Submitted by Darrell Trimble – Skipper Ct
This is a second in a series of three articles on “Can we trust our leadership to spend our money wisely?. In the last article we looked at HOA operations. In this article we will look at how we prepare for future needs by looking at reserve funding and how our Board has dealt with or ignored the realities of an aging infrastructure.
As we receive our voting information on the new club house, we have to make a large spending decision. I personally like the thought of a new clubhouse, though like many of you I am concerned whether the current plan is what we need or is it bigger than we need? We are looking at an estimate exceeding $5m (which will probably exceed $6 given our track record) . Is the hill at the golf course the right place to invest in a large group meeting place, or should it be kept to just a bar and grille, and expand the community center for larger groups? All of these things are questions.
With the exception of the present BOD, over the past 5-7 years our Board has largely ignored the issue of not having enough funded reserves, again to “keep our annual fees low”. Many community members asked about the issue of funding our future, but for the most part the past BODs “avoided” the discussion. In fact, had the reserves been done correctly on the club house, we would not be facing such a big bill.
Regardless we need to understand that the clubhouse is a minor expense, given the other upcoming infrastructure liabilities that we have. Did you know that we have as much as $8m in unfunded reserves beyond the club house? We are all painfully familiar with the Chaparral culvert project (over $300k). Did you know that there are many more bridges and culverts that may need the same repair? Did you know that the golf course needs a new sprinkler system that is more than $1.5m? An article on this blog was done in March of 2013, which laid out the unfunded infrastructure in some detail. The point I am making is don’t we deserve to see the entire financial picture as we are making the decision on the club house and how much to spend? Should we not get a full picture of the impact on our annual dues inclusive of properly funding the reserves and what we will have to pay for the club house annually? Continue reading