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At the June 25th OVA Workshop regarding an OGC  purchase, 4 options were presented:

  1. Do nothing.
  2. Shut down some OGC operations
  3. Operate as now, using a management firm
  4. Operate similar as now, with a Net Lease Partner

Option 4 was discussed in depth with details given by Ken Arimitsu, OVA Broker. I asked the following questions about Option 4: 

Ken, you said that one million dollars will be needed for upgrades. So, OVA is responsible of bringing the buildings up to code before the lessee?

Director Kendrick: The million dollars is from the lessee, not from OVA. They are putting that up.

The lessee is putting one million for us (OVA) to do the upgrades?

Director Kendrick: Right, they are putting it up for the buildings.

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The Committee of Education and Transparency (CETC) is trying, but their efforts and recommendations are not supported by the Board

Background: this committee was created some months ago by Board President, Steve Spanier, who also serves as the committee’s liaison, to bring Education and Transparency of Community issues to the membership.

In February, the CETC recommended that the Board hold a Town Hall Meeting on the OGC issue and this recommendation was approved by the Board at the March Open Meeting. The CETC recommended a neutral presentation of the pros and cons of a golf course purchase, what scenarios are being considered, and how these will impact home values and dues.

Yesterday, at the May 9 CETC Meeting, the committee members discussed if the April 16th Town Hall met their objectives. These were their comments: 

  • Felt that it was not a neutral venue, especially when a majority of the Board voiced their support thus indicating they had already decided
  • Wished more pros and cons of a purchase were presented; wanted more facts
  • Were disappointed in the reporting in the Oakmont News – felt that the article skewed the perception of overwhelming support of a purchase and did not report on the concerns raised 
  • Did not address any financial considerations of both a purchase or non-purchase 
  • Did not address what OVA’s future would look like if OVA purchases the courses/land

The majority consensus was that the Town Hall DID NOT give the community the information it needs to make a decision on the golf course issue. So…

The Committee voted to recommend that the Board present a Workshop on OVA Financials and the impact of OGC acquisition. They wish it to be held prior to any offer to purchase the golf course because, in their mission for facts and transparency, they feel the membership needs to know the implications of such a purchase. What will be the financial impacts to the OVA and individual members?

I have attended many CETC meetings and am impressed with their desire to give the membership the facts. I hope the Board will honor future efforts of this committee, including the recommended Financial Workshop on OVA Finances. The Board did not do so for the April 16 OGC Town Hall. 

I would encourage members to attend this committee meeting, held on the 2nd Thursday of each month at 10 am in the OVA Manager’s Conference room, to show support for education and transparency.

Director Goodwin’s Fireside chat at the East Rec on Monday, July 23 was well attended. The purpose was to hear how neighbors feel about financially supporting the Oakmont Golf Club (OGC.) The consensus among attendees is that the Oakmont Golf Club is not OVA’s responsibility.

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PHOTO: Deferred maintenance at the ERC has left our facility partially barricaded for the past three years and Reserve Study costs escalating from $690,000 to $2 million

This town hall was apparently not meant to address the question of whether or not OVA SHOULD fund OGC but instead HOW OVA should fund OGC.

Director Kendrick opened the meeting by asking the audience 2 questions, both of which indicated the tenor of what we were about to hear. He asked a room with an apparent majority of OGC members:

1. Raise your hand if you are “interested in the golf courses failing.”

And

2.  Raise your hand “if the golf courses did fail, it would improve the value of the homes in Oakmont.”

A more important poll Kendrick could have taken is:

1. Raise your hand if you oppose subsidizing a private entity that has a history of poor management practices.

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During the recent Finance Committee meeting on June 14, OVA President Steve Spanier sat in for Finance Committee Board Liaison Tom Kendrick.

The Agenda included the Treasurer’s Report, Capital Fund expenditures of the East Rec Center and the recently completed physical inspection for the 2019 Reserve Study Report.

 

Several members of the community were in attendance and joined in the conversation regarding the 2019 Reserve Study. Answering a question as to whether the Reserve Study will include realistic costs for the Berger Remodel in 2020, OVA Manager Kevin Hubred stated that if accurate costs for the Berger remodel were included we would have a negative funding percentage and this would look very bad for prospective buyers of Oakmont homes.

OVA Treasurer Elke Strunka countered Hubreds statement, saying that including this accurate accounting will make it clear that a loan would be necessary and that a line should be included showing loan proceeds as the funding source. Hubred held to his view of not including the costs for Berger since they were estimates and not hard costs. It was then pointed out that best estimates are what we have and they must be included in the Reserve Study accounting.

Nordby Construction provided OVA an official estimate of $4 million in costs for the Berger remodel. To retain the current Reserve Study cost of $250,000 would result in a false funding percentage. An audience member pointed out that savvy buyers and current homeowners want to see a true reflection of OVAs financial health and to provide a materially inaccurate report is a misrepresentation of the Association’s financial health.

Strunka went on to note that a considerable number of items scheduled to be repaired or replaced in 2018 have not been completed. Hubred and Facilities Manager Rick Aubert were to meet the following day, June 15, to be updated on the Reserve Study report.

It was also reported that OVAs new Reserve Analyst Robert Browning has completed the required 3-year visual inspection of OVA assets and is processing this information. Hubred said that the final version will be available for interested OVA members to view in July.

The next Finance Committee meeting is scheduled for July 12.  Ms. Strunka said she is conducting an analysis and will report the details of a possible loan to cover maintenance and remodel expenditures, with the understanding that interest rates are likely to be lower in 2018 than in the future.

During the May 1 OVA board meeting Strunka mentioned that the issue of such a loan had come up at the Finance Committee meeting in April. She added, “If the board would like me to consider some different financing scenarios I would look into it and prepare an analysis for the next (i.e. June 19) board meeting.”  Strunka said she was waiting for the completion of the Reserve Study visual inspection for more accurate numbers.

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Why is it OVA Boards can’t learn from past mistakes?

Can we avoid such discord?

YES!

How?

First, the Board needs to stop cherry-picking attorney opinions to suit their typically club-affiliated agenda and acknowledge the need for a membership vote on such matters. They should welcome and embrace prominent HOA attorney Steve Weil’s read on this, which he provided during a 2017 OVA Board meeting:

“There is nothing in Davis-Stirling, nor is there anything in the OVA governing documents that prohibits the Board from submitting it to (a vote) of the members. Under Section 3.3 (bylaws) the Board can convene – the President or the Board of Directors – can convene a special membership meeting for any purpose. And then under Section 4.1, the members have the right to vote on any referendum or proposal submitted to the members.”

I call on the OVA Board President to honor his commitment to the membership that he will conduct OVA business with transparency and input from the community. So far, the OGC subsidy request has not been conducted as he promised.

The Board needs to do its due diligence and demand accurate information (aka transparency) from the OGC as well as an independent audit of their financials. Also, ALL Board members should have access to OGC’s financial information, not just those selected by the OGC. Actually, the OVA Board should simply reject any subsidy, in which case they don’t need to see OGC financials at all. If certain Board members wish to believe and/or accommodate OGC’s plea for financial support, then identify an OGC asset of value to OVA to trade for some lesser sum, so member dues are not diverted from maintenance of OVA’s own assets.

Why weren’t ALL OVA Directors available at the June 5 Meeting to voice their concerns and ask pertinent questions? We heard each member of the OGC panel say the two courses were not in trouble of folding and will not be sold. We were even told the OGC did not need our money for operations. But then we heard Director Kendrick say the financials were “murky.” What does this mean?

Troubling statements I heard on June 5:

Barbara Robinson, president of the OGC said “areas of collaboration will not be discussed with residents, only the Board of Directors.”

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