Confusing Numbers: What is the Truth?

By ArrowCreek Homeowner

We, the ArrowCreek homeowners, have been given three different sets of numbers for the same thing: owning and keeping the golf courses, or parts of them, green.

In 2014, when the Joint venture was the best and only solution, the keeping-it-green and letting-it-go-brown options were both dismissed because of the cost. The do-nothing option was dismissed without further explanation.

One year later, at the 9/16/15 HOA board meeting, buying the 36 holes of the golf course was presented as the best and only solution. Other main assets, such as the Club house, the pump house, and the 50 acres they sit on, would remain the property of the FOA. The FOA would control if/when to downsize by 9 or 18 holes, or declare bankruptcy. In the case of downsizing, we the homeowners would then assume responsibility for keeping the 9 -18 holes released by the FOA green and mowed (dormant) according to the briefing. The property and assets retained and owned by the FOA (the Club house, the pump house, and the 50 acres they sit on) could be purchased by the HOA in case of bankruptcy. This option is going to be put to a vote.

A few days later, on 9/28/15, the Letter of Intent (LOI) was signed by our VP Robin Rakusin and Gary Pestello (managing partner, FOA) with figures significantly differing from those briefed to homeowners at the 9/16/15 presentation by Rich Kenny.

The table below compares the costs to homeowners presented to us in the initial proposal of 2014, the 9/16/15 proposal, and the signed LOI of 9/28/15.

Confusing

Let’s summarize:

In Rich Kenny’s briefing in 2014, maintaining the 36-hole complex green and mowed (dormant) was dismissed by the board as too expensive at $135/mo. Keep in mind, in that option we would have owned the entire property and all assets.

A year later (based on figures in Rich Kenny’s proposal to maintain 18 holes dormant) the cost for maintaining 36 holes dormant (without owning 50 acres and assets), in case of FOA bankruptcy, would be $129 – $151/mo. These numbers appear to be reasonable one year later. Really? Again, in this case of an FOA bankruptcy, the purchase costs of 50 acres and assets owned by FOA, maintenance costs, increased reserve fund costs, and property tax increases for these acquired assets would all have to be added, plus the cost for fire mitigation, special assessments for investments, neither of which have been determined to date. And let’s remember: your HOA fee can only be increased by 15% per year by your board without your input.

Additionally, how can the cost to keep 18 holes of the golf course dormant be quoted as $48 – 59/mo. in the 9/16/15 briefing, but would be $25/mo. in the Letter of Intent signed on 9/28/15?

Are you as confused as I am? Does anyone know who calculated those numbers, and based on what data? On paper, in the Letter of Intent, the dollar figures and cost to the HOA seem to be going down. But take a closer look at the open ended financial obligations that all of us homeowners would have to pay for. Even golfers cannot hope that their current cheap fees will remain in place to offset the increase of their HOA fees and assessments in the future.

Have we been given any actual, empirical data that buying the golf course will protect our home values or will the unlimited increases in HOA fees and special assessments drive away buyers and decrease your home values? Will the prospect of each homeowner owning ½ acre of a golf course and the inherent associated costs, while leaving the control over that property to the FOA, and while knowing that golfing is a dying sport, drive away buyers and decrease your home value?

Even if you have found a reason to justify for yourself the purchase of the golf course, you have to ask yourself can you trust any of the proposed numbers as they are absolutely inconsistent and with no apparent factual basis. Have we been given the whole truth? Could other options of what to do with the golf course property that early on were dismissed by the board as not viable, be worth considering if we had the real numbers?

The Letter of Intent is the basis for the contract between the HOA, that is we homeowners, and the FOA. We deserve the whole truth, i.e. disclosure and discussion of the complete, detailed final draft of the contract for the purchase of the golf course before it will be put to vote. This should include but not be limited to a breakdown of all the costs we homeowners will and possibly may be liable for. We all have learned one truth: “Buyers Beware.” Do your homework and read the fine print to prevent “Buyers’ Remorse” down the road.

This entry was posted in ACHOA, ArrowCreek, ArrowCreek HOA, ArrowCreek411, Assessment, Belief Systems, Golf at ArrowCreek, Golf Course Closure, Golf Course Purchase, HOA, HOA BOD, Trust, Truth and tagged , , , , , , , , , , , , , , , . Bookmark the permalink.

5 Responses to Confusing Numbers: What is the Truth?

  1. Ellie says:

    The writer says that the HOA fee can ONLY be increased by 15% without homeowner input referring to the initial proposal when Rich Kenny said the HOA fee would increase by $33 ( that is about 15% of the current fee), and not exceed $300/m. In case of downsizing we would stay below $300, but the costs of keeping 9 -18 holes green would take us above a 15% increase in our HOA fee. In case of bankruptcy, we would clearly have to go above $300/m HOA fee to keep the golf courses dormant and the cost would also add more than 15% to the monthly fee. Do we have to watch out for a clause in the purchase contract or in the voting ballot that would allow for higher increases in the monthly fees specifically related to golf course needs? Will we also have to watch out for specific changes in our bylaws? The only thing that was said in case of bankruptcy in the 9/16/15 briefing and the Letter of Intent was that the HOA has the option to purchase the “assets” of the FOA and negotiate a purchase price. No mention of any HOA vote or any detailed strategy. AND: in the future, in ADDITION to the costs outlined in the briefing and summarized in the posted comparative table: the HOA board can increase our fee by 15%/year without any homeowner vote for any reason they see fit: to cover golf course needs or other financial needs within the HOA. Where will it end? This golf course issue is turning into a real nightmare: financially, legally, and it is causing a whole lot of stress inside and outside the home. My little neighborhood is divided into two camps. I did not sign up for any of that. I know, because I did do my homework before buying a house here, but I still have “buyers’ remorse”.

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    • Ronald Duncan says:

      Ellie,
      In all fairness, Mr. Kenny stated that the ACHOA dues would only go up by $30/month, $25 for loan repayment and $5 for reserves (an estimated amount as the reserve study has yet to be completed). The other $3 that’s been included in the $33/month figure is actually the monthly contribution to each of our property tax bills (this amounts to $36 per year in property tax increase that the county will escalate at 3% per year, under our current tax code).;
      However, the premise of your statement is still accurate within our ever more divided community. Some see these amounts as insignificant, while still others would need a serious readjustment to their budgets and perhaps be forced to find new employment or relocate.
      This situation requires a solution for all owners and the best one, leave private enterprise to work through its own issues, seems to have been dismissed through some serious misunderstanding of the word ‘COMMUNITY.’
      Ron Duncan

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  2. Mary Ann Gaebe says:

    The FOA is not the only one who doesn’t identify themselves! Why is everyone afraid to state their name in their comments?
    Mary Ann Gaebe

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    • Ronald Duncan says:

      Mary Ann,
      They choose to hide their identity for the very same reasons that the majority of the FOA hide theirs. They don’t want or wish to be ostracized, or ridiculed or shunned from activities they participate in within our community. After all this subdivision is larger than many small towns.
      This issue of purchasing the golf property has been a huge awakening and a divisive hot potato. It began with a simple idea to create a ‘community club’ and has morphed into just buying the underlying land of the golf courses for something on the order of $3.3 million PLUS reserve fund, fire mitigation, and a portion of golf course maintenance, if the FOA can’t sustain the full 36 holes, fee increases.
      So, your candor is appreciated as clearly you do not feel threatened.
      Ron Duncan

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  3. Run for the hills on this dirty deal says:

    These people are all in bed together. They care nothing about homeowners, just their private club. All the numbers are false (give us facts – numbers with how they were derived!) and do nothing to protect the HOA.
    Keep in mind FOA still have not told us who they are and yet they want to sell us a pile of junk and keep the assets. You can be guaranteed the end game is BK after they suck the HOA dry, grab their cash and leave us a pile of dust. They think we are stupid. Don’t prove them right. Vote no on this very bad idea!

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