The Eastman Free Press
Providing owners with the information they need to make informed decisions.

Friday, August 1, 2014

Financial Promises Broken

A reader, a market analyst, wrote:

The golfing industry in the U.S. is in headlong decline. To contemplate a multi-million dollar investment in such an industry seems contrary to good sense. At the same time, to defer the development of amenities that are in high demand [walking or bicycle trails] can only be characterized as self-destructive, ignorant or arrogant - you choose.

Eastman is a forty-year old community, and it has a major problem - an insufficient capital reserve given the infrastructure it is responsible to maintain. Any potential investor in an Eastman property who does even basic due diligence will likely realize this. For future property owners, this means they face the likelihood of special assessments to fund required infrastructure repairs. In other words, assessments are likely to grow at more than the rate of inflation regardless of new building projects.

Disclosure: I am not an Eastman property owner but have visited many times. My decision to buy has been put on hold until these critical governance and financial issues are fully sorted.

In October 2008 Mr. Goldman wrote a letter to the community that accompanied a report from the Long-Range Planning Committee called “A Plan for Our Future”. In his letter, he stated in paragraph 2, “Because the South Cove building project requires a significant amount of our resources, the Committee has kept major new initiatives to a minimum in the first two years of this plan. The Finance & Budget Committee has tested this Long Range Plan against its ten-year financial planning model. It shows that the Capital Reserve Fund is currently projected to not only fund the approved South Cove capital expenditures, ongoing capital replacement projects AND all the projects included in this plan (this Plan FY2010- FY2019 did not include a major overhaul of the Center), but to still retain a fund balance above the required minimum—without additional borrowing or special assessments.

What has happened?


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