Sex in the Poconos: Where to Find It
by Buz Whelan
Okay, now that I have your attention let me admit this is not about sex. It’s about the finances of the Emerald Lakes Association, and the news isn’t good. We need more money. Our infrastructure is aging, our amenities need major maintenance, and as of right now, the money just isn’t there.
Many of us, especially those who are long-time members, bought into this community because we wanted to vacation in, or be part of, an amenity-filled community that offered many types of on-site recreation and neighborhood events. We saw the Community Center and the heated indoor pool, we toured the beaches and were shown the outdoor heated pool. We saw tennis and basketball courts and green areas where we could picnic and play lawn sports like volleyball, badminton and others. There were beautiful lakes we could boat on, and fish and swim in. It appeared to be just what we had been looking for and we bought the house or we bought the property and built one. Life would be good. It would come at a cost, but we knew that and we were prepared to pay it.
But there were others who were not interested in the amenities. They found a house they liked at a price they could afford and they bought in. Their main motivation was affordable housing, not opportunities for recreation and partying. They have an entirely different attitude toward the issues facing the association and their main concern is to keep dues low. From that point of view, any attempt to raise dues and justify the request by pointing to needed amenity maintenance is just so much frivolous wasting of money. Is their position the right one?
One of the most common mistakes in evaluating association finances is to point to a balanced budget, such as we currently enjoy, as proof that more money is not needed. But a balanced budget, required by law, is not an indication of sufficient funds.
Over the last 5 fiscal years the boards of directors and the general managers have tried their best to economize. The overall economy has had its well-publicized problems, and Emerald Lakes was not immune to the effects. We tightened our belts. While we had 17 full-time employees in 2007/2008, we now have 9. The outdoor pool was open 7 days a week in season; it is now open 4. The beaches, Pine Tree and Main were both open 7 days a week. Now they alternate weekdays with one or the other being open. We had a youth activities program that cost $100,000 per year complete with a full-time director. That program and its director have been eliminated. In 2007/2008 the Community Center and its indoor pool were open 7 days a week. Now they are open 3½. The compactor was open 5 days a week; now it is open 4. And prior to 2007/2008 we were doing between a mile and a mile and a half of new paving every year. We haven’t done any since; we can only afford to do repair now. The Administration Office was open 6½ days a week while now it is open 5½.
In the area of maintenance we have also economized. We have known for at least 6 years that there is a problem with the Pine Tree Lake dam valve. We have put off fixing it. We know the evacuation pipe is leaking, and DEP will order us to fix it sometime soon, in two to four years, depending on the deterioration rate. Divers will tell us the extent of the problem in the Spring, but we estimate the cost of repair at around $300,000. It could be more, but the estimated cost has been rising over the years. We are wasting energy in the Community Center because we haven’t replaced the aging HVAC system as we should have 8 to 10 years ago. Then, it probably would have cost around $150,000. It will be considerably more when we finally get to it. Meanwhile we will continue paying much more to heat and cool the building than a new system would cost.
Are you still reading this? A certain fatigue would be understandable. But there is even more. The Community Center boiler needs replacing. Much of our maintenance equipment, including vehicles, is past its shelf life. The roof on both the Community Center and the Administration Building are in need of replacement. And so on.
So the budget is balanced. How? We have been living on reduced services and deferred maintenance for the better part of the last decade. Our dues are artificially low. And the membership shows no sign that it wants to pay a fair price to get a first class community. A tipping point either has been reached or is near at hand. That will come, or already has, when those who do not care to live in our type of community outnumber those who do. We may eventually slide into receivership where our bylaws are invalidated and court-appointed administrators decide the dues, just as your property taxes are decided. And property values will plunge.
We have tried initiatives that might have saved us. Approval of a CPI escalator would have provided at least a constant value income. As an example, had such an escalator been approved in 2011, next year’s dues would have been $1,067. Not a huge leap, but enough to keep up. In 2011, 2012 and 2013 the CPI was 2.8%, 2.0% and 1.7%. The only way to keep up with increasing prices, as any shopper knows, is to spend appropriately or buy less. We have been buying less for years. And we’ve been getting less. The time for a dues increase is now. We cannot continue to pretend otherwise.
If all this is depressing, let me say that as dire as our position is, it is not hopeless. The Finance & Planning Committee has considered two alternatives to strengthen our financial position. One is a Special Assessment. As envisioned by committee members, this would require each property to pay $16.67 per month for two years. That would total $400 per property and at our current rate of compliance raise approximately $580,000. This would not solve all our problems, but it would be enough to repair the Pine Tree Dam valve and evacuation pipe. It would also give us the money to replace the aging HVAC (Heating, Ventilating and Air Conditioning) system in the Community Center. As stated previously, we don’t know the exact cost of either of these projects, but estimates center around a price point of $550,000 (for both). That would leave around $30,000 for equipment replacement or for a new boiler. This initiative has been taken off the table until a more precise estimate of the projects becomes available. By late June we should have a clearer picture.
Alternatively, the F&P Committee is recommending a dues increase of $100. This would raise about $145,000 per year, or half of what the Special Assessment would raise, but it would continue beyond the second year. It would mean that quarterly payments would rise from $250 to $275. We would not be flush with funds, but we would have a much more realistic chance of making needed repairs and replacing aging equipment. It may also help with operational costs, since newer equipment does not need the constant repairs and associated costs that our current physical plant and vehicles require. The recommendation, as passed at the committee’s March 15, 2014 meeting, would – if approved by the membership – become effective on November 1, 2014 when the 3rd quarterly installment of the dues assessment is due. That payment would rise from $250 to $275. The same would be true of the February 1st 2015 quarterly installment. Those who pay their dues in full at the beginning of the fiscal year would have the option of paying $50 on or before November 1st or make quarterly payments of $25 on Nov. 1 and Feb 1. Before the membership can vote on this, however, the board of directors must decide to recommend that vote.