Swim Team "renting" our pool?

Once again our BOD has decided to provide the swim team with a sweetheart deal for the use of our pool next season. They have around 100 swimmers and get to use our pool M-F from 8:00am till noon. They also host three swim meets each year. Our board is again only charging them $2500 for the season which usually runs from May - July. The swim teams procedure is to try and charge the lowest membership of any of the swim teams in the area in hopes of getting more swimmers, some of which may actually be able to swim.

Do any of you know of swim teams that have to rent their practice pools and if so, what is the going rate for the season?

Tim mentioned a few things worth looking into or bringing up. My question would be how is this money put into the budget? Would it not be taxable income? Is it an owner who is renting it out who has the swim club? What is the connection between the swim club renter and the HOA?

Pools are kind of a double edged sword for a HOA. They are great sales tools to attract potential buyers. People love access to pools without all the maintenance issues of having their own. However, there are many downsides to them as well. The liability if someone were to drown. The care and maintenance expenses. Monitoring the area for unauthorized users...

The HOA board should be considering is this fee enough to cover the expenses of operating the pool? How did they come to this amount to rent it at? If it were our HOA and we did this, I would want to do a break down of costs like the chemicals, maintenance, insurance portion,taxes, and paying the caretaker while they would be using the pool. Since they are using the pool maybe 25%, then I would charge them 25% of the expenses the HOA experiences during their use. That would be the base rate. The profit portion if any would be difficult to set as that would be subjected to taxation.

Another consideration is to make sure this club doesn't have to have any licensing or insurance in and of itself. It would be best if they did have to carry insurance or have a license/registration the HOA have a copy of it.

I am NOT against this activity of renting the pool out to the club. It's a good idea for some pools depending on the useage level of the residents. Why take care of a pool that no one uses? A pool works best when it is being used. It's just that steps should be thought about before erroneously charging a rate and making sure to define the liability issues.

ditto

Based on my experience with some who have posted actions by their boards in this forum in the past, experience with board members in my own association, and my experience as a tax professional, the ASSUMPTIONS are not unreasonable.

It should be comforting to Randal that most who have posted thus far here think his BoD is incompetent.

Others have mentioned tax implications of the consideration charged for use of the pool. But in addition, is the HOA paying property tax on the pool property itself (which I assume is part of the common elements)? In our state, common property is not supposed to be taxed normally. But charging out for its use may throw a monkey wrench into that angle as well. Your BOD should probably run all these tax implications past someone who knows.

Come to think of it, I never have heard anything about the tax implications of renting to the neighborhood swim team. This board has always gone to the one resident who supposedly "knows all" about everything having to do with taxes and they just take his opinion on everything. I've had my fill with the swim team mooching off us. For years all we've heard is how the swim team has been a financial benefit in offsetting our pool operating expenses. They supposedly brought in anywhere from $7k-$12k per year. Even when I was on the Board I kept hearing those numbers. Now, after the fact, we learn that they may have brought in the money but it was going right back out in the form of insurance, salaries, equipment, etc..., ALL of which the HOA was writing the checks for. In reality, at the end of the year, they had only contributed about $1000 towards operating the pool. Now that they're paying $2500, the spin is that we're making them contribute 250% of what they were paying us! Arrrrrgh!

I may just have to write the BOD a letter asking them to explain all these great issues that you have come up with. And when they don't respond, like I know they won't, maybe I should the IRS to look into the situation for the rest of us?

Thanks for the great input. I still want to move out into the country to get away from these BOD yahoos.

Gee, I wonder where we could have gotten that idea?

Quite familiar with the "public" concept. Our Board is going to spend at least $12 MILLION to build two new ski lodges that we don't need to attract more "Public" revenue. Our downhill operation is totally "mom & pop" quality. No private sector company would spend this kind of money on such a wimpy operation. In my opinion it is being driven by the Board's ego, trying to be something they cannot possibly be.

Paul T

This is a question about the renting out of common areas. The dues that are paid by the homeowner would surely include access to all the common areas including the pool. Can a board make the decision to restrict this use without getting some kind of general agreement by all or at least majority of the homeowners. Because many people work different hours, the swim club schedule may restrict their ability to use the pool at the times that are most convenient for them. I would be very hesitant to buy into a place that can take away some of the benefits I thought I was getting when I moved there, although maybe it is written into the contract.

Sorry, don't get around to checking my computer everyday to check emails. As for communications from the BOD, it's almost nonexistent. We get a wimpy little one sheet newsletter each month that's full of nothing. You ask them for information, they provide nothing back. Their thought process is that they're safe because it would cost more to hire an attorney to challenge them in court than anyone would be willing to pay. Unfortunately that does works to their advantage. They spent over $24K in attorney fees suing, and threatening to sue residents for non payment of dues (we supposedly transitioned from a voluntary association to mandatory though the whole process was fraudulent almost from the beginning). They still will not reveal what was learned from the lawsuit that one resident filed against them in Chancery court but that one resident is now "off limits" and doesn't ever have to pay dues again! They didn't even list their street address in the neighborhood phone book this year! The records of that lawsuit have been "sealed" so when asked, the Board just takes the 5th. They announced at the annual meeting last week that they're going to resume using their attorney to go after the "deadbeats".