HAMMOCK BEACH ESTATES HOMEOWNERS ASSOCIATION (HBEHOA)

Background Information: Pavilion Ballot Initiative

Article 5 of our C&Rs empowers our Association to “to hold, operate, manage, improve, replace, maintain and beautify the "Recreation Facility" and "Developer Improvements" without profit to itself, for the use, benefit and enjoyment of the Members of the Association.” The By-laws state that “All of the powers and duties of the Association shall be exercised by the Board of Directors” (Section 5)” and authorizes the Board to assess the membership for such betterments. (Section 7).

During 2005, the Board has solicited information from several contractors to determine the feasibility and cost of enhancing our recreational facilities by adding a covered Pavilion to the association’s lot area adjacent to the swimming pool. The idea of having a pavilion or an enclosed clubhouse has been raised several times over the association’s history but the question has never been put to a full vote of the membership. Because building a pavilion is costly, the Board believes it should act to build a pavilion only if a majority of the membership supports doing so. Because we needed to approve the 2006 budget before we could conduct a vote of the membership, we left the pavilion out of the 2006 budget. If the membership supports building a pavilion, then the 2006 Board could vote to amend the budget to include this betterment and the related assessment. Presented below are a description of what would be built, an explanation of the project’s cost and how we would pay for it, and a summary of arguments members have made for and against constructing a pavilion.

What would be built?

As illustrated on page 4, the pavilion would be built on a 40’ by 25’ concrete pad with wood posts supporting the truss work for a shingled roof—a low wood railing wall would be between the posts on all four sides with openings left on three sides (toward the restrooms, the pool, and Cottonwood Trail.) The 40’side would run parallel to Cottonwood Trail and begin about 12’ from the left side of the lot (as viewed from Cottonwood Trail) about even with the left hand wall (west wall) of the restroom building. The pavilion would extend eastward toward the pool and stop just before the dripline of the oak trees where the picnic tables are currently located. The pavilion would be set as far back from Cottonwood Trail as is feasible, meaning that the pad would begin a few feet in front of the current privacy fence that screens the restrooms and extend 25’ toward Cottonwood Trail. This location would allow us to remove the privacy fence because the pavilion would screen the view of the restrooms, allow for additional parking along Cottonwood Trail, as is now provided in front of the pool, and leave room for trees and/or other recreation enhancements, such as a horseshoe pits, between the pavilion and the new parking area.

The pavilion would be wired for electricity and include ceiling fans and overhead lighting. The electricity would be controlled from a switch located in the restroom building so that only members with keys could turn the power on and off. A water faucet and hose would be provided outside the restroom or near the pavilion so that pavilion and tables could be hosed off. As for tables, we envision a mix of circular and rectangular tables that are heavy enough to be left out in the pavilion in high wind conditions.

How much would it cost?

During 2005, the Board considered alternative approaches to constructing a pavilion. In particular, we learned that the developer was in the process of dissolving his corporation and continued to have no intention of building a pavilion at his expense, a decision that the C&Rs state is at his sole discretion. We then discussed whether to try to build the pavilion with volunteer labor from the membership. This approach has some appeal because it would save labor cost and be like an old-time “barn-raising“ that could enhance our sense of community. However, this option was problematic because of the downside of insurance and liability issues and the limited number of willing volunteers with the talent and physical condition to do what needed to be done without overly burdening individual residents. Given these risks, we opted for having the whole project built by a contractor.

We have obtained preliminary bids from three contractors, ranging in price from $28,800 to about $35,000. These bids did not include any electrician or plumbing costs, the cost of lighting fixtures or fans, or the cost of tables. After allowing for these items and potential cost increases when these bids are finalized (some of these bids were received in early 2005), we anticipate that the pavilion project cost range will be between $31,000 and $37,000. This translates to a one-time, lump-sum special assessment of each lot of between $211 and $252.

The Board has also researched financing this project with an unsecured bank loan for those members who would like to spread the assessment over a longer period. For example, if we obtained a loan with an 8 percent rate and a five-year term (as quoted by one bank), a lot owner instead of making a lump sum payment of $211 could instead make payments of about $51 per year for five years (total cost of $255). Assuming we can find a willing lender and there is membership interest, we will attempt to offer this deferred payment option.

If the project is approved by the membership, the Board intends to obtain final bids from at least the three original bidders and select the contractor that we determine to be the best value to the association considering price, workmanship, warranties, reputation, and any other relevant conditions. We will also obtain multiple quotes for fans, picnic tables, and electrician and plumbing services. Based on the selected bids, the Board would then amend the “betterment” line item in the 2006 budget to reflect the project cost and levy a special assessment on the membership sufficient to cover the project’s cost. Accordingly, the ballot asks support for a special assessment not to exceed $250 per lot when paid as a lump sum.

Arguments For and Against a Pavilion

Members favor construction of a pavilion for one or more of the following reasons:

Adding a pavilion to the common area will significantly improve the overall appearance of the common grounds near the pool and thereby enhance the value of homes within HBE.
Other home communities, e.g., Sea Colony, have nice common facilities including clubhouses. Construction of a pavilion combined with our pool, would make our recreational facilities more competitive with other communities.
The availability of a comfortable, shaded table area adjacent to the pool grounds where food and beverages can be consumed will make the pool a more attractive place for members to spend longer periods of time with each other and their families and friends.
There is a support among a growing segment of residents for additional community social gatherings and for a place for groups of residents to have informal gatherings—if we have a nice place to gather more gatherings will take place.
A pavilion is a lower cost, functional alternative to a clubhouse and will not require significant expense to maintain.
At this time, it would be risky and costly to pursue legal action against the developer to force the developer to build the clubhouse/pavilion because of the discretion provided to the developer in the C&Rs and the fact that the developer corporation has been dissolved.

Members oppose construction of a pavilion for one or more of the following reasons:

Notwithstanding the language in the C&Rs, the developer’s marketing of HBE included plans for a clubhouse. Developer should pay for any pavilion or clubhouse and HBEHOA should hire lawyers to make it happen.
Past experience indicates that there is not a sufficient number of gatherings to justify the expenditure to construct a pavilion (estimated 7 events over the last 10 years).
The need for a shelter for occasional gatherings can be met by renting a tent and table and chairs or by using the Melacompra Community Center .
Pavilion would be an undesirable and unwanted hangout for youngsters and subject to vandalism.
Ongoing costs will increase that have not been budgeted: cleaning and maintenance, property taxes, and insurance.

A few facts to consider as you weigh the pros and cons of the pavilion proposal

Renting a large tent and chairs for an outdoor gathering costs about $500.
Renting the Melacompra Center costs $25—if alcohol is served $35.
The Association’s property taxes would increase about $550-$800 annually at current rates.
The Association’s Insurance premiums would increase about $300 annually.

Illustrations of the pavilion appear on the next page.

PLEASE VOTE. THE BOARD WILL ABIDE BY THE WILL OF THE MAJORITY.

Sincerely,

The HBEHOA Board of Directors

Pavilion Illustrations