2013 SOA Draft Budget

The September 2013 budget meetings for the Common Area/Canyon 9, The Club at Town Center and the Private Gates & Streets assessment areas have been completed.  The proposed budgets for each of these areas may be accessed via the following link: SOA 2013 Draft Budget.pdf. The first three pages provide budget summaries, whereas the last five provide a more detailed breakdown.

Barring any last minute changes, these will in all probability reflect the “final” budgets to be presented at the October 4th (5:30 – 7:00 PM Aspen Lodge) and October 5th (5:30 – 7:00 PM The Loft) Homeowner Budget Presentation Meetings and subsequently approved at the October 11 SOA Board meeting.

SU encourages all to review the 2013 proposed budgets, and attend the Homeowner Budget presentations for an update on 2012 financials and an overview of the proposed 2013 budget items. Any concerns and/or questions relating to the 2013 budget can be raised at this time.

The 2013 budget for “Special Projects” has been significantly reduced from 2012 and amount to the following:

  • Common Area/Canyon9  –  $10,000
  • The Club at Town Center  –  $50,000
  • Private Streets & Gates  –  $15,000

Special Project items that made the short list are accessible via the following link: 2013 Special Projects.pdf.  The new Board of Directors will select which projects the above allocated monies will be spent on.

The proposed 2013 budget reflects the following decrease in monthly assessments:

  • Common Area/Canyon9 – $2
  • The Club at Town Center  –  $1
  • Active Gated Area  –  $8
  • Inactive Gated Area  –  $4

As a side note, the final ballot count regarding continuation of litigation against Moana Nursery for construction defects received the required number of yes votes to continue the litigation.  This apparently was the result of a significant number of yes votes received at the last minute from a Somersett home builder who still owns a large number of home sites.  Hopefully this will be accomplished within the $42K legal expense item included within the 2013 budget, and that the new board will also see fit to go after Somersett Development Company to recover all litigation costs paid for by association (i.e., homeowner) money.

Rich Oster Open Letter Commentary

Sending a Response Courtesy og Freedigitalphotos.net

Posted by Geoffrey Brooks

Hi Rich, 

WOW! I read through your letter, concerning the value for monies that ALL the residents are getting for our $1.3 million 3 year lease deal (is it really cancelable then?) with the SGCC.

I am now reiterating the written commentary I made to the SOA Board in January, 2012; about what I believed to be an extraordinarily bad deal for the homeowners and how we all should have had the been informed and allowed to vote (per NRS regulations) on these very “large expenditures” of homeowner funds.

Wow, again! We are paying $300k “lease fees“ (of the $1.3 million) to build our new amenities!

In the world I have operated in, most lease agreements will give you the opportunity to own it, if you lease it – that is something for your money. A car lease allows you to buy it (yes, actually own it) at the end of the lease. Somersett homeowners never can, as the SGCC cannot sell the land on which the new amenities built for the SOA are constructed.

The Championship Golf Course (unlike the Canyon 9, which the homeowners own), is still effectively owned by Blake Smith/Somersett Development.  In his role as SOA Board President (a conflict?), and, with the current board members approval, they “engineered” the “lease” agreement. Ray Lee has posted a justification for the “amenities lease” on the SOA member web site. The actual lease agreement has been challenged through the NV Ombudsman’s Office, it was referred to the Real Estate Division’s legal department for review under Case # IN-1580 dated 6/4/12.

Lets assume for a moment that the homeowners owned these newly constructed amenities after 3 years (we would pay about $30K in interest at 10% if it were like buying a Ferrari), so what is the other $1,000,000 we are paying buying for ALL of us?

Maybe:

-3000 “free” driving range experiences for residents!

-3000 “free” fish (if we can catch them) that we have to release! (We could alternatively have resident fishing adventures on one of our nearby lakes say at $300 a day/person (boat rental, gear). Assume 3000 residents, each could potentially have one “free” trip for a total cost $900K (and one gets to keep/eat the fish). Maybe the SGCC should offer a series of fishing tournaments. What a great thing for all member/residents.

-6 “free” resident/member meals over 3 years (but we have to pay to eat/drink at the Sunsette Grill). So, assuming a $50 meal and drink is worth $100 at another restaurant/casino. Again, assuming 3000 residents participate that would be

-18,000 meals = $900K subsidy by the SGCC to create harmony and value for ALL residents. Also, this would represent a $900K gain for the SSG. This could be easily accomplished by a $50 resident give-back on a $100 + dining experience.

-Using my anarchic logic, I can find many ways to provide residents value for their $1,000,000 3 year investment over the agreement period, but not unfortunately, for the $300K for the new “leased amenities”.

Eat up, enjoy your money, ask for that real fishing experience. The SGCC should be happy to do this for you so you can really be happy with how your HOA money is spent.

I would welcome other opinions, after-all we do have pay for our golf ambience. I do believe that most people bought houses here because they DID NOT have to belong to a private golf course!

Rich, What do you think about my assessment of the “lease” and ideas for the SGCC to provide some “extra” value for the residents investment?

In my mind, lower assessments result in higher prices for our property!

SGCC Reality Check

Somersett United

In an Email to their members, the President of the Somersett Golf and Country Club revealed the following 2012-2013 membership initiatives in an effort to increase revenues:

1.     Move the Club from 248 monthly dues payers to 380 by August 2013

2.     Reduce Equity Purchase Price to $2,500.

3.     Reduce monthly Equity Dues pricing in April of 2013 to $395. Contingent upon new Preview Sales.

4.     Offer a Preview Membership priced at $300 with 6 day advance tee times

5.     Offer a Preview Membership priced at $200 with 1 day advance tee times and no access to the Major club events such as the Club Championship, Member/Guest and Member/Member.

In a subsequent Email the Membership Director of the SGCC provided the following Background information:

“We are writing to update you on upcoming changes to our Membership offerings for the 2nd half of 2012. More importantly, we want to explain how these offerings tie in with our primary goals of creating and maintaining a viable Club and achieving sufficient financial strength and reserves by the end of 2014 to ensure that we are not dependent on the Somersett Owners Association agreement.

Currently, we have the following basic realities:

1.     We’ve added 84 new Preview Members in 2012

2.     Current Year to Date dues are even with budget and slightly below last year’s levels.

3.     We are losing 2-3 Equity Members per month, currently at 140 members.

4.     Given current membership enrollment rates and expected attrition Club sustainability may become an issue.

5.     We need an average enrollment velocity of 12-14 members per month for the next 30 months to achieve a net growth in dues.”

“The overall goal is fill this club to its Cap of 450 members, become an independent on-going concern, become a Club with a waiting list to get in rather than a waiting list to get out and re-establish an Equity Value for those who have paid into the Club and been dedicated to supporting its operation over the past 10 years. We hope you will chose to continue to support what we all on the board consider to be a very special part of our lives as we diligently strive to make Somersett the model Club for all others to follow.”

SU understands that “Preview Memberships”, which are open to the General Public, require a one year subscription, after which the SGCC hopes they will convert to “Equity Membership”.  No information on how many of the existing 84 Preview Members have opted to convert.

We all wish them well in their initiatives, especially with regard to not being dependent on the SOA/SGCC Lease Agreement, which hopefully would end homeowner assessments going to the SGCC.

Comments welcome.

2013 SOA Budget Update

Town Center

The August 2013 budget workshops for the General Common/Canyon 9, The Club at Town Center and the Private Gates/Streets assessment areas have been completed.  Special Project items that were considered are accessible via the following link: 2013 Budget Special Projects 8 18 12 (1).  These represent items that were submitted by homeowners and the SOA staff.  Numerous other items were also submitted, but were not considered because they were either: 1) outside the scope of SOA responsibility, 2) items that can be accomplished through regular operational expenses or 3) present an undesirable liability. Funding estimates were provided for some of the items, while others were TBD.

Revisions and recommendations from the August workshops will be presented to the SOA Board for consideration per the following schedule, with the final budget to be completed by September 28.

  • Tuesday, September 11, 4:30 – 6:00 pm General Common/Canyon Nine
  • Tuesday, September 18, 4:30 – 6:00 pm Club at Town Center
  • Tuesday, September 25, 4:30 – 600  pm Private Streets & Gates

All the above meetings will be held at the Loft. Homeowners are encouraged to attend and be part of the process and/or to voice their opinions.

Preliminary indications from the August workshops indicate that the Board is considering limiting the “Special Projects” budget significantly from 2012 and applying any surplus to the Reserve fund and/or Homeowner assessment credits, as should have been done in previous years. (See previous Blog article posted by Jim Haar, “SGCC Open Letter Response”). This is good news, perhaps homeowner feedback has been effective!

A suggestion from the Board President was to budget money (~$10K) for the new board to hire a “Consultant” to assess Somersett Community needs in the future.  Sounds like a good idea.  As previously noted, SU is of the opinion that the current SOA BOD has not always exercised good fiduciary responsibility to Homeowners  in their decision making  (e.g., Developer Subsidy Agreement, SGCC Lease Agreement, and Construction  Defect Litigation Fees, among others).  Perhaps a Consultant can appropriately assess what has been done in the past and what needs to be done in the future to assure that Homeowners are getting the “best bang for their buck” and not being over assessed for services

Next update will include results from the above referenced Budget meetings, which will in all probability reflect the “final” budget to be presented at the October 4th and 5th Homeowner Budget Presentation meetings and approved at the October 11 SOA Board meeting.