The Communicator - Volume 1, Issue 3 - (Page 9)

analysis of the HOA’s landscape infrastructure (location, soil types, irrigation system, historical and current water use, urban forest requirement, plant inventory and maintenance practices). Landscape management addresses such questions as: • What is the current level of the landscape infrastructure? • What level is desired within what period of time? • What funds (if any) are available to achieve this level? • What are the best uses of total invested funds to receive the highest return on those funds? Landscape management, skillfully implemented, protects and increases value of the landscape asset to the residents, while maximizing use of invested dollars for a greater return on eventual sale of the unit. process of discovery and documentation that will be included in the association’s emerging GIS. This process is admittedly not very scientific, but it really works! LANDSCAPE LEVEL AND ASSET VALUE Consider a 30-year-old, 125-unit association in the Bay Area, with a current average market value of $700,000 per unit. Studies have shown that the landscape can represent up to 10 perecent of the property value. Using a scale of 1 to 10, with 5 being “acceptable” and 8 being “excellent,” Table 2 outlines the current value of the landscape asset of this association. TABLE 2. VALUE OF THE LANDSCAPE ASSET WHAT DO WE MEAN BY LANDSCAPE ASSET LEVEL? # of Units Avg. Price Association Value Level Landscape Value 125 $700,000 $87,500,000 5 $4,375,000 The starting point is determining the owner’s perception of the current landscape level. This is a very simple but critical step. Using Table 1, ask the question, “How would you rate the current landscape?” This is an objective question, meant to solicit a consensus. Be it with one or two persons, or an entire association membership, it’s a great way to get a better understanding of everyone’s perception. 6 $5,250,000 7 $6,125,000 8 $7,000,000 For individuals who may have as little as a few hundred feet (or less) of landscaping around their units, the value of this small asset would equate to $35,000 to $56,000!! TABLE 1. RATING YOUR LANDSCAPE Property Rating A AB+ B C CD F Quality Perfect Outstanding Excellent Good Standard Acceptable Barely Acceptable Unacceptable Quality Rating 10 9 8 7 6 5 4 1-3 ANNUAL LANDSCAPE INVESTMENT Every dollar that goes toward the vendor costs, as outlined in Table 3, is an intelligent investment in the landscape asset. In the example, the association determined its current landscape level, reviewed all maintenance, tree and irrigation practices being used, inventoried and evaluated all aspects of its landscape asset, incorporating them into its GIS, determined its desired landscape goal level, and implemented the changes required to achieve its desired level within five years. During 2007, changes in landscape and irrigation practices (made with full cooperation of the contractors) allowed future funds to be reallocated to different accounts where funds could more closely support the association’s goal. The association also recognized that (in today’s dollars) it will be investing $1,440,000 in its landscape asset during the next 10 years. This amount is equal to, or greater than, reserves Again, to obtain objectivity, the second question to ask is, “In your view, what makes the landscape this level?” The answers to this question can go a long way in addressing unresolved issues and placing greater emphasis on funds used to resolve those issues. Are you using the landscape-maintenance contractor’s specification (which typically contains no specific performance lanTABLE 3. ALLOCATION OF FUNDS guage)? If so, it may be time to consider adding specificity to the contract. Or it may not Vendor Costs Budgeted 2007 be a landscape-maintenance issue at all, but Landscape Contract $70,000 one that pertains more to the original design Landscape – Extra Work $5,000 intent. Irrigation Management Contract $24,000 The third question to ask is, “At what level Irrigation – Extra Work $5,000 would you like the landscape to be?” The answer Irrigation System Improvements $10,000 to this question should reflect the desire of the Landscape Water $15,000 entire community, and will give a landscape Large Tree Care $15,000 committee or board of directors clear direcLandscape Planting $0 tion for any future plans. It also begins the Totals $144,000 Budgeted 2008 $55,500 $20,000 $14,000 $5,000 $15,000 $9,500 $15,000 $10,000 $144,000 The Communicator • 9

Table of Contents Feed for the Digital Edition of The Communicator - Volume 1, Issue 3

The Communicator - Volume 1, Issue 3 Contents President's Message Eyes in the Sky Down to the Last Drop Ask the Experts - Budget Your Water Usage 2008 Events & Educational Calendar Welcome to CAI BayCen Index to Advertisers

The Communicator - Volume 1, Issue 3

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