(001) Dear Fellow RRLE Property Owners:
(002) This letter is intended to give you
some history and insight on the financial problems confronting our Park.
(003) It is also intended to present some
workable solutions that need your support.
(004) For many of us, who purchased here
in the 70’s & 80’s,
the history of RRLE has left us with great and lasting memories.
(005) Many of us remember the good times
and how hard we worked to plant trees & shrubbery because we knew with
pride, that RRLE was going to be one of the best parks in the USA.
(006) For new comers, allow us to
reminisce and give you a look at where we’ve been, what we have today and where
the future may take us.
(007) YESTERDAY: In the 70s
& 80s, we had a Park Manager, Assistant
Park Manager, Country Store Manager, Social Director, Office Secretary, two
janitorial employees, 3 or 4 seasonal employees and 4 to 6 country store/pool
attendants.
(008) The 80’s
were good years as RRLE had approximately $130,000 in its capital reserve and its annual budget
for maintenance was $110,000.
(009) Our buildings, pools and roads were
in great condition.
(010) In the late 70’s, our yearly maintenance fee was $150.
(011)
In 1981 it was $250
and $300 through the 90’s.
(012) From 1975
through 1981, our maintenance fee accounted
for almost the entire RRLE budget.
(013) Over the years, this has gradually
changed to account for only 65% of the total
RRLE Budget income.
(014) User fees (e.g., boat docks,
storage yard, etc.) are about 15% and the
balance of income, namely about 20%, coming
from miscellaneous sources (e.g., video games, country store, washers and
dryers, etc.).
(015) Since 1990,
our total budget income and expenses have increased by about 38 percent, while our maintenance fee has only
increased by 20 percent.
(016) Under the RRLE Rules adopted in 1975, we cannot raise the maintenance fee unless
we can get two-thirds of “all members”,
whether voting or not, to approve a change in the cap.
(017) As such, every failure by a
member to vote in essence equates to a “No” vote.
(018)
This makes it a substantial challenge to get a change
(019) As we have not been able to get the
two-thirds vote from the membership, RRLE has had to rely on other forms of
income to keep the Park barely operational.
(020) Over the years, our previous and
even this current Board, after having obtained legal counsel, were obligated to
impose or increase various “user fees” in areas such as the storage area, boat
docks and refuse.
(021) Recently, our managing of the water
system was turned over to the RRLE Cooperative to ensure proper maintenance of
the water system.
(022) The RRLE Cooperative’s creation was
also a way in part to get around the “$300
cap” on assessments and bring in more money to cover needed repairs.
(023) The $300
cap established in 1975 has been unrealistic
going back at least to the mid 90s.
(024) TODAY: In the budget for 2002,
we again are obligated to raise the user fees on boat docks partly to meet the
needs of our Park.
(025) Because of the boat dock increase,
our maintenance fee applicable to all Park members in 2002
accounts for only 64.9% of our total income.
(026) We cannot continue to raise user
fees that impact only some of the owners, and allow the rest of the owners to
escape their rightful share of the costs of running this Park.
(027) The budget, as currently presented
is a “no frills” - no money in the savings account - budget.
(028) The only so called “extra money” in
this budget is about $27,000 earmarked to repair the entrance road of our
Park.
(029) That will leave only $7000 in the 2002
budget for the year to address any unexpected cost in running or maintaining
our Park.
(030) That is simply unacceptable and
would be irresponsible going forward not to address this in any meaningful
manner.
(031) TOMORROW: As to the FUTURE, the Long Range Planning
Committee, established by this Board, has initially identified over $75,000 in
needed repairs and refurbishing of Park property.
(032) As our common properties continue
to wear over the years, we will experience increased repair and even
replacement costs.
(033) Currently our capital reserve
account is at less than $40,000 (a carryover from previous years) which is the
lowest it has been since the 1970s when we
had about $130,000.
(034) Should we be faced with a
catastrophic event (not covered by insurance) a special assessment could be
necessary placing a financial burden on many members.
(035) It also could take a substantial
period of time to be approved by the necessary number of owners voting in the
affirmative.
(036) We also have no guarantee that a
bank would consider RRLE a good risk to lend a substantial amount of money if
the $300 cap continues and the bank
questioned the past difficulties in attempting to get it raised.
(037) Due to the age of the Park
facilities: roads, pools, common grounds and equipment along with the increased
cost of services, which include utilities, contractors, accountants, attorneys,
security, refuse, insurance and payroll and other sudden or unforeseen costs to
maintain our Park; the need for increased income should be obvious.
(038) If you understand this and wish
the high standard of RRLE to be maintained, which is so beneficial to the
investment of every property owner, you need to support and to actually vote
“YES” to an increase.
(039) We do not have a crystal ball, but
it is obvious that we need to take specific action now to avoid a future
disaster.
(040) With the cooperation and positive
efforts of all our members, we can change the course of history and continue to
make our Park a place for all ages to enjoy for many years to come.
(041) This Board desires to be as “up
front” as humanly possible.
(042) We cannot continue to raise user
fees that impact on only some of the owners, and allow the rest of the owners
to escape their rightful share of the costs of running this Park.
(043) The Board recommends that the “cap”
be raised to $450 over a three-year period
starting in 2002.
(044) As such the cap would be raised $50 each year for the next three years when the cap
becomes $450.
(045) Under this proposal, the cap would
go up automatically by an amount tied to the reported rate of inflation in the
United States each year.
(046) This hopefully would lessen the
need in the foreseeable future to go after another vote to approve yet again an
increase in the cap.
(047) It is important that you understand
that an increase in the maintenance fee cap under the Rules does not mean that
this or a future Board would necessarily increase this fee to that level
immediately or potentially ever.
(048) However, it would allow them to
raise this fee anywhere up to that new-capped amount if they felt it necessary
to properly maintain the Park.
(049) The Board feels strongly about
putting as many fees, related to maintenance (e.g., refuse, etc.), under one
maintenance fee rather than all the separate fees we currently have.
(050) As to user fees for the boat dock
and storage areas, they would continue without the current pressing need for
increasing them further.
(051) As there are limited boat docks and
storage areas, it is appropriate to have some user fee to recognize that those
privileged to have such areas should pay something above the maintenance fee
and that they should largely pay for themselves in terms of cost to maintain.
(052) Your current Board recognizes the
need to give assurances that if this proposed Rule change is passed by the
members, that at minimum, the current refuse charge will come to an end
and that going forward there will be no assessment for refuse.
(053) Attached is a copy of the proposed
Rule changing.
(054) The Board urges you to study this
document.
(055) Please send your written questions
or drop them off at the Office on or before May 24,
2002.
(056) The Board will review your
questions and comments and respond generally to the points made by members in
the Review.
(057) Names will not be given. We also plan to have a limited discussion of
this issue at the RRLE Annual Meeting on May 27,
2002 along with the proposed architectural
code hearing.
(058) Our current plan is to seek a vote
from the membership on this Rule change raising the assessment cap on or around
the Labor Day holiday weekend.
(059) We realize that this document is
much to absorb.
(060) But we hope you take our plea in
good faith and forthrightly.
(061) With your help, we can assure that
RRLE will continue to be one of the finest and most beautiful parks of its
type.
(062) That is why we all bought in here.
(063) It is not in the interest of anyone
ultimately to allow it to fall into disrepair and diminishing value.
(064) Thank you, on behalf of your Board
of Directors.
Ray
Jachim