Sunday, December 19, 2004

Let us review the problem ONE MORE time

John: First, the dues increase passed while I served on the Board was to fund Reserves not to cover Operating Expenses. At the time, our Reserves were dangerously low at just above 40%. They should be at 70% or higher. We did the right thing. And, the funding of existing Reserves to cover many line items had nothing to do with taking on new tracts. We were funding repairs and replacement for assets that primarily already existed in Coto and were not in the new areas. And, if we had not raised dues; though we would have collected some monies from the new tracts to fund Reserves, it still would not have been enough because we also then took on the burden of their streets, parks etc. Second, it is true that the more homes we have to spread fixed Operating cost over, the lower the cost per unit. i.e. There is only one Sport Park such as it is. Obviously, the maintenance of the Sports Park on a per unit basis, assuming good management is in place which is questionable, is less if there is 3,500 homes to divide the cost rather than 3,000. It would be even better if the Estates and Villages were paying dues because then the costs, though they would remain the same, would be divided by roughly 4,000 homes. There are many expenses in the budget that meet this rule. Third, I have only gone back to 2002 to compare our expenses; not 1996 which is relevant. Certainly by 2002, we had taken over all the new tracts with their related expenses so in comparing 2002, 2003, and 2004 we should have apples to apples. And, finally as one Italian to another, let's not talk about the Mafia. It feeds stereo types. But, I will tell you that your Grandfather would never have been bothered if he had "friends" if you know what I mean. My grandfather, who had nothing to do with the Mafia, had the same threat of extortion only they were going to blow up his stores, but it went away. We can just leave it at that. Regards, Joe Morabito

P.S. I have never said that the cash register should be closed. All I am saying is that smart people need to manage the cash register so that we don't have unnecessary dues increases that will cost CZ Members an additional $400,000 in 2005 and thereafter if something is not done to fix the problem.


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