SCA PSYCHICS AT WORK! IT DEPENDS?

In the September 2023 Spirit Magazine Co Authors Greg Swenson BOD Treasurer and Mike Quinn, Finance Committee member partnered with Andy Muha, Chair of the Finance Committee to describe and define what is a reserve study and to support the 5 Year Reserve Study( 2024-2028).

Here is an opposing opinion as to what was asserted. I support funding the Main Reserves at 100%.

Mr. Muha asserts that “ To be at 100% , we would need to contribute an additional $5.9M to reserves in 2024, or $829 per residence.” He continues, “ So what is the “ right” percentage, is it 68%, 80 % or 100%?” He states “the answer- ‘it depends.”

First, increasing the Main Reserves would be done gradually over about a 5 year period( not one) through a combination of tight control of spending and gradual assessment growth to the Main Reserves. Doing it all in 2024 was just a “straw man” tactic to oppose the 100% funding idea. The fact is that over a number of years the board has drained the reserves from a previous 90% standard to where if this 2024 budget is ratified the reserves at the end of 2024 will be 68.4 % if the board spends the projected Reserve Study amount. To most rational people that percentage is underfunding.

Two previous board Treasurers and members of previous Finance committees, Forrest Quinn and Jim Mayfield both have sounded the alarm against the current board’s mishandling of the Main Reserves. Jim Mayfield has said , “The Main Reserves are a mess and ought to be brought back to the 90% standard that was customary when I served.” He also mentioned that the current method( Thresh hold Funding) used by the board’s Reserve Specialist is the least preferred and reliable method for funding and has been widely rejected by HOAs across the country.

All Reserve Specialists agree that funding the reserves 100% provides the best protection for homeowners from the unexpected and insulates them the best from possible special assessments. No psychics needed. Mr. Muha’s answer remember was , “ It depends.” And that we agree on. However he asserts that “ the reserve balance over the next five years is more than adequate to maintain SCA’s assets in top- rate condition.” What happened to, “ It depends?” Psychic? His conclusion is flawed by his own words. Like he knows what will happen the next 5 years including what happens to the restaurant’s deficit financing. He doesn’t. Could there be two unexpected events? It’s happened elsewhere. That’s why 100% Funding is the safest method to protect homeowners. This Board’s and Finance Committee’s judgment puts all homeowners unnecessarily at risk.

Steve Anderson , HOA President, on Nextdoor earlier when defending the board’s pending actions for the Reserve Study and Assessment Component for the 2024 Budget said.” The key point is do we have sufficient cash flow to meet our planned and unexpected needs.” Really? Another psychic?

RY on Nextdoor responded to Mr. Anderson by saying,” As far as your argument that you are funding for the unexpected is pure contradiction because you cannot measure the unexpected.” “ The disaster with the Villas on your watch documents that. Their reserves were underfunded and the unexpected happened.”

Exactly! Mr. Anderson’s position is clearly refuted. Just more bad policy. In addition, what if Hurricane Hillary had hit us hard and/or an earthquake caused significant damage? Or both? The current board and current Finance Committee minimize or ignore the risks. Is their priority to spend more of your money? Funding Reserves 100% will slow that down and create financial health and stability for SCA homeowners.

I urge all homeowners to show up at the November Budget ratification meeting and vote to reject the 2024 Budget. Here’s the joke. It takes 90% of homeowners to show up and vote NO to reject the 2024 Budget. Would I be too arrogant to suggest that will NEVER happen. You say , ” It depends!”. Fine. Elections matter. That’s the only way to fix this. Join me in supporting like minded competent candidates in the 2024 Election. We need some serious personnel changes. That’s what the psychics are telling me. LOL!