Finances at Tellico Village in question
Property owners group faces pressure as delinquent dues rise
The number of Tellico Village properties delinquent in their monthly association fees has more than doubled in recent months, sparking debate about transparency of records and the overall financial health of the Tellico Village Property Owners Association.
The fees pay for amenities and upkeep at the planned community in Loudon County, including its three golf courses, clubhouse restaurant and yacht club.
At the January meeting of the association's budget board, it was reported that 371 properties were delinquent. The association confirms that number had increased to 862 properties in April, with $702,000 now in arrears.
"My concern is that if you let this trend continue, we can expect to see the amount past due rise by an additional $75,000 per month," said Tellico Village resident Richard Anklin, a contributor to the Tellico Village Watchdog Web site.
By the end of the year, the cost to the association could top $1.2 million, or about 18 percent of the total yearly collection. And if the delinquencies continue to increase at the same rate as the first three months of the year, the potential shortfall is much greater, Anklin said.
"We want to know what specific actions the board is going to undertake in the next 30 days to stem the tide of this extremely harmful loss of revenue," he said.
John Cherry, public relations manager for the Tellico Village Property Owners Association, said the association instituted procedures for delinquencies in 2003, when more than 580 lots were behind in payments. Using the same procedures that are in place today, he said, the association reduced delinquencies to 181 lots by 2007.
"We have a plan, and it works," he said, but "the entire country and our industry are seeing increases in delinquencies due to the economic slowdown."
Anklin and other Tellico Village residents formed the Watchdog group to get more access to association financial records, and he said transparency would be an aid in tracking the trend and collecting the past-due money.
Anklin said he would like to see a spreadsheet listing delinquent accounts prepared and reviewed each month during board meetings and posted on the association's Web site.
"We want to see the records so that we can form valued opinions about the state of the delinquencies and the financial health of the POA," he said, but Cherry said the association has a policy of not sharing personal financial information about any of its members.
The loss of monthly revenue is especially critical because some amenities that the dues support are running in the red. The golf course, for example, is responsible for a $1.2 million-per-year net loss, Anklin said.
"If the delinquency rate continues to rise, this POA is going to be in some serious financial trouble," he said.
The association already has curtailed spending for this year and is prepared to adjust further if revenue is less than anticipated, Cherry said.
One way to increase revenue is to increase association fees. Current fees per property owner are fixed at $87 per month and cannot, according to the association's bylaws, be raised more than 5 percent per year.
"You can't raise fees fast enough to offset this kind of shortfall," Anklin said.
Some residents think the fees already are too high.
Dues were just $45 per month when Marilyn Mazzeo Ayers built her house in Tellico Village in 1995. In addition to raising dues, the association also has been raising revenue through other means, she said.
Building permits cost $5,000 in 1995, Ayers said. Today the same permit has been burdened with additional fees for such things as water hook-up that bring the cost up to almost $8,500.
"They found new ways to charge us more," she said.
Other residents dispute that the monthly dues are too high. "This is a bargain," said county commissioner and 17-year Tellico Village resident Don Miller.
"When you look at the amenities and compare them to similar communities across the country, the fees at Tellico Village are very reasonable," Miller said.