pending assumptions made when forecasting Village financial needs
July 12, 2014 – Here’s a summary of what’s been going on and what’s coming up on the assessment front:
After nine months of study, a task force concluded the POA needs more money. If we don’t change the way we do business, we’ll end up with a $22.5-million cash shortfall in 2020.
To reach this conclusion, the task force made certain assumptions and added key spending items:
• Rebuild Balboa Golf Course next year – $2.7 million.
• Rebuild Coronado Golf Course in 2019 – $2.2 million.
• Rebuild DeSoto Pool in 2016 – $2.2 million.
• The number of unproductive lots will increase 325 a year as they have in the last three.
• Golf rounds decline 5,816 a year, which they have over the last 12 years. The task force’s numbers may be low; in the last seven years, rounds are down an average of 12,142 a year.
• Recreation revenue continues to fall 1.5 percent a year.
• Most fees would rise 1.5 percent a year.
• Operating costs would rise 2.5 percent a year, but be offset by a 1 percent improvement in productivity.
• Road paving spending would be $1.4 million a year. Historically the POA spent about $2 million a year to maintain Village streets. That was cut to $924,000 this year.
First, ask members to approve a two-tier assessment plan. Owners of undeveloped lots would continue to pay $36.68 a month. Owners of developed lots would pay $65. Plus: The subsidy of golf would be reduced from $2.5 million a year to $1 million by 2020.
Second, higher assessments would generate $3 million a year. This would offset revenue lost from 9,258 unproductive lots: On June 30, there were 6,913 lots which are 60 days or more past due, and 2,345 lots in the POA inventory. They represent 27.1 percent of our 34,149 total lots. The money would pay to keep our amenities and infrastructure in tip-top shape.
Third, financial stability would enable the POA to move forward with a new business plan being developed to re-invigorate the community and increase everyone’s property values.
After nine months of study, a task force concluded the POA needs more money. If we don’t change the way we do business, we’ll end up with a $22.5-million cash shortfall in 2020.
To reach this conclusion, the task force made certain assumptions and added key spending items:
• Rebuild Balboa Golf Course next year – $2.7 million.
• Rebuild Coronado Golf Course in 2019 – $2.2 million.
• Rebuild DeSoto Pool in 2016 – $2.2 million.
• The number of unproductive lots will increase 325 a year as they have in the last three.
• Golf rounds decline 5,816 a year, which they have over the last 12 years. The task force’s numbers may be low; in the last seven years, rounds are down an average of 12,142 a year.
• Recreation revenue continues to fall 1.5 percent a year.
• Most fees would rise 1.5 percent a year.
• Operating costs would rise 2.5 percent a year, but be offset by a 1 percent improvement in productivity.
• Road paving spending would be $1.4 million a year. Historically the POA spent about $2 million a year to maintain Village streets. That was cut to $924,000 this year.
• • •
To deal with the all this, the task force is making a three-prong recommendation:First, ask members to approve a two-tier assessment plan. Owners of undeveloped lots would continue to pay $36.68 a month. Owners of developed lots would pay $65. Plus: The subsidy of golf would be reduced from $2.5 million a year to $1 million by 2020.
Second, higher assessments would generate $3 million a year. This would offset revenue lost from 9,258 unproductive lots: On June 30, there were 6,913 lots which are 60 days or more past due, and 2,345 lots in the POA inventory. They represent 27.1 percent of our 34,149 total lots. The money would pay to keep our amenities and infrastructure in tip-top shape.
Third, financial stability would enable the POA to move forward with a new business plan being developed to re-invigorate the community and increase everyone’s property values.
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