What’s going on with the Special Assessment?
We have had some inquiries about the plan to “reward” those members who voluntarily paid in the $250 special assessment that was needed to keep the hotel open a couple years ago. As many members know, we had developed and put forth a plan to reduce the maintenance fees of those who did make payment for the next 3 years, leaving a $50 difference as a “reward.” At the time that plan was discussed and OK’d by the board, there was a significant number of members who had NOT paid in the special assessment. By the time this year’s maintenance bills were being prepared over 90% of members had made payment. This made it seem overly complicated to raise the annual maintenance fees by $75.00 for all members, then issue coupons for that same $75 to the 90% plus who had made the payment. This would create a lot of extra work, processing, and bookkeeping. It was decided at that time that it was a lot more sensible to just ADD the $75 as a special assessment to those maintenance bills that had NOT paid the $250 special assessment and leave the base maintenance fee as is. This will put everyone back on an even playing field.
We have used these payments to complete improvements on the hotel while not raising the regular maintenance fees. Maintenance fees were slated to be raised to $550 or $560 this year in order to continue these improvements. Instead we have been able to keep the fees at $500, which in essence, is the same as giving a $50 or $60 yearly refund of the special assessment. As you are aware, we have not raised maintenance fees in five or six years. In fact, our goal is to lower fees as our room revenues increase. We are beginning renovation of 25 of the bathrooms prior to the start of high season and plan on completing the remainder of the rooms after high season ends. We will also be updating the interiors by providing fresh paint, new bedding, mattresses and draperies once the bathroom renovations are completed and as funds allow. Improving our property will improve our revenue which will ensure that our fees can be kept to a minimum.
Comments
Mitch, I’m sorry but some of this does not make sense to me. How in the initial plan, can reducing maintenance fees by $75 per year for three years can make up for a $250 payment AND leave a $50 difference as a “reward”? It seems to me that 3 x $75 = $225 (still $25 short of $250, and absolutely no “reward”. If the plan were for four years, then I can see it (4 x $75 = $300, hence the $50 “reward”). Perhaps this was a typo. Also, you say that for those that have not paid the $250 special assessment, you are going to add a $75 assessment to their maintenance bills, but for how many years?
Further, you maintain that not raising our maintenance fees to $550 or $560 is the same as giving us a $50 or $60 yearly refund. This time your math is OK but the example is not. You could just as easily say by not raising our maintenance fees to $1,000 you are giving us a $500 refund! Mathematically still correct, but of course, it is nonsense. It is akin to saying I’m only going to kick you in the shin fifty times instead of 55. Aren’t you happy?
OK – I’ll try to work through the math once more. I know it’s confusing – it had me going for a while too:
IF we presume that the maintenance fees are left at $500, and we presume that you have paid in the $250, the plan WAS to raise the maintenance fees by $75 to $575 AND give those who HAD paid in their $250 a “coupon” for $75 for 4 years. (I think the “3 years” might be my error) which would make the maint. for those people in effect, $500, and after 4 years they would have “saved” $300, a net gain of $50. HOWEVER! When the time came to actually DO this, we discovered that MOST of the members HAD paid in the $250, so it would have been a big freaking mess to RAISE the maintenance fees, then PRINT and mail “coupons” and keep track of everyone’s payments to make sure the coupon was applied correctly etc. The Treasurer wisely decided to bag that whole complicated scheme and just add $75 (or, I suppose, $75,$75,$75, $25) to the maintenance fees of those who had NOT paid until the deficit was brought even. The issue of “rewarding” those who made the payment when first asked is still under consideration since the original plan went by the wayside.