Starting January 1, 2028, community associations in Washington will fall under new changes to Washington State’s RCW 64.90, including ours. Under this law, the Board of Directors will be required to present any proposal to borrow funds to the membership for ratification. Similar to the budget ratification process, the Board will be authorized to proceed with borrowing unless a majority of homeowners in the association vote to reject the proposal. This means that even if changes were made to reinstate direct homeowner voting rights on borrowing in 2025, RCW 64.90 will automatically override any conflicting language in our governing documents once it takes effect in 2028. The statute will remove any requirement for an upfront vote to approve borrowing, shifting the process to the new ratification model. While the law takes effect no later than January 1, 2028, the association could choose to opt in earlier if approved by a membership vote.

At the 12/17/24 Board Meeting, the board voted to “Continue with discovery and explore permitting process toward Plan A upon which the Board will approve a final plan.” With this vote, the approved spending approximately $309,000 in 2025 to continue with exploration and planning for the potential Community Center project at Mountainview. This exploration process will include hiring subcontractors who will help with the development, design and engineering, and preconstruction process for the project. These experts will help pinpoint the exact scope and cost of the project. At the end of the exploration phase, likely in the third or fourth quarter of 2025, our Owner’s Representative, Gary Lin, will present a final plan for the project, including specific project plans and costs, to the Board for their review. The Board will then have the chance to vote on whether to move forward with the project plan as presented, or to explore other options.

A reserve study, which is done annually by a third-party consultant, helps the Association plan for the repair and/or replacement of the Association’s assets and amenities. It is a forecasting and planning tool used by the Board, and it includes a very detailed calculation on how much the Association should save in the Reserve Fund for the upcoming repair and maintenance of the Association’s assets and amenities, or components, as they are called in the report. The reserve study lists the major components of the association, their expected useful life, remaining useful life, and current replacement cost. When a reserve component is repaired/replaced, the cost of that repair/replacement does not need to immediately be replenished in the Reserve Fund. Since items have useful lifespans, the total cost of that item does not need to be available until the useful lifespan is over. This allows the Association to save for future projects over time and means that they do not have to have money in savings to be able to repair/replace all components at the same time. For example, let’s say a storage shed has a useful life of 20 years and was purchased in 2024 for $12,000 to replace an old shed. The storage shed was already listed on the reserve study as a component, and since it is new, the useful life will be reset for the shed to 20 years. Since the Association should not have to replace the shed again for 20 years, only a fraction of the cost of the shed needs to be saved for in its first year of its useful life. In each of the next twenty years, more and more money is saved for this shed, and after 20 years, enough money is saved, and a new storage shed can be purchased. The fully funded balance of the Reserve Fund, as outlined in the Reserve Study, changes each year, depending on the projects that have been completed (expenses) and the income that is allocated back into the fund to offset the expenses. When large projects are completed, the fully funded reserve balance may actually go down, since those repairs/replacements won’t need to be done again until they reach their useful life again. The reserve report helps the Board save for the future, so funds are available for repairs/replacements when they’re needed. You can find a copy of the 2024 Reserve Study on the Resident Portal. According to the 2024 Reserve Study, the Association Office building will reach the end of its useful lifespan in 2025, and $779,710 has already been saved in the Reserve Fund for its replacement. The reserve study is not binding, so if the board decides not to use this money in 2025 for the office building replacement, they can choose to defer the project to a future year, and/or use the money for other reserve items in future years. Since the building does need to be replaced, due to its condition and age, it would not likely make sense to reallocate that money to a different project. The reserve study is a guide, and the board has the authority to spend the reserve money on reserve items as they see fit, as long as they are abiding by their duties outlined in the Bylaws, section 4.6.11 “the Board shall continue to make expenditures in such amounts necessary to fully implement their duty to the Association to fully and completely maintain, repair, replace, improve and otherwise manage all of the Common Areas so as to keep all of the Common Areas in good order, repair and condition and in a clean, healthy and attractive state at all times.”

• The Klahanie Board has the obligation, as outlined in governing documents, to maintain and Klahanie’s common areas and amenities. This includes our trails, office, courts, green spaces and pools. • Specifically, for the past five years, the Board (under at least 25 different board members) has worked with various consultants in conjunction with the Building and Special Projects Committee and Finance and Operations committees to develop these options. • The current Klahanie office is a manufactured building that was built as a temporary sales office for the Klahanie developer in 1985. We need to vacate our current space because of the building’s structural deficiencies and zoning of the property on which it sits. • The Mountain View Pool has significant structural issues that need addressing including drainage, compromised pool liner and a settling deck. • The Board considered addressing the pool and office issues separately but determined that it would be more fiscally responsible to combine these projects. Additionally, our residents have expressed a strong interest in providing a community gathering space and now is the time to consider this option.

When purchasing a property in the Klahanie Association HOA, buyers agree to adhere to the governing documents of the association. The board oversees the funds and operations, utilizing dues and other raised funds to manage tasks. Members convene annually to elect directors and discuss relevant topics. Generally, the association's assets, such as the pool, courts, and trails, must be maintained within the budget. The board strives to maintain, repair, and replace these assets, with opportunities for capital improvements when possible.

A reserve report is conducted by a skilled professional, and state regulations mandate that it be completed annually. Klahanie has utilized two different companies over the past two years and is looking to hire a new expert this year to provide more detailed information in a report that will be received in the spring.

Our current office building is about 40 years old. When considering a 20-year period, renting for a 10-year term at the quoted rate would cost approximately $900K. With expected rent increases, the cost for the second 10-year term would be around $1.3M, bringing the total to approximately $2.2M for 20 years. Over 40 years, rent would total approximately $7M. If we invest in our own building, we can maintain and upkeep it diligently, ensuring we have a viable building after 40 years without remaining loan payments.

The pool is dangerously shallow, the liner needs replacement, the deck is sinking, soil reports are required, and the pool is 30 years old. Investing in repairs for such an old pool is fiscally irresponsible.

As a member of Klahanie, you are required to pay dues for the maintenance of all amenities. While using the amenities is optional, financial support through dues is mandatory. Many people find that the amenities positively impact their property values.

The expansion aims to increase our offerings to Klahanie residents. We are currently at the capacity for swimming lessons due to limited pool space and cannot meet peak demand with only 4 lanes, resulting in long waiting lists. The new pool will be 25 yards long, in line with updated pool standards. The width will depend on the number of lanes. For reference, an Olympic or long course pool is 50 meters long by 25 meters wide. We are proposing a pool about half that size.

Currently, our board meetings, committee meetings, and staff meetings take place in a 360 square foot room, which is insufficient for groups larger than 10 people. An indoor meeting space would allow us to host events for Klahanie residents and provide rental space.

Most of the pool usage by residents involves swim lessons and lap swimming, so lap swimmers are not a smaller interest group. The teams that rent our pools provide more value than they receive, as the association earns more from them than the costs incurred. This benefits even non-swimming owners by helping cover these pool expenses, reducing the burden on dues.

The Board is trying to move forward with this project now, rather than waiting 5-10 years, to avoid having to pay to make costly repairs now, only to tear them down and build something in 5-10 years. This has been an ongoing discussion since 2008, and has been revisited by multiple Boards.  There are major deficiencies at the Mountainview Pool Complex, including insufficient drainage due to the settling of the soil and foundation, leading to frequent flooding of the deck and the building, cracking of the pool deck and parts of the building, raising structural concerns and requiring significant remediation.  We cannot wait 5-10 years to address these issues, and since they will be costly to remediate, it made sense to consider rebuilding and potentially combining the office building into the rebuild.  The Association plans to contract industry experts to evaluate the condition of the Mountainview Pool Complex to help us catalog the numerous issues and give us cost estimates for repairs.  This will help the Board determine whether repair or replacement is the best path forward.  The current office building is a portable structure that was originally intended to be a temporary showroom and sales office for the first homes built in Klahanie and was originally located at the old Klahanie entrance next to Sutter's Pond before being moved to its current location.  This means the building does not sit on a proper foundation, causing structural instability. Although we have been using this building for almost 40 years, the lifespan of this type of structure is limited, and the building has ended its useful lifespan according to our 2024 Reserve Report. Since there is no foundation, moisture pools under the building, causing the joists to show signs of rot. This situation presents a liability for the HOA. We are currently working with third-party professionals to obtain full official assessments as to the state of the office building, and these assessments and their associated costs will help the Board determine the best way forward. 

Our Owner’s Representative, Gary Lin, and Urbal Architects have been contracted to provide a full estimate of the costs relating to this project. Based on these estimates, the Board will consider various options ranging from an office replacement only to a full replacement of the pool complex, which includes the office and the addition of a community meeting space. The Community Building project could be funded by utilizing multiple sources available to the Association. Those include money already saved in our Reserve Fund for the project, money already saved in our Capital Fund for improvements to our facilities, and money from future dues and non-dues income. The effect on dues depends on the project's scope as well as the amount needed to borrow to fund it. The initial rough costs for this project, as provided by Urbal Architects, range from $9.15 to $12.5 million. The Association has saved slightly more than $2 million that may be used for this project. The Board will be considering a loan to make up the remaining balance. Here are a few loan scenarios that may be considered, depending on the finalized cost of the project, and their potential impact on dues: • If the Association takes out a 15-year loan of $8 million with an interest rate of between 6.5% and 7.5%, the loan payments would be between approximately $830,000 to $900,000 annually. These annual payments, divided by 3,021 dues-paying households, would potentially impact dues by approximately $275 to $300 per household per year, or $23 to $25 per month per household over 15 years. • If the Association takes out a 15-year loan of $10 million with an interest rate between 6.5% to 7.5%, the loan payments would be between approximately $1.04 million and $1.11 million annually. These annual payments would impact potential dues by approximately $345 to $370 per household per year, or $29 to $31 per month per household over 15 years. • If the Board chooses not to take a loan out for this project, the dues will likely need to be increased dues to much higher levels much more quickly, to try to save the amount needed for the replacement of our office building and the repairs needed for the Mountainview Pool complex due to the immediate need to complete these projects. By taking out a loan and spreading the payments out over a portion of the assets’ lifetime, we can keep the percentage increase to dues lower and spread out the cost over a longer time. As we have not finalized the scope of the project, we do not currently know exactly how much will need to be borrowed, nor what the interest rate will be at the time of the loan. The above are some possible loan scenarios, but exact numbers will not be available until we know the final costs for the project, likely mid to late 2025. These ranges are meant to give an idea of what might happen to dues if the Board decides to move forward with the Community Building project and they are not definitive, as many variables play into the equation. They also do not take into account any other non-project related increases that may need to be made to dues to cover potential increases in operating costs, other major future Reserve projects, or any other unexpected expenses. The Board will not enter into a loan agreement without finalizing the costs and approving the project. The Board’s intention will be to take out one loan to pay for the entire Community Building project, so that no future loans will be needed to pay for this project at the Mountainview complex. The Association will also utilize other non-dues income to help fund this project. Income from document transfer fees, late fees, fines, and interest on investments may be able to help bring the per household number down over the 15-year life of the loan. The amount of non-dues income that may be available to help fund this project is continuing to be evaluated by the Association, and more information will be shared once we have more accurate projections. In the 2025 Budget, there is a large allocation of $744,000 of dues income budgeted to be moved into the Reserve Fund to help offset some of the large Reserve expenses budgeted this year. In future years, the Association may not need to allocate such a large amount of dues income into the Reserve Fund, freeing up some of the dues income to help pay off a potential loan. During the budgeting process each year, the Board decides on how much to allocate (add) to the Reserve Fund and how much to spend on Reserve projects. This crucial calculation will help dictate how much of the current level of dues income would be available to help pay off a potential loan, as well as how much more dues would need to be raised through a loan. By spreading the costs over a 15-year period, we hope to make the burden on each household more manageable, ($23 to $31 per month dues increase). Moreover, if you were to sell your home in the next 15 years, the dues and costs for this project would then be paid by the new owner. Each household would only be paying for the cost of this project while they own a home in Klahanie.

The Mountainview pool has drainage issues and needs a new liner. Although repairs are possible, replacing the pool is a more financially sound option, especially considering the buildable space challenges at Lakeside. We already own buildable space at Mountainview, making it a practical choice. Additionally, we can improve our reserve reports. For the past five years, the board and many members have recognized the need for new office space, and approximately $780K has been set aside in reserves for this purpose.

Our available funds will allow us to structure a line of credit for 18 to 24 months. After construction, we will transition to a 10 to 15-year loan of $7-10M, with the goal of making aggressive repayments to be fully paid off within 10 to 12 years. Debt service and payments can be managed within our operating budget and supplemented with non-dues income.

Yes, dues will increase in 2026 and 2027. The exact dues amount will be determined annually through the budget process. Dues increase for several reasons, including: · Our community amenities are aging and require work · Previous boards reduced dues when increases were advisable, resulting in lower reserves.

Urbal Architecture and Lineage have been developing plans for Mountainview, relying on professional forecasting. Additional factors such as approvals from the Fire Department and County, traffic studies, and expanded space requirements contribute to the cost difference.

Additional lanes are estimated at approximately $250K per two lanes. Pricing depends on permits and market costs for materials.

Due to material breakdown and updated land use requirements, the facilities require significant upgrades. Replacing the pool and combining it with new office space is a financially sound decision. The project is classified as a replacement under reserve report guidelines and state statute.

Your Klahanie home would not be at risk if the Association were to take out a loan.  The bank could not place a lien on any home since the loan is to the association and not the owners.   Failure by the Association to make a loan payment within a reasonable amount of time after a scheduled payment date would result in late fees.  In the event of egregious missed payments, the Bank will forcibly increase the interest rate on the loan by roughly 5% and put the loan in default.  In the event of continued egregious default, missed payments, etc., then the Bank will enforce the assignment of the assessments (this has never happened in our bank’s history).  This means all assessments (dues) will be paid to the Bank first on a monthly basis, then the bank uses these assessments to make the scheduled loan payment (inclusive of any catch-up for missed payments) and distribute the rest back to the association for regular operating expenses.  This will continue month after month until the Bank feels comfortable enough to relinquish the assignment of the assessments.  If the assignment of the assessments is not enough to either allow the association to meet their obligation, or there are still egregious defaults on the loan, then the Bank may call the loan in full – due on demand.  This would be highly unlikely, since before a Bank would lend The Association money, they will ensure that the amount of assessments The Association collects would be enough to cover the repayment of loan.  Klahanie has a very successful collection rate of homeowner dues, and as of 12/31/24, only 2.5% of homeowners had a balance due on their account.  The total Accounts Receivable balance on 12/31/24 was $46,616, including $10,365 that is not past due.  The Accounts Receivable balance as of 12/31/24 was 1% of the total amount of dues collected in 2024, meaning we collected 99% of dues billed in 2024.  The only time a homeowner would be at risk of having a lien placed on their home is if they don’t pay their Klahanie dues.  Per our Assessment Payment and Collection Policy, which can be found on the back of every Klahanie Association Statement, the Association can send past due accounts to collections, place a lien on the home, and then pursue foreclosure, if necessary, as a last resort. 

Our Capital Fund is separate from our Operating Fund and Reserve Fund and is funded with non-dues income, such as document transfer fee income, late fee income, fine income, and interest income. Money in the Capital Fund can be used to fund improvement projects in the community that are not repairing/replacing our current assets and amenities. Any repair/replacement expenses would be reserve expenses. The intent of the Capital fund is to pay for new improvements to the neighborhood, or, more simply, things that we don’t already have. For example, the concrete stairs, ramp, and seating area at the Lakeside basketball and tennis courts were new features added in 2023, and they were paid for with money from the Capital Fund. Before the stairs, residents had to walk down a grassy hill to get to the courts. Now they can more safely access the courts with a ramp and/or stairs and have a place to sit and enjoy time at the courts. This was an improvement to our neighborhood, funded by non-dues income that was saved in the Capital Fund. In 2025, we have money from the Capital Fund budgeted to pay for new lights along a few dark sections of Klahanie Blvd. These lights are funded by the Capital Fund because they are new lights in the community, and they will hopefully make Klahanie Blvd. safer. Once they are finished, they will be added to the Reserve Report, and the repair and maintenance of these new lights will then be paid for by money from the Reserve Fund. In the Community Building Project, Capital funds may be used to fund a community meeting room, since we don’t currently have a community room in our neighborhood. Capital Funds would not be used to fund the office or pool, since those are both currently components on our Reserve Study and are not new improvements. The Board decides each year during the budgeting process whether or not to allocate non-dues income (such as document transfer fee income, late fee income, fine income, and interest income) into the Capital fund, and if so, how much. While Pool Revenue - Members (typically generated from swim lessons) and Pool Revenue - Non-Members (typically swim team rental income and guest fees) are both categorized as non-dues income, they are typically used to pay for swim lesson instructor salaries, and to help offset the costs of running and maintaining our pools (including lifeguard salaries to guard the pool during open swim). Typically pool income is not used to fund capital projects, as the Board usually chooses to have pool income help offset the pool expenses. In the 2025 budget, there is $230,850 of non-dues and non-pool income budgeted. Of this $230,850, the Board decided to allocate $200,000 into the Capital Fund in 2025 to help pay for future improvements.

We are increasing the number of postings on our page and the project’s landing page. Additionally, we are directly engaging with Klahanie Families.

This decision will be made later. Residents would have a low fee, while non-residents would pay a higher fee and deposit.

Discussions began in 2012, followed by feasibility studies. Meeting minutes have been available, and multiple updates have been communicated in newsletters and other forums.

Any vote set up by the association requires a 51% or 75% affirmative vote to pass, which is difficult to achieve. This is included in the governing documents.

Environmental studies and inspections indicate that we are significantly out of code. The current manufactured building is inadequate.

No, the cost is prohibitive. Lakeside pool is covered with a bubble during winter months and accessible to all residents.

Klahanie homeowners participate in the HOA's governance through the following mechanisms: • Annual Meeting and Board Elections: Elections are held in the first quarter of every year , and homeowners vote on new Board members, with one ballot allocated per building unit. New Board members are announced at the Annual meeting in March. • Budget Ratification: In the fourth quarter, the Board-approved budget is shared with homeowners. The Budget Ratification meeting is held in late November/early December. Homeowners have the opportunity to reject the Board-approved budget as per RCW 64.90.525. The 2025 budget was ratified on December 3, 2024, during the regularly scheduled meeting. • CCR Revisions: Any proposed changes to the CCRs are included on the annual ballot for resident voting. • Amenity Decisions: The KHOA Board retains the authority to decide on maintaining and improving community amenities without requiring a community vote. These amenities vary in scale, ranging from a basketball hoop to the maintenance of buildings and trails. These processes ensure that homeowners have a voice in significant HOA decisions while empowering the Board to manage the community effectively.