2020 Annual Meeting Highlights
2020 Landings Association President John Holmquist opened the meeting, welcomed the group, and gave an overview of the agenda for the meeting. He recognized retired Directors Blake Caldwell, Rick Cunningham, and Jim Rich for their service on the Board. Holmquist then acknowledged 2019 Volunteer of the Year Ed Conant for his work with the Tallow Terrors as well as the R-3 Committee (Reduce, Reuse, Recycle), which was named 2019 Volunteer Group of the Year. Decked in their safety vests, the entire committee rose to accept the award.
“For 2019, the Assessment was $1,850 per lot,” he said. “The original budget called for $1,386 to go to Operations and $464 to Capital Reserves. At 2019-year end, the allocation for Operations was adjusted from the original budget to transfer $972,400 to the Capital Reserves fund. This was possible because of several expense account line items that were under budget as well as several revenue line items that were better than budget expectations. Cash management also allowed additional cash to be transferred from Operations to Capital Reserves, with the Association’s goal to maintain a $1.5M balance in the Operation fund. Per lot, the allocation was adjusted to $1,166 to Operations and $684 to Capital Reserves. For 2020, the Assessment is again $1,850 per lot.”
Martin then shifted gears to the Operating and Capital Reserves funds. He explained that from 2018 to 2019, revenue decreased for Operating since there was a transfer to the Capital Reserves Fund of $972,400 prior to 2019 year-end.
“In 2019, we had an increase in Marinas revenue, and have budgeted this item to assume the higher revenue trend will remain for 2020 and future years,” he said. “The Other income line item includes all cell tower leases, interest earned, dump tickets, recycling revenues, and architectural fees, etc. Total expenses went up to $215,000, mainly due to staffing, IT expenses, and legal expenses.”
Martin went on to explain the 2019 results for the Association’s Capital Reserves Fund. “It is important to note that Capital expenditures don’t occur evenly year-to-year. Capital expenditures were higher in 2019, mainly due to road and cart path repair and replacements. Other capital expenditures included the replacement of four fleet vehicles, 17 security cameras, two automatic gate systems, and a fuel dispenser at Landings Harbor Marina that had reached the end of their useful life. We also completed storm drain and lagoon repairs that help maintain our existing infrastructure.”
The discussion then shifted to The Landings Company (TLCo), the Association’s wholly-owned real estate subsidiary. As such, TLCo is included as part of TLA’s audited financial statements. The fact that commissions are up at TLCo is great news because that means sales are up. The other line item on the financial for TLCo is mainly rental revenue,” Martin said.
“The net income after depreciation for TLCo is mainly due to the additional commission revenue earned in 2019. All of its expected profits are spent on marketing The Landings.”
Martin moved on to cover highlights from TLA’s recent Reserve Study.
Although the report offers several different methods of funding the Capital Reserves Fund with illustrated examples of each, the primary finding of the study is that The Landings Association is not allocating enough money to the Reserves Fund, and the level in the Fund is not sustainable over time, placing the community in danger of resorting to bank loans or Special Assessments.
“Full funding, or 100% funding, provides the lowest risk of deferred maintenance or Special Assessment but requires large contributions,” Martin said. “National Reserve Standards indicate funding plans that maintain a minimum of 30% to 70% fully funded reserve provide an adequate level of funding. The recommendation for the threshold funding plan is based on required funding to replace or restore The Landings Association’s actual assets, maintaining a minimum cushion of 30% of future costs.”
Martin concluded the financials by reviewing the consolidating statements of revenues and expenses as well as the consolidating balance sheets. He explained that the consolidating statements of revenues and expenses show the combined results for all TLA operating components, including the Company.
The audit of TLA’s financial report for 2019 has been concluded, and the Association has received a clean opinion from our auditors. The Annual Report containing the 2019 audited financial statements and an excellent review of the financial and operating results are posted on the Association’s website. I hope you will take the time to visit the website where you can download or read the report online.”
Holmquist returned to the podium to discuss The Landings Association’s communications and steps that have been taken to improve, including live-streaming of the Association’s monthly Board Meetings and Budget Workshops, Backyard Buzz (the email that weeds through rumors and shares the facts), an upcoming website redesign for the Association’s website (www.landings.org) to make it more user-friendly, and the Working Neighbor Drop-in Sessions hosted monthly by the Board. He then talked about the upcoming Assessment Vote in the fall of 2020. He shared with the group that after two years of flat Assessment, an increase is needed.
“I wanted to put the word Assessment into context for us in The Landings,” Holmquist said. “Assessment for us is our determination of what we need to do to continue enjoying the lifestyle we have and to make The Landings better. Staying the same is not an option. Property values don’t increase in a community that stays the same. People don’t buy houses in a community that stays the same. And as we’ve just seen in Tony’s brief discussion of the Reserves, if we don’t take care of our assets and have the funds available when necessary, our assets will gradually deteriorate.”
Holmquist went on to say that everyone moved to The Landings for different reasons, but he is certain no one moved with the desire to live in a community that stays the same and deteriorates.
“When Branigar left, they didn’t say, ‘Here you go; things ought to be good for 50 or 60 years,’” he said. “The Landings doesn’t just happen. By that, I mean that our community has some responsibility. We all live here, we drive on the roads, and we use the different facilities. No one else is going to come in and take care of this. It is our responsibility.”
The Board will be working to come up with a final Assessment by the end of March that will be shared with the community and ultimately result in a fall Assessment vote in approximately August or September, Holmquist said. He added that during this time, there will be many educational and informational opportunities provided to the community.
“Communications is of paramount importance to us, and you will be informed,” he said. “The Board wouldn’t be looking for an increase in dues unless it was absolutely necessary. Believe me, life as a Board Member is a lot easier when you are not trying to get a dues increase. But it is our responsibility to do so. We are a community at a crossroads, and we must decide on our future and what type of community we want to be.”
The floor was opened for questions from the audience. Following are some highlights from that portion of the program. To view the PowerPoint presentation from the 2019 Annual Meeting, click here. To read the 2019 Annual Report, click here. To watch a video of the meeting including the full Q-and-A, click here.
Q. Can The Landings Association consolidate trash service in the community to save wear-and-tear on the roads and to save residents money? What about the consolidating cell phone or cable services as well?
A. The Association continues to look at trash collection consolidation and how that legally might work. As for cell phone coverage, the Association does receive revenue from our cell towers that help to lower Assessments. The Landings Association remains open to researching all areas of cost-savings to the community and will continue to keep residents posted on our progress.
Q. Has the Association considered offering among its amenities a community pool or restaurant at Landings Harbor?
A. The Landings Association has taken the position that we do not compete with The Landings Club. However, we do partner and collaborate with them as much as possible.
Q. Are the Capital Reserves Funds being invested to garner the greatest benefit for all residents? If so, where does the interest go?
A. The Association’s Investment Committee is charged with reviewing the investments of the Capital Reserves Fund. Investments are selected based on preservation of principal, liquidity, and then yield. All interest earned stays in the Capital Reserves Fund.
Q. What is the risk-benefit ratio of not immediately addressing infrastructure?
A. The Capital Reserves Fund is very important. There are serious consequences of deferring infrastructure maintenance not only as it relates to safety but also in significantly increased future replacement costs.
Q. What is being done about the traffic flow of the island? Has a roundabout been considered?
A. Chatham County continues to monitor the traffic flow of the island as well as the four-way intersection at Diamond Causeway and Green Island Road and McWhorter Drive. Several options, including a roundabout, have been explored by the County. However, to date, no final decisions or official announcements have been made by them.
Q. Will The Landings Association consider lowering the cost of rentals at the Sunset Pavilion?
A. The Association evaluates user fees on an annual basis. Entry passes, as well as the pricing of the Sunset Pavilion, will be reevaluated in 2020 along with all other fee-based amenities. When setting the price for rentals, the Association takes into consideration several factors, including maintenance, repairs, and current rental rates of similar facilities in the area as well as in other gated communities.
This article was originally published by The Landings Association on their website. Visit landings.org to read the original article. https://landings.org/news/2020/03/06/2020-annual-meeting-highlights