By Frank Leeming, October 15, 2019
2020 budget, marketing, updated Village information on the table
There’s a lot to go over, so let’s get to it:
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The “What’s Happening in Hot Springs Village” package has been updated to include information for the first nine months of this year. To see it, click here. [PDF is also included at the end of this article.] Highlights:
- Slight improvement in reducing the number of unproductive lots not generating assessment revenue. Still: 11,182 lots – 32.5 percent of the 34,457 total – were unproductive in terms of generating assessment revenue to support the POA.
- The number of new-home permits approved in the first nine months was down 25 percent. This is the most important barometer of Village growth.
- The Village real-estate market remains solid. 516 homes sold in first three quarters. Average sales price ($197,752) was highest since 2009.
- Golf rounds played in first nine months fell again, nearing one half of what they were in 2005.
- Rainfall was 14.5 inches above average, or 36.3 percent, yet drought conditions are growing in Arkansas.
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The starkest example of why our desperately needed marketing efforts remain mired in mediocrity was displayed in the last seven days.
First, the CMP marketing subcommittee (composed of marketing experts who live in the Village) delivered a remarkably good presentation on what the Village needs to do to turn things around.
Then, days later, the POA staff put out its own Marketing Plan. It is woeful and filled with blather and little substance.
We have to face an essential truth: No one on the POA staff has the background or talent to develop and lead a professional marketing program.
Click here to see the marketing subcommittee’s report, and click here to see the POA’s marketing plan. Spend a few minutes to compare the two.
Note: Even the staff plan says we should be spending between $518,000 and $1,037,000 for marketing. So how much is expected to be spent this year? $207,000. How much is to be budgeted for next year? $395,000. The board needs to take this problem seriously.
Bottom line: The POA must hire a top marketing executive to lead us out of the mess we’re in, and the board must create a standing Marketing Committee to provide support and guidance.
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Do not be surprised if this board of directors tries to take some action in the coming months to block Dick Garrison’s bid to win back his seat on the board.
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The fourth version of the 2020 POA budget will be presented to the board tomorrow for approval. Click here to get a copy. Think about saving it on your computer for future reference.
Important: An ad hoc committee made excellent recommendations for improving the budget process. Click here to see a story on what they’re recommending. The committee is another example of what talented Villagers can do for the POA if given a chance.
As expected, the committee urges the board to create a standing Finance Committee to provide Villager input and support.
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Good news: The POA is getting out of the real-estate business. In the first nine months this year, the POA’s land acquisitions and real-estate sales operations had $89,706 in revenue and spent $269,403. That, folks, is a business which lost $179,697, or 200.3 percent, in the first three quarters of the year.
Nevertheless, CEO Lesley Nalley said: “Along with our area Realtors and builders, these efforts directly resulted in improved property values, additional recurring revenue for the POA and a foundation for synergy surrounding growth and community marketing.”
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At tomorrow’s POA board meeting, directors are expected to approve spending $162,500 for sealing cracks in Village roads. The work will be done through next April.
But: Looks like 2019 will slide by as another year with no major road resurfacing. We need to be resurfacing 30 miles of roads a year, at a cost of about $1 million a year. This is a ticking time bomb because all of a sudden the Village will realize it has hundreds of miles of roads that have to be fixed. It’s hard to sell a community with roads falling apart.
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Some relief in the board’s agenda: We won’t have to listen to the COO and CMEO give oral reports (they’re available online), and property owners will be invited to comment on the budget before (shock!) the board votes on it.
By Frank Leeming, October 15, 2019
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To View Frank Leeming’s “What’s Happening in Hot Springs Village Click on the PDF Below
what_s_happening_10_19To View the HSVPOA Proposed 2020 Budget Click on the PDF Below
9a2020-Proposed-Budget-V4
Linda Anderson
10/15/2019 — 4:55 pm
Unless you are a certified CPA, understanding a Corporation Budget is Greek to most people. What is desperately needed is a FINANCE COMMITTEE separated from management’s involvement to give members an understanding of where we really stand, however that was shelved by the majority BOD. The question becomes, where is the BOD getting their information to effectively know how much money is available to spend on a quarterly basis? Every budget appears to be a forecast. Where’s the plan to eliminate our DEBT? Instead we see this rush to tear down and replace Golf Courses and Buildings without showing that a plan works before moving into a huge Debt situation. The last Board Meeting halted a collision with DEBT simply because members became aware of the consequences of that vote and showed up to say NO.
Mr. & Mrs Board member- can you do a better job of looking at the budget before moving forward to vote ” for ” these projects?
Gary Puffer
10/16/2019 — 12:06 pm
Linda, Your comment, especially this statement, “…Every budget appears to be a forecast.” is exactly that. POA has always counted on revenues that doesn’t materialize, such as projected golf income (the golf department run by Tom Heffer loses more than a million dollars just about every year rather than bringing in revenue), the projected income from absentee lot owners who don’t pay their assessment, etc. So, that is the reason the budget is not really a budget but smoke and mirrors at worst and wishful thinking at best.
Julie
10/16/2019 — 7:41 pm
It would have generated far more interest in HSV if these fools had just given away a 1 million dollar house in the village to some lucky winner.
The wanton waste never, ever ends.
More money for accounting software now. Gee, I wonder why that is??? Could it be utter incompetence? Or is it just plain ignorance? Hard to know.
One thing we do know for certain. It is easy to spend other people’s money.
Get out while you can. That is my plan.
Gary Godfrey
10/17/2019 — 2:06 pm
Julie, after 15 years my wife and I saw this coming. The way the board operates and spends and raises prices. We moved there because of the great pricing on golf and the courses. Past Director of golf John Paul had a lot to do with the way the prices went up and the rounds going down. We moved back to our home state four years ago. Miss the friends and the golf but it was the right thing to do. Its crazy that the board doesnt realize that it is driving people to leave. Good luck. We have no regrets