Some simple facts for all owners to consider:
The Governance Committee was established to address more active engagement in the POA by owners, to seek a path to self-governance, and to shape how our POA will be structured after Coastland is no longer in control.
The Governance Committee clearly represents the attitude, thinking and will of the vast majority of Ocean Sands homeowners. This is confirmed by a survey of all owners conducted January 2017, in which 92% of respondents approved of removing Coastland’s control.
Currently, Coastland makes all revenue and spending decisions for OSPOA. This includes determining dues amount and choosing how money is spent. An owner -controlled board of directors would allocate our funds in the interest of owners and with the input of all owners.
With that said, there are three overarching questions we have heard during the past year from owners:
- How can we possibly get free of Coastland?
- We developed the process that was successful for Crown Point and is now underway with the Written Consent Amendment distributed for homeowner signatures and notarization on 4/27/17.
- What will our new OSPOA government look like, how will it operate with Coastland gone?This has been touched upon several times. Another specific email addressing this question is coming shortly.
- A reasonable question from many is: How will removing Coastland’s control impact my dues? There is a worry that achieving good, focused community improvements will mean large dues increases.
Here is the Governance Committee’s considered opinion on the impact to owner dues:
There is ample evidence there should not be a need for any dramatic dues increases, such as the $100 increase imposed by Coastland in 2016, followed by the additional $20 increase for 2017.
We can demonstrate the veracity of our position by looking at a five year average of certain Revenue and Expense items from 2012 to 2016.
- The POA (Coastland) collects an average of $388,136 in dues income annually
- The 5 yr. average cost for all the various Management Services (Coastland’s take) is $97,453 or 25% of our income. These funds will be redirected to paying for a professional association management firm which will report to and take direction from the new board.
- The 5 yr. average cost for Legal Services: challenges to Currituck County efforts, conflicts with OSWWD, refusals to abide by basic NC non-profit law, etc. equal $28,738. This is 7.5% of our income all of which would be unnecessary if we achieve self-governance.
- There has been an inordinate portion of the POA annual budget dedicated to opposing wastewater, stormwater and Greenway bike path progress. The five year average for Coastland to fight these objectives of Currituck County and the vast majority of owners was $52,314 or 13.5% of the POA annual income. These expenses would not exist if Coastland was not: litigious by nature, contesting changes that improve Ocean Sands and Corolla, and unwilling to work with owners to develop a unified vision for the Ocean Sands community.
- Coastland incurs business expenses operating their offices. That amount, $22,885 or 5.8% of annual income is then charged to the POA. These costs would not continue at all, since there will be no need for equipment leasing, telephone and utility expenses
In summary, more than a quarter of our income (26.8%) is being spent on efforts which oppose the interests of the owners, delay efforts to improve the quality of life in the community and distract all from the real needs of the community. The 26.8% is the sum of the last three bullet points above. All of the amount in the first bullet point (25% of income), plus some portion of the 26.8% (decided by the new board) will be spent hiring a professional association management firm. Over 50% of our money goes to Coastland in one form or another with minimal benefit to Ocean Sands. While Coastland continually harps on providing “below market” management services, Ocean Sands has received minimal value from these services.
The remaining moneys will be allocated to Association needs such as roads, landscaping and funding the Capital Replacement Reserve. Also, it is clear that some additional savings will be wrung out of the expense budget with a new POA Board of Directors. This will come with the application of best management practices, a real RFP bidding process to reduce costs, and taking owners desires into account in allocating resources.
It is clear that a combination of smart association management and reducing non-productive spending, the existing dues structure is adequate to soundly operate OSPOA for the foreseeable future.
Now that you have read this email, please send your signed and notarized Written Consent Amendment to the attorney.
The Governance Committee
Al, Rick, Jeanne, Robert, Jim, Chris, Greg, and Dennis
PS: Our sister community, Crown Pointe, now enjoys self-government. Coastland has no participation in their affairs. Their annual meeting lasted less than two hours, it included lots of laughs and total agreement on the needs of the association and how their money will be spent.