May 2015

Decision Making and Tahoe Donner Association: Who, What, Where, When, Why

As a large-scale homeowner organization, Tahoe Donner Association is registered in the state of California as a California Mutual Benefit Corporation, and with the IRS as a 501(c)4 social welfare organization. With a budget of over $21 million, our association is regulated by both federal and state regulations which cross a diverse array of areas. It also has a set of governing documents (covenants and restrictions, articles of incorporation, and bylaws) which, along with the California Corporations Code and the Davis-Stirling Act, provide for very specific governance of the association, much like all corporations in California.

The board of directors is the governing and elected authority for the association, and as the general manager, I serve as their principal employee and agent who employs and works with our great staff to deliver a wide variety of services to the membership in keeping with our strategic plan. The board’s specific authority is clearly defined in our association’s governing documents. Corporate responsibility, known as fiduciary duty, requires them to act in the best interest of the association and the adherence to the reasonable business judgment rule.

Board members are elected annually by the membership on staggered terms of three years, with required voting quorums, which in recent years is about 25 percent of the 6,471 owners. With each annual election, articles are published in the monthly magazine, email blasts are sent to the owners, and hard ballot mailings are sent to all eligible owners. Yet, in spite of these communication efforts, we only receive roughly 25 percent membership participation rates. However, there are two other activities that owners take part in annually that has a higher turnout of involvement by the entire ownership interest: paying the annual assessment and purchasing the recreation fee. Approximately 98.5 percent of our owners pay their annual assessment on a timely basis, which is significantly high compared to industry standards. And, just over 60 percent of Tahoe Donner owners purchase their optional recreation fee. Even the recently popular
Nextdoor.com, a private social networking service for specific neighborhoods, indicated approximately 565 participants from Tahoe Donner. In recent years, our post-season operational and general plan surveys ranged in participation between 200-1,300 members (6,471 owners, 25,000 members), but even these small data points help shape board and management decision making. The Town of Truckee recently ran an online survey regarding the 96-gallon yard waste program for the entire Town of Truckee. The Town’s survey resulted in more than 1,000 responses with just over 500 participants from the Tahoe Donner subdivision. Certainly, no magic survey solution on every major or minor issue of the association has produced anything close to a majority of owner participation. As a result, a governance model has been set up for corporations so they can take appropriate and timely action for the corporation.

However, past results will not deter us from continuing to seek greater membership awareness of issues and participation in our established governance structure.

The annual growth rate of the association and the annual assessment has been a subject of some feedback lately. As presented in the November 2014 issue of Tahoe Donner News, our director of finance and accounting discussed the 2015 annual assessment and the three primary drivers behind the 2015 increase:
1.    $48 for replacement reserve funding
2.    $53 for the state of California increase in worker’s compensation insurance, and
3.    $98 for drought-induced reduction in operation revenue. This loss in revenue is due mostly to the Downhill Ski Area’s shortfall from the past three years, and to which the installation of snowmaking equipment will curtail the loss of future revenues.

Tahoe Donner was not developed as a retirement community, or as a fixed-income housing development. From its inception, it has been an outdoor recreation community with well-documented plans, goals, and regulations covering its activities. Therefore, the elected board of directors, staff, and our volunteer committees utilize several major documents to guide their decision-making process. The annual budget process, the actual performance of amenities, the development of strategic plans and goals, and soliciting membership feedback, are each guided by prescribed stipulations. Specific to the annual assessment calculation, there are a few detailed processes that the association utilizes to make decisions that impact the assessment. The annual budget process includes comprehensive finance committee meetings, and multiple board meetings to review and discuss every aspect of the annual budget, starting in late August — and continuing through October. All meetings open to the membership, and meeting minutes and overviews are published to the membership monthly.

The major influencing factor of capital investment annually is the 2030 General Plan, which is currently being updated by the General Plan Committee. There are numerous opportunities for membership input during this process. With regard to development projects in the General Plan, these are funded with the development fund, which is included in the annual assessment. The development fund portion of the assessment has not gone up since 2011, and is not proposed to increase.

Please be assured that your association closely adheres to proper guidelines from the state and from our governing documents. Overseeing all of this is the ultimate responsibility of the board of directors — one which they take very seriously. Over the next several months you will see more membership engagement efforts to solicit your valuable feedback, while also providing more information on future plans and decisions once made that impact the membership. Already, you can find a new link at the top of the Tahoe Donner website titled “Feedback.” This link directs members to our webpage which will contain all our active membership surveys along with options to provide feedback on any topic.
Summer is rapidly approaching and the amenities and trail system are looking great for your summer fun.

Lastly, don’t forget to review the enclosed 2014 annual report!

Robb Etnyre | General Manager