Should the homeowners Vote for the Merger?

1/18/2022 21 Comments

Should the homeowners Vote for the Merger?

The board has released two informational documents and has scheduled a town hall meeting to encourage homeowners to vote for the merger of the HOA and the Country Club. This merger has been discussed over the past 10 years and the Board has now decided to ask the Homeowners to vote to approve this merger.

The Board states that the merger has nothing to do with our HOA being on the “Do not Lend” list.
An outside expert consultant has been hired by the board to advise and recommend what steps the board needs to take in order to move the HOA off the “Do not Lend” List.

We as homeowners need to know the following in order to vote on this merger:

Does the consultant know if the merger will help or hurt the efforts to get the HOA off the “Do not Lend” list?
After a decade of planning for this merger, is there any compelling financial reason that it must be completed now?
Should homeowners either abstain or vote to reject the merger until all the facts are known?
Why can't the board table the merger vote until all the facts can be presented to the homeowners?

The Blog would like to know your thoughts.

21 Comments

Joan

1/18/2022 09:19:16 pm

I feel this would be a very unintelligent thing to vote on at this time. There is simply not enough information. From what I understand Loan Depot to have said about this, a vote for this merger would make it so that the Country Club Amenities (the golf course, restaurant, etc.) would no longer be able to receive outside funds. Like, as in, the public would no longer be able to frequent these amenities. So, if that is the case, we the homeowners would pick up the tab by way of tremendously increased fees!
That said, I don't even know if I am understanding that correctly. NO ONE that I have spoken with about this feels that they have a good understanding of this.
The pure fact that so many do NOT understand all that this really means, is a big fat NO! This should not even be on the ballot!!!

1/18/2022 09:33:37 pm

I have a question. I read the information the board released wherein they said: DP being on do not lend list has nothing to do with the potential of the merger. They also stated that they did not know why DP is on the do not lend list. If they don’t know why we are on the do not lend list then how do they know it’s not due to the potential merger? It may not be but how can they say we don’t know but it’s not about the potential merger?

vincent rella

1/19/2022 06:55:36 am

At a minimum wait until the consultant's report.

James R Olsen

1/19/2022 07:30:45 am

All of the unknowns should be resolved before any decision is made.

1/19/2022 07:42:05 am

I totally agree that the homeowners need questions answered about the the current "do not lend" status and on future impacts to condo/villa prices if mortgage loans are limited. Homeowners should be skeptical of the current board in light of one board member resigning due to self-dealing, the recall of Peter Webb, and allowing Russ Holowachuk to run for a third term contrary to the by-laws based on a technicality.

Tom Rosa

1/19/2022 07:49:26 am

Those are the correct questions. There is NO compelling reason to do this now. Also, the merger will NOT get the DP removed from the "do not lend" list. Understanding government lending, the "risk" of the property values is the overarching matter. Lets vote for new board members not the merger. I also would like access to whatever report this "consultant" produces. After all we the homeowners are paying for it.

Anonymous

1/19/2022 08:42:08 am

Exactly, Tony. Let's vote for new Board members and simply withhold our merger ballots. You really have to wonder why the Board is pressing so hard to sell the owners on this merger NOW, when the two corporations have co-existed nicely for almost 3 decades. They stated in the FAQ sheet that the advantages in maintaining the two corporations no longer exist, but conveniently did not elaborate on what those advantages were/are. This Board has failed miserably in presenting even a decent case in why we should proceed with this proposal at this time. The reasons for doing so now may have more to do with what we DON'T know or are being told, than any benefits the Board has presented thus far. We have nothing to lose by exercising caution and postponing this vote, and God knows what we may lose by barreling ahead without all the facts.

Joan

1/19/2022 01:39:52 pm

Well stated!

Ann

1/19/2022 03:36:02 pm

Please take this opportunity to vote for NEW leadership in DP!
Out with the old, in with the new.
It is SO needed!!!
Now is our time to seise the opportunity to at least attempt to start to put an end to the "wash/rinse/repeat" broken record cycles in the Desert Princess.

NEW leadership would be a vote for Mark Brown, Karen and Char Bland. You get 3 votes. Please use them wisely!

1/19/2022 07:14:10 pm

My worry is if we don’t vote when we feel NO is currently best that gives the yes vote a greater lead.

1/20/2022 09:28:24 am

I recently got a cash out loan for the SFR home I own at the Arroyos through a private lending. In the process I learned that my home is not an SFR but it is considered a condo due to how it was defined under HOA. It came as a huge surprise to me. Obviously there are more to figure out here, but if the merger would change the status of our home to a Condo/Tel (Condo and Hotel), that is a big concern. I used to own a condo-tel in Granby, Colorado and I know that regular or main stream banking would not loan a condo-tel. So the speculation of "DO NOT LEND LIST" is not far-off and there might be some grounds here that we must be addressed with clear definition and understanding from the HOA.

Mary Maloney

1/21/2022 10:12:23 pm

Being on the "Do Not Lend" List is not speculation, it is fact. We are on it. The question is whether we will stay on it. If the merger happens, that is a definitive YES!

Judge

1/20/2022 11:29:54 am

1st things 1st. Get a new board !

Leslie

1/21/2022 01:18:59 pm

This is a little off the topic at hand, but why is it we can have in-person bingo nights, in-person fashion shows, but informational Town halls, HOA meetings and out all-important Annual General meeting are being conducted virtually ONLY? It's beginning to feel very much like our great and powerful Board prefer to emulate the Wizard of Oz and pull the strings from behind a curtain of obfuscation. Just wondering.

Mary Maloney

1/21/2022 10:13:08 pm

Great point and spot on!

Terry

1/22/2022 09:51:20 am

We as homeowners don't have any understanding at all about why the rush job the board is doing to cement this merger. The ramifications COULD BE DEVASTATING to homeowners. We would become a totally private property with NO ability to raise or receive funds from the public for the use of our facilities. The golf course and club would be totally on the shoulders of the homeowners. There would be NO residential loans available because of commercial type risks to the homeowners. Make no mistake. There are those who would love to see this happen. Their private little golf course and clubhouse they would not have to share with others paid for by homeowners alone, many who do not use these facilities. Unfortunately there is the possibility that the board is not operating in the best interests of all homeowners. Why all the rush without any explanation? The board wants to pretend they know what they are doing but can't explain why we are on the do not loan list. If the board does not understand that by now why should we have any faith at all in their ability to operate in the homeowner's best interests. If the board does not back off until all the facts and ramifications of the "merger"are known there should be legal consequences to members of the board based on their actions. We are being coerced by the board for reasons they are unwilling to explain to us. This BS never ends.

Leslie

1/22/2022 01:31:20 pm

Terry, you have articulated my worst fears beautifully. There is more to this than we are being told. It is totally irresponsible for the Board to even consider this merger BEFORE they determine why we are on the Do Not Loan list, all the while assuring us it has nothing to do with the merger. In my world, this is known as speaking out of both sides of ones' mouth.

Douglas Schmidt

1/23/2022 11:23:12 am

Self-Correction by Douglas Schmidt

At the Desert Princess townhall meeting on January 22, 2022, discussing merger of the Country club into the Homeowners Association, I said that I will vote in favor of authorizing the Board to proceed with the merger.

I said that Board members and all homeowners have the same personal interest to preserve Desert Princess property values. I added that if the upcoming election authorizes the Board to proceed with the merger, the Board should hold all its ensuing discussions of the matter in open session, not in executive session, in order to keep members informed and to preserve their confidence in the Board.

To set up my remarks as coming from an objective Board observer rather from a Board apologist, I said that I had been active in two “recall” elections. That was a slip. I should have said two “recent” elections.

One was the 2016 recall election in which I campaigned for the recall, and the other was the 2019 election to annex the Hotel-9 Holes. Although I personally favored the annexation, I campaigned against it in the election. The reason was that I thought the Board was being duplicitous in using the 33% standard for passage in the Country Club governing documents rather than the simple-majority (“more-than-half”) standard in the HOA governing documents. Fortunately, the annexation passed with 55% approval, so my issue was mooted. Nevertheless, ever since I have favored merger of the Country Club into the HOA.

As for the 2022 election to recall the Board president, I studiously took no position.

1/23/2022 02:08:36 pm

Why do you favor the merger? How does it change things
For both entities vs just being merged? How does this impact the tax exempt status of the HOA? An HOA tax form is an 1120H wherein all dues collected are considered tax exempt. All sales (food, rentals, golf fees etc) are counted as taxable jncome. Wouldn’t that make the HOA have taxable income when it currently doesn’t? Please advise.

Val

1/24/2022 03:49:33 pm

In order to maintain its tax exempt status, only a portion of the proceeds can come from "outside revenue", aka, the public. That still does not make me want to vote for the merger. I believe our amenities are ASSETS and if they were managed correctly, they would serve as income producers for the homeowners, that could actually LOWER our HOA dues and give us more access to funds to improve our facilities; therefor the taxable income would override the tax implications or any benefit of the non-profit status. The non-profit status is only helpful if you have minimal outside revenue. If the amenities were managed properly as the assets they are, paying tax on the revenue, would be no big thing. Because there would actually be notable POSITIVE revenue!

Kim

1/25/2022 08:17:02 am

Notwithstanding all the compelling reasons forwarded by owners to vote NO to the merger, I'd like to add another potential benefit to retaining two corporations.

There is a growing dissatisfaction among many owners about the quality of service we are receiving from Management Trust. Thus far, under their management, they have failed to increase the revenue potential of the golf course, spa and restaurant. Yes, the pandemic has had an impact on everyone, but even prior to 2020 there were no new initiatives undertaken in this area....just same old, same old.

By keeping the two operations separate, the owners could have the option of seeking specialized golf, food and beverage management to maximize this revenue stream while still retaining ownership of our country club. It's time we started thinking outside the box and keeping our options open is a good first step. If you believe we can utilize our assets to increase outside revenue to avoid unduly high dues increases and/or special assessments down the road, vote NO to this merger.

Your comment will be posted after it is approved.

Charter

This blog is designed as a means to provide transparency and informative access to the policies and protocols of the Desert Princess Palm Springs Homeowners Association, the governance of the HOA Board of Directors and the management of the community’s assets by The Management Trust. The expressed intent is to establish a neighborhood hub for trusted connections and the exchange of helpful information, goods, and services; it is hoped that homeowners will use it to build a stronger and safer Desert Princess Palm Springs.

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Should the homeowners Vote for the Merger?

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