At the start of this year, Continental Country Club (CCC) faced several serious financial obstacles that threatened the future operation of our Association. Collectively, they resulted in the Board’s decision to file for Chapter 11 Reorganization.
Today we want to address one of those three items in more depth: our need for adequate funds to both maintain our 50-year-old facility now and have a healthy reserve for planned, and occasionally unplanned, obligations in the future.
In truth, the financial shortfall that we face today could possibly have been avoided if today’s financial needs had been anticipated many years ago.
To that end, the Board unanimously approved having Reserve Advisors create a Reserve Study for CCC. The plan, completed in late 2020 and posted to the Owner Portal in January 2021, looks at what our financial needs will be to maintain or replace CCC assets over the next 30 years.
The Reserve Study provides the Board and our community with a long-term plan for the maintenance or replacement of Association assets, based on their anticipated life. Knowing the cost to properly maintain the club is critical to understanding the revenue that will be required in the future to do so. Beginning to plan now will help to ensure that our Association won’t face these types of financial pressures in the future.
The Reserve Study has proven an important tool in the Association’s Chapter 11 Reorganization process as we consider a special assessment and/or possible increases to annual dues.
One of our members recently asked, “Without going into details, what is the likely financial impact of the restructuring and implementation of recommendations in the reserves study on homeowners?” The Board is utilizing financial models that were developed to help us project “what if” scenarios over different timeframes utilizing the comprehensive data available in the Reserve Study.
We strongly encourage you to familiarize yourself with the Reserve Study available on the CCC Owner’s Portal. The 3-page Executive Summary at the beginning of the report alone is very informative.
If an assessment is suggested as part of the reorganization plan, part of the revenue raised will be used to start to build the reserves needed for the future indicated by the Reserve Study.
We have received many thoughtful comments, opinions and suggestions from our members in response to these ‘THINGS TO KNOW’ messages. Please contact us at board@continentalflagstaff.com as we appreciate your feedback!