Special Committee 2012 Proposal
At the January 19th, Board of Governors meeting, the Special Committee 2012 presented a proposal on dues structure. The Board would like to share this presentation with the membership so that they can get feedback on how the membership feels about this proposal. Please see the attached proposal. If you have questions, you can send them to Bog@hiawathaclub.com to be forwarded on to the Board to be answered. Your questions and answers will be included on the website for others to see so they can learn from them.
If you have comments that you would like sent to the Board, please email them at Bog@hiawathaclub.com or send your comments to the office. Of course you can always contact them directly also. See our governor’s web page for contact information.
Respectfully,
Lester Livermore, Manager
Questions from the Board of Governors and the Special Committee answers:
1. How will this affect dues? (Board of Governors)
In the short term the transfer fees will make up for the initial lost revenue for memberships being turned back to the Club. In the long run as the returned memberships are attached to third tier lots the Club has held in reserve, the dues plus the assessments not previously being paid on these memberships, will make the Club secure for years to come as they once again are put into service. (combine with the property lot information)
2. What will the effect of this proposal be on third tier lot owners?
Members owning one lot/membership will have little immediate impact on their dues and assessments, but in the long term these members’ assessments could be lowered. Some members may own multiple non contiguous third tier memberships for the purpose of speculation or to just hold for family. These multiple non contiguous lot owners’ costs will be charged per the 2011, current by-laws. While multiple contiguous lot owners will be relinquishing their additional memberships for the good of the club and paying a standard transfer fee to accomplish this task. The current transfer fee per membership is the equivalent of a current annual dues amount.
3. What will the financial impact be to the club?
Club financials will be neutral through 2016. Following that, it will depend on the number of new memberships sold and the pricing of those memberships. Spread sheet attached as addendum.
4. How many members does this directly affect?
261 members with 428 memberships. Regardless of the actual number of families involved, the right thing is being done for the future of the Club. Fifty foot wide lots plotted in the 1920’s for summer cottages no longer apply for a home with modern appliances never dreamed of in that era. Homes now not only have inside plumbing and two or three bathrooms but a kitchen, utility, living room and bedroom spaces never imagined. Many of these summer cottages are now owned by retirees for year around homes. A great many of the Club’s third tier lot members will eventually wish to live here all summer if not the year around and will purchase a home or build one once they reach retirement. They will see no reason they should have to retain several memberships either.
5. What membership lots are considered contiguous?
Contiguous is side by side, back to front, and corner to corner excluding easements such as a road
6. Why aren’t non-contiguous lots included in the proposal?
Members who hold multiple lots with attached memberships spread throughout the Club do not hold these lots for the support of their home/cottage. It is by choice that they hold these non contiguous properties. They may continue to do so if they wish. Proposal One took into account that a member may secure a second membership for a family member or for future sale at the 30% dues rate. Also, the effect of Proposal One had a greater impact on a significantly larger number of multiple contiguous lot owners, rather than non-contiguous lot owners. If this proposal allowed for noncontiguous lots to be combined into one membership, we would end up with parcels of ground, all over the club, with no membership attached. To sell this type of lot a member would have to buy a membership from the club and re-attach the property to it. Please note that no system governing property choices could ever cover all possible circumstances. (Can’t hold separate lots w/o memberships attached.)
7. Why is this good for the entire membership and not just a few?
The requirement to hold multiple memberships to provide for a home under the current Club rules is seen as a forced situation due to lot sizes. Owners who have purchased their property at the fare market value and pay the required annual property tax were holding several Club memberships at a reduced membership fee and no assessment. The assessment is even larger than the membership fee. This system left members with a single membership carrying a much higher share of the cost of the Club on their membership. The change requires no one to hold more than one membership unless they choose to hold more.
8. Isn't the club rewarding multiple lot owners at the cost of the single lot owners?
No! Under this proposal everyone is a "Member" of equal standing, not a one, two, three or more membership member. Any member purchasing extra lots must pay taxes on those parcels. There is no penalty to the Club or other member that comes from owning 50 or 100 feet. Every member will pay the same annual dues for their membership. Again, as these transferred memberships are sold, the dues burden and assessments will be distributed more equitably to each member and should lower as time passes.
9. Why should members vote for this?
This proposal has the affect of solving the problem of home ownership on the Club without changing the original concept that members are truly owners of the Club and its property. This proposal will make it fair and equitable to all members’ cost of belonging to the club by stopping the decline in primary dues paying memberships and by stopping the increase of assessment costs caused by dividing the operating costs of the club by a smaller number each year. This proposal brings about a long term solution to the financial support of the Club, puts all of its members on an equal level and assures that a few do not pay an inordinate share of its operating costs. Providing a more equal footing is probably the greatest advantage of this proposal. This is by far the most equitable solution for providing equality of membership costs well into the future.
10. Once a contiguous lot with membership has been combined into one membership, can one of these lots be withdrawn from the single membership and either sold or gifted as a primary membership?
The answer is yes it can, however, not without a price. While these memberships were originally transferred to the Club, they have been applied to 3rd tier memberships. In order to sell the existing non membership parcel created by transferring that membership back to the Club, it must be repurchased from the club at the then prevailing price and the membership reattached to the property in question.
11. Are lot that are separated by an easement or road still considered contiguous?
Yes, as long as they meet all of the other requirements they are considered contiguous.
