On 38 Cents and David Berman's Campaign Poppycock
In his Anthem Journal, David Berman would like his readers to understand that “Thanks to the careful, prudent financial management exercised by our Board of Directors, managers and volunteers, the one fact that never fails to impress people is that in 2009 our Association fees are only 38 cents a week higher than they were seven years ago!”
That’s a bunch of crock and David knows better, but then again, David may have had a certain political agenda in mind when he wrote that, like giving a little boost to the campaign efforts of his wife and Jack Troia. As the community has learned, David has real trouble when attempting to relay historical events, even when those events involve his own past behavior. Perhaps David needs our forgiveness for demonstrating periodic bouts of selective memory. Then again, perhaps not.
If David is keen enough to know that dues were raised by $200 to $940 between 1999 and 2001, did he just happen to forget why and along with that what events happened in 2002 that changed the course of future association income and expenses? I think not.
In 2001 and for several years to follow, the Developer had control over important budgetary decisions, like the level of annual assessments. While the association likely benefited from those decisions, there were more powerful forces at work driving future association expenses down. Rather than giving credit to the existence of “prudent financial policies,” as if that was the explanation, David failed to mention what was really happening in 2001 and 2002.
First of all, one has to understand what Del Webb was constructing in 2001 and what they were planning to do in the future, compared to what happened to those plans in 2002 after Pulte took charge. From 1999, dues incurred a substantial increase, almost 30%, to $940 a year. That increase was intended to help finance the community’s then planned development. Del Webb, in the process of completing work on the Concord and Lexington golf courses in 2001, had envisaged a community of 10,000 homes and a total of 4 golf courses, two of which would be in use in 2002. It is widely understood that a golf course is a very expensive amenity to operate, with staff, equipment and extensive grounds to maintain. In 2001, Del Webb owned and maintained the Revere Golf Clubhouse, while the association was operating the Trumpets restaurant at a substantial loss and would eventually need to finance the operation of the two courses that would be soon coming on line. However, with Pulte in full control by the end of 2001, what Del Webb had been planning for Sun City prior to the buyout by Pulte would soon disappear in 2002 with major changes to our master plan.
Those and other changes occurring in 2002 included:
With a reduction in needed outlays to finance future growth and no third golf course to build, let alone a fourth course, coupled with the sale of the clubhouse and two golf courses by Pulte to Troon Golf, thereby eliminating the need to finance such operations in the future, one could make a very compelling argument that the original justification for that 2001 increase in dues from $860 to $940 a year no longer existed. Given those events, one obvious budget option would have been to lower dues.
So what did Pulte decide to do? They decided to keep annual assessments at that now artificially high rate of $940 a year. Despite the elimination of a future reduction in operating costs, there would be no reduction in our dues. Whether one counts those decisions as potential blessings in disguise, one thing is evident. In 2002, the association was running on Pulte’s assessment decisions, and not the benefit of “prudent financial decisions” by our volunteers as David would have us believe. Those assessment decisions were dictated to us by the board-controlled Developer, and only much later were those same decisions carried forward by the resident-controlled board.
Least we not forget, with Pulte selling almost 900 homes a year during much of that period, the association was always flush with a new source of income, year after year, actually more than $800,000 coming into our coffers annually.
No David, I would not be so bold, or as irresponsible as you were, to attribute our past dues structure and holding the line to a mere 38 cents a week to our board’s prudent efforts. That's sure nonsence. Instead, we need to look more carefully to past decisions largely beyond our control and driven by the Developer's actions and needs. A stable, although artificially high, dues structure from 2002 onward was a Developer directed marketing tool that benefited Pulte's sales efforts. It was not the result of the financial acumen of the board.
With such gross and flagrant misrepresentations of events and facts, one might get the impression that David is letting his past catch up with him.
Ronald Johnson, 31 March 2009, corrected with the assistance of David Berman and Chuck Davis, 1 April.