Since I don’t belong to the Pagosa Lakes Property Owners Association (PLPOA), my opinion about the proposed financing of a community gym is just that: an opinion.
We all know that opinions are like… well… everyone has one.
But I do have questions about the proposal, as it has been described by Bill Hudson in his current Daily Post editorial series.
Specifically as regards this part of the proposal:
“… the gymnasium operating and maintenance costs — like the operating costs and maintenance of the existing Recreation Center — would be fully covered by user fees, including the fees paid by pickleball players, sports teams, after-school programs, and tournament organizers who would be using the facility.”
Before I get to what looks to me like a fundamental flaw in that aspect of the financing, I have a preliminary question. How many (if any) of the activities for which the recreation center is currently utilized will be duplicated by the new gym? If there is duplication, will that not reduce the fees for such activities at one, or both, of those facilities?
Is this financing proposal relying on some of the fees currently supporting the rec center, to also support the gym? Has that even been considered, or calculated?
But, as I said, that is a peripheral issue. The real issue is the consequence to the PLPOA of taking on the obligation of long-term maintenance, particularly when that obligation seems that it is being incurred in the name of enhancing property values.
Mrs. Beatty used to swim at a nearby pool facility owned, and maintained, by an HOA, for which she paid a user fee. It closed last year due to increased maintenance and insurance costs. The HOA is still having to pay property taxes on the facility… as it stands unused.
That pool is a relatively small investment compared to what some Florida HOA’s have undertaken by owning the premier facilities — golf courses — built to ‘enhance residential property values.’
If you are a developer in Florida, and want to really be able to jack up the sale price of new homes, build a ‘golfing community’. Talk about ‘enhancing’ property values.
According to Law.com:
A common model in Florida is for the community to be governed by a (HOA) and the golf course is separately owned, operated and maintained by a golf club.
There are usually two options for such communities if you own property: Mandatory golf club membership, meaning if you buy there you must belong (and pay membership fees) to the club, whether or you play golf or not… or if club membership is not a requirement of home ownership, you must pay a user fee to use the course. Either way, the mere presence of the golf course supposedly increases the property value of those owning a home in that community. It certainly increases the home prices.
The PLPOA is proposing the second option, rather than mandatory membership. But that can present different long term financial issues — and the PLPOA gym will be owned by the POA, which can only exacerbate those issues.
For example, what happens when operational, and maintenance, costs increase — as they inevitably will — possibly to a point where they exceed the income from user fees? Apparently that’s a not-uncommon scenario for golf course communities here in Florida.
Here’s how the article I linked to above describes that situation,
…without a requirement in the Declaration that all members of an HOA shall become members of the golf club and that they shall pay a golf club membership fee, the income generated at voluntary golf clubs is frequently inadequate to sustain the relatively high costs of operating and maintaining a golf course. To further exacerbate the problem, additional capital eventually becomes needed when golf course greens and bunkers need to be renovated and rebuilt after years of use.
In terms of maintenance, and future capital expenditures, a gym certainly is not a golf course. But the principle is same.
If the PLPOA does not make paying a membership fee for the gym mandatory for all homeowners, it’s possible that the cost of maintenance will eventually outrun the income from fees… unless fees are raised correspondingly, which could ‘price out’ some users… possibly leading to the same shortfall.
Then what? Does the gym close, like the pool Mrs. Beatty was using? Or will there be future assessments charged to the homeowners?
Speaking of future assessments. I mentioned that ownership of the gym by the PLPOA can exacerbate them. I presume the PLPOA carries property owners’ liability insurance to cover their exposure for operation of the current recreation center. Liability insurance was briefly discussed at the Association meeting on January 8, but questions remain.
Will the cost of insurance for a gym — which, presumably, will host athletic events with a higher risk for potential liability, entail higher premiums than those associated with what commonly occurs in a recreation center?
If the PLPOA opts to forego the increased cost of such liability insurance, the question then becomes, what happens if a lawsuit against the gym results in a settlement beyond the resources of the PLPOA? Would that result in assessments against the member property owners?
I have no dog in the fight about the PLPOA gym. Like Mr. Hudson, I’m “simply an interested journalist”… who may have readers who belong to the PLPOA.
Being at the stage of life what some would call “an active senior,” the gym sounds like a good idea to me.
Notice I said “sounds like,” rather than “is.”
I’m just askin’ questions.