President's Update 6-24-2020
As property owners, we have the responsibility to vote on a three-year property owners’ dues/assessment. These dollars fund our operations and the Reserve Fund for capital expenses. For the dues to be approved, 66.7% of the owners must vote yes.
The last vote occurred in October of 2018. The dues plan failed to be approved by 66.7% of the owners; it fell 0.7% short. The dues which were in effect in 2018 ($1,850) have continued in 2019 and 2020. Had the dues proposal passed in 2018, our dues this year would have been $1,970 and next year $2,030. In light of the dues freeze for the past two years, TLA has had to cut its operating expenses.
At our June meeting, the Board unanimously approved the proposed dues increase as follows: an $18.33/month increase for 2021; an additional $8.33 a month for 2022; and an additional $8.33/month for 2022. On an annualized basis, the dues would be $2,070 for 2021, $2,170 for 2022, and $2,270 for 2023. The community vote will occur in September.
I have had friends say to me that they have not noticed any differences in the community even though operation expenses were reduced in 2019 and 2020 because of the dues freeze. I take that as a compliment for TLA’s staff because they have adjusted to reduction and performed their jobs so well the community does not see the effect. Similar to Goldilocks and her porridge, TLA’s cuts could not be too little or too much; they had to be just right. Just right doesn’t stay that way forever, and we now need to make adjustments. Those adjustments would be made under the new annual dues plan.
Friends have also asked me what the dues increase would be used for. In addition to adjusting operational expenses, it will be used to fund the Reserve Fund for capital expenses. Last year, we had a Reserve Study completed to see how adequate our Reserve Fund is to fund ongoing capital expenses in our community as it approaches its 50th anniversary. The report recommended a reserve funding level between 30% and 70% of the replacement value of our capital assets. We are not currently at the 30% level where we have determined we should be. The increase will get us there by the end of the third year.
The term “Reserve Fund” may be somewhat confusing. Think of it as the major capital repair and replacement fund. It is not a rainy day fund for operations. It can be used for only capital expenses in conjunction with scheduled repairs and replacements and unexpected replacements. For example, last year, unexpected road and storm drain failures resulted in spending $328,505 in repairs. We have spent $16,000 this year on storm drain and repaving projects and are anticipating another $586,000 in repairs of the main gate asphalt and Tidewater brick square and walkways. All of these projects are in response to deteriorating conditions.
Sometimes the purpose of the dues increase gets lost in the details of the increase. We need to take a minute to remember what we are trying to accomplish…ensuring the viability and sustainability of The Landings so that we may continue to be the community that we are today while maintaining and increasing our property values.
The combination of the natural beauty which we have maintained for almost 50 years, coupled with the fiscal responsibility we have shown in planning for future needs, creates an irresistible draw to prospective buyers, especially those whose recent shelter in place experiences were far from what we had here. Buyers can move here with the assurance that, in this debt-free community, there are no financial surprises waiting for them with respect to major capital repairs. We are a very marketable community.
Obviously, TLA will be providing much more information and details to the community in the upcoming weeks. I encourage you to ask questions as they arise as you review the information made available to you.