Suggestions & Recommendations for Future Revenue Analysis Task Force (FRATF)
By Tom Blakeman, April 14, 2021
The FRATF was appointed with an implicit assumption that more ‘new funding’ needs to be identified for the future (and current) benefit of Hot Springs Village. This assumption may or may not be accurate at all.
Before FRATF comes forward with recommendations on ‘new funding’ there are several long-standing problem areas within the Village and POA that must be addressed. These include General issues, Expense and Cost Reduction issues, Management issues, Governance issues, Employee & Staff issues, and Capital Allocation issues.
All of the problem areas are addressed in this report. Assuming that all are resolved, generating ‘new revenue’ may not be needed at this time. If not resolved, or if there is still a desire for more funding, the report outlines several Plans that have the potential to raise significant new revenue streams.
Hot Springs Village is a unique animal. There is no ‘cookie cutter’ solution that can be adopted from some other similar community ‐ there is no other similar community. Nonetheless, all the suggested Plans are based on concepts that are used in many other communities all over the United States.
If new revenue is truly deemed needed, it is hoped that the FRATF and the Board of Directors will choose one or more plans with care. That decision should NOT be based on the expediency or ‘saleability’ of any particular Plan. Decisions should be based solely on what is truly The Best Interest of Hot Springs Village.
[Click on the PDF below to read the full article. This pdf may be enlarged and also downloaded.]
FRATF-Comments-4-14-21* * *
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, also known as POG (Property Owners’ Group).
Andy Kramek
04/15/2021 — 9:14 am
Excellent analysis and summary of the financial state of the Village, The questions posed are the right ones! They need to be answered in detail and those answers incorporated into whatever plan is going to emerge for the future. Without these answers any “plan” will be incomplete. Great Job Tom.
Gene Garner
04/15/2021 — 11:16 am
WOW! Where to start, Tom did an outstanding job addressing our problems, both financial and organizational. He also came up with practical, common sense ideas to “stop the bleeding”. If the FRATF takes just 10% of his case study to heart and follows through to completion, I’m sure we’ll start to heal.
I’d like to comment on just two of Tom’s observations;
Page 5
o The Golf program needs to become a Village ‘cash cow’ throwing off at least $1‐2million per year to support the other amenities.
o These issues must be addressed and fixed ‐ BEFORE anyone starts promoting more assessment increases of any kind. –I couldn’t agree more, golf revenue is a major concern .
Page 6 “In 2012,management prepared a twenty (20)‐year capital improvement and maintenance plan (“CIP”) for years 2013 to 2032 that included all existing buildings, golf courses, utilities, roads gates and rolling stock. The CIP incorporated the original in‐service date and value …projected the construction or replacement value…useful life and estimated year….” A complete 20‐year plan. Great idea. But what happened to it? —-Yes what happened to all the promises? Every new Board promises to fix our problems but forgets them soon after being elected.
There are many more areas that Tom considers with suggested solutions. But do we believe this committee will take the time or effort to choose answers that require research and hard work— or the easier “resident assessment increase” route?—Gene
Susan Posner
04/15/2021 — 1:04 pm
Tom should run for board, plans of “men and mice”…golf is not “cash cow” it’s a “white elephant” so much on paper, but reality eludes. The uniqueness is it’s a place mismanaged by too many that can’t get along for the good of all owners of HSV and run by the few for the few.
Jama Lopez
04/15/2021 — 7:46 pm
Very, very well done!
One question I had, and still have is regarding the defined contribution plan mentioned in the audit report. When I asked about it, I was told it no longer existed. I then added it was in the footnotes of the audit report. I was told again it no longer existed. I now wonder if it does or doesn’t exist.
Thank you for such a complete analysis.
Tom Blakeman
04/15/2021 — 11:11 pm
Thanks Jama. I wonder too. If it does not exist then the auditors did a pretty poor job. If it existed at one time then there should be some existing payouts from somewhere going to at least a few past retired employees. And some future obligations on part of the plan or POA.
Hazel Ecyla
04/16/2021 — 6:50 am
Outstanding report especially the depth of research. Always detailed & references are taken from past years & tenures of many board members that did not do their homework or uncovered slight of hand. ??
Had the board listened to Chair Podawitz & Chair Sherman, the board as it exists today would be performing said fiduciary responsibilities. Obviously being fought at every turn both Chairs to take a step down ‘with honor —- Not shame.
However, the other board members elected to vote against these intelligent people because as the Chair knows, THEY DO NOT HAVE A VOTE. They are the ones who actually did their homework. But no one wanted to listen TO THE FACTS !!! I’m tempted to believe, as others Village residents do, there are inside maneuvers which have not been investigated by the Audit team thoroughly. IMHO
Lloyd Sherman
04/16/2021 — 11:56 am
The “audit” if you will, is really nothing more than an assessment that GAAP has been followed and that items were basically put in the right buckets. It is not an audit of processes, procedures, management effectiveness, etc.
I know I will take grieve for saying this, but the truth sometimes hurts. If we continue down the path of allowing staff to control the narrative instead of the board, the results will be the same. A major culture shift must occur for anything to really happen and as much as I appreciate the dedication and goodwill intent of our staff, they don’t know what they don’t know and can only operate from what they have been taught. We have great employees who are trying to do the best they can with what they have to work with. Problem isn’t, and never has been, anything other than poor management and ineffective boards. Try to change the culture and Kathy Bar The Door! Without a quantum culture shift, expect more of the same while the focus will simply remain on fixing our issues by raising assessments. Failed before and will fail again if that path is followed.
Stephen Rust
04/16/2021 — 1:06 pm
I have known Tom for about 3 years. I was impressed with his writings when I first started seeing them. I was impressed with Tom when I had the privilege of meeting him. I am more impressed after reading this today. Tom is brilliant in my opinion and deserves to be heard by the board and FRAFT, though I fear they will ignore him.
I also fear that the majority of property owners will not take time to read this article, though it is well worth your time.
Mary Ann Kennedy
04/22/2021 — 9:00 am
Our FRATF Committee seeks property owner questions/comments/suggestions, but like the 40+-page Tom Blakeman “plan” of years past, I doubt this negative lengthy commentary will be well received by anyone except his most ardent supporters. Most of the recommendations (those that are legal) have already been discussed or are presently under consideration.
Among the unworkable suggestions, the author proposes a “no‐fee policy” for Fitness Center, Pools, Dog Park, Library, Lawn Bowling, Pavilions and Meeting Rooms, etc., but his many numbers don’t include the increased subsidy expense. Emphatically, he insists no assessment increases can be considered until every penny spent in HSV history is accounted for and those who spent it are held “accountable”. This is not a “plan” or “solution”.
It’s expected that submissions to the FRATF be respectful. Comments such as “property owners who neither Golf or Live on a Lake must NOT continue support those who do or the lifestyle they enjoy” suggests the rich are taking advantage of the poor. What does living in a home valued under $200,000 have to do with wealth status? Many have no desire to live in a large golf course or lake home. All who have chosen to live in HSV knew there were countless amenities to be enjoyed or ignored. Every amenity adds value to our individual properties and community attraction.
Our POA staff does not deserve condescending insults and criticism; “the Village should get GREAT PERFORMANCE, not back talk, grievances and whining” and “employees only exist to serve”. The author’s resentment is apparent relative to titles, salaries and benefits our employees receive. Most of us enjoyed those benefits and much more before retirement decades ago. No POA position is mentioned respectfully, including: “someone who started out as a mere secretary” or our executives – referred to as “hired hands”.
If our hard-working POA staff members and countless volunteers read this latest Tom Blakeman “analysis”, I hope they consider the source. One that has never issued a commendation to any of you that I’m aware of. I hope one day he’ll use his writing skills in a more positive and productive manner.
Kirk Denger
04/28/2021 — 10:10 pm
Mary, the “fratf” (fraternity friends) you refer to is not a committee, it has no charter and it is illegally constituted according to OUR declaration and bylaws. Take your positive outlook and look again. Everything illegal and illegally constituted is negative from the start. Please spend your valuable energy on an honestly positive view of the waste of our hard earned extra $3million per year 2 tier, which has not YET been used or saved wisely, instead of a never ending assessment increase scheme that has no end but catastrophe.
David L. Henderson
04/22/2021 — 5:04 pm
Tom – Thanks for your comprehensive and thoughtful analysis of flawed management practices in our Village.
It should be required reading for all property owners, and Board Members should be required to pass a comprehension test to be sure they understand your tutorial.
I would like to add a few comments, as follows:
First, a word about golf revenues. Ten thousand lot defaults ago, when the BOD first decided to make golf revenue-neutral by raising fees, did it consider how much assessment income might be lost when golfing here ceased to be such a bargain? I think not.
As to leasing golf carts and sanitation trucks, it appeared to me that the only good reason for doing so was to extract property owner equity for spending on other things.
Rather than merely reacting to Staff proposals, our BODs should have access to independent analysis of the merits of their proposals. A role the RASP Committee sometimes played, until it recommended that the Board not proceed with the Two-Tiered Assessment, following which RASP was soon dissolved.
Thanks again Tom for the considerable time you obviously spent preparing this excellent analysis for the benefit of your fellow property Owners.
Steven Mason
05/31/2021 — 9:32 am
Does the POA collect any additional monies for rental houses/vrbos which may be deemed commercial lodging enterprises and therefore should pay a higher assessment than those who live in their legally owned residence? This may be an untapped revenue stream if it hasn’t already been done. How many of these such properties exist in the Village? Passing the extra charge should not be difficult.
Paul Collins
07/18/2021 — 12:40 pm
There are significant amounts of information contained in the document, like them or not. How will the material be provided to all property owners…email, HSV website, or postings in Nextdoor, or Facebook are not sufficient.
HSVP C
07/18/2021 — 6:37 pm
Paul, it is up to the POA to provide this information to property owners. Will this happen?