One of the aspects of MCA Homeowners’ subsidy of TMCC that some have trouble getting their mind around is the value of the assets which TMCC got for $10/year and now pays about net $15,000/year (we think!).
Here is a way to think about it. “Ted McCarthy” (TMcC) owns a used car that isn’t in great shape that he uses for his taxi business. Ted’s business isn’t doing well because he doesn’t have enough clients, and he can’t afford his car payments. Ted can’t keep going. So “Mike C Anderson” (MCA) buys his car from him. Mike had some money in the bank but he had to use all that and take out a significant loan that will take him quite a while to pay back. (2018 MCA purchase of sports complex assets from TMCC to retain control of the greenspace)
THEN Mike gives the car back to Ted for $10!/year. Ted will pay for the gas but gets to use the car to earn income so he gets all the benefits of the car for nothing. Mike doesn’t get to use the car at all. Ted indicates this is just a 3-year arrangement and he’ll pay Mike a proper lease payment after that. (2018-2021 lease)
AND Mike agrees to pay for all repairs beyond minor maintenance, which is going to add up. It is an old car and Ted didn’t maintain it well because he couldn’t afford to. And Ted isn’t making enough money to pay for repairs anyways. (2018-2021 and subsequent leases)
This made no financial sense for Mike, but he hoped this would help out Ted and eventually Ted would pay Mike a fair and reasonable fee for the use of the car.
(Sorry can’t think of a good “keep control of the greenspace” analogy here but that was a legit benefit for MCA Homeowners when TMCC was going under)
BUT a year later Ted is still not doing well even though he only has to pay for the gas. So Mike agrees to pay Ted a substantial annual fee so he can use the car on the 3rd Saturday of the month after noon when Ted isn’t using it. There are a lot of other times Ted isn’t using it, but Mike can only use it at that specific time. (Renaissance Access Plan/subsidy)
After 3 years, and despite getting the car for $10/year AND getting the additional annual fee Mike pays to Ted, Ted is still barely making ends meet. So despite Ted’s promises to pay him a fair rate after the first 3 years, Mike gives it to Ted under the same terms for ANOTHER 3 years (2021-2024 lease).
Ted is supposed to do oil changes and tire rotations to keep the car like when he got it, but he is short of funds so he doesn’t do the required appropriate maintenance. (poor maintenance of Highlands and under-maintenance of facilities which are becoming apparent and turning into a replacement cost)
The car is now in rough shape due to under-maintenance before Mike bought the car and since. Ted saved money by not doing the required maintenance. Last summer, Ted had 3 unexpected car accidents (hurricanes) resulting in cumulative damage to the car. Mike now has to pay to replace the engine, fix the major accident repairs, AND Ted still continues to use the car for free.
($2 million for Meadows & Groves work + Regency room. Fitness facility part of $4 million MCLWF, $3.7 million Clubhouse work coming. Many millions more on course and facility updating being referred to by TMCC Board and Management)
Both Ted and Mike had hopes that someday Ted would do the major repairs but realistically isn’t going to change. Ted hasn’t been able to afford major repairs for more than a decade. Mike will have to fund EVERYTHING so Ted can use the car the way he wants to. (TMCC doesn’t generate enough income to fund the maintenance and replacement of the aging sports complex assets)
Mike’s family has been understandably upset about the annual fee that he doesn’t get much for. So Mike tries to make it less obvious how much he is helping Ted. Mike starts paying for some of the gas Ted uses instead of paying the annual fee, and tells his family that he is now paying less to Ted (MCA hiding subsidizing TMCC by paying TMCC’s normal business expenses: Property taxes, insurance, MCA assessment, and possibly more).
Why would Mike do all that?
Seems like Mike is really letting himself be taken advantage of
Here is what we are told by TMCC and members of the MCA Board:
Without Ted operating it, the car wouldn’t exist
(=We need TMCC to have golf courses and green space.)
Reality: All the facilities can exist and be run without TMCC, likely as a semi-private golf facility. Tennis might still be member-only if demand continued to be sufficient. TMCC supporters regularly imply that the golf courses won’t exist and our property values will plummet if it doesn’t remain as a private club. Hogwash. Ownership and control of the greenspace is important to MCA Homeowners, not the existence of TMCC.
Without Ted, Mike would have to pay for all the gas.
(=TMCC pays $9 million of expenses per year to run the golf courses that MCA would have to pay if TMCC didn’t exist)
Reality: this is technically true but highly misleading as it is only half the story.
TMCC earns roughly $9 million of revenue using MCA’s assets for (near) free. If TMCC wasn’t in the picture, MCA would have overall responsibility for the sports complex operation. MCA could continue with ICON managing the golf courses in a semi-private model and probably some committee structure like TMCC has. TMCC is NOT saving us $9 million per year as TMCC and MCA Board implies.
Ted is Mike’s neighbor and should financially support Ted
(= MCA and TMCC “belong together”. MCA “needs” to support TMCC)
Hogwash. TMCC is a private club. Every other private club has to be self-sustaining through dues and assessments.
Only 5.6% of Meadows homes are TMCC golf members (which is the problem area that we subsidize as a private club). (94.4% of Meadows households don’t have a TMCC golf member).
We are subsidizing a private club for very small number of Meadows residents and a similar number of non-Meadows residents.
Mike doesn’t want to operate a taxi business
(= MCA doesn’t want to operate the sports complex)
Heard this aloud for the first time at the Nov 14 MCA Board meeting and it rings
TRUE. But responsibility for owning the sports complex is what the MCA Board took on in 2018 when it purchased those assets, and it acknowledged as much at the time. It has been very convenient for the MCA to give it to TMCC to manage, and TMCC is more than happy to do so, especially under such favourable conditions.
But our MCA Board is supposed to
DO THE BEST THING FOR MCA HOMEOWNERS,
not the easiest thing for the Board.
(let alone the best thing for TMCC private club members)
We recognize that taking responsibility for ownership of the assets is a REALLY REALLY BIG DEAL. It would likely need additional committees, perhaps similar to the structure of TMCC’s current committees. But that is the path MCA must take to get us to a viable entity that is best for MCA Homeowners. We recognize that the MCA Board does not have the skills to figure this out, and that is why MCA should get independent professional advice.
It is difficult to convey what a crazy and unfair “relationship” this is
(talk about an abusive relationship!). But we hope this analogy is helpful in understanding it. (analogies are always imperfect but this one is fair)
Please share this post and our website with your friends and neighbors.
The step forward to change this is to for director candidates who are not TMCC members.
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