HOT SPRINGS VILLAGE -- More than 500 people attended the first of two town hall meetings on a proposal to raise some assessments Wednesday afternoon in Woodlands Auditorium.
The Future Financial Task Force, after eight months of research, released a report that proposed raising the assessment rate from $36.68 to $65 a month for property with homes, if approved by a vote of the membership in good standing. The rate would not change for unimproved lots.
Board President Keith Keck prefaced a presentation by David Twiggs, Hot Springs Village Property Owners' Association chief operating officer and general manager, by emphasizing that cuts have been made in recent years, particularly by deferring capital improvement projects.
"We've put our departments on a tight budget. The root cause is that we have a lot of people who haven't paid their assessments to the tune of over $13 million the past five years. We are in the comment phase, and the board will look at these comments along with the Assessment Committee and then take the final proposal for a vote among the general membership in good standing," Keck said.
Twiggs said the key is to adapting to change, as the community went from collecting 99 percent of assessments billed in 2006 to 75 to 78 percent today.
He recapped the years when the developer, Cooper Communities Inc., was selling lots and spending millions of dollars promoting the Village. When Cooper stopped that practice in 2003, the Village fell behind the cost-of-living curve in terms of assessments, and the work done by National Recreational Properties Inc. in California was termed as a "Band-Aid that took advantage of the housing bubble. When the economy and real estate market collapsed in 2008, they stopped paying assessment dues on 5,000 lots. From then until this point, we have done cost-cutting measures. We cut $3.2 million from the budget in 2013 because of unpaid assessments. Hot Springs Village has not kept up."
The last approved assessment increase was $4 in 2010, which raised dues from $32 to $36 a month.
"However, looking at this chart, you can see that our revenues remained about the same because of nonresident members abandoning their lots. We have about 7,500 lots in arrears now," Twiggs said during his multimedia presentation.
Looking at inflation, Twiggs said that dues were $12 in 1971. If dues had kept up with inflation, today's rate would be $70.49.
"If we raise the dues for improved lots to $65 a month, that buys us time to get some of these long-range projects done to add value to the community, particularly investors who are interested in the future growth," Twiggs said.
Twiggs showed charts that indicate delinquent assessment payments are leveling off because the big corporations and investors have left. The same is true of a drop in golf rounds. He has set a goal to increase golf rounds by 25,000 per year by 2020, from outside rounds from individuals and group and corporate outings.
"We are dealing with individuals now as the big investors are gone. Our goal is to bring them back, and we have to maintain what we have to make it appealing to them and add value with the low-hanging fruit investments we've made, such as Grove Park and its activities and expanding work on Balboa Beach. We've got to make plans to take care of ourselves now and keep us stable until the long-range plans start taking shape. I understand that people are on fixed incomes, and all of us have to learn to live on what we have," Twiggs said.
Realtors say that home sales have increased, which is a move toward more new home construction, he said.
"We have to change the model we have now. It won't happen overnight, but it is a work in progress," he said.
Twiggs summed up the plan in three stages -- funding for future improvement; maximizing amenity performance; and increasing assessment levels.
"Getting the nonpaying lots back on line is the key. This is done in stages. An assessment increase will give us now money, and the future plans will add value to the community, attract more visitors and future owners that will put these lots back into production. One of the Village's biggest challenges is overcoming the statement I've heard often -- 'Yeah, we know about Hot Springs Village. They won't let you in.' To change that image, we are working on aggressive marketing, and we're planning on having guest rounds with media personnel to spread the word," Twiggs said.
Twiggs said that a $65 monthly rate for developed lots would raise $3 million annually and nearly offset the current delinquent assessments.
"By not raising the rates on the nonresidents, they will be less apt to abandon their lots, it will keep our rates competitive with other similar communities, it puts us in a position for growth and funds the maintenance needs. We have to stop the bleeding first before doing the operation," Twiggs said.
During a question-and-answer period, residents raised concerns about having enough police and fire personnel to protect a bigger community, voiced a dislike of a two-tiered assessment system, and budgeting for higher rates.
Twiggs and Keck said the questions and comments will continue to be taken and evaluated until Aug. 15, and a final proposal will be voted on by the board at its Aug. 16 regular meeting.
Local on 07/18/2014