"Sign" Language....

Kelly,

When we borrowed the money for the clubhouse it was in an amount large enough to handle unforeseen contingencies. Due to your excellent management the project came in on budget. At the time, we discussed taking a surplus of money from the loan and prepaying it back to the bank. Due to the current economic conditions I believe we are better served by keeping the money in reserve, since future credit may be difficult to obtain.

But I am not in favor of a continuation of the policy of "we have the money, so let's spend the money." The sign is currently mounted on the side of the clubhouse, it is perfectly legible, and while it will not win any sign of the year awards, it does all that a sign needs to do. If you took a perfect stranger to the clubhouse I don't think that they would say, "what a beautiful clubhouse, it's a shame you have such a crappy sign." And if you had this new and wonderful sign, I don't think they would say, "it's a really nice clubhouse, and boy what a magnificent sign."

It always seems that the right time to save money is on the next project. Whether money is budgeted or not, whether money is available or not, the real question is: Do we really need to spend the money? You don't work your way out of debt by always choosing to spend the money on marginal issues.

"But, a decision needs to be made and it might as well be made sooner than later" What exactly is the rush? Are we hearing, "Oh, I would have rented the clubhouse, but it has such a crappy sign!" If that is the case, then the sign is actually affecting business. If not, then can't we take time to consider "the principle" we will be working under.

Kevin

Kevin watches the flow of expenses and keeps his eye on our reserve account as I mentioned in the previous post.  Some non-board members are sharing their opinions.....

Lynn S. emails:

Kelly, I read your blog and Kevin's reply. Here's one home owner's opinion for the board to consider if there is further discussion on whether to authorize the sign expenditure...

The board was very wise to maintain/increase the value of the clubhouse property; the benefits to the community are many. If the current sign clearly identifies the building and is in good condition, then I see the expense for a new sign as frivolous. I'd rather see you take the $500 and add it to reserves or use it to promote a rental stream for the facility. You can pay the loan back faster if the club house can offer some ROI.

Theresa emails:

I am torn as to replace the sign or not. Yes, Kelly's point is valid, the sign which is currently posted looks tired and worn. Since the remodeling of the clubhouse, it would be nice to finish the project including the exterior sign.

Since I am a new owner in the Edgehill group, I would like to see the clubhouse look as appealing as the other buildings and the entrances to the neighborhood. The way I see the $$$ issue is you can spend the money now, spend it later or let it collect interest. Which ever option is chosen has to be accepted.

It would be nice for the clubhouse to be a shining jewel in our community and I see no issue with replacing the existing sign as part of the clubhouse renovation capital.

Hmmmm.......both sides of the issue are articulated rather well.  

TO LYNN:  Our 2009 budget estimates that we'll "earn" $500 in rentals from the clubhouse.  It's December 2nd, 2008 and we've already secured $450 worth of rentals for 2009 and haven't hit New Year's, yet.  Our ROI on the clubhouse rentals are charted at $50/day so it's slow and steady if at all making making money off the clubhouse.  One resident booked 3 rentals for late this year...After a personal tour, he booked 5 more and we greatly appreciate it.  Another regular renter had to hold on rentals because we were repairing the clubhouse.  He hasn't returned but we wish he would.

Regarding an option to hold the borrowed cash in an account and not spend it....our savings accounts aren't earning a return 1/2 of what our loan's interest rate demands in payments.  We lose money by holding high interest rate funds in low interest rate accounts.

And, the matter at hand is over an amount of money totaling 8/10ths of 1% of overall renovation expenditure.

Regarding "needs" and "wants" - we don't need a pool, clubhouse, lake or walking trail.  We want them by virtue of living here and checking out the neighborhood before buying or renting here.

However, we'll vote on a sign at the meeting next Tuesday (12/9) no matter what.  Up or down will be the decision, but the clubhouse renovation matter should not enter 2009 over a sign.  We need a clean slate of responsibilities.

BY THE WAY.....

Tell your interested neighbors about the blog and invite them to participate with comments, questions and written offerings of any sort!  

The board members are getting emails and a few residents who aren't on the board have trickled in to get "in the know."  Hang around long enough and you may consider us fairly effective or total fools - at least you can make an informed decision after watching us in action.  :)

KMc