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Looking Forward: A Report by OVA Board Leaders

Frequently Asked Oakmont Questions

These questions and answers were developed through a wide-ranging discussion during December by Oakmont News editors with OVA President Steve Spanier and Vice President Tom Kendrick. Answers on Oakmont Golf Club-related questions were written by Kendrick and answers on other subjects by Spanier.

The OGC Question

 Q: What philosophies and strategies underpin OVA’s approach to the OGC question?

A: OVA’s OGC strategy has always been based on two main philosophies: 1) If there are things OGC has that OVA could benefit from (for example, land, services or facilities), OVA could make a deal with OGC to acquire those in exchange for money, which OGC needs; 2) OGC failure hurts OVA because hundreds of Oakmonters live on one of the two golf courses and thousands use the courses or dining facilities (or both) each year. As community amenities go, it’s one of Oakmont’s most popular.

The board and our local real estate agents believe housing values in Oakmont will decline if the club disappears, or even if Oakmont golf is compromised. Oakmont was built around the two golf courses and they have always been a central component of our community.

 Further, we believe Oakmont gambles with the future of our community should it lose control of OGC land. Some might say that Oakmont doesn’t currently control that land. While this may be true technically, it’s not true from a practical perspective. The OGC controls the land now and the OGC board of directors largely consists of owners who live in Oakmont and care about the community.

 If OGC is forced to sell to an outside for-profit corporation, profit will be the primary motivation for everything that happens to the land from that point on. This is not necessarily in Oakmont’s best interests.

 Eventually, because the most valuable use of the land is for homes, the land could be sold to a deep-pocketed developer willing to wait until they can change the zoning to create new homes. This will increase Oakmont housing density, which will require larger facilities to serve the extra people (not to mention the decline in Oakmont desirability due to decreased open space).

 From the standpoint of fiduciary responsibility, then, the board believes it is our obligation to work with OGC to determine if a mutually agreeable arrangement can be made. This does not by any means imply that OVA will do whatever it takes to protect the OGC’s viability. Whatever is done must be in OVA’s best interests.

Q: Why would OVA provide money to OGC when OGC has yet to prove it can successfully manage a golf club?

A: It’s undeniable that throwing money at a problem indefinitely doesn’t work if the problem is systemic. This approach just diminishes the likelihood the root problem(s) will ever be addressed.

However, OGC has survived for about 25 years. During much of that time, its financials have been reasonably solid. Over the 25 years of its existence, OGC leadership has changed many times. Several extraordinary circumstances have happened in the last year or so that have significantly worsened OGC’s situation.

 Many golf clubs are operating at break even or better, so we know it’s possible to do so, even in the current climate. The same is true for hospitality businesses like the OGC’s food, beverage and events component. The question is, what is the formula for success here in Oakmont?

 OVA believes an OGC business plan should be produced by a competent, independent, outside agency. Any potential lender to a struggling business would expect a thorough business plan before they commit funds.

 Such a plan should include a complete analysis of current financial conditions, both within the OGC and in the golf industry, a set of proposed actions (each of which to be associated with pro forma projections of revenue gain or expense reduction leading to profitability predictions) and timeframes in which the proposed changes would result in financial improvements.

 If the OGC leadership team, working with Kemper (the OGC management company), executes a solid business plan created by an outside entity, the result should take the OGC to financial stability.

 Q: The OGC is a completely separate, for-profit corporation. Capitalism ensures the survival of the fittest and, as a whole, everything works better when strong businesses flourish and weak businesses fail. Why should OVA intervene in this natural, regulative process?

 A: Whether the OGC is a separate piece of paper filed in some office in Sacramento (that’s what California corporations are) is not the issue. The issue is whether its success or failure affects our community. We believe it does.

 Q: Golf is a dying sport. Why should OVA consider throwing our money at something that’s dying? 

A: Most evidence shows golf is a contracting, not a dying, business. The spike in golf popularity that occurred just after the turn of the century resulted in golf course overbuilding. Now, less healthy courses are failing. The market will stabilize when it contracts sufficiently.

Inspired by the success of Tiger Woods, golf has strong support from our country’s youth. New youth programs, including Youth on Course, The First Tee, US Kids Golf and Hook a Kid on Golf have been created in recent years and are thriving. The professional game is stronger than ever, with more depth than ever before and exciting new stars. As a result, high school and college athletes who previously would have chosen baseball, football or basketball now often choose golf instead because the money is there. With a thriving senior professional golf tour, the earning period for professional golfers is much longer than for other sports. No one has a crystal ball, but we believe golf will be with us for many years.

 Q: OVA has not been as transparent about the OGC matter as it has been about other issues. Why not?

A: As most Oakmonters know, the OVA board was asked to sign a non-disclosure agreement with the OGC in order to see detailed OGC financials. Signing this document meant it became not just inadvisable, but illegal for the board to disclose what it learned.

 One can question whether signing the NDA was a reasonable thing for us to do, but we believed (and still believe) that OGC business could decline significantly if a full understanding of OGC’s financial situation created doubt that resulted in less revenue for the club. It was and still is in neither the OGC’s nor the OVA’s best interests for this to occur.

Q:What IS the current financial state of the OGC?

A: It’s up to OGC to say what they will about their situation. However, recent hardships such as poor air quality from the Paradise fire and delayed receipt of loan proceeds have not helped. OGC has taken steps to compensate (including restricted hours at the Quail Inn, closing the East clubhouse and cutbacks affecting their maintenance staff), so it’s no secret that OGC faces ongoing financial challenges.

Q: What will happen if the OGC cannot sustain itself financially?

 A: The OGC will be forced to sell the club or, failing that, to declare bankruptcy (which would also ultimately result in a sale of the club). Whether the club is marketable at the price the OGC would ask is unknown.

 Should the club be sold, the buyer would probably try to continue to try to make a go of one or both of the current businesses (golf and hospitality) in order to keep money coming in to offset expenses. Likely buyers for the club would be developers and companies that own and operate golf courses.

 Q: Why not close the East Course?

A: Closing the East Course, or even nine holes of the East Course, would decrease OGC revenues by more than any potential savings. The resulting profit decrease will make the situation worse, not better.

 Q: Why not lease the F&B (hospitality) service?

 A: Most knowledgeable parties agree that OGC upside potential is greater on the hospitality side. In the middle of wine country, a strong hospitality business can make money. Leasing this service would take away potential upside from the OGC financial picture.

Q: Why not sell the club?

 A: OGC will not sell the club unless they believe they have to, but if they do, community influence over 225 acres in the middle of Oakmont would likely be lost forever.

 Q: Why not buy the club?

A: This might be a good long-term solution, but there are two issues: 1) How would OVA raise the money? and 2) This would require a strong, credible business case, which has yet to be developed.


The Berger/Central Area Question

Q: What is your strategy with regard to the Berger/central area?

A: We’ve always said our strategy is to consider the central area holistically.

 Q: What does that mean?

A: It means that, rather than just renovate the Berger Center, we’re looking at a variety of options for not just the Berger Center, but the entire central area.

Q: What options are being considered?

 A: Options include those considered (briefly) by the previous board: 1) to renovate the Berger Center, 2) to create a new, potentially larger Berger Center in the same spot, and 3) to create a new auditorium elsewhere in central Oakmont and repurpose the Berger Center. 

Q: The Berger project is the most important one for Oakmont. Why work on any projects, particularly the dog park, before Berger?

 A: Because we’re not yet ready to commit to a central area solution, while we are ready to commit to a dog park solution. Deciding what should be done in the central area is the most complex question Oakmont has ever faced. It can’t be done quickly because it depends on a thorough needs analysis, community input, consideration of options and very careful planning and execution.

Q: What is wrong with just renovating the Berger Center, as the previous board had planned?

A: We believe it’s time to consider whether Oakmont is best served by other options that may provide greater value per dollar than renovating the Berger Center.

Q: What is this “Downtown Oakmont” project I’ve heard rumors about?

A: We think this rumor may have started with a “blue sky” discussion at a long-range planning committee meeting. That committee’s job is to brainstorm and discuss ideas that might create a better future for Oakmont. In any case, there is no active “Downtown Oakmont” project. If the committee ever comes to the board to recommend something like this, you’ll know about it.

Q: For future construction projects, why would we ever spend money before the project has been approved and a permit issued?

A: Because at a minimum, we may have to do inspections, tests, and other investigations before we can even define a project. We may need to do soil, seismic, noise, or other testing before we can complete a permit application. Some of that testing may be required before we complete a design. We will need a design and project specifications when we apply for a permit. All of these things take time and cost money, and results from one of more or the tests or investigations may result in the project not being feasible or justifiable in a particular location or at all.

 Also, past projects have proceeded without a thorough understanding of the overall undertaking. OVA is in the process of adopting an oversight process to address this, and the process involves engaging professional services during early definition to provide guidance and exploration of potential options and opportunities. Prior to approval, OVA will need to spend money to ensure that it’s sensible to go forward with each project.

Q: Why does it take so long for an inspection or a design to be completed? 

A: Inspectors and designers have gotten much busier since the fires. The best inspectors and designers are booked months or years in advance. If we contract with one of these, we must wait our turn in the queue.

 Q: Why do we have to deal with cost overruns when we could get fixed price contracts with fixed time tables?

 A: Building contracts can use two cost structures: 1) fixed price or 2) time and materials. With the former, the contractor bears the risk and burden of overruns. In the current post-fire market, few if any contractors are willing to bid on a fixed-price basis. And, even if they were, fixed-price contracts generally carry an upfront premium.

In Sonoma County’s current construction climate, because available work outstrips available help, fixed price bids will include huge contingencies to protect the contractors. Contractors won’t risk losing money when there’s so much work available. Further, if a contractor makes a fixed price bid and finds during project execution that they underestimated costs, they will be tempted to cut corners with quality in order to not lose money.

Time and materials arrangements, coupled with a reliable, ethical contractor, means neither the contractor nor the customer needs to be on the hook for surprises. It’s fair for both parties and usually yields the best quality work.

 Putting a sufficient contingency in each project’s budget based on a thorough understanding of the uncertainties and risks of the work will help in keeping the project costs aligned with expectations.

 Q: Why don’t we require three bids for all projects?

 A: This is one of those ideas that seems good at first glance (and previously was very common), but withers under scrutiny. Since the 2017 Sonoma County fires, the law of supply and demand has forced construction costs to unimagined heights. Good contractors are booked years in advance.

 Oakmont must use good contractors because they’re doing work that will affect our residents for decades. Poor or even mediocre quality may be tolerable in an individual home, but it’s unacceptable for a building that will serve tens of thousands over 30 – 50 years. Further, general contractors for commercial projects need to work with subcontractors they know and trust. More than with a residential contractor, commercial general contractors recognize that their reputation is paramount.

Q: Why don’t we just take the lowest bid?

 A: As stated above, for commercial work that will serve many people over decades, this is not usually the best strategy. Other factors, including professionalism, competence, and availability are also essential. Usually, you get what you pay for.


The East Rec Question

Q: Why was the East Rec project so over budget?

    A: A better question would be: Will Oakmonters get strong value from this $2.78 million project? The answer to that question is yes, definitely.

 Q: What is the actual cost overrun and why did it happen?

A: The initial overall ERC project budget was approved in June 2018 for $2.26M, so the actual cost overrun is 23%. This was caused by a combination of post-fire increases in material and labor costs, problems uncovered while digging and breaking into walls, and a substantial increase in the contingency allowance. 

Expenses for this long-overdue project remain consistent with the current market. The ultimate amount paid will be based on the work performed, and better foreknowledge of these costs, while desirable, would not materially change this. The value of the facility when reopened will more than justify the overall investment. 

Q: What is Oakmont doing to ensure more accurate cost estimating on future projects?

A: In June – well before the emergence of any ERC “discoveries” – the board approved a more formal oversight process to better understand and more accurately budget major projects. There are five phases: 1) identify and assess the opportunity, 2) generate alternatives and select the preferred alternative, 3) develop detailed specifications for the selection, 4) execute the selection consistent with the specifications, and 5) close the project and do a “project lookback.”

The OVA board plans to do a public “Phase 5” retrospective analysis on the ERC project to help us better anticipate costs and requirements for major future projects.

The process will ensure better understanding of major OVA projects by thoroughly analyzing detailed plans and specifications in advance of starting work.  It will provide better community visibility of big projects and aid in coherent scheduling and financial plans.  Because the process calls for early contributions by professionals, it may or may not result in lower overall project costs. Regardless, it will provide a foundation for more accurate budget estimates, as well as explicit recognition of unknowns and risks using range estimates in the early phases and appropriate contingency allowances during execution.


The Dog Park Question

Q: Why build a dog park now when so many other projects are so much more important?

 A: Because we’re ready and see no reason to delay. Dog owners deserve a spot for their dogs to run without leashes. A dog park is a common amenity in active adult communities. We can do this while working on other projects.

Q: Almost $200 thousand for a dog park seems really high. Why can’t you just put up a fence and call it a dog park for much less money?

 A: It would be nice if this were true, but it’s not. Based on input from a consultant who has created more than 20 dog parks, dog parks of this size typically cost $300- to $400,000. Permitting and ADA requirements alone cost tens of thousands of dollars in Sonoma County. This amenity will support thousands of visits per year, will cost Oakmonters only about $40 per person (one time only), and will serve Oakmonters for decades.

Q: It doesn’t seem like many people need or will use a dog park. Why create one here in Oakmont when there are dog parks close to Oakmont that Oakmont dog owners can use? Most Oakmonters will have to drive to the park anyway.

A: Rough estimates indicate somewhere between 500 and 1,000 dogs in Oakmont. Not all dog owners will use the park, but there are now and will always be many dog owners in Oakmont who appreciate this amenity. Having our own dog park will encourage social interaction between Oakmont residents (as well as Oakmont dogs). It’s a common checklist item for those looking to move to active adult communities.

 Q: Don’t you care at all about the fact that neighbors will be impacted by the dog park?

A: We care about all our Oakmont neighbors. If there was OVA land available that wasn’t located near Oakmont homes, we’d consider it, but there aren’t many available sites. This one, we believe, is the best. The current site isn’t visible from the homes on Silver Creek (unless you climb onto the roof of two of them) and is well away from all other Oakmont homes.


The Transparency Question

Q: Why is Board transparency such a challenge?

 A: HOA boards get dinged for lack of transparency all the time, but I believe most HOA Directors, both here in Oakmont and elsewhere, are interested in being as transparent as possible all the time.

When boards become less transparent over time, it may be because they recognize that, the more information they provide, the more they’ll be confronted by those who don’t like the information being provided! It’s a “shoot the messenger” kind of thing – very natural, but not terribly pleasant.

This is why civil discourse is so important. The less civil the discourse, the greater the reticence of any board to work on community improvements they know will subject them to attack. Over years of this happening, problems pile up. This has happened in Oakmont. Volunteer boards comprised of community members don’t enjoy being insulted and losing friends over decisions they make, so they sometimes become less forthcoming (and less active) over time.

 Another byproduct of this unfortunate dynamic is that fewer people want to run for the board when they know how unpleasant it can be to be a board member. Even committee members can be targets.

 Oakmont needs good governance to thrive. When public service subjects one to rude behavior or personal attack, good candidates are less likely to volunteer their time.

Q: Will this board become less transparent over time?

 A: We’ll do everything possible to prevent it. The fact that we make public a lot of information (including this “question and answer”) that we know will draw fire should indicate we care more about transparency than we care about what people say about us.

Q: If transparency is truly a priority for you, why not just let the community vote on all big decisions?

A: Some decisions do require a community vote, including changes in dues exceeding 20% year-over-year, and special assessments exceeding 5% of the association’s annual budget. For other decisions, the OVA bylaws delegate the responsibility to the OVA BOD. That said, large decisions can, and will be made transparently, using community input and providing visibility into the decision process.

There are many reasons for delegating most decisions to the elected directors. First and foremost, it is written into our bylaws. Oakmont  – like most civic institutions – is a representative democracy, and has been throughout its history. Oakmont homeowners can affect the Oakmont political scene by voting into office those who have committed to sweating the details on all community decisions so others don’t have to. Delegating decisions to the OVA BOD also provides a mechanism for timely resolution of even complex matters and avoids a substantial amount of administrative effort and expense.

The bylaw revision committee may propose a change to this policy, but it’s very hard to change the bylaws, especially for something like this, so a community vote is probably so unlikely that it’s a poor expenditure of time and energy.

Community decision making has other potential problems. For example, our lawyers tell us it may subject Directors to lawsuits. Why? Let’s look at an example.

 Let’s say the board allows the community to vote on a big issue and the community votes in a way the board doesn’t think is in the community’s best interests. If the option for which the community voted is implemented and, over time, creates problems, those residents can sue the Directors for inappropriately giving away their fiduciary responsibility. Based on California law, there’s a reasonable chance those residents would win that lawsuit.

Of course, if there is a provision in the bylaws allowing this, it might be difficult to prove negligence on the part of the Directors. But, again, the hurdle to change the bylaws is a high one. 

In addition, defining the details for such a vote will be an enormous challenge and sure to fuel endless arguments. Should votes be based on projects exceeding a particular dollar amount? Should votes be for new construction and not maintenance projects? In that case, what about multi-million dollar maintenance projects like the East Rec? Who creates the options upon which the community votes? Some residents will want to have input on such decisions. Where do we draw the line? Wherever we draw it, people will be upset.

 If the community is presented with, say, three options for an entire project, such as the three central area options mentioned previously, how can anyone choose without understanding all the details? And, if they know all the details, wouldn’t many people then say “well, I like this option best, but I don’t like X, Y and Z, so change those things.”

Most of us don’t have detailed knowledge of commercial construction, nor do we want to try to acquire it to vote intelligently on construction-related decisions. Numerous tradeoffs regarding value for money need to be made as well as countless other decisions. On what basis do residents make these decisions?

Further, it would cost the OVA significant money to prepare for and execute elections, and it would stimulate lengthy marketing battles fought on social media, via email and in print, which would cost even more money and take even more time (and probably pit resident groups against the board, which will surely want to lobby residents in order to prevent results they believe would harm the community).

Some recommend non-binding community votes as a potential solution to these issues. But non-binding votes would still have some of the previously mentioned problems and would ultimately result in a no-win solution. If the board goes along with community opinion and enacts change that later goes south, they are subject to lawsuit. If they go against community opinion to act in a way they believe is in the community’s best interests, they would lose community trust.

Perhaps the biggest problem with requiring a community vote for major decisions is ensuring participation.  Even in the annual elections for the OVA BOD, only slightly more than half of the votes are submitted.  For most decisions, not even that many would vote,  Even with modest thresholds required for passage it seems probable that few, if any, decisions would receive sufficient support to be enacted.

 It’s easy to suggest solutions that, at first glance, appear to be reasonable. It’s the board’s job to think through the execution of possible solutions to determine whether they’re actually practical, effective and would provide good value.

 Q: What has this board done to improve transparency?

A: We’re very proud of our results in this area. First, new member packets are provided prior to each meeting, giving residents more detail on what is to be discussed. Second, resolutions in these packets help meet the needs of Robert’s Rules of Order and indicate exactly what the board will be discussing and voting on. Third, we’ve added OVA Board meeting summaries in the Oakmont News. Fourth, we’ve already had a number of town hall meetings and will continue in this vein. Fifth, a new standing committee is enhancing transparency and community education. Sixth, this interview and similar vehicles provides background and rationale for many sticky issues by answering specific questions. Seventh, fireside chats allow directors to address any and all questions asked by audience members. Eighth, neighborhood gatherings emphasize neighbors getting to know one another and allows residents to express their concerns about various Oakmont issues. Ninth, President’s Messages in the Oakmont News and on the Oakmont website summarize important community issues and set a tone of civility, education and transparency. Tenth, we’ve expanded the Friday eblast to include more useful community information. Eleventh,weekly East Rec progress reports provide descriptions and pictures of the work as it progresses. And finally, we’ve restarted workshops to provide in-depth analysis and discussion of issues critical to Oakmont.

As time goes by, we’ll continue to look for new ways to let you know what’s happening in our community. Your suggestions are always welcome.


Financial Questions

 Q: Where should our reserve levels be, and why?

A: Reserves are a complicated issue, but in general OVA should have a balance in the Asset Replacement Fund (ARF) that will adequately cover at least the assets that are expected to require replacement in the next one to two years.  While a “percent funded” target is helpful, this number shows only a portion of the overall picture, because OVA reserves need to cover current and future new short and medium term assets out of the ARF, and the Capital Improvement Fund (CIF) – not part of the “percent funded” calculation – must anticipate needs for longer-lived assets and our buildings. We need to assess reserve funding levels by considering both contributions and demands out at least five years in our budgetary planning.

Q: Every time you get a loan, you force the OVA to spend more money. For example, a $2.78M East Rec project becomes a project we will have spent well over $3M by the time we pay off the loan. Why do you favor loans as a strategy for large capital improvements?

A: Loans are not free, so they do add to costs. At the same time, loans allow us to do two desirable things: Realize benefits sooner and spread costs into the future so they can be borne by the future OVA members who will use them.  For major projects, loans provide the money needed to do work quickly, while still maintaining adequate reserve levels that can be used to cover any unexpected expenses. 

The loan negotiated in late 2018 was taken primarily to ensure adequate reserves. Although the levels in the reserve funds were sufficient to cover the planned costs of the ERC project, the balances remaining by early 2019 in both reserve funds would have fallen below what is prudent. Money from this loan will be drawn when needed in 2019 and added to the ARF and CIF to ensure that reserves are available in both funds to cover asset expenses as we encounter them.

 For very large projects, such as dealing with our more than half-century old Berger Center, loans can be used to spread the costs into the future, where they will be paid by the residents of Oakmont who will be benefiting from the improvements.

Q: We’ve seen radical dues increases over the last three years. Why is this necessary and when will be able to “level off” on dues increases?

A: Oakmont faces at least two current financial challenges: 1) our major facilities have all required significant attention in a short time window, and 2) one of Oakmont’s major sources of money, developer fees (which accounted for millions of dollars over the last 13 years), are now gone. OVA directors plan to do everything possible to moderate any increases through this period of major venue revitalization, after which dues should stabilize and increase only modestly.

Q: Why are we spending money on “special interest” projects that will only serve a fraction of Oakmont?

 A: Virtually all of us use some of Oakmont’s amenities, but none of us use every amenity. In this sense, every amenity we have is a “special interest” amenity.

Deciding whether to add amenities to Oakmont is not easy. It depends on two things: 1) how many would use the amenity, and 2) how much the amenity costs to create and maintain.

No board would choose to add an amenity that serves only a handful of people and costs millions. Every board would choose to add an amenity that costs a few thousand and serves thousands. In between these two extremes, choices are less clear.

 Because the community’s mission is to provide social and recreational opportunities for our residents, and because the demand for amenities changes over time, Oakmont leadership must continually evaluate the need for new and existing amenities and react accordingly.


Other Questions

Q: Why is it so hard to change the bylaws?

A: It’s been about 25 years since Oakmont changed its bylaws and changes are way overdue. But it’s a tough hill to climb because it requires over half of all Oakmont homeowners to vote for the changes. Many Oakmont homes are occupied by renters, so those ballots are mailed to the addresses on file for owners, many of which are property management companies. Although these companies are legally required to provide these to the actual owners, some probably fall through the cracks and, even if properly delivered, many absentee owners are disinterested in community governance issues and throw them away.

In our recent election, a total of over 1,900 properly voted ballots were received, which is over half of our 3,200 or so homes, so it’s possible to change the bylaws even with the current community composition, but approximately 85% of a typical number of voting homeowners need to vote “yes” to approve the changes. Such a supermajority is very difficult to achieve and is realistic only in cases where a change is inarguably necessary.

Q: Why do you want to attract rich people from the Silicon Valley and San Francisco to Oakmont? Aren’t you worried about forcing out those who can’t afford the huge dues increases and possible special assessments that will entail?

A: We have no plan to attract rich people to Oakmont. Even if we did, such a plan would be useless because, unless a board or combination of boards makes Oakmont utterly unattractive to most potential buyers, forces beyond the control of any of us will determine who moves into Oakmont over the coming decades. These forces include 1) the beauty and amenities of our location, 2) our proximity to high-value neighborhoods from which people might want to retire, 3) the relatively high percentage of detached homes here (which offers more privacy), 4) the fact that a significant number of our homes are large and on big lots, so they are appealing to high-net-worth individuals, and 5) our relatively good weather.

As an example of something beyond our control determining who moves into Oakmont, let’s consider the sharp spike in Oakmont real estate values in the first part of 2018. Local real estate agents will tell you this was due to people who were burned out of their homes moving from areas like Fountaingrove. Who could have foreseen this price spike that brought many high-net-worth individuals into Oakmont from Fountaingrove and similar neighborhoods?

Q: Why can’t you do things to help those who have less money?

A: We’d love to do this. We have considered and will continue to consider many possible solutions.

 Solutions considered include determining dues based on property value, use of facilities/amenities, or some other criteria, setting up a program where OVA can take a position on the homes of those who need additional liquid capital, and other solutions still actively being considered.

A differential dues structure (dues based on property value, use of facilities, or some other criteria) is currently forbidden by our bylaws, which dictate that there should only be a single membership class (Article 2.1). This bylaws clause was meant to protect a founding community ideal – that OVA dues should be the same for everyone and everyone who pays those dues should have access to everything. When people buy into our community, they understand this and tacitly accept the idea that, for all of us, our facility usage will likely decline as we age.

Still, we’re not giving up. We’ve been searching for ways to ease the burden of our struggling members since we were elected, will continue our search for a legal option, and will let you know when we have something more to report.

Taking a position on the homes of those with equity and cash flow issues is plagued by several problems. First, how do we determine who falls into this category? Using PG&E’s CARE program has been one suggestion, but PG&E doesn’t verify that you qualify before putting you on the program. They can require you to submit tax information, etc. when you’re in the program but it’s not a gate to get in. It would be hard for us to verify the person is legitimately in the program. PG&E has people recertify every 4 years if they’re on a fixed income (about $32,000/yr for a one or two person household). We would probably have no way of getting that recertification.

The second problem with this idea concerns avoiding issues with heirs who don’t want their estates diminished. Children or other family members sometimes see a lien on their parents’ property as taking advantage of an elderly person who doesn’t understand his/her finances.

We recognize some Oakmonters have trouble making ends meet and we will continue to seek solutions so as many people as possible can stay in their homes as they age.