Tom Blakeman offers comments and suggestions to HSVPOA Board in advance of the October 10, 2019, Budget Meeting
Tormey & Diana,
As you again review the budget on October 10th please consider the below comments and suggestions. I am sending this only to you two because I feel you are the only two Board Members that are really paying attention. You may forward this to the others if you wish.
- The idea of a surcharge on golfers, which it seems the Board has agreed to, is pure folly. A surcharge won’t work:
- How can you put a surcharge on the daily Member player greens fee when you have a variable fee to begin with? It is smoke and mirrors. The Troon originated “Flex Pricing” variable fee model for golf has failed miserably in HSV – just like all the other Troon ideas. Board Members should own the “Flex Pricing” problem and fix it.
- We are also in a different time and market now than in 2008 and 2012 when surcharges were previously used. Since then our golf rounds have been dropping every year and we do not have pricing power in the marketplace to increase fees – at all. Back then we also had fixed fees to start with but once added the $2 surcharge really never went away. It just became part of the cost of golf; part of the increased fees that helped drive rounds down through today. It simply won’t work.
- The $2, $3 or even $5 idea proposed may not sound like much to some of our wealthier annual fee players who are doing 200 or 300 rounds per year, particularly if their basis is only 100 rounds. But the fact is we are already well above market when you include cart fees. We are simply not in a market that will support the level of golf fees we would like or may be possible in larger metro and resort areas. Keep in mind annual player members have been dropping every year, for years.
- It is very disappointing that not one board member even questioned the price elasticity of golf fees. There was virtually no discussion of the real market price for golf in this area of central Arkansas. Anyone can go on Golf Now and see how our daily fees DO NOT compare favorably to others within a 50-mile radius. Or, just go to the websites of a few “country club” type golf courses in the area and compare their annual fees and member benefits. Entire families can get full unlimited privileges for less than our Annual Golf Fee. We DO NOT compare and HSV is not a country club. If the majority of Villagers wanted a high dollar country club we would have bought homes in Diamante and be paying the $500 per month they charge – and they are out of line with the market too – that’s why Diamante homes don’t sell – ask a Realtor. The following links will prove the points just made:
Click here for Golf Now Tee Times Near Me
Click here for Centennial Valley Country Club Membership and Pricing Information
Click here for Eagle Hill Golf and Athletic Club/Affordable Golf Memberships
- The idea of an across the board fee on all amenities/ households is even worse. I usually don’t agree with the CEO on much but on this, she is right on target: If it “smells” like an assessment, it is an assessment. Unacceptable. By the way, you are not going to get any assessment increase votes until the Board can take back the POA and demonstrate that proper management is in effect and monies are being wisely spent.
- The staff idea of “freezing” unfilled golf maintenance positions is not a solution to anything either. If we needed the 10 additional workers a few years ago how can we not need them now? If we had had them all these years surely a lot more work could have been done that hasn’t been done. Buddy’s idea that we need a crew (or crews) to be assigned to irrigation (or whatever) was discarded off-hand by staff. It shouldn’t have been.
- The idea that our problem with rounds is mostly weather-related is phony. Just look back at all the board minutes for the last 10 years and you will find that we have had weather issues every single year. What are you going to do next year if the weather doesn’t cooperate with 365 “playable” days?
- Finally, the proposal that you can budget a 38% increase each for Green Fees – Members and Green Fees – Non-Property Owners got nowhere enough scrutiny in the previous budget meeting. This is an obvious red flag begging for objection. There is just no way that can be achieved without wholesale changes in how HSV prices and markets golf.
- In summary, there is a golf pricing and marketing crisis here in HSV. The budget doesn’t address it and it appears that the Board is not addressing it. Golf should be a profit center and not a $2 Million LOSS center. And NO this is not a general “funding” problem.
That’s all I have for golf. But there is another solution to our financial woes which no one is talking about. And, it would work. Frank Leeming proposed it just a couple of months back but it has been totally ignored. To quote Frank:
- We should implement . . .” a $5,000 buy-in fee to the cost of every home sale in the Village, and perhaps $500 on every lot sold. The idea is intriguing: Existing homeowners and property owners – you and I – have been paying for Village infrastructure and amenities for years through assessments and fees. Why shouldn’t newcomers be asked to share some of that cost? Over the last three years, an average of 650 home sales have been recorded each year in the Village. If the buyers paid a $5,000 buy-in fee, it would generate $3.25 million a year. Tracking lot sales in the Village is more difficult, but a board committee studying the issue in 2013 found there was an average of 1,643 lot transactions a year in Saline County between 2007 and 2012, and 1,367 in Garland County. That’s an average of 3,010 a year. If there was a $500 buy-in fee on each deal, it would bring the POA $1.5 million a year. That would be a good way to fund redoing the Balboa Club, and help fill POA coffers in the years ahead.”
The Leeming idea is a good one. It is a concept being utilized by other communities similar to ours that also had capital and maintenance funding issues in the past. It would work and, assuming a vote is needed, is much more likely to get passed than any assessment increase.
Thanks for your consideration,
Tom Blakeman, 10 October 2019
Cindy Anderson
10/10/2019 — 12:43 pm
Please indicate to our dictator, nalley, that we want back in the meeting. This is our right, our money, our Village. Thank you
Mary Szczepaniak
10/10/2019 — 12:53 pm
If such a fee existed, we would have scratched HSV off our list.
Robert Jersak
07/02/2020 — 5:49 pm
Absolutely. Prices for single family and duplexes are not holding up well. Glad something like that ill-advised sales fee didn’t pass.
Nancy Burleson
10/10/2019 — 1:02 pm
I have friends from out of state who have been coming every fall for 10 years for a couple days of golf and to celebrate birthdays. I don’t personally play golf but in past years have been able to easily get tee times well in advance by phone. This year between the weird computer system and having to use my credit card and the ensuing confusion with adding two resident friends to accompany them, and the pricing structure… well, I can see why people aren’t playing as often.
After their rounds were over, I asked them how the courses were this year. They played Ponce and DeSoto and enjoyed both courses… BUT for the first time in all the years I got complaints about the pricing. They felt they were overcharged, and had to pay much more than they do in their respective areas (Dallas and Nashville). Next year we might skip the golf all together and rent a party barge on Lake Ouachita instead. I wonder how badly the POA is shooting itself in the foot as to future business. Just my humble opinion as budgets and fees are being discussed.
Chris
10/14/2019 — 12:34 am
Nancy,
Thank you for sharing.
On a visit years past my wife and I wanted to play Isabella and called for a tee time and asked about the guest fees. We were told It would cost us more than $165 to play … so we didn’t. We were accustom to paying senior fees at some really nice private course open to the public paying no more than $35 each for green fees and a cart.
Tom Williams
10/10/2019 — 3:35 pm
A buy in fee is insane, you would not be able to sell your home. Besides when some one buys or builds a home here they become invested like everyone else. With having to pay assessments . Just plain common sense don’t you see.
Anonymous
10/10/2019 — 3:46 pm
The buy in fee will scare potential buyers away from the Village. What will eventually happen with that plan is the seller will pay it to unload his home. Not a good plan. I didn’t read one suggestion of what would work, all I read is what’s not working. If we are out of line in pricing then reduce costs to be competitive. That might bring in more golfers thus boosting the bottom line.
Man from the clouds
10/10/2019 — 5:49 pm
The first thing you lose in college is common sense, it’s not all butterflies and rainbows, we need boots on the ground that know what they’re doing to get this Village back in shape just my opinion
Common sense works best
10/14/2019 — 12:39 am
Man from the clouds
Thank you … boots on the ground to get things done. Committees are mostly a waste of time and energy, especially when they have no real authority.
Jeff Atkins
10/10/2019 — 7:36 pm
We already have a buy in fee, the $125 “deed transfer” fee. This fee started in the early 2000s at $8 or $10. It went to $125 under Twiggs. it’s part of the reason we have a lot deliquency problem. Fees create friction in transactions. If there’s a large fee on a “buy in”, you can bet that the sellers will pay some or all of it, either directly or through a lower sale price
Gary
10/11/2019 — 5:53 am
Have any of you ever been to college? Did you forget to take Econ 101?
Any activity, regardless of its nature, is reduced whenever a tax or “fee” is added. This is simply fact. So, this inane idea will assuredly result in fewer homes being bought or sold. You can count on it. It is not debatable. It will happen. Do you remember the luxury tax on boats? How did that work out?
Maybe you forgot to take any history classes, too.
Anyway, enough of this absolute nonsense. The POA does not need ANY more money. This idea is complete and utter nonsense. If ever implemented it will only serve to hasten the demise of HSV. No question.
Move on people.
Might Be an Ex-Golfer
10/11/2019 — 8:33 am
08/22/2019 — 10:38 am
Adding a surcharge for golf is just putting a spin on a rate increase for golf. Just look where past surcharges went. We never saw rates decrease after the justification for surcharges was complete. Golf will continue to be in trouble due to several factors, including basic economics and changing demographics in the village.
We have an oversupply of golf coupled with decreasing demand. The addition of 27 holes of golf has not helped this balance, neither has the continuous price increases over the past 20 years. You only have to dust off your Economics 101 book and look at a price/demand elasticity curve. Couple that with the present oversupply and the outlook for golf is not favorable. Exacerbating these effects are the changing demographics in the village.
Unfortunately, after 20 yrs. of paying the annual fee I am joining many of the avid golfers who filled the tee times in the early 2000’s. We have aged enough that we are now unable or unwilling to play and pay as much. Also, being on fixed incomes has been detrimental, given each annual fee increase. Recent retirees coming to the Village have reflected the national trend of a decrease in golf participation. Simply put, we haven’t had enough new golfers to replace those we have lost.
These realities are not going away and the only solution will be to reduce the supply by closing courses or increasing golf demand. While it would be impractical to abandon any of our courses, periodic closure would provide some cost relief but would cause some turmoil. A better alternative would be to increase demand.
How to increase the number of Villagers playing golf and encouraging new residents to learn the game is challenging, given the cost of equipment, tee times and effort required. One possible way of doing this would be to offer “free golf for life” on Coronado when tee times are available and provide group lessons, inexpensive or free rental equipment. Cart rental would offset the cost of any increased course maintenance. Villagers finding the enjoyment of golf would soon graduate to playing our full sized courses. This would also be a great marketing strategy….. it works for the Villages in Florida!
Gene Garner
10/11/2019 — 1:56 pm
ACA 18-12-107, an AR statute, is titled “Transfer Fee Prohibited”. Which means any fee required when real property (land) is bought or sold will not be allowed–unless it is specifically authorized by the CC&Rs.
Twiggs tried to force this one thru once before but soon discovered there was little to no support among property owners to amend the Declaration and he then dropped it.
The added cost for new home construction (grinder tank, sewer & water connections etc.) is now $8000+, adding another $5k would discourage many retirees from building in HSV.
Jeff is right, someone will have to pay the $500 buy in fee on existing houses and unimproved lots, probably the seller.–Gene
Tom Blakeman
10/11/2019 — 5:10 pm
A couple of facts: Transfer fees by a HOA or POA are commonplace nationwide. Usually between $75 and $250. Fees for the grinder are no different than if a homeowner had to have a septic system installed. Usually the homeowner pays for anything built and to extend water, sewer lines to the street, and repair them if they leak or break. Maybe a builder could install for less than POA charges, who knows. Maybe it should be on the homeowner to repair grinders if they break down but our board apparently voted to make this a freebie. Right or wrong is debatable.
And yes, the total of all costs and fees (closing costs) to buy and sell real estate is insane, particularly for those who chose to finance. Ultimately, it all comes back to be reflected in the price of the real estate. Like it or not.
Tom Blakeman
10/12/2019 — 8:16 am
Update:
It would appear that despite warnings against, the BOD, in their third budget meeting, has agreed that surcharges will be added to golf fees for 2020. It is not clear exactly how this will be done but the 2.50 charge per round will be the new magic number. For annual members they will increase last year’s rate by $250 based on the assumption of a 100 round basis. For daily pay members the methodology is less clear since there is no fixed base rate to start with and based on the existing “flex pricing” model POA can change the daily rates at their whim. Nonetheless, expect to pay more in 2020. Nine hole players will likely feel the bite even more because POA has discovered that many former 18 hole players, due to age or cost have migrated to playing only nine holes, and the numbers of nine hole rounds have actually been increasing while total rounds have declined. So, to capitalize on this POA have already been charging proportionally more for a nine hole round than for eighteen. They will continue to leverage this disparity. Whether or nor the surcharge for nine holers will be $1.25 or some other amount is not clear yet. One dubious bright spot will be the new “pay $1,000 and get $1200” worth of play “annual” idea. You’ll have to pay up front in January just like the regular annuals but you will save $200 during the course of the year. That might be ok if we knew what the every day daily rates were going to actually be. But, as noted above, we don’t. Smoke and mirrors. Oh yes, and their “target rate” on which they will continue to base fees for outside players is still $60.00 per round (green fees only? – plus $2.50? – not clear). However, either way this is above just about any other rate for any course in a 50 mile radius. So, don’t expect any great increase in outside play to help fix the POA golf losses. We will probably still lose $2 million plus in 2020. That’s money out of your pocket as a property owner whether or not you play golf. Or, as POA likes to call it – SUBSIDY. Go figure.
George
10/12/2019 — 3:40 pm
Agree that there is risk of play decreasing because of the rate increase.
I do expect they will separate this surcharge amount into an escrow type fund that is reconciled against rounds played each month. There needs to be complete visibility of this money monthly.
Anything short of this type of transparency will drive people away as much as the surcharge.
Did you see the $540,000 budgeted in 2021 for Member & Visitor Access System Upgrade? Listed as deferred maintenance. The failed gate project already cost over $150,000 and I don’t recall the amount ever being over a 1/2 million budget item in prior years.
In addition there is $90,000, in total, listed for Security Camera systems over 2020 and 2021. Noted under the Admin Dept.: “Security Camera systems at recreation & operational facilities as part of an overall risk management program.”
Would like to see the ROI and detail on this $630,000 worth of spending.
Just examples of why the surcharge needs to be visible each month, too easy to collect money and write checks for other projects.
Tom
10/12/2019 — 5:16 pm
Hi George, I agree. Any surcharge needs to be isolated and protected. I guess we’ll see in due course; if any of us are still here.
POA problems will not be solved with new software or systems either. Our country sent men to the moon 50 years ago and the calculations were done with a slide rule.
What’s needed here is just a big dose of common sense and practical management. Thanks for commenting.
Minn Daly
10/12/2019 — 5:49 pm
Tom, George , I thank you for telling us about the budget. Why is it so hard to get expenses in category as implemented? Why are the expenses not listed under what the charge was? Example attorneys fees for BOD/CEO, where are they listed? Gate system, Camera system, One half million plus for member system access upgrade, I have never seen a budget outlined like HSV budget. We need a forensic audit or retired members who are account guru’s to aid the situation & get structure so we all can look an see what the money is spent on. What are all of our liabilities? Minn Daly
Ernest Armentrout
10/14/2019 — 12:46 am
How can the BOD, decide to increase or assess additional fees arbitrarily without some input from the community?
Maxine
10/14/2019 — 5:24 am
The same way they decide everything else without input. They just do it.
And you elected them.
And you stand idly by while they continue to destroy HSV.
So, on and on it goes.
Sally
10/14/2019 — 5:44 am
We had friends visit from SaddleBrooke near Tucson, AZ. Their first comment was, “what happened here?” They were dumbfounded at the decrepit state of our community. Take a look where they live and you will see why.
https://www.robson.com/communities/saddlebrooke/