Lake Carroll News A publication of the Lake Carroll Association and its Members The Lake Carroll News is online! www.golakecarroll.com News & Events>Newspaper November 2019
What’s Inside
Craft, Art, & Holiday Fair - A Success! Page 10A
The LCWC Blanket Project makes warm comforting quilts for children. Page 11A
Board Meetings Nov 22, Annual Mtg Dec 1, Dec 27 (if needed) 2019 ANNUAL MEETING Sunday, December 1, 2019 Clubhouse Lower Level Registration 11:30am Meeting 12:30pm
2019 ANNUAL MEETING NOTICE By Donna Beyer, Communications Director In accordance with the By-Laws, “Meetings of Members” found in Chapter 33.20-33.26, notice is hereby given of the Annual Meeting of the Lake Carroll Association will take place on Sunday, December 1, 2019. General business of the Association for the 2019 year will be the topic of order. This meeting will be held in the lower level of the Lake Carroll Clubhouse. Registration will open at 11:30am, followed by commencement of the meeting at 12:30pm. Please present your LCA Member ID Card at registration. You will receive your Annual Packet containing the BOD Candidate Ballot, Voting Proxy Card, and all pertinent materials in early November. Review all information and instructions carefully to ensure your ballot and proxy are properly validated. Only members in good standing are eligible to vote. Vote! Your opinion is important. This is your opportunity to be heard. REMINDERS: The Annual Meeting mailing is scheduled for an approximate mailing date of November 2, 2019. The mailing will be sent in 4” x 9” black & white Lake Carroll envelopes. All delinquent dues & Association fees (mowing, marina concession charges, citations, chlorine bills, etc.) must be paid in full to exercise your voting privileges concerning the BOD election, the 2020 Budget, By-Laws amendment, and other matters presented at the 2019 Annual Meeting. If you were paying your dues on a quarterly basis, the final quarterly payment was due October 31, 2019. As of November 1, 2019, $100.00 late fees have been added to all unpaid quarterly accounts. Late fees were also added to unpaid 2019 August mowings. Ballots for the BOD election must be received by Thursday, November 21, 2019. They are to be mailed in the envelopes provided with the mailing. Those envelopes may also be dropped at the First State Bank of Shannon or Lake Carroll. Do NOT drop your ballot(s) at the Admin Office or mail them with your Proxy; they will be VOID in either of these events. Please read the instructions carefully. Proxies for the 2019 Annual Meeting may be returned to the Association Office any time prior to the meeting on December 1, 2019. Once again, Please read the directions included in your Annual Meeting packet. Unsigned proxies will be voided.
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President’s Message
Dear Fellow Lake Carroll Members,
During the past year, our Lake Carroll Board of Directors has sought to run our Lake Carroll Association as we would run our own business. We have, along with teams of experts, examined every bit of financial information we could uncover. Current year performance, as well as previous years performances, were analyzed. We performed Tom Bogusevic detailed reviews of our monthly financial Board President statements with our management team. We even implemented sophisticated modeling techniques to predict our Association’s projected financial fixed asset needs decades into the future. In addition, based on our monthly operating cash flow projections, we have invested our spare cash that previously sat in non-interestbearing accounts or low interest checking accounts into secure higher earning investments, all within the guidelines of our new Investment Policy. We are rebuilding our financial reporting system in order to report financial results in a more timely and accurate manner. We have rebuilt our membership system and transformed it from a real estate focused system into a member focused system to better manage our business. Our new payroll system has been installed and it is streamlining our payroll process. It electronically collects data and helps minimize time spent doing clerical tasks. As a reminder, the new system replaced 6 separate “systems” that had evolved over the years that collected labor data for payroll. Our new website is being designed and the initial rollout is expected in the next few months. We have consulted with outside management companies about more efficiently operating our golf course and restaurant amenities. Our Lodge renovation program is in process and we are considering plans that could, over the next several years, propel the complex to once again becoming the center of winter recreation. We are awaiting a comprehensive plan for the repair of our roads, which will include areas of curbs and gutters as well as our numerous parking areas.
Vol. 47 No. 11
As you know, the collection of dues from all members has been a problem for many years. Our traditional collection process includes loss of amenity privileges, fines, and eventually a lien being filed against the property. Foreclosure is not a preferred solution as the cost often exceeds the market value of the property. So, in effect, there has been little consequence to not paying dues. Eventually, the past due outstanding bills have been written off after two years. However, over the years, we have continued tracking these “written off” receivables in our operating system. We continue to invoice the annual dues to the total due as well as applicable fines each year. These accounts continue to sit in collections as the past due amount increases. This is now changing. We have addressed the issue this year by looking at every one of the more than 2200 active accounts in our system. Remember we built our 2019 budget around 2100 dues paying members. We have approximately 150 problem member accounts that represent many years of delinquent dues and fines. In some cases, the member is deceased (yes, we have continued to bill and fine the deceased) and other cases the members have moved, filed for bankruptcy, are in hospice, etc. Each “written off” account has a unique story and some of them are heartbreaking. As a result, in 2019, we offered members an opportunity to negotiate an exit from Lake Carroll. Approximately 55 members responded. To date, 28 negotiations are completed, and the properties have been returned to Lake Carroll. Approximately another 20 are in the negotiation process. By the end of the 2019, we should have an arrangement in place with Sperlonga, a credit reporting company. This company’s goal is assisting Associations similar to Lake Carroll, to recover past due amounts. With Sperlonga, a consequence for members that are not paying their dues will include a negative credit report. The write-offs of uncollected dues and the accumulation of operating losses over previous years has a consequence for our Association, as well. The consequence is found in our cashflow. It has become routine for our Association to “run out of cash” in late November or early December. We have a $600,000 line of credit, but to avoid interest charges we have used the dues paid by members in December for the CONTINUED ON PAGE 5A
The Time Is Now
Our vote to approve our 2020 budget, mailed to us in early November, 2019, is critical. Our Board has voted 7-0 to recommend this budget. Unanimous. Please vote yes to our recommendation. There are important reasons below. “If you fail to plan, you are planning to fail.” Benjamin Franklin A Business. Lake Carroll is a business. Yes, our business has all the aspects we Steve Mack look to enjoy; Lake, golf course, aquatic Board Treasurer center, roads, clubhouse and lodge facilities, campgrounds, trails… and, for many, a getaway and solitude. Our financial goals are shared and must consistently plan for our present and future. We are looking to level our dues, but first our finances must be stabilized. Immediate challenges have been identified and are being addressed for our present and future well-being. In just the past 11 months, your new Board and General Manager have taken a tremendous amount of time to examine our financial structure with a goal to plan for our present and our future. Check out our President, Tom Bogusevic’s article for how far we’ve come in such a short period of time. Budget. Our Budget. Dues total is $269 more than 2019 for a total of $2,025 annual or $176.75 per month for those who choose to pay by ACH (automatic checking account draft). Below is a breakdown of the 4 major categories being addressed in the budget: Losses ($59 of the total $269 increase), Fixed Assets and Fixed Asset Reserves ($85), Operations ($64) and loss of members ($61). “Live today like there’s no tomorrow.” Quote from Jerry Spinelli. 1. Losses ($59). $59 of the $269 total increase. Yes, if you are not already aware, Lake Carroll is carrying significant losses on its books. We might say “why would a loss matter if we are a non-profit organization?” Like your home checkbook, the effects are immediate and if not addressed by recovering the loss, then the effects are cumulative. Explanation. What if your employer pre-paid you all of your earnings in January and you needed to plan how to spend those funds to last until the following December 31? You’d have to budget. It’s
done by individuals every day, month, year. And, budgeting leads to long-term plans. Save some here, invest some there, plan to spend at different points. Yes, a budget. Many teachers understand this. Work and get paid for 9 months and budget for 12.
Board member Alan Cazzato put it this way: “What if during the year, you are collecting a paycheck every month. You did an excellent job planning all of your expenses and are right on budget, and in some cases, under budget. Then, your employer lets you know that you are not going to get paid in November and December and will have to wait until January to get your next paycheck! So now, you have a shortfall of revenue (i.e. dues paying members), but you still have to pay your mortgage, utilities, etc. What do you do? You have to borrow the money and/or not pay your bills for November and December. Come January, you are still behind because you do not have the funds to catch up. This is what has been happening at Lake Carroll.” But what if you could get paid all up front – sounds great, right? Maybe not! For many – maybe most – the temptation to spend may be too high. What if an emergency comes up in June? Your December may be in jeopardy! Can you imagine running a business that way? Have you figured out where this is going? Lake Carroll has always collected a majority of its dues by January 31 of each year. Our Association must then plan how to keep those funds available for upcoming payments and projects throughout the year and save some for future years. It starts again every January; a budget. However, this year, Lake Carroll is expected to use its 2020 dues income, collected in December, to pay its 2019 bills. The same was done in 2018. This practice has developed over years. Most should see this as unacceptable and risky business. The Time Is Now. Your Board is addressing this with a multi-year plan to become current. “Planning is bringing the future into the present so that you can do something about it now.” Alan Lakein. 2. Fixed Assets and Fixed Asset Reserves ($85). Two parts here: CONTINUED ON PAGE 5A