April 2016

First, I want to thank those members who turned out for meetings and who provided written feedback regarding the board of director’s review of the Beach Club Marina boat launch and waterline. Following three board meetings, an online survey, and a Town Hall meeting, the board is scheduled to review a series of final recommendations to further improve the member experience and safety of Beach Club Marina boat launch and waterline. These recommendations will be presented at the April 22, 2016 board meeting.

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 or C&Rs, 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 board members to act in the best interest of the association and to adhere to the reasonable business judgment rule.

Board members are elected annually on staggered terms of three years by the membership with required voting quorums of the 6,475 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. Typically, we only see about 25 percent of the owners participate in the annual election. As a result, a governance model has been setup so the board can still take appropriate and timely action for the association/corporation. Board decisions and oversight are regularly informed by a variety of membership feedback as noted earlier with regard to the Beach Club Marina. There is also a communication infographic included in this month’s magazine to help depict these various communication outlets used at Tahoe Donner.

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 resort 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 all decision making processes.

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 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 – through October. All meetings are open to the membership, and meeting minutes and overviews are published to the membership monthly.

The major influencing factor of capital investment annually is our replacement reserve study and a development fund project review process – newly updated this year by the General Plan Committee. There are numerous opportunities for membership input during this process. With regard to development projects, 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.

In the continuing process of developing amenity improvement plans with our volunteer general plan committee, some members have asked for clarification on what type of organization Tahoe Donner is, and why we reinvest in our amenities and support facility infrastructure. As previously noted, Tahoe Donner is a 501(c)(4) federally tax exempt social welfare organization, and a California mutual benefit corporation focused on providing recreational facilities and architectural standards for our community; amenities like the Alder Creek Adventure Center and Downhill Ski Area make a significant contribution to not only the memberships recreational needs, but also the local economy, and the financial viability of our homeowner association business model, which helps mitigate the annual assessment.

Tahoe Donner is not your typical homeowners association, nor should it be confused with other private clubs or tax-based funding institutions. Tahoe Donner was created in the early 1970s as a recreation homeowner resort community with the majority of its amenities and programs open to the public. Our mutual benefit association business model is focused on providing a vast array of recreational facilities for our membership, guest, and the public in keeping with our covenants and restrictions, bylaws, California mutual benefit corporation status, regulatory use permits, and our federal 501(c)(4) social welfare status.

These services are provided for in each year’s budget; the 2016 operating budget is $16.1 million, with an individual property annual assessment of $1,900 ($1,074 for the operating portion of the assessment) contributing $6.9 million of the annual operating budget. Of the $16.1 million, 53 percent is comprised of annual assessment operating funds, and 57 percent ($9.2 million) of annual revenue is generated by our operations (non-assessed). Over the last ten years (2006-2016), the compounded annual growth rate of the operating assessment is only 4 percent. The overall annual assessment increase over this same period has been 6 percent. Of course, we did hold the operating portion of the annual assessment flat for four years (2009-2012) while we caught up on significant shortfalls in our reserve replacement funding level due to previous years underfunding.

The 2016 budget report covered the change in operating revenue assumptions given low snow year averaging along with other key factors. The employer mandate portion of the affordable care act will likely have a significant impact on the 2016 budget along with the new California minimum wage laws. During the period of 2009-2014 full-time benefited employees have only grown from 59 to 64 (measured as of 12/31 annually). However, requirement of the Affordable Care Act will require that number to increase to 85 this year. Total association employees have ranged from 620 to 801 during this time period, with seasonal fluctuation based mostly on weather and operating amenity volume.

Summer is almost here! I look forward to seeing you all out enjoying the great community we share.

Robb Etnyre | General Manager