210, Bozeman, MT 59715
EMAIL TO: info@lunaproperties.biz
Landmark Water Company is a privately owned company that supplies water to the subdivision through water distribution lines they own within the subdivision. Landmark Water purchases water from the River Rock Water & Sewer District. The Landmark Homeowners Association is not affiliated in any way with the Landmark Water Company.