MANDATORY MEMBERSHIP IS GETTING TOO EXPENSIVE AND
HARDER TO LIVE WITH BY THE DAY AT DELAIRE
The cost of Delaire Resident Membership for the year 2017, as stated in Mark Zucker’s December 27th 2017, letter is a “sham”. He listed the dues as “$20,744”. It sounds comforting if it were true, but it is not! The “out-of-pocket expenses” that must be added to establish the real and true costs is the real story.
$4900 @$410 per month Clubhouse, $1200 Golf Enhancement, $2600 Supplemental dues, Tax 6% $1800, $3200 tax incl. Nov/ Dec/ 2017 assessment = $33,284. 60% difference between the reported and the actual dues, as stated in our Article, View of New Dues Increases.
We only have 326 mandatory members that share fully. The Board is spending as if we had double the membership. Matching programs with larger facilities is hopeless. As a former COO, I learned that a smaller Corporation cannot match dollar for dollar with its larger competitors. Matching “THE BIG BOYS” with a smaller base ends in bankruptcy and liquidation.
The Delaire Board's "MODE of OPERATION" is to use deceptive language and misleading numbers. Delaire Governance insists using proper business practices and adherence to (GAAP) generally accepted accounting principles. In the corporate world, to “make it look what it is not”, sends the culprits into a Jail cell. That is called “Corporate Fraud”. Reading the December 21, 2017 Board Meeting Report, reminds us “Liars Figure and Figures Lie”. Delagov’s mission is to keep its eye on the truth and report the fake.
The December 21, 2017, Board Meeting Report recorded in the letter of 12/29/17, on page 2, Mark Zucker described the following Mumbo Jumbo [“for the month of November, the club had an operating surplus of $444,081 as compared to a budget operating surplus of $23,794 for a variance to budget of $420,287. Year to date (YTD) the club had an operating deficit of $38,010 compared to a budget deficit of $86,391.The (YTD) positive variance is $48,381. This positive variance is attributed to the $564,605 operating assessment billed in November”. [Sounds like we had a good year]. The real story is quite different. Karpel in his letter of 11/21/17 wrote [“We have an expected operating shortfall in the amount of $543,965,”]. In Nov. /Dec. of 2017 we were billed $1600 tax incl. for the Operating Deficit and the Beautification Program totaling $1,280,000. The board meeting report by Mark Zucker of 12/21/2017, in the Delaire letter dated 12/29/17, is amass with “Liars Figure and Figures lie” We had a huge loss, not a profit, a terrible year. If not for the $1,280,000 mostly from the mandatory members, we would have been insolvent.
We started 2018 with a new dues increase, of $1500 tax Incl. A 7.19% increase over last year. No changes were made toward improvements. No changes to the non-resident program, in spite of our fiscal problems, the board is spending $382,700 more on the golf courses. Wishful thinking is the mantra of the Board of Governors. Therefore, we can expect a continued operating loss in 2018. The 2017 operating loss was over ½ million dollars.Remember the promises made and not kept: “$4.4 Million dollars not to exceed” the promise that with "the new clubhouse and health club our properties values will soar" None came true. As long as we have Mandatory Membership the board has a Bank that subsidizes “bungling”. Negative financing is bankrolled by mandatory members. It’s beginning to look like OPTION III is a solution for the future.
Just a few questions to pin-point why we are running into deficits subsidizing Non- residents (NR) none- resident equity members (NRE) by mandatory members (MM)
QUESTION: NR members pay nothing to retire the clubhouse debt. MM must pay $410 per month. NRs use the facilities more than MM who have homes on the premises.
QUESTION: How come NRE members pay only a $3000 refundable bond to get the same ONE VOTE that MM must pay $80,000 (only $ 1000 refundable) and get a free golf cart?
QUESTION: NR members can just walk away if bits and pieces get intolerable or too expensive while MMs are held captive until they sell their houses.
QUESTION: How is it that no one can put a number on the net proceeds that NRs bring to the bottom line? Maybe because no one wants to face the truth???
QUESTION: How many extra carts and bag staff and parking lot attendants do we need to serve the NRs? We have over 80 NR member’s. 25% of our total membership paying less dues than the 326?
QUESTION: How come NRE members pay $10,000 a year less than MM and get a free cart, free bag storage and subsidized food while MM are required to own a cart or pay $25 every time they use one?
READ ON THE BEST IS YET TO COME
Delaire dues are on the rise, $40,000 is likely. Once that happens it takes our lower priced property values to “0”. Problems with “0” property “IS” as it is practiced at Boca West. A Home Seller will have to compensate a Home Buyer with cash at the closing, to take the property off his hands? When selling a lower priced apartment at Boca West, the seller gives title and cash to the buyer instead of just the tile. The buyer gets both. That is a new phenomenon, brought on by Mandatory Membership, when the initiation fee and the dues “stay” too high. Just walking away from the house is no longer an option. That may happen at Delaire. That is what we mean when we say Mandatory Membership is getting to expensive and harder to live by. Our non-resident membership “bargain” program has made Delaire into a semi-private club, just a fancy word for a Public Golf Course. Home sales and the important appraisals are affected by such a category.
We have about 20 BUILDER HOMES that PAY NO CLUB DUES for up to 24 months. Why should the remaining 304 homeowners subsidize the builders as well as the selling homeowner whose obligation ceases once the house is sold. That $600,000 annual subsidy costs each dues paying member about $2000 per year.
We have 39 houses for sale with more coming on the market as the assessments and dues increase. Turn-over slowed. We sold 12 houses last year to people that add to our Capital Improvement fund. That was 7 less than last year. From 20 sales, 6 sold to builders, 2 were sold to members, none of these added to the Capital improvement fund. The Board stated we need 19 outside sales to stay solvent. Let the AD HOC committee concentrate on necessary improvements instead of re-writing bad bylaws with worse ones. They accomplish nothing but added litigation and more red ink! To save Delaire and return it to greatness our management consultants told us we desperately need a “TURN AROUND SPECIALIST” and his name is not Curtis Karpel. For a quick fix we need a professional outside service that can accomplish the task not an outside voting service as suggested by the AD HOC COMMITTEE.
THEN THERE IS ALWAYS "OPTION III" TO MAKE DELAIRE GREAT AGAIN