Written by Lloyd Sherman, June 17, 2019
LLOYD’S FINANCIAL CORNER – Hello fellow property owners. I am attaching my monthly day one analysis of the HSVPOA financial statements. I wished I had some good news for you, but you won’t be surprised to know that I continue to have concerns. I have altered my monthly report to contain some additional comments highlighted by blue text. I’m sure both the CEO and CFO will tell you everything is fine, but let me highlight a couple of things I don’t think they will highlight, or will downplay.
FIRST – While they will tell you we added $1.5 mil to our reserves this year, they won’t tell you that our overall cash and cash equivalents are down by the same amount which means we have $1.5 less security in our cash and cash equivalents.
SECOND – Golf revenues are way down but the most disturbing is that the revenue per playable day is down $534 A DAY. It’s one thing to have rainy days but it is quite another to have your revenue down that much on days that are playable. I see no action being taken to determine why. Another huge concern for me has been bad debt expense. We are currently projecting over $4 mil in bad debt this year against a budget of about $3 mil. That is a 25% discrepancy. At the bottom line and in spite of what appears reasonable control of spending, given these other factors, as of May’s results, we would miss our bottom line projection by $3.8 million this year. Actions taken by last year’s board won’t allow for the restatement of a budget without a supermajority vote which you are not going to get when four of them voted this silly rule into place. Enjoy and always happy to answer what questions I can.
Lloyd Sherman’s June 2019 Financial Analysis for Hot Springs Village
June-2019-Financial-Analysis-1Written by Lloyd Sherman, Hot Springs Village
Tom Blakeman
06/18/2019 — 7:12 am
Excellent work Lloyd, as usual. Too bad our POA only highlights the issues they can report with a positive spin and leaves out the not so rosy parts. Thanks to you for pulling back the curtain on the real issues.
Revenue must be increased and that can only be done in only two ways. One is increasing dues. We all should realize by now that whatever benefit the two tier provided was quickly offset by increased spending on administrative staff, special projects (CMP), consultants and lawyers. In other words it was wasted. To jack up dues again would take a vote, take time, and likely any vote would fail.
The other is increasing asset utilization rates. The big one here is golf. Since we have tens of thousands of unused tee times we need more play from outside the Village. That means non-member play. Something needs to be done to entice any and every golfer in a three hour drive radius to want to come here and fill those empty tee times. That means special rates, promotions, advertising and the like. Whatever it takes. This is obviously not being done.
The golf department loss last year was almost Two Million Dollars. It is on track to be even worse this year and trimming back golf maintenance as has been mentioned won’t fix the problem.
Message to management: Fix It!
Jerry Carroll
06/18/2019 — 11:03 am
Leslie Nalley must go. What could be more clear?
Karen D Lundberg
06/22/2019 — 2:46 am
Tom Blakeman and Jerry Carroll, I agree with you both. Getting Lesley Nalley out of here, along with the three old Board members and Cindi Erickson would be the absolute best scenario for the Village.
Tom Blakeman, I also agree with you about the golf problem. And this may not be a popular response, but I also agree with you about the assessment increase. Now before everyone gets angry with me, let me just say that my husband and I are senior citizens living on a limited fixed income. I know there are many of us out there. I, personally, would not have a problem with paying a small increase on our assessments if I was absolutely sure it would be spent wisely on repairs needed in the Village and not pie in the sky pipe dreams by our CEO. But I also believe that concessions go along with an increase in our assessments. Just as the government does with assistance to people, I believe that senior citizens who can prove that they honestly cannot pay more for assessments, that they be issued a waiver for increases. This is done all over America. We do not want to harm the seniors that moved here because it was affordable and have to have them move because it is unaffordable. I do not see anything wrong with making a program like this work. I also believe that a great majority of us would not mind our assessments going up in small increments if we were absolutely sure our money is not being wasted. We have not seen that yet, but I think the argument for increased assessments would become less of a fight if people knew their money was going to good things for the Village.
Linda Anderson
07/02/2019 — 5:30 pm
Lloyd, always appreciate you update’s on important issues like the financials which will effect us all. Thank You. It appears that things are changing and the spending appetite of management is taking shape. The picture is not looking good. Is this just the tip of the iceberg? We need a finance committee. Why, because people cannot understand a Corporation’s financial Report. It is too involved and complicated. A Finance Committee would be of great help to simplify and give everyone an understanding that no increases in assessments are needed and if they are ” WHY “. The board, at least the 3 new Board members wanted a Finance Committee but it was voted down and put on a back burner because L.N. does not want all Financial information made available and staff members must be on the committee to ensure only certain financial information be made available. Keeping things secret causes more questions but that is of no concern. Until we are shown that there is no money available and HSV is in deep trouble, there will be no justification for removal of anyone. So when does the Board’s fiduciary responsibility come in? When we are bankrupt? A developing scary situation.
Anonymous
07/12/2019 — 6:26 pm
Take a guess at what the CEO, CFO, c o o make a year in salary I think he will be surprised!