NOVEMBER, 2020
www.diamondheadms.org
VOL. 37, NO. 11
The president’s report: Dues are vital to community well-being By Ernie Knobloch DHPOA President
s written last month, the DH POA has the fiduciary responsibility to maintain all our amenities which are valued between $15 million-$20 million. If the amenities are not properly maintained, there’s the distinct possibility that the land/amenities could revert to the developer and no one knows exactly what would then occur. Most residents seem to agree that such a move would have a detrimental effect on all our property values. Currently, member dues represent about 50% of the approximately $6 million in revenue for the POA every year. The remaining 50% comes from user fees, food & beverage sales, facilities rentals, sale of POA owned lots, etc. The expiration of covenants creates a great deal of uncertainty in future POA dues collections. The chart
A
YEAR
DUES LOST IF 100% DO NOT PAY
DUES LOST IF 30% CONTINUE TO PAY
SEPTEMBER HOME AND LAND SALES IN DIAMONDHEAD Single family: 21
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
$201,453 $733,764 $1,302,247 $1,877,048 $1,958,880 $2,006,294 $2,053,708 $2,053,708 $2,053,708 $2,060,757 $2,070,180
$287,790 $1,048,234 $1,860,234 $2,682,012 $2,798,400 $2,866,134 $2,933,868 $2,933,868 $2,933,868 $2,943,938 $2,957,400
ALL NUMBERS ARE CUMULATIVE
below shows the effect that a reduction in collecting dues could have on POA revenue. The figures were determined by two separate methods and both methods ended up with the same numbers. The projected numbers were determined by how many lots lose covenants each year and the month in which the
covenants expire. The numbers each year are cumulative. If the above occurs, at some point soon, the POA will not be able to maintain all our amenities. Decisions will be made based upon resident reactions to the dues situation. The POA Board is working on a budget for 2021.
Approximately 43% of members pay their dues on a yearly basis, normally in December or January. Nine sets of covenants expired in June 2020. Additional covenants expire in December 2020 (1 set), June 2021 (1 set), July 2021 (7 sets), and August 2021 (4 sets). This means that we do not have any accurate figures to base
revenue for 2021. At the present time, most Board members seem to agree that a budget will be passed for 2021 with the understanding that possible significant budget revisions will have to be made after the first three months of 2021. Covenants continue to expire almost every year for the next nine
DEADLINE FOR THE DECEMBER ISSUE OF DHNEWS IS NOVEMBER 10
Townhouse: 0 Condo: 4 Lots: 7 (all cash sales) Cash: 10 Conventional loan: 7 FHA loan: 5 VA loan: 3
CURRENTLY LISTED FOR SALE Single-family homes: 56 (low inventory) Townhouse: 0 Condos: 9 Lots: 64
years, and in different months each year, so revenue uncertainty will continue. POA members, as well as the POA Board, will have to make decisions soon that will affect our community for years to come.