Changing of the Guard

Our association is now 40 years old and has relied on volunteer boards, directors, etc. Unfortunately, we've had one building condemned and torn down and a golf course that our association had to take over with a $2M rehab loan.

Currently, most residents are over 75. While I don't mean any discrimination, I point it out because most just want things to remain as it's been. Problem is we had our Operations Manager resign and crazy as it sounds, this resident/member volunteered to manage all community operations! And yes he was burned out, he even yelled at a resident just the other day at the pool cause umbrellas were all being removed because of wind...another long story on cheap pool furniture.

My question is can anyone share how it went transitioning from volunteer based association to one that is ran professionally? Specifically, what steps did you take, how'd you overcome "status quo" wows, and how'd you convince the community it was best?

Off-hand, I would point out that paying a professional manager has to cost less than tearing down condemned buildings and paying off a $2M rehab loan.

On the other hand, plenty of people are bad with numbers and even worse with dollars, so this may not compute. Any community that isn't howling over condemned buildings and $2M loans really raises my eyebrows. I also question whether your boards have been doing their jobs properly, because this screams negligence to me, and a professional manager can't fix that - the manager takes instructions from the board, not the other way around.

So the first order of business is training for board members so that they know what they're doing.

Also check what your governing documents and state statutes say. Usually it's up to the board, not the homeowners, to decide whether or not hiring a professional manager is appropriate - and based on what you've said, it seems to be in this case. Your limitations may involve homeowners' ability to vote down assessment increases. I call these provisions a "license to commit financial suicide" and if you have them, you may have problems.

Another potential problem: finding a manager who's willing to take on what sounds like a troubled community.

Timothy,

You'll always have a volunteer board of directors (unless as TimB4 suggests, your CIC ends up in receivership). If your association has been self-managed for a long time, it's easy to forget the benefits and challenges that come with retaining a third party manager.

I'm a big believer in knowing exactly what you're getting into. I hope that you and your peers will spend plenty of time looking before you leap and strongly recommend that you read through Great Expectations!: What to Expect from your Management Company for some ideas that can help. You should not re-create the wheel.

Regards,
Steve

The association consists of 841 units, 192 of that is townhomes, rest are single family homes. We pay $180 per month, $60 goes toward Golf Course ops. Not sure how many volunteer hours, but sure it's pretty high especially OPS since manager is a resident.

Club house decorated in 1990s, pool with Walmart Made in China furniture with no permanent reprieve from Texas sun and heat. Two tennis courts, one with a painted on Pickleball court.

Timothy

HOA's with attached golf courses are getting into financial problems all over. One main factor is younger people are not attracted to golf or the country club life. Older people who were attracted to that life style are also the ones screaming they are on fixed incomes and cannot afford any increases.

The fact that you have never had professional management is a bad omen in that I doubt many of your people knew/know what is in store for them.

My initial blush is sell the golf course. If it is to stay a golf club, then make a lucrative arrangement for an owner to be a member.

Operating income is at least $1.816k per year with $600k going to the golf course. I suspect the townhomes pay a little more because of insurance requirements. Sorry, that doesn't seem "shockingly low".

Here's the real sad thing is that we residents pay exact same amount for membership as anyone off the street. In fact, all we can get is 10% discount on green fees and that requires you to tell pro shop every time. But first words out of their mouths are "are you member?" In fact, if you own you own golf cart and want to get a valued sticker to allow your cart on the course requires you to buy membership...you know kind of like mafia stiff arm.

TimothyB5, in your first post you say the HOA "had to take over the golf course with a $2M rehab loan." Is it correct to say the HOA is now running the golf course as a separate business, said business being open to the public?

I am curious: Was there an owners' vote to amend the Declaration to include the golf course as "common area" that the HOA maintains?

I apologize up front but just thinking out loud, a “public” golf course with a budget of 600k doesn’t seem like it has much chance of success.
It also seems like a few legal steps may have been overlooked in the “acquisition” of the said property. Not looking at the true financials make it hard to offer recommendations but a property that large with a golf course would need some type of professional management. May not be a PMC but a business professional can help you see the upcoming pitfalls you are about to experience.

Do your CC&Rs require a periodic audit of your books? I *strongly* recommend having one, especially if you haven't used a professional manager who knows how to keep the books in good order.

I agree that the facts you've presented don't quite add up, and you're probably not getting answers because the questions haven't been considered before. I'd also be concerned.