Progress Report: Nagog Woods Project
Capital Planning Status, Assessment, Recommendations, 31 August, 2024
Our focus, on this first season of This Old Neighborhood is my home subdivision - The Village of Nagog Woods in Acton, MA - where we are attempting to avoid the fate of other aging subdivisions, by getting ahead of major systems updates. What follows is an interim report on where our work stands, and my personal & professional recommendations for next steps. I note that these recommendations go well beyond standard practice for condominium complexes, requiring a scale, scope, and level of cooperation that is way beyond the comfort level of most condominium dwellers.
Immediately following is a sources sought / call for papers seeking input from industry as to current best practices for comprehensive updates to the buildings, grounds, utility infrastructure, and common facilities of a suburban condominium subdivision. I invite subscribers to join the discussion - particularly from the perspective of owners in comparable condominium complexes, who share these same requirements & issues.
Memorandum
TO: Owners & Members, Nagog Woods, Condominium Association #3
cc: Nagog Woods Community, Interested Parties
Prepared By: Miles Fidelman
Unit Owner
Nagog Woods Condominium Association III, Board Member & Treasurer
Nagog Woods Long-Range Capital Committee, Member
This Old Neighborhood, Host
Date: 31 August 2024
SUBJECT: Capital Planning Status, Assessment, Recommendations
SUMMARY: Nagog Woods is a 50-year old condominium complex, approaching the need for major renovations. This document offers a Situation Assessment, a set of Strategic Options, and Recommendations for Developing, Executing and Financing a Comprehensive Modernization Program for Our Buildings, Grounds, Utilities, and Common Facilities.
DISCLAIMER: This report represents the personal & professional opinion of the author. It constitutes an unsolicited report & recommendations to Owners, and Board Members of the Village of Nagog Woods, and is informed by this author's service on the Condominium Association III Board, as its Treasurer, and service on the Long-Range Capital Committee - but should not in any way be taken as representative of opinions or official actions thereof.
Introduction & Background
The Village of Nagog Woods is a 50 year old condominium complex - the oldest in Massachusetts - consisting of 277 units organized into 38 buildings, a clubhouse, pool, tennis center, and maintenance facility. We maintain an irrigation system and operate a sewage treatment plant that we share with our neighbors. We are supplied with town water. Gas, electric, telephone, and cable service are provided by private utilities. We have our own zip code. We border a reservoir, town forest, art museum, and regional park.
We are governed by a collection of four condominium boards, supported by a non-profit operating corporation (the Nagog Woods Community Corporation, NWCC), that in turn subcontracts much of our daily operations to a private management company. Effectively, we are a self-governing, unincorporated village & taxing authority (collecting condominium fees), existing within the larger Town of Action, which provides a variety of municipal services, including schools, libraries, and public safety (and collects its own property taxes). We note that, while we pay the same property taxes as those paid by other property owners, we do not receive the same level of services from the Town - notably, we pay for our own street maintenance, recreation facilities, public works, planning, engineering, and management services, through condo fees.
Nagog Woods is just over 50 years old, and, like many subdivisions built in the last century, our buildings, grounds, utility infrastructure, and other facilities are showing their age - coming up on the need for major systems overhauls & updates. Compounding matters is a new Town Ordinance requiring that large projects be fossil fuel free - as one of 10 Massachusetts Towns participating in a pilot project requiring new projects, and major renovations, be fossil-fuel free. We are past the point where we can perform incremental maintenance or avoid rebuilding to code - and, as we renovate, we are required to electrify our systems.
Where Massachusetts cities & towns are required to perform comprehensive master planning every 10 years, using these plans to drive long-term infrastructure update - condominium complexes operate under looser rules. We are required to review our operating documents, every 30 years, and required to maintain a "reserve fund" for major repairs & replacement of common elements. While often referred to as "capital reserves," and accounted for as part of a "capital fund," they are, in fact, maintenance reserves. And while there is a statutory requirement to maintain such reserves, there is no guidance for how to establish spending levels. In practice, it is common to commission a "reserve study" from an engineering firm, every several years.
Here at Nagog Woods, we have just renewed our operating documents, relatively unchanged from their original form, with a promised update stuck in committee - while inconsistencies continue to cause ongoing confusion & dispute among our owners, condominium boards, and our corporation board. We are fortunate not to be embroiled in litigation between owners, boards, and insurance carriers, as is becoming more common in other communities.
Meanwhile, our latest "Level 1 Full Reserve Study," dated September 2023, is based on "visual, noninvasive inspection" of our Buildings, Property, Clubhouse, and Pool. The study recommends monetary reserve levels for maintenance & repairs of existing facilities - but is silent about major overhauls and long term capital reinvestment. It explicitly excludes "long-lived property elements" - specifically common electrical systems, foundations, inlet/outlet structures, concrete, storm water management system, and structural frames. It also excludes elements that are the responsibility of individual unit owners - specifically electrical systems, HVAC units, interiors, interior pipes, skylights, windows & doors. Its timeline is limited to five years.
In previous years, we have established ongoing programs of roof replacement, and street maintenance. Recognizing the dangers, associated with aging systems & deferred maintenance, we have established a "Long Range Capital Committee," on which I serve - to develop longer term plans for building & infrastructure updates (notably, the "long-lived property elements" excluded from our Reserve Study - with particular attention to building envelopes, and drainage). We have assembled a team with an exceptional set of engineering & financial expertise. Unfortunately, we have been hampered by the limits of volunteer time, and lack of access to even the most basic information about the property (e.g., as-built diagrams of our drainage system). We are at a point where making further progress requires us to recommend significant expenditures for external engineering studies, as budgetary input to the NWCC Board, for inclusion in next year's budget (and condo fees).
Separately, as a parallel effort, I have been performing my own Situation Assessment, and Planning Effort - based on personal & professional experience developing large systems in the municipal arena - attempting to develop a general approach to the problem of renovating aging suburban developments. I've been chronicling this work on ThisOldNeighborhood.Net.
What follows is my personal, professional assessment of our situation, and options for moving forward... NOT an official report of the Committee.
Situation Assessment
I come at this project after 50 years of developing large systems, with experience in the municipal space, and a particular focus on systems architecture, program planning, and launching big programs. I've been up-close-and-personal with projects that include developing global communications networks, updating the electronics of major-city transit systems, municipal master planning, Boston's Big Dig, and gut-rehabbing an urban townhouse. I wrote the book on Municipal Telecommunications Strategies for Local Government, and consulted to cities & towns on right-of-way management, and developing municipal broadband networks.
Based on this experience, I offer the following observations, options, and recommendations as to the status of Nagog Woods, and how we might proceed.
Nagog Woods is in relatively good shape, as compared to, say, Miami's Champlain Towers Condominiums - where their board waited too long before commencing long-term planning - resulting in their collapse into the Atlantic. We still have time to develop & execute a comprehensive facilities update program. Our finances are in good shape, we have so far avoided skyrocketing condominium fees or staggering special assessments. We have significant capital reserves & borrowing capacity to work with.
At the same time, aging systems are catching up with us - each year sees the need for more, bigger, and more costly repairs. We can no longer approach things incrementally; it's time for major systems updates & replacement - while we can still plan, rather than react to catastrophe.
The need to renovate on a large will trip requirements to update to code, and specifically to "decarbonize" (i.e., electrify) our Village. These requirements offer the opportunity to shift to high efficiency, low maintenance, HVAC & electric facilities (e.g., ground-sourced geothermal heating/cooling, solar awnings) - allowing us to cover much of our construction cost through reductions in fuel, operating, maintenance, and insurance expenditures. As part of Massachusetts's 10-Town Pilot Program - we may be in a position to attract pilot & demonstration projects, where vendors cover some of redevelopment costs, as well as attracting funding from government sources (we note that our sewage utility is already using ARA funds to reline pipes).
Our fundamental problem is organizational. Technology is available to perform needed updates to our buildings, grounds, utility infrastructure, and common facilities. The construction industry knows how to do the work. Financing is available for projects of similar scope. Our fundamental problem is that nobody is in charge - or that too many people are in charge: 277 Unit owners, 4 condominium associations, a community corporation, a sewage utility, town & private utilities - all must plan & work together if we are to execute a comprehensive project and take advantage of the economies of scale that can only be accomplished through a well-organized joint project. Ours is an acquisitions challenge, not a technical or financial one.
Strategic Options & Recommendation
Three main strategies suggest themselves:
Business As Usual: Continue to make repairs on a piecemeal, incremental basis; continue to avoid large-scale projects that trip build-to-code requirements. In my opinion, it is too late for this. It is time for major systems overhauls, lest we find ourselves confronted with disastrous failures, and staggering special assessments to recover.
Separate, System-by-System & Segment-by-Segment Updates: Our Long-Range Capital Committee, is currently looking at each system & segment separately, with the notion of conducting an engineering assessment of each, and prioritizing updates based on what we find. Again, an approach fraught with both risk, and significant cost. For example, our sewer utility is busily relining pipes - but that work stops at the point where pipes become association responsibilities, and nobody wants to touch pipes that are in our walls - where responsibility is split between associations & unit owners. This approach risks digging up our grounds multiple times (e.g., for electrical work, drainage work, sewer work), unmanageable projects (replacing building envelopes while leaving it to unit owners to deal with windows, doors, and sliders), and leaving critical repairs undone (e.g., aging sewer pipes in our walls).
Comprehensive Modernization: The alternative is to look at things the way a college campus Facilities Director does, or a City Engineer, or the Site Manager for a large rental complex: Develop. finance, and execute a comprehensive, multi-year program of coordinated systems update, that takes advantage of latest technologies & practices, economies of scale, and seeks to minimize costs & disruption to daily life.
My recommendation is Comprehensive Modernization, starting with preparation of a Comprehensive Modernization Plan - as one might if updating an apartment complex, or office park, or converting a building to condominiums & doing a thorough update in the process - all under central ownership & management:
Design the Vision of Nagog Woods as we would like it to be, after renovation is complete. Don't bother with the cost of assessing existing systems, just plan to replace everything with the latest, most efficient, lowest maintenance, technology available.
Plan construction as new installs: Forget trying to salvage wires & pipes, just dig a single ditch, lay in conduit that combines wires, pipes, drainage, lay new soil on top. Thread new wires and pipes through walls, while they're open for building envelope repair - only open interior the walls at attachment points.
Include transition plans to minimize disruption to daily life - including temporary housing (or paid vacations) during construction.
Maximize opportunities to lower operating costs, e.g., by consolidating HVAC equipment into multi-building, ground sourced geothermal systems (freeing up attic & cellarspace in the process). Aim to reduce ongoing operations, maintenance, and insurance costs. Offer unit owners the opportunity to update their units while workers on site.
Finance over the long term. Organize purchasing so that savings are applied to capital costs, and flow through to unit owners' utility bills & condo fees (e.g., the way we finance sewer system repairs and build the cost-of-money into sewer bills).
Treat the exercise as CAPITAL INVESTMENT: Renovations should show a positive return-on-investment - both in reduced operating costs, and increased property values. At the very least, minimize increases in condo fees, and avoid special assessments.
Neighborhood Master Planning & Acquisitions
Ultimately, we're talking about conducting a Master Planning & Infrastructure Acquisition Program, at the subdivision level - managing the buildings, grounds, utility infrastructure, and common facilities of a condominium complex, the same way a town manages public buildings & public works.
It starts with establishing the equivalent of Planning, Engineering, and Public Works functions - at the subdivision level. Given our convoluted ownership & operating structure, we envision establishing a joint body - akin to the Community Development Corporations that manage urban redevelopment programs - or consolidating facilities operations into a combined cooperative utility that expands on our existing sewage treatment facility.
We suggest hiring, or contracting for, a Facilities Director - equivalent to what one might find on a college campus - and to task that individual (or firm) with developing a comprehensive master plan for both overhauling & long-range operation of all physical plant in the Village - including recommendations for organizing & financing a long-term acquisitions program, and reorganizing our routine operations.
The traditional model for developing such a plan, for a real estate development, would be to:
Hire an Architect to design a target site plan & building sketches.
Hire a Construction Engineer to put together detailed diagrams & plans, and an RFP package.
Go out on bid for a prime contractor to do the work.
Put together a financing package to pay for it (i.e., long term loans or bonds).
Alternatively, we could pursue bids for a consolidated Design-Build program - seeking a Prime Contractor who absorbs the up-front architecture, engineering, and planning costs as part of proposal preparation - a model common in the big systems & utility markets. This approach has the distinct advantage of limiting our up-front and administrative costs for running and overseeing an acquisitions program.
We suggest the first step is to Hire a Supervising Engineer - either as a full-time hire, or a contract to a consulting engineering firm that specializes in acquisitions management - combining the roles of Planner, Engineer, Program Manager, and Acquisitions Officer. This is a common model for large systems & constructions projects. In my time updating dispatch systems for major-city bus systems, it was typical for a transit agency to hire an acquisitions consultant to develop an RFP and run the acquisition (drawing a review team from executive staff). For large construction projects (e.g., a light-rail system, a dam, an urban redevelopment program) - where it's common to have multiple "customers" (agencies in charge), funders (investors, banks, bond syndicators), and vendors (prime contractor, subcontractors) - there might be one government employee, supervising a team of contractors (e.g., the Hoover Dam, established as an independent authority, serving water & power systems in multiple states, capitalized with bonds, built by a consortium of 6 large construction companies, was managed by one Supervising Engineer from the Federal Bureau of Reclamation). We estimate the salary of an appropriate person would be in the $180-220k/year range, plus benefits & overhead - and that contracted services might bring that down to $20k/month, inclusive (estimated at $200/hour, 100 hours/month) - and we suggest budgeting accordingly.
We suggest that there are several opportunities to defray costs further, notably:
Seek support from the Town of Acton, in lieu of Planning & Engineering services that we pay for (in taxes), but do not make use of. Particularly in light of requirements imposed by the new decarbonization ordinance - which might be viewed as an unfunded mandate. Support for a serious planning effort would be far more appropriate than the "energy coaching" now being provided.
Organize a "bidders conference" and industry day, in the form of a trade show, with paid attendance by vendors. In the big systems world, it is typical to issue an RFI (Request for Information), a draft RFP (Request for Proposals), or a Sources Sought notice - inviting potential bidders to visit, present, and demonstrate their capabilities. In the technology space, this often takes the form of large-scale demonstrations (e.g., providing several busses to a transit system), sometimes as large as a military "field day" or participation in an exercise. In the Internet space, the Interop Trade shows - showcasing early Internet technology - were anchored by a "shownet" - essentially all vendors connecting themselves into an enterprise network that demonstrated their technology in action. This same model is found in the military training space - where the annual I/ITSEC trade show incorporates a miniature military exercise - flight simulators, tank simulators, people running around the show floor wearing laser tag gear - great fun. We suggest that the market is ready for a trade show, highlighting the various projects being conducted in the 10 Pilot Towns in Massachusetts, that are pioneering large-scale decarbonization - folks like Eversource are spending serious dollars to showcase their subdivision-scale geothermal capabilities - let's give them an opportunity. We also suggest that comprehensive modernization of one or two buildings, might be attractive to vendors seeking to showcase their wares.
I close, by noting that this report represents the efforts of my own work toward developing an acquisitions model for renovating suburban developments, such as ours - building on previous work developing the model for launching municipal broadband projects (see https://web.archive.org/web/20040102170627/http://www.munitelecom.org/ for details).
I've been chronicling this work on ThisOldNeighborhood.Net - which includes interviews with several academic & industry excerpts, as well as input from Nagog residents & Board members. I am currently trying to organize a series of presentations and site visits by vendors who might be able to perform renovation & redevelopment at a scale appropriate to the size & complexity of our Village - with the notion of organizing a conference or trade show to fund the effort. We invite interested parties to parties to join us as co-organizers.
We encourage Architectural Firms, Construction Engineering Firms, Construction Contractors, and Technology Vendors to review and respond to the The following post contains a draft Sources Sought / Call for Papers in the following post.