Luppens: Eagle-Vail property owners: Save your property; save your investment (column)
May 3, 2018
Editor's note: Find links to supporting documentation at http://www.vaildaily.com.
Why is every election in Eagle-Vail so controversial, so acrimonious? Because a serious financial collapse, that could have easily been avoided, is just around the corner.
As most people realize, nothing should be easier to manage but nothing has been managed as poorly. Eagle-Vail is just a simple recreation district in a great resort location. What is the real problem?
Well, over the past decade the Metro District (which only operates the recreational amenities — no other property, services or utilities) has taken in well more than $25 million in property taxes, user fees and bond proceeds, and all we have to show for it is a pool (that cost $ 1 million more than it should have) … and the long overdue and intentionally delayed repairs to the tennis courts. Many residents have been fighting back against current management for years to get this accomplished. The courts had been an eyesore, and not safe to play on, for years.
Over the past decade, deferred maintenance and capital repair liabilities have increased to well more than $20 million. Instead of dealing with repairs and saving for the future, the current management has blown through the multi-million-dollar reserves we had on wasteful overhead and improper payments to insiders.
The property owners who have been fighting for better government realize that financial collapse is imminent. As currently managed, the District looses more than $500,000 every year, almost exactly the total amount of unnecessary management "overhead." No enterprise with only $3,000,000 in yearly gross sales can afford $500,000 in annual overhead. If the District had been managed for the benefit of all residents, it would operate at an annual profit and we would have large reserve funds ready to deal with the upcoming repairs and replacements.
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In anticipation of the potential election of reform candidates to the Metro District board, the insiders gave the long-term, very ineffective manager an expensive "golden parachute" contract that has been discussed in secret meetings just days before a new board will be seated.
The most striking fact and evidence of gross malfeasance is the lack of improvements in Eagle-Vail. Over our 34 years in Eagle-Vail, the only significant improvement has been that the trees have grown. In a resort valley where property values have increased dramatically (original $20,000 Vail lots sell for more than $4 million), Eagle-Vail homes have not even appreciated at the rate of inflation.
Where is there more potential?
Eagle-Vail was conceived as directly connected to Beaver Creek by a ski lift. Every property owner survey shows that a chair lift is by far the most desired amenity. But current management and "leadership" have opposed and blocked even the investigation and exploration of obtaining the lift as originally intended.
The old group of crony insiders tries to excuse their horrible performance by blaming the Tax Payer Bill of Rights and the Gallagher Amendment as taking away property tax revenue. This is not true; the budget for 2017 showed a total assessed value of $80.7 million and the adopted 2018 budget shows the total assessed value as growing to $86.2 millio — a 7 percent increase.
Total tax revenues are increasing from approximately $1.75 million to just less than $1.80 million. The District is getting significantly more total tax dollars from a significantly increased assessed value base, so the assertion that Gallagher, not bad management, has created the financial problems is a lie.
It takes a degree of financial sophistication to run even a simple operation like Eagle-Vail. Informed residents would not elect anyone to the board who has not run an even larger enterprise of their own. The history of Eagle-Vail has been very inexperienced people playing around with their neighbors' money and property. The 1,440 homes in Eagle-Vail, even at an only $500,000 per unit estimated value, equates to three-quarters of a billion dollars in value. Properties are worth, at a minimum, 20 percent less than they should be, so that is a loss in value of more than $100,000 per home — real money.
The three reform candidates, Jake, Albert and Steve, are not friends of mine and would not be my first choice for directors, but they are good, honest businessmen who have worked very hard for several years putting in countless hours to turn things around for their neighbors', not their own, benefit. They average 30 years in Eagle-Vail.
The opposition candidates, who represent the old crony group, have only lived in Eagle-Vail a couple of years on average and haven't been involved at all in efforts to right the community. One doesn't even live in Eagle-Vail and was part of the regime that got us in trouble in the first place. He didn't even realize that spending more than we took in was unsustainable. He didn't even know what was going on. None of the old board did. They were just there for free golf.
Save your property. Save your investment. Save your neighborhood. The Property Owners Association is now in good shape. Finish the job; finish the reform. Please vote for Albert Ewing, Jake Jacobson and Stephen Daniels to continue the return to honest and fiscally sound government for Eagle-Vail. And then get involved and stay involved so that we don't slip back.
Carl Luppens is an Eagle-Vail resident.
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