DECEMBER, 2020
www.diamondheadms.org
President’s Report By Ernie Knobloch
n the last few years, Diamondhead has been named one of the Top Ten best places to live in Mississippi due to its amenities, quality of life, access to quality employment, education and affordable housing. MSN Money named Diamondhead The Best Place to retire in Mississippi due to its amenities, quality of life and proximity to a variety of other activities. Diamondhead was also named as the Smartest City in Mississippi due to the overall educational level of the residents. Based upon the number of new houses being constructed, Diamondhead, at this time, is a desirable place to live and raise a family.
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My recent monthly articles have reviewed the financials of the POA, Covenant expiration, and what negative changes will probably occur if a substantial number of dues are lost. All of us are in this together and we’re at a crossroads for determining the future of our community. A summary of our situation follows. Although covenants in some areas are in perpetuity, covenants in most areas have started to expire and others will expire between now and 2029. Most of the covenants were written about 50 years ago. There are 30-plus sets of covenants. Renewal of covenants generally requires a minimum of 85%
of the property owners in each covenanted area to vote positively to renew covenants. This would be difficult. For at least the last 10 years, POA Boards should have been exploring ways to solve the covenant expiration situation. Unfortunately, many previous Boards ignored the problem completely. As covenants expire, City Ordinances will take their place. If we did not have a City with ordinances in effect, we would fall under Hancock County Ordinances, which are designed for rural areas. The POA is responsible for running and maintaining amenities valued at around $20 million. Dues contribute about 50% of the revenue re-
quired to maintain our amenities. The remaining 50% of revenue comes from fees such as golf, food and beverage, POA lot sales, etc. About 43% of property owners pay their dues yearly, usually in December or January. We do not have sufficient figures at this time to be able to predict how many property owners will continue to pay dues after covenants expire. We will have more accurate figures after the first quarter of 2021. The POA, depending upon the response of property owners, may lose at least 2/3 of the revenue from dues by the end of 2022 and almost all the revenue from dues by the end of 2023.
VOL. 37, NO. 12 If revenue from dues decreases significantly, the POA will not be able to maintain all the amenities. Amenities will have to be closed, sold, or given to another entity. Loss of amenities, according to the Hancock County Assessor and local real estate personnel, will result in lower property values for all of us and make DH a less desirable place to live. Loss of property value in other communities who have experienced loss of amenities range from 15% to 45%. If legal battles ensue, property value losses become larger. Property value loss varies throughout a community due to numerous factors. Consider driving to the St. Andrews area of Ocean Springs and tour the area. The area lost one modest golf course, which has never been repurposed. We have far more amenities than one golf course.
DEADLINE FOR THE JANUARY ISSUE OF DHNEWS IS DEC. 10
The POA is in the process of making the POA more open, consumer friendly and efficient. There’s a limit to how much can be cut/reduced and still provide a desired level of service needed to our community. The POA is also starting to work on the order of closing amenities if that’s required in the future. No specific decisions have been made at this time, but time is starting to run out for logical, specific decisions to be made. The negative publicity generated from closing amenities would influence the ability for all of us to sell our property as well as impact the price paid for our property. The decline of property values along with the halting of home construction would mean future loss of revenue (property taxes) to the city, Hancock County and the
SEE REPORT, PAGE 2