For as long as anyone can remember -- and at least as far back as 1980 in the files of the Seven Lakes Landowners Association [SLLA] -- rental properties have been assessed a higher rate of dues than owner-occupied resident homes.
At the suggestion of the Association's legal counsel, the question of whether that arrangement is fair and enforceable was brought to the table during the Board of Directors Work Session on Monday, January 9.
“Seven Lakes is unique," President Bob Darr said. "We can’t find anyone else who charges additional dues to renters."
Simply explained, an SLLA homeowner pays $900 per year in dues. If that home is rented, the Association bills the renter for an additional $410 in dues. Once the renter's dues are paid, the SLLA office then reimburses the property owner for $205 -- half of the renter dues.
The net total of $1,105 dues paid on a rental property is, therefore, more than the rate charged to resident owners. With approximately 90 rental properties in the community, Community Manager Alina Cochran estimated those additional dues will contribute nearly $20,000 to 2012 revenues.
Trying to find a way to eliminate the SLLA's unique "renter's dues" arrangement, while preserving the $20,000 in revenues it produces for the Association, the Board appeared to favor the notion of charging renters an administrative fee in lieu of the additional dues.
A proposed fee of $200, all retained by the SLLA, would preserve the revenue stream. It would, however, eliminate the current $205 rebate paid to owners of rental property, potentially increasing their costs and effective dues rate.
In a related discussion, the Board seemed to agree that membership cards and guest cards should only be issued to one entity -- that is, either the renter or the owner could use the community amenities, but not both. Currently, both landlords and renters are able to use the amenities.
The proposed change in fees will be considered for approval during the January 25 Open Meeting.
Long Range Planning Committee
Based on the recent completion of a road evaluation report by the engineering firm S&ME, and with last year’s Reserve Study in hand, the Board took steps, during Monday's Work Session, toward developing a Long Range Planning [LRP] Committee.
But before the committee convenes, the first order of business is to determine exactly what tasks that group will be given.
SLLA President Darr spoke in favor of creating two distinct committees: one focusing specifically on road paving issues, and the other looking at all other long range and infrastructure planning needs.
“We have set aside dollars allocated to roads and state-mandated dam repairs," Darr said. "That has been pulled away and is in a separate section of the Reserve Study. I think a LRP committee should be formed to look at how we are going to approach the rest of the Reserve Study.”
Darr’s recommendation was respectfully opposed by SLLA Treasurer Conrad Meyer and Director Bud Shaver, who both suggested that a single committee would be preferable, so that all potential major expenditures would be considered within a comprehensive decision-making process.
“We all know the potential projects ahead of us are far in excess of the funds available to us,” noted Meyer. “The committee will mostly wrestle with a prioritization process of what will be done. Others will either be deferred, or they will come to a point when we decide to go out and borrow money to accomplish a project.”
Community Manager Cochran reminded the Board that this year, the Association is fully funding the reserve level as recommended by the Study; however, the proposed 2013 Budget will not satisfy the incremental increase that was suggested.
Meyer and Shaver both commented that -- while well done -- the Reserve Study is simply a set of recommendations.
“It does not mean this is what has to be done or this is what will be done,” Shaver said. “I want to see this put together in the hands of a committee to assure continuity. We need a committee that puts it all together and says to the Board: These are things we recommend.”
Darr responded that his primary concern is time and that he does not want to progress on road repaving to be bogged down in committee.
With members of the Finance Committee already expressing interest in joining the LRP Committee, as well as a few others, Shaver and Meyer argued that progress would not be delayed by including roads with other infrastructure in their discussions.
In addition, Shaver noted the Reserve Study recommendations are almost exclusively related to road paving improvements until 2015, which would allow the committee to focus on road paving initially.
Directors Bruce Keyser, Jr. and Andy Lowe agreed with that assessment, leading Darr to relinquish his idea of two committees and agree that a single Long Range Plan Committee would be organized.
Lighting versus park closing
Frustrated by ongoing vandalism at the community’s common areas, the Board is considering closing the parks and beaches earlier than the current 11:00 pm curfew -- possibly resetting the operational hours back to 9:00 pm, or even dusk.
Before taking such drastic action, the Board is exploring whether enhanced outdoor lighting and motion-activated cameras can curb the vandalism problem.
Director Racine noted that the pool and restroom facilities at Northside Park are both well-lit, and argued that the extra lighting has not been effective in preventing litter issues -- particularly around the soda machines and baby pool.
“Will lights alone solve the problem?” asked Racine.
Responding to a concern raised by Director Lowe about the overhead lights being left on when the tennis courts are not in use, Community Manager Cochran said it was more economical to leave lights burning in a public area -- that is, the cost of wasted energy is less than the cost of repairing damage done by vandals.
Director Fentzlaff recommended tabling the discussion until the newly contracted security firm, The Budd Group, had appropriate time to evaluate the community’s needs and issues.
After going around the table, Darr agreed to leave the 11:00 pm curfew in place, but was clearly disappointed with what he called a ‘holding pattern.’
“It drives me crazy that we have problems with this place and issues just keep getting put back,” he said.
Usage fees for amenities?
All residents have access to the lakes and beaches; however, using a boat on those waters requires a separate registration process that includes a small fee for an annual sticker.
“Is that fair?” Darr asked during Monday's Work Session.
He said he has difficulty justifying the fact that user fees apply to some amenities, but not to others. For example, Darr explained, a portion of every resident’s dues is used to maintain the stables and pool -- even though not everyone will use them.
“In a meeting, not long ago, we were talking about rebuilding the bulkhead on the [Lake Sequoia] island," Darr continued. "One resident said that he never used the lake or island -- so why should he be charged?”
"He said, 'It benefits them not me,'" Darr recalled, adding that, while he didn’t necessarily agree with that point of view, it was a valid point for discussion.
Director Racine said that any additional amenity fees -- such as the existing dock fees -- should be collected and allocated strictly to maintain and repair that amenity.
Director Keyser responded that the $900 annual landowners dues is the usage fee for Association amenities. He cautioned that any additional fees -- for example, to swim at the pool -- would likely only encourage more use of the lakes.
“The pool would sit half empty, and the Association would still have the issue of having to maintain the pool,” Keyser said.
“Those original amenities are essentially what we all bought into,” Keyser argued.
Taking a different tack, Treasurer Meyer said the Board was not looking to eliminate any amenities, but rather taking a closer look at revenue.
Using the stables as an example, Meyer noted that the Association currently owns eight horses and three ponies.
“Is that the right number for the usage?” he asked. “Before we go into a discussion of ‘let’s start charging,’ we owe it to the community to determine that we have right-sized the amenities.”
Director Shaver agreed and noted that he conducted a study several years back that calculated the per day costs for individual amenities, as well as other Association services, such as the daily cost for the in-house maintenance staff.
Lot Combination
Looking to set a firm written policy on combining lots, Darr said the issue must be resolved.
“We have a number of lots that are combined," Darr said. "Some are combined in such a way that they are recorded in Carthage [with the Moore County Register of Deeds], and some are not. Some were combined with [Board] approval, but were not properly recorded. And there are some that have indications in the files that if they are ever uncombined, they would be subject to back dues. But what we have is an absolute mess as it relates to this whole issue.”
Darr said, in his personal opinion, that the Association should not allow lot combinations, though he recognized that a prohibition would require a decision on grandfathering any lots already combined.
Treasurer Meyer argued in favor of adding new language after honoring the “path of least resistance.”
That is, Meyer suggested building on the long-established and accepted -- but apparently unwritten -- policy that back dues will be owed if and when a combined lot is ever re-divided by a property owner. He also suggested that the owners of any unrecorded combined lots be given a grace period to correct the issue, with the proviso that they would not receive a dues reduction until the lot combination is properly recorded in Carthage.
Director Racine also suggested the Board consider whether the policy should differ in the cases where two non-contiguous lots are combined.
After going around the table, the Board agreed that a new formal policy will be developed -- and that owners of currently combined, but as yet unrecorded, lots will be given adequate notice that further action is required.
Sequoia Point boat storage
Distributing a proposed layout, Darr said that more parking and an expanded and improved boat storage area could be realized at Sequoia Point by utilizing the Yard Debris Site to store boat trailers.
“Security concerns are not as great for trailers as for people with boats on trailers, and by rearranging the storage yard we can provide better utilization, especially in the Summer,” Darr said.
Specifically, he recommended that boats on trailers be moved closer to Firetree Lane, which would allow in-house maintenance staff access to the back area of the storage lot for leveling and necessary drainage work.
“Eventually, we might want to think about enclosing the area with fencing to make it more secure for boats," Darr said, "but the first part is to clean it up by just moving the trailers."
One potential problem with parking trailers in the Yard Debris Site, Darr noted, is that the area is locked for twelve-hours each day, potentially causing a problem if a boat owner needs to pull their trailer during off-hours.
“Though trailers are rarely moved, it could be an inconvenience if someone did want to move their trailer,” he said.
Responding to a question by Keyser on the anticipated costs to fix the drainage issues at the Sequoia Point lot, Cochran estimated the materials cost at $3,000 and said the work could be done using the Association’s backhoe and in-house staffing.
Keyser cautioned the Board that only recently it was recommended that another part-time maintenance staff employee was needed to manage the existing workload -- and that this project was in addition to that.
In a related discussion, the Board also recommended that boat trailers -- in addition to the boats themselves -- should display a current registration sticker. Most seemed to agree that a set three-year registration schedule would be adequate for trailers.
Budget input
A draft copy of the proposed Fiscal Year 2012 Budget was provided to the Finance Committee for their review on January 6, reported Treasurer Meyer, and will be presented to the community during a special presentation on Tuesday, January 31 at 7 pm.
The SLLA Board will then review the draft budget during the February 13 Work Session and is expected to adopt the budget during the February 29 Open Meeting.
