TLTAdmin on February 27, 2015
We reached out to former Director Wayne Marhelski to get his take on the proposed budget, assessment increase and special assessment. He’s been there during the budget meetings and we know he’s one of the few that’s actually spent time diving into the financials. Here is his response:
The proposed assessment of $960 rings a bell as it came up during the last year budget discussion. Of course, we had the capital reserve study at that time. The funding option that includes the yearly step increase looks familiar as those numbers looked similar to what I had calculated out, with the final increase being around the $960 mark.
The key piece here, and one that property owners should ask is, “Does Treasure Lake really need to maintain all those items?” Of course, there are some on the board that will be adamant that it is absolutely necessary. But the real problem is that at some point, the board WILL run out of other people’s (property owners) money. So ask yourself this, “Is the board really oblivious to this fact, or are they intentionally looking to put Treasure Lake in a precarious financial position?” When a board officer makes a comment along the lines of what would happen if Treasure Lake filed for bankruptcy, would Sandy Township have to step in; it needs to make people wonder.
The assessment increasing to $960 is only valid IF the capital reserve study is considered gospel. Personally, I don’t believe it is and it merely a suggestion, but not an absolute. The reason is the lifespan of items contained within it are based on some average number of years of use. They could be higher, they could be lower, but in reality it is still just an estimate.
There really is no reason for the special assessment at all. If one considers the amount of money that has slipped through the POA’s hand because of the mounting losses at the Lakeview Lodge, the golf courses, and in other areas; there is easily over $2 million dollars that could have paid down debt or fixed infrastructure. But again, you have people sitting on the board that are either incapable (i.e., they don’t understand) or unwilling to act in the best interest of the association. Maybe if board members had to personally pick up the tab for losses incurred the association, they would behave differently.
Looking to take out an additional loan amount has to be the granddaddy of dumb ideas. If the debt situation has just been brought under control through the consolidation of loans last year, why add risk by incurring more debt? I guess someone on the board has a pet project that needs completion. Again, they are looking to take on more debt, but they are still not willing to address the losses incurred by the POA. They’ll probably point to how wonderful the amenities are doing, but being disingenuous with how the financials are being reported and manipulating the cost structures does not change the reality that the losses are still there.
Property owners have a serious decision to make. But I wouldn’t support this budget either as a board member or even just a property owner. Just be wary, and I’ve said this before on the blog, that they don’t roll out this budget for shock value and then tone it down by 20-30%. If they come back with a lower number after claiming to have listened to the property owners, and that is something that rarely ever happens for those who attend board meetings, they still get 70-80% of what they wanted. Don’t be fooled.