HOT SPRINGS VILLAGE -- Members of the Hot Springs Village Property Owners' Association staff and board of directors held town hall meetings Tuesday and Wednesday to discuss the financial impact of the proposed assessment increase that will go out for a vote Wednesday.
At the Wednesday afternoon meeting, board President Keith Keck made a presentation explaining that two separate budgets are being worked on -- one if the increase passes, and one if it doesn't. Ballots will be due from members in good standing Nov. 21. If the increase passes, properties with a water meter will pay $65 a month assessment dues, effective Jan. 1, while properties without a meter will remain at $36.68 a month.
Keck said the POA has lost an average of $3 million a year in delinquent assessment payments, and that has accumulated to $13.2 million. This has been offset by delaying capital projects, including the purchase of rolling stock that is aging, the Balboa golf course and Balboa Club renovations and scaling back on improvements at the West and East gates. At the same time, the capital reserve fund has been used with the bulk of that money going to the water plant expansion as well as cleanups from natural disasters.
"FEMA did provide us with a lot of funding, but we also had to tap into reserve funds to take care of the rest of it," Keck said.
Golf rounds are also down by 100,000 a year, from a peak of 350,000 rounds in 2005. Increasing golf rounds through the Troon Golf agreement, the assessment increase and attracting new property owners are part of a three-pronged attack to strengthen the community's financial situation.
Keck said the staff has outlined budget priorities and how they will be dealt with in the two different scenarios.
If the increase does not pass, the board will most likely institute the cost-of-living increase on the assessments starting in 2015, going from $36.68 to $37.52 a month on all properties. Golf fees would go up $1 across the board, and water costs will go back to 2012 levels with a base cost of $10.62 a month. These increases would generate $1 million in annual revenue.
If the increase passes and the two-tiered system goes into effect, there would be no increase on golf or water fees, and additional revenue would be $2.9 million a year.
"People have asked us where that additional money would go, and we have laid that out in this presentation," Keck said.
Under capital purchases, without an increase, funds would remain about $3.5 million to $4 million a year, about half of what is needed to replace rolling stock, such as police and emergency vehicles, sanitation vehicles, maintenance equipment and golf carts. With the increase, the additional funding would include maintenance for both wastewater treatment plants, HVAC and lighting work in Woodlands Auditorium, Balboa course irrigation and cart paths, work on the DeSoto and Balboa clubs, gate security upgrades, Coronado Center renovations, a pickle ball complex, tennis court lighting and a new fire engine.
In regular maintenance, Keck said that no increase would result in $711,000 worth of water and sewer maintenance projects in the 44-year-old western end of the Village, road and culvert work being deferred during 2015-17. With the increase, water and sewer maintenance spending would increase from $368,000 to $795,000 and road and culvert maintenance would be increased.
Employee pay is also an issue, since it takes more than 40 percent of the POA's budget.
"We have over 500 employees, and they like to get paid," Keck said.
Without an increase, employees would get a cost-of-living raise for 2015, but salaries would be frozen beyond that point. With an increase, the raises would continue at an average estimate of 2.5 percent a year.
"No new amenities will be funded from this assessment increase. There are millions of dollars in capital projects that have been identified but are still under review. The key to funding these projects relies on HSV growth initiatives, part of our three-prong plan. Our growth is dependent upon a solid financial footing, which the assessment increase will assure," Keck said.
Keck was questioned about the budget priority of getting the DeSoto Club renovated and relocating the DeSoto Pool closer to that complex. Part of the club renovation will come from insurance funding after the building received extensive water damage during the winter when the sprinkler system ruptured. The DeSoto Pool is 42 years old and needs work, but remains one of the Village's signature amenities during the summer.
"Getting these two items renovated and closer together is a key component. We would get the golf shop into the clubhouse, utilize the additional space for banquets and other functions to generate revenue, and having the pool closer would allow patrons there to step over to the club and purchase food from the grill portion of the complex. It can be put to good use with some of the costs being covered by insurance money and be a more efficient facility," Keck said.
He added the same plans are being looked at for the Balboa Club to maximize its use and make it a viable facility that would be an attracting point for future community growth.
Local on 10/10/2014