The Tellico Village Property Owners Association budget is set for 2018 after a split vote Nov. 15 during the monthly board of directors meeting.

“This has been a long and arduous process,” Parker Owen, POA chief financial officer, said. “Perhaps the most challenging of my tenure.”

The board voted in July to approve new guidelines for a balanced budget that included a maximum 3 percent salary increase for POA employees based on performance, no changes in rates or fees for Villagers, no increase in assessments and no new amenities other than projects already in the five-year plan.


The Finance Advisory Committee recommended the board vote on a budget with a 4 percent assessment increase in order to “maintain a balanced budget with positive net income and fully fund reserves.”

According to information provided during the meeting by Owen, a 4 percent increase to the assessment rate would lead to $350,972 of net income in 2018 and $759,996 in 2019, resulting in total cash reserves of $3.4 million in 2018 and $2.6 million in 2019.

A 2.5 percent increase would lead to net income of $219,095 and $615,345, with total cash reserves of $3.3 million and $2.4 million, respectively, Owen said.

Board members Alan Hart, Claire Frazier and Tom Lee supported a 4 percent increase, primarily to bolster the amenity reserve ahead of the Toqua and Kahite clubhouse projects slated for 2019. At a 4 percent increase, the amenity reserve would drop to $414,895 in 2019, while at 2.5 percent the reserve drops to $230,774.

“The capital expenditures that we anticipate in ‘18 and ‘19 are going to drain a lot of our resources,” Hart said. “I would recommend the 4 percent. I think the FAC has it well thought out and well-reasoned.”

Hart suggested a 4 percent increase that would sunset to 2.5 percent after two years.

The board instead proceeded with a motion from Cap Purvis for a 2.5 percent increase. The motion was seconded by Sue Tinder.

“Am I for saving? Yes. Absolutely,” Tinder said. “That’s what I’ve done all through my life and that’s how I was brought up. I’m not convinced at times that previous boards saved as much.”

Tinder criticized a 4 percent increase as an excuse to spend “more money than spending inside the budget.”

“There is a vocal minority that want higher fees and more assessments, but the silent majority that elected me wants to live within our budget,” she said.

Lee disagreed, calling the larger increase insurance against the unexpected.

“We have no way of projecting in four years what’s going to happen with construction costs,” Lee said. “We’ll find out next year when we take those projects out to bid. ... The fact is, four years ago when that money was put in the five-year plan for the Toqua project we were not growing anywhere near what we are today.”

Vote for 2.5 percent increase passes 4-3

The vote passed 4-3 in favor of the 2.5 percent increase, with Purvis, Tinder, Mike Colacone and Bruce Johnson voting in favor. Frazier, Lee and Hart opposed.

“I’ve thought long and hard about what needs to be done here, and I do not take this thing lightly,” Johnson, board president, said. “I have half the board wanting zero or very little increase and have half the board wanting high or almost max. I try my best to bring the board together to a compromise position. It’s very difficult to do.”

The budget as passed includes a capital plan of about $1.8 million, with $1.5 million for equipment replacement and renovation. The remainder covers additions to infrastructure and equipment, and design work for the Toqua and Kahite clubhouses.

Fee increases included 3 percent for fitness, dock leases, RV storage and water, and 17 percent for sewer.

The board also approved a mowing contract with Millsaps Mowing Service at $80,960 per year, which came in nearly $100,000 less than two other bids.