See Forever Update, Nov. 2023
See Forever Owners
I want to provide a brief update on various matters that impact all of us. There has been a lot going on, and Andrew and Dennis are doing a terrific job addressing the many issues we are encountering, as are Garrett and Scott from Telluride Consulting. I cannot overstate the amount of work that they are putting in to try and make our property better, and we are really lucky to have them on our board, and Garrett and Scott from Telluride Consulting representing us.
The biggest issue we have is insurance, so let me start with that, and then provide additional updates on HOA matters.
1) Insurance. This is THE big issue, and we all owe a big thank you to Andrew, Dennis, and Garrett from Telluride Consulting for digging into this mess and coming up with options
The good news is that we have insurance THIS WAS NOT A FOREGONE CONCLUSION. We were rejected by 9 carriers who refused to provide us with any coverage. This includes our current carrier, who is no longer writing mountain property policies. Even when we offered to take up deductibles to over $1MM and exclude Wild fire coverage and get a separate policy for that, we were still denied.
We did finally get an offer for walls out coverage of 60MM that included wildfire. However, the annual premium was $2.4MM, so basically each owner would pay the same amount that you are paying for the 1-time special roof assessment. The Board believes that was not reasonable.
I am guessing that all of your have seen steep increases in your other property insurance policies. I know we have, but nothing like this. We did get confirmation that another condo HOA here in Mountain Village is paying $900K for their total property insurance, and they are a much smaller building with a lower insured value, and have a metal roof. So this mountain insurance situation is a mess
Here is our direction, as our policy expires November 23rd and we just got a formal written proposal Monday November 21 and signed off on it so that we are insured as of 12:01AM Friday.
1) We have secured a policy for $51MM (walls out replacement value) at an annual cost of $197,000. This policy EXCLUDES wildfire. This compares with our current cost of $100,000 that INCLUDES wildfire coverage. This was a HUGE WIN to get this policy. The only other option we had was an annual premium of $569,00 (excluding wildfire)and that was only until April of 2024, when we would then have to go back to the market. We attempted to get coverage at a $60MM replacement cost level, but the best we could get was $51MM.
2) We are also securing a wildfire parametric policy for $5MM at an annual cost of $116,000. This is not nearly enough to cover the $60MM replacement cost in the event of a wild fire catastrophe, but the cost of full wildfire coverage would be $1.4MM. The board does not think this is a commercially reasonable option for our HOA, although to be very clear, it does leave all of us underinsured in the event of a wild fire. That wildfire coverage alone would represent $15.55/ft cost to each owner......more than our current total dues. Therefore, we recommend you speak with your own insurance company and explore additional insurance options for your unit that concludes wildfire coverage.
3) We are proceeding with the metal roof, which SHOULD help us secure more reasonable insurance options next year....although that is not a guarantee, as evidenced by the other condo's cost noted above
So the total cost of insuring our property will be $313,000, roughly $200,000 MORE than this year, but dramatically less than we thought we were going to have to incur. That is roughly $2.50/ft additional cost to each owner for insurance compared to 2023. We do not really have a choice on this, and if anything, we are under insuring the wildfire risk,. We believe this is the prudent decision rather than assess everyone an additional $15.55/ft/year for complete wildfire coverage.
Going forward, we are investigating an option to amend our bylaws so that each owner bears responsibility for securing their own insurance...inside and outside walls, to include wild fire risk. The HOA would then only have to secure insurance for the common areas.....more like a $20 million replacement policy versus the current $51MM. We need to verify the replacement value of common areas, garage, etc. but this is an option we will explore given the extreme challenges we just went through in securing any coverage. The analysis will be undertaken via a cost segregation study This would basically reallocate the insurance cost with an increase to each owner rather than on the HOA. It is not optimal, but we need to have a contingency plan given the extreme challenges we had in getting any insurance for our property this year...even at an exorbitant cost.
2) Roof. We have signed a contract with Horn Brothers to complete the roof replacement on WIlson and Sophia this summer. Horn Brothers did a good job with our cabins, coming in on budget and on time, and the quality of work seems solid. Therefore, after conducting another bid for the big buildings, we ended up with Horn Brothers again as the lowest cost option. Based on the bid, we expect to be within 5% of budget for this entire project. I am disappointed that we might end up a bit higher than forecast, but we are still dealing with the implications of supply chain stresses, inflation, and Telluride's local supply and demand for services, and it will not be a significant overrun (maybe $150K on over $2.4MM project). We will just have to see how things progress as the work begins this spring. A reminder that the final installment of the roof work will be due February 1, 2024, so please plan on that. This work will extend throughout spring and summer so please be prepared for construction activity this year.
3) Stain and Chink. It is time to complete our staining and chinking. This is typically planned for every 5-6 years, and it was last done in 2018. Since the stain and chink work impacts the roof, we intend to get this done BEFORE the new roof is installed. Therefore, we will begin the stain and chink project in mid April, allowing them a head start versus the roofing work. There will be overlap, but the contractors will coordinate the work. The staining and chinking is approximately the same cost as in 2018 - $650K- but the cost will be handled by our reserve and there should be no special assessment to do this.
4) Banking. We have placed the reserve funds - roof reserve and general- into an insured Fidelity Account that pays @ 5% interest. That will enable us to generate an additional $12-$15K over the next 6 months that we can use to fund needed investments.
5) Tree trimming to reduce fire risk and improve insurability. We have done significant tree trimming on the hills in front of the Wilson and Sophia buildings in order to reduce fire risk and improve our fire risk scores. Once spring arrives we will still have to do significant clearing of the underbrush, but this work should reduce our fire risk
6) Other items.
-We have installed security cameras in the garage, garbage, and lobby entrances to provide additional security to owners.
- Telluride Consulting has hired a new maintenance engineer to support our property, which is great news for all of us. Alberto is on to his food cart business, so wish him the best of luck and buy his tacos this winter!
- Driveway repairs are planned for spring. We are patching the problems, but will likely have a significant repair in the next year or two. This will be handled from the normal reserves
- We have a new website or See Forever2 Owners. Nice job by Telluride Consulting getting this up and running, and we now have a site that owners, realtors, etc. can go to and access information on owners meetings, newsletter, etc. The site is seeforever2.com
- 2024 Operating Budget. We are working on these details, with insurance being the real challenge. We are very sensitive to owner dues, but also have a responsibility to secure insurance, and to maintain the quality of our property. Our goal is no more special assessments once the roof is completed, and to handle all of the necessary repairs and upgrades through our normal dues. But expect an increase in dues for '2024. I do not have an exact amount, but with the insurance challenge, I expect it to be roughly $4/ft additional cost to all of us.
7) Holiday party A much more enjoyable topic is our Holiday Party. We will get details to everyone but it will likely be held on December 29 or 30th, so pencil in those dates and we will provide more details as the time gets closer.
That is the news from See Forever. I cannot overemphasize the work that went into getting the owners insurance coverage, and a big thank you to Garret and Andrew in particular. The collective team legitimately spent over 60 combined hours dealing with insurance during the past 3 months, most of those volunteer hours. We all ask that if any of you have experience in this area, please let us know, as we would love some help for next year's process.
Let's hope for some good snowfall in the next weeks, and look forward to seeing everyone over Christmas Holidays
Bill