Guest Editorial: OVA Dues and Loans
Although the approval of the East Recreation Center (ERC) loan is old news, it’s been on my mind. Taking loans for maintenance and improvement work on our facilities appears to be a new fiscal direction by our current OVA Board of Directors (BOD). I recognize, as many others have, that our reserves are insufficient and deferred maintenance has occurred for OVA facilities. I am a bit shocked to find out some residents don’t think we need any dues increases. Inflation alone results in dues increases. However, the size of the 2018 and estimated 2019 through 2023 dues increases currently planned have me concerned.
The BOD recently approved a $1.6 million dollar loan for the ERC maintenance and improvements that OVA Treasurer Elke Strunka said will increase our dues over 5 years by more than the 20% that requires a vote. This loan is for one single event, the ERC maintenance and improvements. It seems spreading the due increase over five years, to keep annual due increases below the 20% to avoid a member vote, is just game playing. I think the intent of the bylaws is being ignored. Is this the new planned method to avoid residential input on big expenditures and large due increases? Is it the new fiscal policy to spread the dues increase over several years for each big project to avoid requiring resident vote; with the net result- dues will be well over $100 per person per month within the five year long planning window? Will the dues remain high forever after the initial increases, building an excessive reserve fund that the BOD can use for any purpose without resident input? Why was a one-time assessment not considered?
Instead of the ERC loan, I would have preferred better scrutiny of the needed ERC remodel scope, a delay in the ERC project until funds were available, or a one-time 2019 assessment with member vote. These options would have avoided the extra ~$230,000 in loan interest/fees and a significant series of annual due increases, which may continue forever. Will this game playing be used for the Berger remodel with even greater interest cost and annual due increases?
Further, I believe all future projects and long range planning approved by current and future BODs should follow a priority model before the scope is approved or change orders approved. For example is the scope a necessary improvement or someone’s (project managers or special interest groups) personal choice? Priority of approving scope items should follow a priority model based on available funds:
1. Safety and regulations, including ADA, should be highest priority
2. Maintenance and repair or removal of unsafe “existing” amenity should be next highest priority. For example resurfacing an existing pool when it becomes damaged or replacing the pool heaters when they can no longer be repaired efficiently.
3. Projects that reduce our annual operating expense. For example adding solar panels to our facilities to avoid having to pay high electricity rates. This deserves crucial consideration based on PG&E now being able to pass fire lawsuit costs onto ratepayers.
4. New scope to meet changing demographics. For example the pickle ball courts, a new amenity. These projects should only be approved when priority one and two projects are completed, reserves are sufficient and substantial dues increases are not required. Residential vote on new amenities should be considered if capital cost and/or increase in yearly operating budget are significant.
5. Projects that reduce Oakmont’s carbon footprint. Not sure this should be number 5 but should be on this list. For example use of the shuttle helps reduce car emissions caused by multiple residents driving to same destination.
All projects should meet sustainability guidelines. For example, why did we approve more lawn in the ERC remodel when we know that will require more water, possible added gopher/mole and yellow jacket issues, and higher operating expenses? As well, elderly and disabled prefer a more stable surface like cement for walking on, than green lawn.
I will be sending my thoughts to the BOD but would also appreciate your comments as to what you think should be the priority model for future project approvals?
Like you, I am concerned that there is a faction within Oakmont that wishes to raise our dues substantially in order to achieve a more “premier” vision of Oakmont, perhaps doubling them over a period of years while never exceeding the threshold that would require a membership vote. I intend to recommend to the Bylaws Revision Committee an amendment to limit 5-year cumulative increases in dues, in order to address this possibility.
Your priority list is a very good one — I wouldn’t change a thing!
Exactly! – This seems to be the present trajectory of most governing bodies from the local OVA/HOAs to national government offices. A world run by lawyers who angle and bend the rules to allow people who were “elected to lead, rather than govern.” Go over the rules and find the loopholes to limit community input and allow unmitigated power to people who might have well under 50% voter approval of the complete community.
I was taken to task on social media for suggesting that the present BOD had plans to change the perceived “Image” of Oakmont to one of a “better heeled,” more athletic, and youthful, to attract a different sort of future resident. This was dismissed as “poppycock” and it was suggested that the changes were actually because of a changing market and the substantial increases in local real estate prices. SURE….
Slimy machinations like spreading costs over time to avoid asking the entire community for the approval of spending millions and setting up EVERYONE for considerable fee increases, as well as setting a precedence for using this method to finance a future that will ultimately outprice many of the exact people who are being deprived from voting on these issues…. NOT FAIR! And in a way, it becomes a form of elder abuse, and possibly should be approached and investigated that way…
I think all of us who live in Oakmont should be concerned regarding the creative financing that is being used by this current board.
There are members of this board who favor building a Burger II rather than repair the current Burger. One current member has already taken steps to facilitate the construction of the Burger II .
One way that could stop this construction would be if the dues were raised above the threshold that requires residents vote.
Perhaps this creative financing being used on the ERC is a trial balloon for future funding for the Burger II that would not require a vote.
Establishing reserves at responsible levels is, or should be, a priority for the OVA Board. It appears that the reserve deficit may well be the result of monthly dues that have been kept artificially low over a sustained period of time. My wife and I have paid dues since 2013. Not much has changed since that time. The fact that a loan is needed for the ERC repair and upgrade speaks for itself. If the reserves don’t meet the needs of anticipated expenses, the “loan” phenomena will be a recurring theme. Better to increase dues to establish reserves that are based on reality than to pay interest in the six figures. The cost of living increases for everyone. This applies to everyone, including Oakmont residents. While there will be individual cases of hardship whenever costs increased, that cannot be used to justify keeping the dues too low. That, in effect, simply results in a subsidy for current residents at the expense of more rapidly increased costs in the future. Those, in turn, will cause even more pain when the need for increased funds is more urgent. Keep what we already have in good repair and make up-grades when necessary. When reserves reach appropriate levels, dues can be adjusted if that can be done responsibly. No one is responsible for increases in the cost of living. Oakmont does not exist in a time capsule. The Board has a fiduciary responsibility to move forward on “the basics.” The alternative of a one time assessment could be explored, but would undoubtedly face stiff resistance from the residents. Either way, more resources will be need going forward just to keep what we already have in good repair. The alternative of a “fee based” structure for use of any of the facilities would also be unpopular. Doing nothing is simply folly.