LPA Annual Meeting Includes 2017 Reports, 2018 Outlook
By Susan Thompson
The 49th annual meeting of the Lake Panorama Association was May 12, with about 100 people in attendance. The meeting provided an update on activities during the past year, plus a look ahead at the remainder of 2018.
Emily Donovan and Rich Schumacher were elected to fill two open seats on the LPA board. They will replace Mindy Larsen Poldberg and Charles Schnack, who were completing their second three-year terms on the board. Jason Grossman, Andy Harrelson and Todd Hyde also were on the board ballot.
Gary Evans, LPA board treasurer, provided the 2017 financial and audit report for the LPA and its subsidiary, LPN, LLC. For 2017, Evans said the LPN operation showed an operating loss of $73,216. “However, this is an improvement from 2016, in which LPN, LLC lost $116,574,” Evans said. “Improvements to inventory and ordering processes and improved management practices added to the decrease in costs and ultimately a smaller operating loss.”
“Maintaining a profitable subsidiary that specializes in the golf and restaurant industry is a challenge,” Evans said. “The LPN board of managers continues to work with LPN staff to ensure our subsidiary is pursuing improved strategies to maximize performance in future years.”
Turning to the LPA, Evans drew attention to the association’s income statement, which showed actual 2016 and 2017 revenues and expenses, plus the 2018 budget numbers for comparison. He said the 2017 operating income figure of $255,146 includes about $200,000 that was the auditors’ adjustment for land sales expense. LPA’s operating profit before this adjustment was $54,821.
Evans said the LPA board of directors decided a five-percent dues increase should be applied for 2018. “The board’s budgeting process focuses extensively on cash flow,” he said. “Cash balances are targeted for 20 percent, with the possibility these will be in the 17 to 18 percent range if non-budgeted expenditures are approved as a mid-year budget amendment.”
Evans said it’s important to remember the LPA board does not set its annual operating budget with the expectation of selling land. All operating expenses are covered by LPA’s recurring operating revenues.
Jim Spradling, who has served the past year as LPA board president, chaired the meeting. In his president’s report, he said the mission of the LPA Board is “to serve the interests of LPA members, and to solidify and sustain Lake Panorama as the premier place to live in Iowa. We do this with the assistance and effort of our staff, the LPN Board of Managers, the RIZ Board, Friends of Lake Panorama, various volunteers and committee members. It takes a lot of dedicated people to achieve our goals and fulfill our responsibilities,” Spradling said.
Spradling encouraged those in attendance to review the LPA board’s 2018 goals, which were adopted in October 2017 and distributed at the registration table. “These seven goals guide and drive the board’s work,” he said.
He focused on two goals during his report. The first was “sustain high quality of lake life/environment.” Spradling said an important step towards this goal is to upgrade the LPA water supply. “This project addresses our water capacity issue with the construction of a deep Jordan well to replace failing wells. In addition, the conversion of the treatment system from a conventional chemical process to a reverse osmosis filtration system will enhance water quality,” he said.
The second goal highlighted was “increase organizational performance.” Spradling said attaining profitability within all LPN enterprises is “a formidable quest given the highly competitive and unpredictable nature of the golf and hospitality industry. We’re taking it on through an ad hoc task force comprised of LPN and LPA board members.”
Spradling said task force members and LPN managers are working together on customer service, marketing and other operational improvements. “Reaching the ultimate goal of profitability is still in the future, but progress is being made with renewed energy,” he said.
Under the same goal of increasing organizational performance, Spradling said the LPA board is considering the construction of a new maintenance facility. “This will enhance public works operations, creating more efficient use of time and space, and removing an unsafe work environment,” he said. “Once completed, the facility will improve maintenance performance, resulting in better service to the membership.”
John Dinnebier, LPN director of operations, introduced key staff. “These individuals truly care about this operation, and are passionate about making it even better,” he said.
Looking back at 2017, Dinnebier said the number of golf rounds played at Panorama West were up slightly at about 9,000, while rounds played at the LPN were down slightly at about 26,000. Memberships at both courses held steady.
Dinnebier said 2018 is off to a good start. “The early bird promotion gave us a nice membership boost at both golf courses,” he said. “We have a lot of special events on the calendar already, with just one open Saturday in the LPN banquet room between now and the end of September.”
Dinnebier talked about the LPN board of managers, saying they are instrumental in helping the business operation improve. “Our primary focus now is on three things — controlling expenses, growing revenues and improving the experience for both members and guests,” he said.
Beginning June 1, the Links Restaurant will be open seven days a week, and have extended Sunday hours, at least for the summer months. Usually, the Links is closed on Mondays.
A new system for both members and guests to provide feedback on all departments of the LPN operation is being developed. “We want to know what we’re doing right, and what we’re doing wrong,” Dinnebier said. “Our goal is for all of our members and guests to have a quality experience each time they visit.”
John Rutledge, LPA general manager, introduced key staff and thanked them for their work. Rutledge then focused on two major projects. The first was the LPA water infrastructure.
Portions of the LPA water plant were upgraded in 2009 and 2010. “At that time, we were truly in ‘crisis mode’ due to the failure of our original Jordan well and our dependence solely on the Dakota wells. This was causing black and brown water from manganese and iron,” Rutledge said.
An infrastructure assessment and rate adjustment supported the $1.75 million investment in plant improvements and a new Jordan well. Rutledge said those improvements have served LPA members well for nearly a decade and have several decades of useful life remaining.
The Dakota aquifer wells were not modified as part of that project and now are failing. Rutledge said these two wells exist on the fringe of a lobe of the aquifer, which makes them difficult to replace. After several years of researching alternate water sources, it has been determined replacing those two wells with a second Jordan well is the best option.
“Because our system will be exclusively Jordan water, we will need to treat it to remove hydrogen sulfide, radium and reduce overall hardness,” Rutledge said. “This is why we’ve coupled this project with the installation of a reverse osmosis system. The total investment is slated to be $3.6 million.”
LPA has applied for and received approval from the Iowa State Revolving Loan Fund to pay for the project. This money can be paid back over 20 years at two-percent interest.
Rutledge said the project will take about 18 months. “LPA and our engineers will spend the summer obtaining permits, finalizing plans and securing bids,” he said. “Once those tasks are completed, we can finalize the loan and issue a notice to proceed on three construction contracts.”
Rutledge said there are a variety of options for paying back this investment. “The board recently directed me to draft proposals that split the $3.6 million between rate increases and a flat assessment. If LPA takes advantage of the full 20-year option, this could mean a $25-$30 per quarter increase for water users, and an annual assessment of $65 per lot. To retire the debt faster, the rate increase and annual assessment would be more significant,” he said.
Rutledge said the LPA board could package the loan repayment plan in dozens of different ways depending on how long they want to maintain debt and how to balance the split between rates and assessments.
The board can make rate adjustments at a monthly meeting, but a special ballot of the membership is needed to alter dues and assessments,” Rutledge said. “Depending on timing, we are probably looking at a May 2019 annual meeting ballot to approve a debt repayment strategy that blends assessments with user fees.”
The second project Rutledge discussed was the replacement of the LPA maintenance facility. “Our current shop is 4,000 square feet, was built in 1973 and struggles to support our current operations,” he said. “Signs of corrosion were discovered in late 2016 and our engineers have determined it would be more expensive to repair the building than to construct a new one.”
A committee is working with engineers to review building design and site selection. “We are pursuing an 11,000 square foot structure at either our current location, or at an alternate location along 200th Road. Unlike the water plant, we don’t have a regular revenue stream of user fees for this structure,” Rutledge said. “So we will be looking at strategies to fund this investment and ensure our maintenance crew can continue to function for the next 40 years.”
Rutledge said it’s understood maintenance buildings are a tougher “sell” than items like a water plant or an amenity improvement. “But you rely on us to be forward thinking and direct with you about the necessities we face,” he said. “We’re working to ensure the development continues to perform consistently from year to year, and a current maintenance facility is essential to achieving that goal.”
Other items Rutledge covered were:
· LPA is providing construction management support for two projects Friends of Lake Panorama has underway in 2018 — the sports court facility at Boulder Beach and the Panorama West Golf Course irrigation project.
· A 20-year draft plan for the Lake Panorama Rural Improvement Zone (RIZ) district is being developed, and should be ready for RIZ board review by early summer.
· Dredging will occur in the upper basin through late-June, then relocate above the debris trap until Labor Day. No small cove work is planned for 2018.
· The third of three wetlands to provide erosion control and improve water quality will be located north of Burchfield Cove and is scheduled to be bid this summer or fall. Construction will occur in late-2018 and early-2019.
· Guthrie County completed a traffic study on Sage Trail. The results showed a very high traffic count and should help LPA’s case for the county to provide improved surfacing.
· Regarding property assessments implemented this spring by the Guthrie County Auditor, final numbers indicate most LPA members were able to navigate this process with some guidance from LPA and the assessor’s office. Fifty-five property owners met with the assessor and Vanguard appraisals in March. Sixty-five met with the assessor for an informal protest in April. Thirty property owners have filed for a formal review.
· To stay informed, members who haven’t already signed up for the weekly newsletter are encouraged to do so. In addition, two GM coffees are scheduled. Both will be at the conference center at 10 a.m. The dates are Friday, June 29, and Friday, September 7.
Rutledge closed by thanking LPA members who volunteer to help make Lake Panorama a great community, then answered audience questions before the meeting adjourned.