Town Hall on Mid-Year Finances Draws Few to First Live Meeting

An OVA Town Hall on July 6 – the first live meeting in over a year – drew a smattering of attendees to the Berger Center but provided a wealth of information on the association’s reserves and mid-year finances. The hybrid event, also offered on Zoom, made use of significant audio-visual upgrades integrated with wall-mounted remote cameras and computer equipment.

            OVA President Tom Kendrick said the timing was related to the upcoming physical inventory of OVA’s assets required every three years for the Asset Replacement Fund (ARF) under California’s Davis-Stirling Act and to share final figures related to the purchase of the Oakmont golf courses. 

Robert Browning, whose company conducts the reserve study, reminded participants that the inventory is not an engineering or safety inspection. “It is a budget planning tool whose goal is to create an equitable, stable funding plan so everyone pays their fair share for the maintenance of the association’s assets,” he said. Costs are already fluctuating, according to Browning, due to minimum wage increases to $15 an hour by 2022 and supply chain shortages.

            Browning described OVA’s reserve plan as “conservative” since the amount put into reserves –$1 million in 2021 — exceeds the annual inflation rate. Based on the reserve study, the current replacement cost for Berger, the CAC, East and West Recs and the Maintenance building components is estimated at just over $11 million.

            Besides the ARF contribution, the $5,770,254 budget for 2021 includes $1,630,200 for personnel and $1,843,614 for other operations; $900,000 earmarked for the Capital Improvement Fund (CIF) and $481,440 for social memberships in OGC.  Mid-year expenditures are “essentially on track,” according to Kendrick, who noted payroll is way below since several budgeted staff positions have not been filled during the pandemic while fire mitigation work will likely come in above estimates. “Any variance of 5 or 10 percent at year end will be rolled into reserves and used to reduce 2022 dues,” he added.   

            Reviewing the circumstances that led to the OVA purchase of the Oakmont Golf Club in February 2019, the OVA president said the community got “a golf course that seems to be healthy” for $6,430,338.  The total includes $4,337,380 in initial purchase costs, $1.2 million in capital improvements at The Oak (formerly the Quail Inn) and $884,183 for a union pension settlement due OGC’s former employees. “The overall costs were covered primarily using money borrowed for the purchase, augmented with reserves available in the CIF,” Kendrick said. Oakmont Village Property Corporation, a subsidiary wholly owned by the OVA, manages golf and related operations.“Business is exceeding estimates in terms of golf, and hospitality is moving into profitable operations that will see benefits to all of us,” Kendrick said, adding the $8.50 monthly social membership OVA pays for residents could be reduced with increased profitability. 

            The newest reserve study asset is the Happy Trails Dog Park which was budgeted at $190,000. A ”bonus” inspection after the city approved the construction required $22,653 in additional costs for work on the deck, fencing and trail modifications. Currently in the planning are three shade areas using sailcloths. 

Also singled out by Kendrick and other Board members was the new Berger floor paid for with $130,000 from ARF. The hardwood replacement is part of an on-going “Berger refresh” that will include painting Oakmont’s main meeting space and sprucing up the bathrooms, installing a gas log in the fireplace, replacing the stage curtain and window coverings, more efficient lighting, some new furniture and cabinets and other non-permit work.

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