The Charbonneau Villager Newspaper 2019_ Dec issue Villager newspaper

20 THE CHARBONNEAU VILLAGER December 2019 COMMON MISINFORMATION REGARDING OUR CCC DUES By EUGENE TISH Myth: Dues are going up by $100 a month. Facts: No one connected with the Char- bonneau Country Club Board or staff has ever advocated for, or even jokingly con- sidered increasing our regular assess- ments (dues) by $100 per month. The genesis of that false claim may have been a misunderstand- ing of a statement made that the dues could be raised to a maximum level of approximately $100 per month. Let me be clear. That refer- ence was to a maximum level of approximately $100 per month, not to raise the dues by $100 a month. And no one on the board or on staff has suggested doing even that. It was an answer to a ques- tion of what the maximum could legally be. Numerous efforts have been made to correct this misunder- standing or outright misrepresen- tation, but this misstatement con- tinues to be put forth. Here is how it works. Going back to the beginning of the Charbon- neau Country Club (CCC), the board could raise the dues each year by the increase in the con- sumer price index (CPI), without a vote of the residents. This is rou- tine for Homeowner’s Associations in order to keep their funding on par with inflation. If the board chooses not to raise the dues by that much, or at all, in a given year, the unused increase can be applied by a later board. It is a sim- ple process, but the actual compu- tation is relatively complex. In 2009, our CPA made the calcu- lation that the dues could be legal- ly increased to a maximum of $90.12 per month at that time. That was not done. When the question was asked this year, a simple estimate was made that increases in the CPI over the intervening 10 years would allow an increase to approx- imately $100. No one advocated do- ing that, it was just an approxi- mate answer to a specific question that was posed. The CCC Board did not have that number formally computed, as no one was advocating going to even $90. A resident undertook to make opposed to repairs and replace- ments funded by the Reserve Fund. This increases the total monthly amount currently going into the CIF to $24 per month per residence, which is in the ballpark of what will be needed to fund the long term loan for the new activity center, de- pending on the plan eventually se- lected, and the amount costs have increased in the year this project Fact file: Due diligence about your dues investment ■ 75%: 2020 dues ($77 a month) as an approximate percentage of the original dues from 1977 ($25), adjusted for inflation using the Consumer Price Index as dictated by our governing documents, means that in real dollars, our dues have actually declined by approximately 25% over the past 40+ years. ■ $24: The amount of your 2020 monthly dues going into the CCC Capital Improve- ment Fund (CIF) each month. This amount, already approved, can be used to make monthly payments on a long-term loan of as much as $6 million to build a new activity center. The Capital Improvement Fund is not the Reserve Fund The CIF is specifically allocated to new improvements as opposed to re- pairs and replacements to existing facilities funded by the Reserve Fund. The $10 increase in dues in 2019 and $12 in 2020 are not one-time special assessments They are regular assessments (dues increases). The CC&Rs state that directors may authorize “capital expenditures for replacements or repairs or improvements from funds generated from regular assessments.” The Board’s bylaws are consistent with this Article VI of the CC&Rs. A member vote would be required to increase dues above the cumulative Consumer Price Index (CPI) limit. The current limit on monthly dues is approximately $100 per month. The difference is how much our dues have fallen behind inflation. the computation on his own, and claims the dues could be raised to $105. The Board has not spent mon- ey to have his computation verified, as it is irrelevant at this point. For 2020 the dues were increased to $77 per month, up from $65, or a $12 a month increase. $10 of the $12 was specifically allocated to the Capital Improvement Fund (CIF). Remem- ber, the CIF is separate from the Reserve Fund, and is specifically al- located to new improvements as has already been deferred. For ex- ample, $5 million borrowed at 5% and amortized over 20 years would work out to about $20 per month per residence. $6 million borrowed would work out to be about $24 per month per residence. It is worth noting that after the $12 dues increase for 2020, the dues level will still be approximately 25% below the original dues level, properly indexed for inflation. In real dollars, our dues have actually decreased over the years, a situa- tion that may become problematic for our community at some time in the future. According to our Conditions, Covenants and Restrictions (CC&Rs) Dues increases outside of the cumulative CPI (i.e. to a num- ber higher than the currently esti- mated $100 per month dues limit) can only be made with the vote of 51% of the members voting in per- son or by proxy at a properly no- ticed meeting held for that pur- pose. That is a real limit currently in place. The same is true for Special As- sessments, (one time lump sum as- sessments), for capital improve- ments. They require a 51% vote as above. But, Article VI of our CC&Rs, in Section 4, the last sen- tence provides: “This section shall not prohibit the Directors from au- thorizing capital expenditures for replacements or repairs or im- provements from funds generated by regular assessments.” While our Bylaws are currently consis- tent with this, it is important to note that in the event of an incon- sistency, the provisions of the CC&Rs control. Amendment of our CC&Rs requires an instrument signed by 75% of those members. Your CCC Board of Directors continues to commit their best ef- forts to serving our community as a whole, and to closely following our Bylaws, CC&Rs and advice from out attorney. I, as well as other board mem- bers remain willing to meet with individuals or small groups to lis- ten, learn, and answer questions to the best of our ability.

The Charbonneau Villager Newspaper 2019_ Dec issue Villager newspaper | Page 20