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“Standing room only’” is a tired cliché — but an accurate one when applied to the turnout for the Tuesday, January 26 Seven Lakes West Landowners Association [SLWLA] Board meeting.
 A crowd that appeared to exceed 200 filled the Great Room of the West Side Park Community Center to meet Board candidates, hear the Board’s budget presentation, and offer input on the budget and proposed dues increase.
Budget Presentation
The centerpiece of the meeting was President Ron Shepard’s presentation of the proposed Fiscal Year 2010-2011 budget, already approved by the Board and subject to a vote of the membership at the Annual Meeting the third Sunday of March.
Shepard’s talk included a Powerpoint presentation which is available for download on the Association’s website .
Because a number of different developers were involved in the creation of Seven Lakes West, Shepard said, investment in infrastructure suffered, leaving the Association the responsibility of caring for the "common elements" owned by the membership. Those include the lake, the dam, the roads, West Side Park and its Community center, four ponds and their dams, the Johnson Point complex, and the front and rear entrance ways.
Shepard walked through those common elements in some detail, noting the recent remediation of Lake Auman dam, including the installation of a weighted dam filter, the on-going work on the pond dams, and recently-discovered problems with the corrugated steel culverts that carry rainwater under Longleaf drive and other community roadways. The latter have deteriorated significantly, and, in some areas, may threaten the integrity of the roadway. The Board has identified at least 14 that are significantly deteriorated and must be replaced at a cost of $15,000 each — or potentially more than $200,000 in total.
The Board began assembling the Fiscal Year 2010-2011 budget in August, Shepard said, doing its work in work sessions open to the membership. The goals for the budget included limiting operating expenses to no more than a three percent year-to-year increase, while rebuilding reserve accounts depleted by the dam repairs to meet the current and future needs of the community.
The result of four months of budget planning is a proposed FY 2011 budget that includes a small 2.5 percent, $26,000 increase in operational expenses, but increases the Associations spending on capital maintenance and investment in reserves by $442,000 when compared to the current fiscal year's budget.
"There is nothing frivolous or extravagant in this budget," Shepard told landowners.
The FY2011 budget includes $137,000 for capital maintenance projects — things like repairs to the culverts and pond dams, as well as road drainage and erosion control. It includes $97,000 for capital projects: including perimeter fencing, a plan for the front and back entrances, new security gate cameras, and, possibly, an electronic card entry system for the swimming pool.
Finally, the proposed budget includes a $424,000 contribution to reserves, with $250,000 of that going toward road repaving. Shepard said a road repaving plan prepared by former director Ray MacKay and currently under review, projects that the Association will need over $2.5 million in today's dollars for paving through 2021.
If the Association had raised dues five percent per year beginning in 2001, the 36 percent increase sought in the FY 2011 budget would not have been necessary. On behalf of the Board, Shepard asked SLWLA members to support and approve the proposed budget.
Public comment
More than a dozen landowners used the public comment period at the end of the meeting to ask questions about and express their support for or opposition to the budget and proposed dues increase.
Jim Balleu asked the Board to explain why the dues increase was substantially greater for unimproved lots. Treasurer Kathy Kirst said she had done an analysis of the expense budget an pro-rated expenditures to reflect their importance to owners of unimproved versus vacant lots. She found that about seventy-two percent of Association expenditures are applicable to owners of vacant lots. For example, security may not be quite as important to owners of vacant lots as to those who actually live in the community, but the fact that the Association provides security enhances the value of undeveloped lots.
Jim Barrett asked to meet with the Board to discuss an alternate approach that he said would make the dues increase unnecessary. Among other things, he said, his plan involved an alternate plan for refinancing the mortgage on West Side Park. Kirst agreed to meet with Barrett, but explained that the NC Planned Community Act limits the Board's options for refinancing.
Ronnie Milligan said he was pleased when the Board eliminated $14,000 form the expense budget to pay for Fourth of July fireworks — and dismayed to learn the Board had reinstated up to $7,000 of that budget to match contributions from landowners. But others, including Charlie Flinchum and Jim Embler, pledged $100 toward the fireworks fund-raising effort.
Tom Sneed questioned the wisdom of building road-paving reserves and investing that money at a less than five percent return, when the cost of paving is escalating fifteen percent per year. The smarter option would be to debt-finance the needed road repairs, Sneed said. Treasurer Kirst explained that the Planned Community Act allows the Association to pledge its assets in order to secure a loan only with the approval of eighty percent of all landowners — an almost impossibly high bar. The options for obtaining an unsecured loan as very limited, she said.
Paul Werkmeister said the idea of using debt financing is attractive, since the expenses for infrastructure appear to increase rapidly and then fall off. "The flip on that would be," Werkmeister said, "if we pay as we go, could we anticipate the budget dropping in 2022. My guess is, once it's in, it will stay in.
Given the escalating cost of paving, Frank Land said, the Board might want to accelerate its repaving schedule. President Shepard noted that a committee is already working on revisiting the plan.
Mike Foreman asked for those in favor of the proposed budget and dues increase to stand, and then for those opposed to stand. Though there was no way to accurately judge the response, it appeared the room split 60-40 against.
Another resident asked what happens if the budget is not approved by the membership. Legal Director Ed Silberhorn explained that, if more than half of all members — roughly 860 lots — vote to turn down the proposed budget, it is returned to the Treasurer, who decides what to do, bringing a proposal back the board. The typical Westside election does not attract 860 voters, let alone 860 on one or another side of an issue.
Max Foley suggested that, instead of buying new security cameras for the gates, the Association should purchase stronger gates capable of stopping vehicles.
James Eilert, noting the budget for perimieter fencing, asked whether the goal was "to make us a big prison with a fence around it." Security Director John Hoffmann said the Association has been fencing areas of strategic importance, where intrusion has been a problem in the past. Hoffmann said he felt "fencing that doesn't hook up to anything is illogical. However, a lot of people don't agree with that. A lot of people think that placing fencing in strategic places helps keepoutsiders from coming in here."
Mary Price thanked the Board for putting together a budget that looks to the future of the community.
Ruth Caldera worried that increasing dues thirty-six percent on one year might set a precedent.
Patty Cleary pointed out that her county taxes had increased 117 percent since 2001, while SLWLA dues had increased only 21 percent.
Tina Darby asked whether the capital projects included the cost of repaving the dam road. President Shepard said that cost was not included in the FY2011 budget because it is not yet clear that the road can be rebuilt.
During the business portion of the January 26 meeting, the Board approved an expenditure not to exceed $6,000 for the clearing of trees and shrubs from the pond dams. A proposal to ask homeowners along the affected streets to pay for water line upgrades so that fire hydrants can be installed was also approved.
Director Silberhorn reported that the community will be asked to vote this spring on the $45,000 purchase of two lots in Colton’s Corners near the back gate, for use as common areas. |
