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- Our new model will only come into play when a home resells from the current model into the new model. Until a resale occurs deferred maintenance costs continue to accrue. - The Land Trust will need to assist with deferred maintenance with almost every home that resells -particularly as our housing stock ages. - We will not be able to sell aten-year old home without a maintenance reserve to a low- incame buyer and expect them to pay for several thousand dollars of capital repairs within a few years. - As a result, we need to estimate how much deferred maintenance will be the responsibility of the Land Trust. This requires projecting when homes will sell and how much deferred maintenance will have accrued. We have done this analysis, with spreadsheets that extend out over 30 years for each of our properties. - We estimate that our existing inventory will receive $1.51 million to pay for the deferred maintenance on capital systems. To arrive at this figure, we estimated the casts of the capital items for each Land Trust home until it sells out of the old model into the new model. - Once in the new model, homeowners will be charged a stewardship fee to pay far their portion of the costs of replacing those capital items. - When new homes come into the Land Trust, prices will need to be set laver to allow for the stewardship fee, similar to how we treat HOA dues. - Because the stewardship fee will reduce the affordability of our homes, subsidy will be needed to keep some homes affordable in the new model. Total Subsidy Needed (projection} ^ Affordability $1,564,000 ^ Deferred Maintenance $1,508,000 ^ TOTAL $3,072,000 In Summary ^ We want this model to be successful ^ We recognize the model needs revisions ^ Additional funding is essential for success: ^ $3.1 million for affordability/maintenance subsidy ^ Additional operational funding - We know that we need to revise our model to address long-term maintenance. But a new model alone will not be sufficient. Additional funding will be needed to address affordability and maintenance. We project that we will need approximately $3.1 million to make this model successful. Our Requests ^ To address these issues we ask that the local governments fully fund our operating requests for 2007-08, and ^ We ask that you determine a process that will allow you to make decisions about these matters within a stated time frame. The work demanded of the Land Trust staff will increase significant as we take on property management responsibilities. We cannot absorb the costs associated with this new position.