By Paul Bridges, August 26, 2021
At its August 25th meeting, the POA Board voted in favor of presenting to HSV’s property owners a three-year assessment increase proposal. If passed, that ‘light at the end of the tunnel’ will go far in restoring HSV’s financial health.
For years we have been watching our deferred maintenance needs grow – due to not having the dollars we needed to take care of a private community that ages with each year. We’ve also absorbed every routine increase imaginable in our operating expenses – from higher minimum wage rates, to fuel costs double what they were not that long ago, to government regulations that require upgrades to our infrastructure. And now after at least 10 years of kicking that can down the road, we are hitting the proverbial brick wall — with an annual financial shortfall of nearly $7M.
Those numbers weren’t pulled out of the blue. They came from 8 months of exhaustive analysis by the stand-alone (and fiercely independent) Future Revenue Analysis Taskforce – known as the FRATF. And for those who might suggest that the FRATF approached its task with preconceived notions, you only need to look at all of the items on the POA’s wish list that were culled out – after not being deemed by the FRATF a “high priority”.
Long before the ink was dry on the FRATF’s recommendations to the Board, the forces who have so long argued against higher assessments began making their case. Old themes like “wasted dollars over the last 10 years”, “a lack of trust in the Board”, “overpaid staff”, and “Jury-rigged financial forecasts” were dusted off and re-presented. But for the first time in the 16 years my wife and I have lived in the Village, there was also an undercurrent of “it’s probably time”.
The assessment increase proposal ultimately adopted by the Board made every effort to minimize the impact on property owners – while still allowing us to get on with the task. The proposed increases are being spread over three years, with improved and unimproved properties both sharing in our financial recovery. If the proposal passes, improved properties will ultimately be seeing a monthly assessment rate of $110 – but not until 2024. Unimproved properties will be looking at $49, but also not until 2024.
So do the proposed assessment increases make any of us happy? Probably not. But there has been so much dissension throughout recent years over potholes, water main breaks, unpaved cart paths, and sound systems that don’t work, that the thought of finally being able to restore HSV gives reason for all of us to smile.
A villager recently proclaimed that he would only vote for an assessment increase when the POA Board proves that it can be trusted. That’s when it struck me that we continue to treat the POA Board as a living, breathing entity. Our Board is nothing more than friends and neighbors – all of whom have agreed to give of their time and talents, for no rewards and a great deal of criticism. Even more striking is the fact that we are the property owners who have changed out those individual Board Members 25 or 30 times over the last 10 years. So how can we possibly keep say “prove to me you can be trusted” – when we are the ones who keep putting new players in those chairs!
The proposed assessment increase proposal we will be voting on in October and November is being presented by the Board that we voted into office. And it is being offered with the best of intentions, using all of the data and information at the Board’s disposal. In simple terms, the Board is “us”, doing its very best.
As to the information the Board is working with, the numbers speak for themselves. You only need to look at the one graph the FRATF has so often presented – which is now being referred to as the “Red Blob”. Take a look at our projected revenue – overlaid against our high-priority needs. See for yourself how large that gap is – and how it continues to grow. That Red Blob tells the entire story.
And if you are wondering where to find that ‘Red Blob’ graph, go to www.explorethevillage.com – then to the Members Portal – then to the Revenue Task Force page. What you will see behind that Revenue Task Force link will bring new meaning to the phrase “a picture speaks 1,000 words”.
Incidentally, higher monthly assessments are certainly the lynchpin to HSV’s financial future; but they aren’t the only step the Board will be taking. Included in the FRATF’s recommendations is a buy-in fee for new HSV property owners, adjustments in amenity fees, reductions in fixed expenses, and new purchasing and project management protocols. As to that ‘trust’ question, steps are already underway to ensure that the additional dollars coming in under this assessment increase will be spent as advertised.
So now is the time (perhaps the last time) to “right the ship”! Thirty minutes watching HGTV TV will tell you that what is being presented for our approval is a bargain, to say the least. So let’s do our part, and get back to “living the dream” – as owners or residents in one of the best private gated communities on the planet.
Paul Bridges
Hot Springs Village
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Thank you for reading. If you like, please comment below. We love to hear your opinion, but comments must be made using your first and last real name, or they will not be accepted. If you would like to submit an article for publication, please contact us through this website. Be sure to bookmark this website. Click here to visit the Hot Springs Village People Facebook Group.
Mary Orman
08/26/2021 — 12:04 pm
Great post Paul. Couldn’t have stayed it any better. Vote yes!
Kim & Patti Vi torine
08/26/2021 — 12:59 pm
Great post. Coukd not agree more. After way too many years with an under need level of property owner fees and neglected maintenence its time to pay the piper. Will this make everyone happy, no. Will it make the Village better, yes.
We will be voting YES.
Tom Blakeman
08/26/2021 — 1:16 pm
. . . it could be a train too.
Raymond E Narug
08/26/2021 — 1:17 pm
Without the 2-tier HSV would now be in a better place, everybody paying equally. But there was a group that promoted it, and here we are, forced to increase our assessments substantially. The Friends of HSV were not Friends, just self-appointed VIPs.
allen curtis
08/26/2021 — 1:40 pm
I hate to be the Devil’s advocate, but the light at the end of the tunnel is likely to flicker and die and years from now the village will be in the same shape due to systemic organizational faults. These can be enumerated, but not necessarily limited to the following:
1. We suffer from an inbred, hierarchical management organizational structure. We have
had a start in the recent staff changes, but I can already see signs of this devolving
back to the status quo.
2. In the last 20 years the village has not had a general manager with adequate
organizational skills and as a result nothing has really changed.
3. In the past 20 years, we have not had a general manager that would hold the line and
staff managers accountable. Usually they were promoted or given title changes in spite
of inadequate performance.
4. We have attempted to solve this problem by throwing big money and ceding too much
power to the GM . This is a board of directors shortcoming along with a recruitment
problem.
5. Both the BOD and GM have always had a backwards approach for managing the village;
rather than addressing our needs first, we have blindly pursued our wants and visions
instead.
While it is easy to enumerate our problems, solutions are evasive and possibly painful. More money and more people always seem to be the answer….. especially when it is “other peoples money”. If you truly believe, this you will support forever increasing assessments.
If we believe the village problems are real* we have taken the first step toward the light and the next step should be to seek competent professional help for proper guidance.
* Note: the data source for the FRATF comes from the budget and projections from the department heads that are one of the root causes of the problem.
Jama Lopez
08/26/2021 — 3:04 pm
Curtis,
You are absolutely on target!
If we don’t hire a take charge GM with strong management skills who will watch the money and tie compensation, in part, to performance, we will be handing over a blank check.
Why are we voting before we know who we’re counting on to manage our money, staff and resources?
David Perry
08/26/2021 — 5:11 pm
I can’t stand you Jama all you do is cause problems
Jama Lopez
08/26/2021 — 5:33 pm
Sir,
You have a right to your opinion, as do I.
Have a nice evening.
HSVP J
08/26/2021 — 5:40 pm
Seriously, David, Jama is concerned about our Village like most of us are. I hardly think she is causing problems, it is the opposite, and it is called trying to solve problems.
Raymond Lehman
08/28/2021 — 11:02 am
What are you referring to and why would you post such an awful statement like that?
Jama Lopez
09/13/2021 — 10:18 pm
Check your messenger account.
Kirk Denger
08/26/2021 — 4:55 pm
The data source for the FRATF comes from the budget that was created by the last GM that always said it “was nothing but a piece of paper”, and then quit, holding zero accountability. After the budget was passed there were several hundred thousand dollar mistakes that were revised. Mr. Bridges was a member of the illegitimately commissioned secret group coming from the friends of the village fraternity. Under pressure they eventually announced their presents to the community, at least 2 months after it was formed to establish a “game plan” to increase assessments as their only objective. After their announcement, dozens of Property Owners volunteered to bring their talents to be a member of the Task Force, but sadly they were given a canned response and found that they were not needed. So it is not surprising that the outcome is all one sided. As one of the two survivors of the 2020 Board member I could see that all decisions were made under the table between the Developer affiliated Board member and new GM, new HR, new Treasurer, new interim GM, and majority Board members, which at that time was only 2. Those 3 are now on the Board making any decision at best a tie due to not keeping a 7 member Board.
Raymond Lehman
08/28/2021 — 11:01 am
Kirk was it you who said the current BOD is in negotiations with Cooper to acquire additional properties?
Ray Lehman
08/28/2021 — 11:11 am
Please enumerate the problems…each of them…
Earl Wilde
08/26/2021 — 1:45 pm
Great post, Paul ! Thanks for the insight ….. we’re a “Yes” !
Sandy Miresse
08/26/2021 — 1:48 pm
Thank you Paul. Well said. We desperately need to start our recovery process and it will take dollars to do that. We love it here and we want HSV to be a success. We need a solid three year plan.
Walter Chance
08/26/2021 — 5:33 pm
So FRAFT made three options. Great. Why are the property owners only voting on one option. Why not put Option 1,2, and 3 on the Ballot and let the us vote on the option we prefer. The Option with the most votes is the option we adopt. How much revenue would each option add to our total assessments vs what we collect now? We are 5 million short each year just on payroll.
Second, why not a similar group look at the other side of the coin. FRAFT looked at revenue stream. Why not look at expenses. Reducing expenses should be examined with the same vigor as revenue.
Jama Lopez
08/26/2021 — 11:49 pm
Walter,
Very good point. Increasing revenue and decreasing expense will get us where we need to be much sooner.
Thank you!
Tom Blakeman
08/27/2021 — 7:37 am
All good ideas. Too simple and common sense to ever happen.
They could also put some of the plans, which don’t need a property owner vote, out there for vote as well. Such as the new owner buy in or a forced cost reduction program.
Susan Posner
08/28/2021 — 1:19 am
It was a “bait and swap” last time and owners got burnt, a few got a whole lot. Nothing changed, nor for interest of the whole. No fiduciary duty(look it up) met. Hasn’t been 10years only 5 since last big increase, with same song and dance of deferred maintenance. Where did the money go? Law suit had to occur to get document disclosure to members after the fact, no forensic audit of the books. Little to deferred maintenance just new not needed made up high paying salaried positions, paying GM more than the state governor, non member approved new projects that were full of screw ups such as new pool cracked, pickleball court surface improperly done, half million for a slide show and a map, 2019 smurf blue painting of front fountain that began to crack and peel, certainly didn’t go to the minimum wager that came only in 2019 after 2018 state vote in small yearly increments ends 2021. Less new permanent hires were happening, just temps. Gas went down not up from last increase in assessment. Arkansas has no zoning outside of private village so no major regulation changes to zoning. Bylaws changed to suit the board not the owners. As for boards most board members have acted on their personal wants not on their fiduciary duties(look it up) some quit or removed by other because they can’t get along with each other.
Mrs. Katherine Miller
08/28/2021 — 4:30 pm
Minimum wage in AR has gone up $4.75 within the last seven years. It was $6.25 for 2014, $7.50 for 2015, $8 for 2016, $8.50 for 2017 & 2018, $9.25 for 2019, $10 for 2020, and now $11 for 2021. From $6.25 to $11 is up $4.75 for most of the village employees. Also, every time the minimum goes up, those making above minimum before the hike justifiably expect to be making above minimum after the hike, and so on, for a few wage tiers up the ladder. I suspect that mandated healthcare also added substantial cost.
Mark Oliver
08/27/2021 — 7:55 am
Just wondering , when the “policy” will be revealed? When will a 7th board member be chosen? What is the status of the GM search? What direction does the village take when the 90yr. old pulling the strings has passed? All relevant questions related to a voting decision.
Keith Broach
08/27/2021 — 11:52 am
Thanks Paul. I find your article to be accurate and it has an uplifting spirit – which not as common as it should be. There are a number of dissenters in the responses and I would like to counter some of their points. I apologize that my comment is almost as long as the article😉
1) Several have come out against everything (and I mean everything) the BoD and FRATF have done. They have attacked the people and the process. They have accused dishonesty. They continually dwell on past missteps of prior leadership. These folks have dug in and won’t be moved. If you follow social media they are easily identifiable.
2) Some now say the BoD should have picked Option 2 (Special Assessment) or Option 3 (Balanced Approach). I suspect a big portion of this crowd is now against Option 1 simply because the BoD picked Option 1.
3) Others now propose that the community vote on “all three options.” This sounds quite democratic and is a “feel good” proposal. However, it removes the responsibility from the BoD. The BoD was elected to make these types of decisions – they own it. Additionally, if we were able to vote on all three, many would protest that “there should be a fourth, or a fifth!” Where does it end? Additionally a “multiple choice” election (if even permitted by our Declaration) would almost certainly require two separate elections or more to reach a “majority of each class” on a single option.
4) Next, there is a ground swell of Special Assessment proponents. There is merit to this option, which is why the FRATF included it as viable. However, Special Assessments can be a dangerous slope. If you have one, you will almost certainly have another… and another. It is well documented that Special Assessments are viewed as unfavorable by prospective buyers and by financial institutions who view them as a “quick fix” for poor fiscal planning.
The Task Force presented what it considered to be three viable options to the BoD and the community. The Task Force also listed pros and cons for each of these within the presentation. It was always understood that the BoD had the responsibility and authority to choose one of the three, reject all three, or create a new option they viewed as more consistent with their fiduciary responsibility. They chose Option 1 for the fastest recovery.
The Task Force and the BoD have done their jobs. The path forward – good or bad – is now in the hands of property owners. My family and I will vote YES – for our future.
Susan Posner
08/28/2021 — 2:18 am
Doesn’t matter which option is presented, the owners vote for any and all assessment increases as it should be. Board present is suggestion only. There are no dissenters unless you are assuming the majority stance in advance of a vote. Deceleration is clear, members vote on assessments though it didn’t take in the later two tier assessment change came 2014 so the weight of vote didn’t get changed as per assessment ratio, isn’t that odd oversight. Seems half assessment on undeveloped vs developed tier should be also two tier vote weight. Call it what you like special or option it all points to poor choices, especially when it was just done 5 years ago and now has multiple year in it, lenders and buyers can see that and come up with same view, “quick fix” to poor decisions and management. Why boards fiduciary duties(look it up) always should be met over personal ones, why boards can be sued for lack of fiduciary duty. Why HSV has liability insurance for our board for suits about breaches of fiduciary duty.(state corporation law that includes non profits)
Drew C. Kahle
08/27/2021 — 7:13 pm
I completely agree with Mr. Bridges that this is the light at the end of the tunnel. Let’s hope that when this increase is approved that we will stay on the track in the direction that the increase was intended to go.
I have served on the Public Works/ Public Service committee for over seven years. I have inspected numerous times our roads, culverts, and buildings. I have met with and discussed with our superintendents of water and wastewater plants about needed upgrades and have a good understanding of the needs of these facilities. There is no doubt in my mind that we cannot catch up fast enough with the delayed repairs and improvements that have been neglected for so long due to financial shortfalls. This vote has to be in favor of an increase or failures in all of our infrastructure are imminent.
The Task Force which studied our financial condition did a through and professional job. They not only reviewed the financials but had numerous one on one conversations with Department heads to understand their needs. The Board analyzed the results and recommendations and presented a professional solution to the property owners. We have to rely on their decision and vote yes .
To Mr Garner and Blakeman and others please come out from behind you editorial curtain and attend some of these Committee Meetings so you can better understand what is happening. To former Board members who lost your election (Mermel (twice) and Denger), if the property owners cared about what you had to say, you would be on this Board today. And to Mr Sherman, you had your chance and could still be on the Board but folded your cards and took a deep dive.
Please Vote in Favor of this increase.
Kirk Denger
08/27/2021 — 10:55 pm
Kahle, you have been on this secretive public services committee for far too long, are there not term limits? Are you the one who recommended putting HSVPOA $2,130,000 in debt for 6 trash trucks when not necessarily 1 was needed? $80,00 above budget in asphalt for pet projects, earmarked as potholes? If you check the votes you will see that a majority of Property Owners voted for conservative candidates against assessment increases to fix irresponsible spenders. You don’t care about what the majority of voters want, you are the problem, not part of the solution.
Susan Posner
08/28/2021 — 1:43 am
You are right Kirk so called serving on a committee doesn’t mean someone knows whats needed nor is there for what owners want. And found attending or speaking at meetings they don’t consider owners at all, in fact dismiss them more times than not. Owners have eyes, have knowledge of things, should be surveys, they don’t have to be on a committee and can relay their findings to board, department heads and committees. Not everyone can be on a committee or board, but as the payers the owners are the ones who should be considered. Question always is, are they ever considered or ignored?
Susan Posner
08/28/2021 — 2:34 am
Board should be appointing the next candidate that got the next amount of votes when board member quits during term, that is fiduciary duty(look it up) of loyalty.
Raymond E Narug
08/27/2021 — 8:45 pm
Question – does anyone know if businesses pay the same assessment as home owners, if they have just 1 water meter? With banks, medical offices, Assisted Living facilities, gas station, restaurants, etc. but using only 1 water meter. seems to me it would be prudent to have a higher assessment rate for businesses while they make good profits off of HSV residents.
John Sowers
08/28/2021 — 2:24 am
Many thanks Paul; you hit the nail squarely on the head.
Ray Lehman
08/28/2021 — 11:13 am
Excellent post Paul. There are some Villagers who continue to live in the past by blaming the current BOD for the errors of others. I thank you for your comments and guidance.
Tom Blakeman
08/28/2021 — 6:06 pm
Ray, I don’t know you but you have this all wrong. It is the BOD fault (past and present) and has always been so. In case you haven’t seen it yet, below is an answer to a question you asked on FB. The root problem is governance which is mostly controlled by the bylaws which are no different from the CFR rules and regulations written by bureaucrats and blessed by the US Congress. Our board(s), past and present, have all caved into the status quo (just like the ‘deep state’ in DC) and never have ventured outside the box to fix what they actually could control. They could change all the bylaws if they wished but they all (almost all – there have been a scant few recently) choose to “go along to get along”. Those that don’t either get badmouth, ridiculed, threatened or ostracized by the rest and by the mostly hidden cartel members who benefit from the status quo.
Big Problems:
The first big problem is we only have six board members. The second big problem is the “rules” do not require board to fill the seventh seat. The third big problem is that if they did fill it they get to pick someone who thinks like they do to fill the seat. The fourth big problem is they are not required to have a special election to fill vacant seats and not required to award vacancy to the next highest vote getter from the recently passed election. The fifth big problem is that there are not enough board members (even with seven) to have meaningful debates and good decision making. The sixth big problem is that no board member can openly dissent from or object to or criticize bad board decisions once made. The seventh big problem is that board members have no specific constituency in a community where there are substantial differences between various areas, types of ownership, etc. The eighth big problem is that board members are prohibited from doing anything relating to staff or day to day operations; they can’t even get information if they want it. The ninth big problem is that property owners have no ability to recall or fire rogue board members. The tenth big problem is none of these big problems require a Declaration change but could be solved by any board – except none ever want to do so because of problems one through nine.
Michael R Shannon
08/29/2021 — 7:08 am
The reasons the board is giving for this increase are almost word-for-word the reasons given by a past board for doubling assessments the last time they increased. Yet after doubling assessments, the problem still exists. How can that be?
I don’t trust this new money will be spent any more prudently than the last avalanche of money was spent. That’s why I will be voting against every assessment increase that does not include a special assessment that earmarks how the money will be spent, lasts a finite amount of time and prevents the board from changing priorities. That is how to rebuild trust with property owners.
I would be willing to spend more for the special assessment than the regular assessment because I can be confident where the money is going. I have an idea that is exactly why the board/staff was not in favor of a special assessment — it limits their flexibility.
Mrs. Katherine Miller
08/29/2021 — 4:54 pm
There is an average of roughly one employee for every twenty households in the village. $33 more monthly per household divided by $4.75 more hourly than in 2014 equals 7 hours of increase covered. Twenty households covering 7 hours of increase each results in 140 hours of increase covered monthly. 140 hours averages 32 hours weekly. That is one employee’s minimum wage hikes supported by twenty households.
Of course, not every employee is minimum wage and some work more or less and some do or don’t require mandated health insurance, etc., but the labor cost increases do explain most of where our last assessment increase went.
Jim Hengstenberg
08/29/2021 — 10:12 am
Strother Martin’s line to Paul Newman was, “What we have here is a failure to communicate.” Pogo ‘Possum said, “We have met the enemy, and it is us.” Dave Mason sang, “There ain’t no good guy, there ain’t no bad guy, there is just you and me, and we just disagree.” I appreciate everyone’s input and concern. It’s exciting trying to improve the most fabulous place I ever imagined I could find, Hot Springs Village, Arkansas! Let’s keep at the job.
Mary Kennedy
08/29/2021 — 10:49 am
It’s true that past assessment increases didn’t produce all of the results expected, but it was never promised that all of our ongoing/accumulating needs would be satisfied. It did help: reserves were set up, schedules for infrastructure repair and amenity maintenance were implemented, aggressive collection procedures of past due assessments were carried out, marketing was increased, etc. Don’t overlook the obvious – we continued to enjoy exceptional amenities, decent roads, safety/security, thanks to the superior service from our POA workers. All good things, even though mistakes were made and will be made again since humans will always be in charge. One big difference, as Paul Bridges notes – this time, our board will incorporate a policy directing where the new assessment dollars are to be channeled and will provide regular reporting to property owners. No future board will easily override such a policy. “YES” is the only vote we can afford.
Lorri Street
09/04/2021 — 12:32 pm
HSV like-minded Property Owners…VOTE NO! This will ‘allow’ the BOD’s to regroup and bring forth an assessment increase that the majority of Villagers will vote yes on. There is simply no teeth in the current Option 1 plan that would hold current and future BOD’s accountable for how the assessment increase would be spent. I hear they’re working on creating some form of legal document that would support accountability, but until one is solidified and made available to all HSV Property Owners PRIOR to the voting process, it’s a NO for me.
As an aside…recently it has been mentioned several times on different social media platforms (mostly by the FOTV folks) that our own McDonald’s at the front gate has a starting salary of $14.00 hr. I personally verified this today by asking the shift manager if it was true. Her reply…”it’s $11 hourly, minimum wage.” She went on to say that she has worked for (different) McDonalds over the past 7 years and that just this year she earns a little more than the minimum wage.
Allen Curtis
09/11/2021 — 4:07 pm
I have trouble understanding why “special assessments” are getting disregarded so quickly. Maybe a terminology change is needed; may I suggest “surcharge”?
Are we not paying and extra $2.50 surcharge for each round of golf to repair the deteriorated infrastructure of our Balboa course? Village people seem to view this as an acceptable solution even though it is an assessment increase not voted on by our membership.
Why not a surcharge to each play of pickle ball to repair the courts…. wouldn’t need to be voted on and upset all the “aginners”?
Why not a surcharge for each usage of the Woodlands, Coronado fitness center, etc to fund past neglected repairs?
These surcharges may be too slow to accrue, makes a case for some general revenue bonds to fund the immediate needs that are identified . Good escrow management will be required, I am hoping this is the case for the present golf surcharge.
Some innovative thinking may be required on how to design a surcharge for culvert repairs, but I am sure the experts in the “friends of the Village” can come up with some solutions.
Maybe a one-time surcharge for designated culvert repairs paid by all those using our roads?
Jama Lopez
09/12/2021 — 10:11 pm
Very good, Allen!
The cost of windshield stickers could help with roads and culverts, if it were significantly higher.
General revenue bonds are an excellent idea.
Thank you!
Jama Lopez