LOW sets 2012 land assessment

At a meeting that could only be described as emotional and contentious, the Lake of the Woods Board of Directors adopted its 2012 fiscal year homeowners’ association budget Feb. 16, setting its annual assessment at $1,197--a 1.9 percent increase over the previous year’s figure.

The budget item receiving the majority of public comment preceding the board’s vote was a new capital project item, an expansion of the association’s clubhouse bar.  The project, mistakenly reported in one local media as a $940,000 expense, had actually been initially estimated at $194,000, and, at the time of this meeting, had received an updated estimate from the contractor at 192,603.43, including a 7.5 percent contingency estimate ($13,437.80) to allow for adjustment to unanticipated conditions which might be encountered in completing the project.

During the initial public comment period preceding the vote, LOW resident Doug Chidlow spoke against the project, citing a petition including some 560 signatures he stated he had, of residents either requesting their input prior to any expenditure exceeding $100,000, or opposed to the bar expansion. 

“It is my intention,” he said, “to continue this petition until I have achieved sufficient signatures to set aside this project (for 2012.)”   Questioned later, he clarified that he was actually referring to the total of two separate petitions, one on each topic.

The board began its consideration of the association general manager’s budget proposal by considering, individually, budget amendments proposed by each board member.  First up was LOWA Treasurer Olive Kelly’s proposal to remove the clubhouse bar expansion from the new capital spending plan for FY 2012, and postpone the project to the 2013 fiscal year. 

“We simply cannot afford it at this time,” she stated.  In response to a question, Kelly stated that she was in favor of the bar expansion, but simply opposed to the timing, and acknowledged that the money for it would remain in the budgeted new capital fund, and that her stated motion, if passed, would not reduce the 2012 assessment.

Her amendment was voted down 3-2, with directors Jon Anderson, Ernie Meier, and Jim Walsh voting against, and Kelly and director Dave McKee in favor.  Director Bob Shope was not present for the meeting.

Her next motion was to remove a proposed $100,000 contribution to the contingency reserve fund and instead establish a new “Lakes Reserve Fund” for 2012-2013 FY to fund the cost of the Keaton’s Lake (also known as the “fishing lake”) restoration plan, and also to reduce the contribution to the roads reserve by a further $100,000. 

“This enables us to reduce the proposed 2012 assessment by $23.49,” she said, “and, at the same time, establishing a separate reserve account for Keaton’s Lake.  This is a win-win situation.”

This proposal passed, on a 4-1 vote, with only McKee opposed.

Board President Pat Rowland next offered his amendment, proposed by the pools committee, to remove the association’s annual and daily swimming pool fees for members and tenants in good standing.  Guests, he explained, would still be required to pay the daily pool fee.  “We hire a company,” he explained, “to look over our pools, provide lifeguards, and put chemicals in them.  We pay a great deal of money to have these pools maintained.  You go up there, and there are three people swimming.  Let’s open the pools, just like we open our lakes, to all members who want to use them.”  The proposal would raise the 2012 assessment by $5.31.

 Kelly and McKee opposed the motion, citing their belief that it might represent a trend toward, in Kelly’s words, “rolling all amenity fees into the assessment.”  McKee added, “Next, we’ll remove fees for tennis, then the fitness center, then the golf course, and, pretty soon, our assessment will be up around $2,000.  Users of the amenities should pay their fair share – the fees should be about the same as it would be for equivalent service outside the gate.”

The motion passed on a 3-2 vote, with Kelly and McKee voting against.

McKee proposed reducing the contribution to replacement reserve by $100,000, reducing the assessment by “about $24.  The purpose of this,” he explained, “is to not make a significant assessment increase at this time.”  McKee’s proposal had been a target of Chidlow’s earlier comments.   “I do not concur,” he said, “with the plan to reduce the (contribution to) replacement reserve by $100,000 in order to create an artificial savings and lower the assessment.   I believe we should have over $2.6 million in reserve, and we should not use it as a slush fund by tapping the barrel whenever it is expedient.”  Kelly also spoke against the proposal, and it was defeated 4-1, with only McKee voting in its favor.

Finally, director Walsh presented dual proposals regarding golf fees.  His proposed amendments, favored by the golf committee, would increase daily golf fees by $1, and create a new weekend/holiday annual golf membership (doing away with the “twilight” fee structure.)  “This is an attempt to get more working people and weekenders out there on the golf course, and an effort to improve revenue,” Walsh said.  The two amendments would reduce the assessment by $1.88 and $1.35, respectively.  Both were passed unanimously.

Kelly’s motion to approve the budget, as amended, with a $1,201 assessment (a 2.2 percent increase), passed on a 4-1 vote, with McKee opposed.

Then, having dealt with the earlier move to remove the bar expansion project from the year’s budget package, Rowland asked the general manager, “How soon can we get started on the bar expansion?”  GM Phil Rodenberg reported that accelerating the project and beginning immediately, in “a shoulder time” would, according to W.E. Bowman Construction, who produced the estimate, take 134 days, and the current bar area would need to be closed for 10 days of that.  “If they began immediately,” Rodenberg said, “they would have it completed by the Fourth of July.  The project would be managed by the assistant general manager.”

“We would need the board’s permission,” he said, “because we would be using existing funds from this fiscal year.  We would hire W.E. Bowman Construction of Richmond, as the general contractor.  They would finish the design to build the project.”

Rodenberg noted that Bowman was also LOW’s contractor on the Keaton’s Run Dam project.  “They are a known quantity.  We’ve worked with them in various projects over time.  We’ve worked well with them, and we know they come in on budget.”

“If we move now on it,” Rodenberg said, “we believe that we could add an additional $50,000 to revenue for the upcoming fiscal year.  We would also have to add $33,000 in expenses, for a $17,000 reduction in the subsidy.  Essentially, we are saying if we are able to build this project immediately, and get it in place by July, we will have nine months  to have revenue in the positive, which would translate into $4 lower on the assessment for the 2012-2013 fiscal year.”

Director Walsh moved to “authorize the general manager to begin the process of expanding the clubhouse bar/lounge, with a goal of having it open for the July 4th weekend.”  After objections from McKee and Kelly, the motion passed 3-2, with McKee and Kelly voting against. 

Walsh then moved to reduce the FY 2012-2013 assessment by $4 to $1,197.  Kelly and McKee abstained from voting on the motion, which passed with a unanimous 3-0 vote.

In the final member comments period, LOW resident Susie Takacs expressed her displeasure with the board’s decision.  “Shame on all of you,” she said.  She then took aim at director Anderson in particular.  “You came to this community in a forum, and pledged to the members that you would listen to them.  Don’t shake your head, Mr. Anderson, you did too.  It is clear that the membership has not wanted this bar expansion.  I am ashamed of you.”

Anderson responded, “Since I have been shamed, I would like to say that we have received a lot of emails on this.  The ones that hurt deeply are the ones that come from people that tell us that we don’t care, and we’re not listening to the community.  I ran for this board because I did care.  I am up here because I care deeply about this community.  You are saying I don’t listen.  Why do you think that, just because you have an opinion, that yours is the only opinion? There is an old country song that says, ‘when we can’t see eye to eye, there ain’t  no good guy, there ain’t no bad guy, there’s only you and me and we just disagree.’”