Notes from the June Council Meeting

You may have missed the June Council Meeting either because you were away, or because you wanted to keep your blood pressure down or because you wanted to keep your breakfast down. All are valid reasons however your fearless reporter was there. You won’t see the official Council minutes posted until almost September, nearly three months after the meeting at which point you may forget what it was  all about. Here is my synopsis which you can compare to the official minutes when they come out.

In the Open Forum, Paul Hoffman said we needed more cost info on the Build Options for the Center. No answer was given, so we can assume no info will be forthcoming. (Subsequent to the meeting, I asked my Special Place Chair to ask the CRC Committee for more cost info and was flatly told by the CRC Committee Chair that no more questions would be answered.)

A correction was made to last quarter’s minutes, where Mr. Goldman stated “cross country and the pool were the most expensive amenities.” It was changed to “expensive to operate”. (A member subsequently asked to see the financials behind this statement and was told by the General Manager that the computer that had that information had crashed.)

Mr. Goldman said the flagpole has been painted. It may need replacement, which “may” need the authority of the Council. He and Bob Parker are appointing a Task Force to investigate a “walkable community”. They are working with the Upper Valley. (This was the most requested amenity (walking paths and bike paths) in the 2007 Survey and the 2010 Survey and has been in the works for at least 10 years). Mr. Goldman went on to state that “assessments have not gone up more than other communities.” (Again, no substantiation. We know that Eastman’s have gone up 10% per year for the last 10 years.) He said, “the Budget shows that wages are 50% of the total so there is not much money left for other stuff. (Yes, that is almost $2 Million for wages) He went on to say, “If we want to cut some amenities we will have to talk about it.” He claimed the issue that people keep coming back to is the 2010 Survey. People want more say in government, they value the environment, and have “little” dissatisfaction with government. (Actually less than half of the respondents felt they were adequately represented.) He spoke about the Governance Committee of 2008/2009 who had 17 recommended changes to Special Places but no support from the Bylaw Committee or the Council Executive Committee. He then went on to say that 2/3 of the Council must bring up changes to Bylaws and it didn’t happen. (That is because it never got by the gatekeepers—i.e. the Bylaw Committee and the Council Executive Committee-- so of course it never went to the Council.) Then he talked about how the community needs to come together, be civil to one another and be kind.  (I assume he includes himself and governance members who in the past months have attacked and disenfranchised community members.)

Then Mr. Ryder spoke about re-structuring staff to put in place a succession plan. We have historically gone outside to hire a general manager. Now we apparently are staying in house as these may be the only people who could possibly get a grip on how the finances work in less than a year’s time.

There was some discussion on the upcoming referendum on spending and that it was the first time one had ever been done. (Well, that is not exactly correct. When the golf course was up for sale back in 1980 the then Board “voluntarily” sent out a referendum to the owners to see if they wanted to buy it. It used to be important to listen to the community. For the last 34 years, members have had no say in spending matters.)

Comment: This is the kind of thinking that looks at the 16 yr-old Golf/Center building and decides that it would be “better” but not cost effective, to tear it down and rebuild a more efficient building. My house is also 16 years old and maybe I could sell it faster if I tore it down and rebuilt it, but then how much money would I want to lose? But if the community pitched in? The recent Center Renovation Committee, appointed by the Board/Council Chair is charged with either renovating or completely rebuilding the Golf/Center. The questions I have, with the answers that come to mind are:

Q.  Why are we thinking of spending $4-5 Million on a 16 yr old building?

A.  We are collecting a large amount of capital money which could be used to pay down some debt, however, ECA Board, Council and management want to spend it.

Q.  Who wants this?

A.  The Board, the golfers, the staff, the concessionaire. Has anyone else been asked? Based on Eastman surveys, all members want to have a say.

Q.  Who benefits?

A.  Golfers, staff, the concessionaire.

Q.  Who gets to vote on it?

A.  The Council—87 people, many of whom are golfers.

Q.  Who pays for it?

A. All the members, especially the other 80% without whom none of this would be possible.

As I read this, it occurs to me that the Council is being treated like grade school students. They are being told what is happening without requiring full disclosure and not allowing all ECA members to have direct vote. Are they really representing the community? Why are they there?

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Comments from Readers

A Reader wrote:

Look. Golf should be a self-supporting endeavor. The restaurant in the Center should be a self-supporting endeavor. If they can't support themselves, they ought to be shut down. This is not the Eastman of over 30 years ago. Times and tastes change. Today's families have a different lifestyle and Eastman needs to change with it if we are to attract new families as residents.

Comment: ECA members acquired the Golf Course in 1980 under the condition it be self-supporting and only required it be run as a golf course for 15 years. (see Post of June 12 Eastman Direct Vote) Up until 2012 the restaurant concessionaire paid rent and a portion of the utility cost. Now Eastman members pick up both costs unless gross revenues exceed $650,000.

Another Reader wrote:

The Center reached the same state of collapse as did the Water System and the Sewer System. There was no schedule or moneys set aside for repairs/replacements for any of them. Was that because of inept, ignorant management? Was it a deliberate effort to "low-ball" fees and assessments to make Eastman more attractive to owners and purchasers? Was it a little bit of both? Who knows?

Comment: Contributing Writer Phil Schaefer wrote:

The Center is hardly in a state of collapse.  In fact the first consultants hired by the ECA to evaluate the Center reported that there were no structural problems. (New consultants were then hired.) Has anyone who claims that there are such problems identified even one specific structural problem!  No, because they don't exist.  So, wipe away those tears and allay those fears, The Center is not falling down.

Does The Center have issues that should be addressed?  Yes, and they are all noted in the ECA's 10-year budget plan.  All the problems are identified and already scheduled for remediation.  What's the rush?  People complain about the air conditioning, and it is definitely not optimal - it over cools and under cools. It should be upgraded or even replaced, but could we please see a written estimate for just that work?  The back of the envelope guess (high-balled??) is $600K!  I've replaced an AC system for a house about one-third the size of The Center and it didn't cost $25K - remember, when you replace an AC system, you usually don't have to touch the ducts, an expensive component - most of the cost is in a new compressor, heat exchanger and control systems.

So, what about the roof?  It's time to replace a roof when you see the first signs of leaks.  Has there been a report of any leaks at The Center?  No.  So what's the rush?   Here's the problem - a major portion of the AC system is located in the Center's attic, and it is not accessible for replacement (there) without opening the roof.  See the picture, need to open the roof, get a crane to remove the old AC system - hopefully the new AC system will not be located in the roof again!  However, you have to replace the portion of the roof that was opened....and we can't match the shingles so it would look strange....if you're flying overhead.  So, that is the reason for replacing a perfectly functioning roof.  It's because the AC system needs to be replaced.  On the other hand, why remove the old AC system, just leave it there, disconnect it and put in a new system, but NOT in the attic.  Voila, no need to disturb the roof at all.

Eastman--a Wilderness of Golfers?

James C. Raymond (contributing writer) wrote--
Dear Eastman Blog Persons:

I stumbled across your advertisement in the Kearsarge Shopper, and am amazed at the information you provided here.

I have lived in Eastman for almost 5 years and felt I was alone in a wilderness of golfers who had no worries whatsoever about the costs of their sport for anyone who lived in Eastman and was not a golfer. And this was before the issue of a new center was raised. I had simply been perusing the annual budget and was amazed to see all the capital expenses solely for golf purposes that was being paid for out of our annual HOA dues. Earlier, when I first  bought a home here, I asked the Realtors what percentage of the HOA dues went to maintaining the golf club and was told they did not know but I could learn it by studying the budget. That is not easy, but it is most revealing.

When the idea of the new center was introduced is when I began studying the budget and that raised an entire new set of issues. Among them were the question of how many Eastman owners were golf members, and how the existing center suddenly became nearly ready to collapse in its present state of repair.

I have owned an even dozen homes so far in my life. Some of them were much older than the current center and some were brand new. But none of them needed a new roof, all new windows and a new air conditioning system all at once.  So immediately the question comes to mind: how did all these systems need sudden replacement all in the same year, and how many years had they been ignored before they got to this point?  It seemed to me that if they do need replacement, it could be done over several years so as to not seriously impact our already huge annual HOA budgets.

But the more I read about the new center plans, the more I felt it was so golf centric as to be suspicious to someone who has no interest in golfing, or dining at the golf course, or creating a facility large enough to sustain large wedding parties, dinners, etc. Nor did I find it reasonable that we suddenly needed to move ECA offices there for reasons that seemed oddly paired with the same urgency that was required to replace the current center.  The old ECA offices were suddenly inadequate, expensive to run and maintain, and "belonged" in the new center.  It all seemed to this non-golfer that efforts were being made to dilute the appearance that the new center was really a golf resort concept being blended with enough other uses so as to appear to be necessary to the non golfers here at Eastman.

Has Eastman's Financial Bubble Burst?

Your government is playing financial roulette with your home value.

According to the Eastman Audited Report, the Capital Reserve Fund (http://tinyurl.com/qaukzw2) as of March 31, 2014 has a deficit or negative balance of $607,439. That's right-- there is no positive capital Reserve Fund according to the community's FY2015 Audit. (P.8 “…due to the obligations associated with the construction of the South Cove amenities building.”)  Added to our debt laden financial position, we have the Finance and Budget Committee's enthusiastic advocacy for increasing ECA members’ financial deficit by an additional $2.8 to $4.5 million of debt with accompanying Interest payments of $1.0 million to $1.65 million (for a Total of $3.8 Million to $6.1 Million--Source: TABLE 2: SUMMARY COMPARISON OF MODELED FINANCING OPTIONS--on p. 16 of the Renovation, Expansion, Build New of May 2014) so it is not difficult to understand why Eastman property values are sinking into the lake. (See Blog Post "Eastman Tax Rates and Assessment Costs")

Yes we have the makings of the “Eastman Financial Bubble”. Like the recent 7- year housing bubble where people overpaid for homes and took on excessive mortgages, the ECA Finance and Budget Committee would like to mortgage the community’s future and your homes using debt to reduce your disposable income. The “seduction” that the Finance and Budget Committee uses is “low payments” -- classic stuff that many mortgage brokers use to get you to take on more debt then you can pay off. In Eastman's case your loan is spread out over 15 years. That's right, 15 years for the loan and that's how they tell you how small your additional debt will be going forward. Can you imagine how appealing a $5000 membership fee is to a buyer who's going to pick up 15 years of community indebtedness?? By comparison, the loan for South Cove at $3.5 M was for 9 years and we will pay interest of $526K for a total of $4,026M. If the community goes ahead with the Center $3.6 M option (or worse), over 15 years we will pay interest of $1.315M for a total of $4.915M or nearly $5Million. That is correct, we Eastman homeowners will pay almost $1,000,000 more for the almost the same amount of debt. You can thank the Troika and the Finance and Budget Committee for this financial flimflam.

The Finance and Budget Committee members ignore the possibility that in one, two or three years the Towns of Grantham, Enfield or Springfield could decide to spend $2 million or so on a new school, a senior center, indoor pool or some other desirable municipal improvement. If they did so, the payback time would be 5 to 7 years or less than half the time your Finance and Budget Committee is telling you is so cheap. The Town of Grantham is far more fiscally responsible than Eastman. It would also get a much lower rate than the 4.38% shown (on p. 16 of the Renovation, Expansion, Build New of May 2014) in TABLE 2: SUMMARY COMPARISON OF MODELED FINANCING OPTIONS. I know no one who is financially savvy paying more than 3% on their mortgage today--I would like a Finance and Budget Committee that is financially savvy and looking out for Eastman homeowners like the Hanover Finance Committee. Spreading the loan out over 15 years, we will get to pay $1,000,000 to $1,600,000 in interest in addition to the principal amount we borrow with the foolishness of this “Let’s Mortgage The Community's Future” mentality.

Compassionate Anger

To quote the Dalai Lama who knows a thing or two about anger and compassion, has said: Anger that arises of compassion is useful. Anger that is motivated by compassion or desire to correct a social injustice, and does not seek to harm the other person, is a good anger that is worth having.  

Some Eastman residents have “compassionate anger” toward the Troika of Eastman Power: Board President Maynard Goldman, Council Chair Bob Parker and General Manager Ken Ryder. These three individuals, aided and abetted by a supportive Board, by the liberal participation on the Council and Key Committees of elitists and golfers, as well as by many of us who are intimidated by the Troika and their allies, have installed an autocratic rule at Eastman. It has become a hierarchical ruled community with no independent ombudsman to mediate when there is conflict of opinion or inappropriate actions taken by these three or their reports.

In upcoming Eastman Spotlight articles we will identify specific actions each has taken to deprive Eastman Members of open, transparent and fully participatory governance.

Recently received correspondence from  long time Eastman residents:

"Until the people in Eastman are given the opportunity to change the structure of the government, all voices will not be heard. Instead of getting upset we just resigned ourselves to that and do not participate in Eastman activities. We love our home, we love the Upper Valley, and we have found many activities that do not involve Eastman........It is now time to end the reign of terror by the Old Guard and give Eastman to ALL residents instead of the select few."