Now that the Country Club Purchase Agreement has been concluded, a question has arisen as to what effect this may have on homeowner assessments going forward. Let’s consider the following:
- During the homeowner presentations the BOD advised that repayment of the $2.7M loan amount would cost homeowners about $9/month worth of assessments (for 15 years), which could further decrease as Somersett build-out continues.
- Homeowners are still paying $15/month in assessments on the previous Country Club amenities agreement, which was not renewed after December 31, 2014.
- Items 1 and 2 above result in a $6/month net gain for the Association or approximately $180K/yr.
Given the preceding, it is fair to ask where this apparent surplus will be applied. A decrease of $6/mo in homeowner assessments or application to some other common area budget item? Perhaps someone from the BOD or Finance Committee, who follow this blog, can provide some clarification in this regard.
A related question posed by a homeowner at the February 25th BOD meeting centered on what alternatives has the BOD addressed in the event of a purchase agreement default by the Country Club and how would they impact future assessments? It became apparent that the BOD has not yet definitively addressed this outcome. The homeowner listed some possible uses and suggested the BOD hire a consultant to evaluate alternate plans and associated costs. Some may consider this premature, but given the financial struggles the Somersett Country Club, and other Reno Golf Courses, have incurred in the past, a default may indeed happen sooner than later, if at all.
In a previous presentation by the BOD they estimated for the Association to continue to maintain and operate the golf course would cost homeowners between $65/mo and $85/mo in increased assessments. At the February 25th BOD meeting in response to the homeowner comments discussed above, the BOD indicated it would only cost homeowners between $1/mo and $2/mo to maintain as green space only. SU believes the later to be significantly underestimated.