961 Arrowhead Drive Pocono Lake, PA. 18347

Dear Arrowhead Lake Community Members:
th
On October 5 , 2013, your Board of Directors adopted the Strategic Plan for Arrowhead Lake Community Association
(ALCA) and Arrowhead Sewer Company (ASC). This is the first comprehensive, forward-looking study of its kind
conducted for Arrowhead.
Our Community has undergone tremendous change within the past 50 years, and the strategies that have worked in
the past, will no longer work for our Community’s future. The Strategic Plan includes details that address the
Community’s aging infrastructure and long-range plans, which will assure the continued improvement of amenities to
provide the safety of our Members and Guests, along with their enjoyment, through strong fiscal management of our
Operating Expenses and adequate funding of our Reserves to ensure its future.
This plan, developed by the Strategic Planning Ad-Hoc Committee, assesses the status of our Community’s
infrastructure, governance, amenities, property, operations, finances, and lays-out the strategies for their growth and
improvement over the next 5-10 years. The committee, made-up of a group of Member volunteers relied on input
from Management, Committees and a broad segment of Members through a member survey over the course of the
past two years.
Within the plan, there are strategies for improvements that affect everyone’s enjoyment of the lakes, such as the
additions of a youth center, walking/bike path and a bridge over the lower spillway. However, one of the most
strategically important parts of the plan centers on the waste water systems, roads, and drainage projects. ALCA and
ASC’s Reserves are inadequate, as the Community has not historically saved money for major replacement projects
and has kept dues artificially low in the past.
Arrowhead has major problems with water infiltration and inflow in the gravity section of the sewer system, which are
caused by cracks and breaks in the pipes, improper grading of manhole covers, illegal sump pump hook-ups, and
other issues. The Pennsylvania Department of Environmental Protection has reviewed the situation and mandated
that Arrowhead show a good progress on fixing the problems by 2017. The estimated cost for the project was
estimated at $17M by a professional engineering firm. The second major infrastructure problem is roads and ditches.
The roads are rutted and are washed out after every major rainstorm. Rocks and sediment fill-up the lakes each year,
due to improper drainage. The sewer pipe replacement and road/drainage projects must be completed in
coordination to maximize their cost efficiency. This, along with finishing the expansion of the sewer line around the
perimeter of the lake, adds another $10M in cost to the project.
While being in compliance, with these mandated infrastructure improvements are necessary, the Strategic Plan
provides a comprehensive roadmap for the future growth, financial security and continued improvements of ALCA
and ASC.
There will be Member Informational Sessions held with volunteers from the Strategic Planning Ad-Hoc Committee
and your Board of Directors to help answer any of your questions in regards to the Strategic Plan.
We thank the Members of the Strategic Planning Ad-Hoc Committee for their tremendous effort and accomplishment.
On behalf of your Board of Directors,
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ALCA / ASC
STRATEGIC PLAN
October 7, 2013
Produced by the Strategic Planning Ad-Hoc Committee
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TABLE OF CONTENTS
Page
1. Strategic Planning Purpose at ALCA/ASC
4
2. ALCA Mission and Vision
5
3. Shared Values
6
4. Situation Assessment
A. The Challenge of Change
B. ALCA SWOT Analysis (Strengths/Weaknesses/
Opportunities/Threats)
7
13
5. Objectives, Goals and Strategies of Strategic Importance
15
A. Governance
16
B. Infrastructure Requirements for Preservation,
Protection and Maintenance of the Community
a. Comprehensive Master Plan
b. Wastewater Management
c. Roads and Surface Water Drainage
d. Maintenance of Facilities
e. Lakes Management
23
24
25
29
33
36
C. Administration And Communications
41
D. Quality of Life
44
E. Security and Safety
48
F. Financial Management
a. ALCA AND ASC Revenue Strategies
b. ALCA AND ASC Operating Expense and
Capital Reserve Strategies
50
58
G. Major Funding Priorities
65
H. Strategic Plan Implementation Process
76
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Appendices
a. ALCA History
b. Strategic Planning Committee
c. Committee Input to Plan
d. Management Input to Plan
e. Member Survey Response Summary
f. Reserve Study
g. Maps
1. ALCA Facilities
2. ASC Wastewater System
h. ASC Master Plan
i. ASC Revised Rules & regulations
j. List of Documents Reviewed During Preparation of
Plan
k. Government Agencies that Impact Arrowhead
l. Current Status of Reserve Fund
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1. Strategic Planning Purpose at ALCA/ASC
The purpose of strategic planning is to increase our ability to support the
Mission and Vision of Arrowhead Lake Community Association (ALCA)
and Arrowhead Sewer Company (ASC). ALCA is facing challenging times
requiring solutions and funding that will bridge over many years. In the words
of H.L. Mencken, “for every complex problem there is a simple
solution…and it is always wrong”.
ALCA can no longer expect yesterday’s strategies to achieve today’s and
tomorrow’s goals. ALCA is now a more complex, mature community with
aging infrastructure to upgrade and maintain over the coming years based on
comprehensive planning, project prioritization and effective management.
Like the Lodge, any new facility and program to serve members will require
careful planning and financial support consistent with projected revenue.
An effective, mission-based strategic plan will have long-term goals tied to
annual action plans that remain flexible to changing conditions. With clear
strategic goals and objectives, the Board, staff, committee volunteers and
other stakeholders are able to develop measurable action plans consistent
with their common understanding of the strategic direction that will assure the
long-term viability of ALCA/ASC.
2. ALCA Mission and Vision
Mission Statement
ALCA is a member-owned, family oriented vacation and residential community providing
for multi-generational recreational activities and amenities. Through the uniform
direction of our strategic plan, which incorporates strong fiscal management,
responsible and proactive infrastructure management, and environmentally sensitive
decision making, ALCA will ensure the enjoyment of our community for current and
future generations.
Our Community Vision
Arrowhead Lake Community Association will be the foremost privately-owned family
oriented vacation and residential community in Pennsylvania. Our community plan, as
set out in the strategic plan along with its annual work plans, will reflect the vision and
shared values of the majority of our community owners. We will maintain sound
investments in the responsible planning and management of the community
infrastructure and environment.
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We will continue to encourage active participation by members to benefit from their
diverse knowledge and experience which will grow and strengthen the community. We
will practice strong, environmentally conscious, forward-looking leadership with fiscal
responsibility, sound management, and open communication.
(The above Mission and Vision are considered strategically important and require eight out of nine Board
Members’ approval to change per the Governance Section, Strategy 7)
3. Shared Values
ALCA’s historic and long-term success relies on the following fundamental
Shared Values.
Honesty and Integrity – Owners are honorable, trustworthy
and sincere about the welfare of the Association and fellow
members
Excellence – Always strive to deliver the best possible services
and facilities to the community
Volunteer Involvement – The Association relies on member
committee and other activity volunteers
Responsive – Leadership listens, is empathetic and takes
appropriate action
Open Communication – Transparency is maintained in all
decisions and actions of the Board, Management and Committees
Accountability – Leadership is responsible to the community for
all decisions and actions
Active Community – Arrowhead provides a wide range of yearround recreation, entertainment and activities for all members
Environmental Sensitivity – The community protects the
environment and invests in its beautification
(The above values statement is considered strategically important and requires eight out of nine
Board Member’s approval to change per the Governance Section, Strategy 7)
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4. Situation Assessment
A. The Challenge of Change
Both ALCA and the Poconos have changed over the past fifty years, in some instances
fairly dramatically. The challenge to the Association is to retain the spirit of our historic
Mission and Vision while continuing to adapt to the changing needs and interests of our
original and new members, maintaining and improving a more complex and costly
infrastructure, and managing the impact of increased external regulatory and economic
influences on the community.
As the Poconos and Monroe County have grown dramatically over the past fifty years,
so has Arrowhead. In late1964 when Arrowhead began sales, the Poconos was the
honeymoon capital of America. Camelback had just opened the year before with a few
slopes. There were no casinos, no water parks, and no mega-stores. There were only
around 40,000 residents in all of Monroe County. Now the population has grown to
almost 169,000 residents in 2012.
After Sections 1-7 of Arrowhead opened for sale in 1964 there were around 40 early
settler homes by 1966, a lake with no island, no Owassa bridge over Trout Creek, no
ALCA board, no pools or Clubhouse. Today, in addition to a Clubhouse, we have an
outstanding new Lodge, three pools, and many amenities only dreamed of by our early
settlers. (See Map 1-ALCA Facilities in Appendix g). Today there are over 2400 houses
and 1100 owned lots of the total 4330 properties in the community.
ALCA has accomplished all of this while adhering to the spirit of the original bylaws of
the Association that stated its purpose in part “…to promote the interest of its
members in social and recreational facilities, roads, lakes, premises, and
activities, in and about the premises of Arrowhead Lake…”. (See a more detailed
history of ALCA in Appendix a.)
But just as the “honeymoon capital” is no more, changing demographics, economic
conditions and other external factors can influence how our community responds to
current and future needs to achieve its Mission.
For Arrowhead these factors have been significant in recent years and parallel to some
degree the overall U.S. situation:
1. Changing Demographics – As a community founded by and for more suburban,
middle class working families, Arrowhead’s membership has evolved in ways that
require close attention to changing interests and needs of a more diverse
member profile. Like the U.S. population, the member profile has changed over
the years with a growing number of older and retired owners. Many original
owners are now full-time residents in retirement while others spend their winters
in warmer areas of the country. With two-income households more the norm,
younger members or Associate family members find it more difficult to spend full
summers here with their children. Most new homes are much larger than the
original structures, most of which remain occupied or periodically used by the
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children of now deceased original members. One sign of the changing
demographic diversity in the community today is that home values now range
from under $50,000 to $400,000+ for homes on the Lakes. With many owners
spending less time at their Arrowhead homes, part-time vacation rentals have
become a more significant summer trend and, to a lesser extent, in the Winter
season also. While Arrowhead remains in large part a community that attracts
and retains a similar demographic to its roots, differing member and guest
interests, needs and involvement have and will continue to evolve.
2. Impact of the Economy – The general economy has a direct impact on ALCA’s
growth and financial strength. Monroe County has suffered more significantly
from the recent recession than other areas in Pennsylvania and the country with
an unemployment rate remaining above 9%, high foreclosure rates, and
outmigration. At the same time, the County has seen growth in Section 8
housing. Other associations in the area have struggled economically, cutting
services. Arrowhead has avoided the worst problems and, in fact, has made
investments in upgrading the Island Pool and constructing the Administration
Building and Lodge during this period. However, our low ALCA and ASC reserve
funds have become a significant issue to address.
At any recent given time, there were over 100 mostly older homes for sale in
Arrowhead. ALCA now owns over 300 properties with an additional 147 in
Monroe County tax Repository.
Today the Association faces the same major influence and impact areas. Monroe
County is facing the highest foreclosure rate on homes in its history. But we have
not escaped the stagnation in member growth, increased default in member dues
payments, more neglected, blighted houses and hardship for an increasing
number of members to afford ownership in Arrowhead, either due to fixed
incomes orreduced or lost employment income. There has been a major impact
on the number of owners who were not paying dues and have lost their homes or
lots primarily due to the same high unemployment and reduction of family
income. This has translated into a loss of dues from home and lot owners.
Delinquencies equaled 14% of billed dues in 2012 or $658,441. The Arrowhead
Sewer Company has some losses from homeowners but the major impact has
been the loss of availability fees paid by the lot owners in sections 14–21.
Arrowhead took over 62 more properties in the past three years. As of January 1,
2013, ALCA has 300 lots in its inventory and 514 lots which have been Greenbelted. Monroe County is currently carrying 147 lots/homes on which overdue
taxes that have not been paid. The developer (Bank) still owns 29 lots in which
the Association does not get any dues. The total number of lots which no longer
pay dues is 988 out of the original total number of lots of 4,330. This represents
23% of all lots and over $800,000 in annual lost dues revenue.
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On the positive side, according to local realtors Arrowhead homes are holding
their value better than similar Pocono communities during the recent economic
downturn.
ARROWHEAD REAL ESTATE
SALES*
*Data provided by Keller – Williams **Sales through 5/29/13
Since 2007 there have been 427 homes sold in Arrowhead representing 17.7%
of all homes. Sale prices ranged widely from a low of $17,000 to a high of
$446,000. Of the 50 lots sold, the average value in excess of 15,000 would
indicate that most have sold on the lakes and in the sections with sewers.
With most predictions of a slow economic recovery over the coming years, the
Association will need to remain extremely diligent in maintaining a sound fiscal
policy and increased operational efficiencies while continuing to provide needed
services.
3. External Impacts and Influences -- When All American Realty developed
Arrowhead Lakes, there were very few external regulatory influences and
impacts. They still had to face economic impacts and severe weather impacts.
The only building code was the one developed by All American Realty, which
essentially set the minimum square footage for homes to be built, and the
installation of a drainage pipe for the driveway. They provided no water supply
and the only waste water treatment was on-site septic with little or no inspection
for the installation. The homeowner only had to pass a percolation test to show
that they could put an on-site septic system on their lots. Roads were built and
dams were constructed with essentially no local, state or federal oversight.
Slowly that changed, and more and more regulations generated at the local,
County, State and Federal levels started to restrict not only what the Association
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can do, but also placed restrictions on what homeowners and lot owners could
do on their property.
Township and Monroe County officials encouraged the developments to improve
their tax bases and encouraged tourism in the area, which was economically
depressed after its heyday in the 1900 to 1920s.
The local townships in the area relied on state police to provide their police
protection.
The second area of impact is the force of nature, which can impact the
community with ice storms, major snowstorms, tropical storms, hurricanes,
extreme weather and extreme wind events. This has and will continue to have
major impacts on our roads, drainage, sewer system and electrical service to
homes and the Association facilities. Over time Mother Nature has eroded the
infrastructure of the community. With a total of 2,413 homes now within the
community, our infrastructure and emergency response systems are being
overtaxed. For the long-term owners, it is clear that that the tree cover is now
twice as tall as when our community started, and when these large trees get wet
feet they can cause severe damage to adjacent property, community facilities
and homes. Currently the Association requires that no more than 50% of the
trees on a lot may be removed without being replaced. This situation has been
aggravated by the fact that sump pumps are not required to be discharged to
existing drainage ditches and existing drainage facilities are inadequate to
properly carry surface water to natural watercourses.
By far the biggest impact on our community has been the growth of big
government at all levels of the Township, the County, the State of Pennsylvania
and the Federal Government. The Pocono Mountain Regional Police and the
Arrowhead Lake Community Association’s security personnel are now
responsible for the safety of our community. Both Coolbaugh Township and
Tobyhanna Township have zoning and building codes in place which are
statewide, but enforced by code enforcement officers in each township. The
townships also have wastewater enforcement officers that are responsible for
enforcement of residential on-site septic systems. The Pennsylvania Department
of Environmental Protection is responsible for oversight and enforcement of
discharge permits for the Arrowhead Sewer Company sewage treatment
facilities. If the Association would like to cross a stream, extend a sewer
collection system or construct drainage facilities, it involves a number of
government agencies at the local township level, Monroe County level,
Commonwealth of Pennsylvania and the federal government. The total number
of agencies involved could be as high as 15. A building such as the Lodge
required interface with agencies at all 4 levels of government. If we are talking
about the lakes and dams we have yet another assortment of government
agencies at all 4 levels. If you have wetlands on a residential lot and you're
planning to build a home this can involve agencies from 3 of the 4 levels of
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government. The bureaucratic maze that the Board of Directors and the General
Manager and his staff face during every day activities can become
overwhelming, especially if one of the agencies is overlooked. A list of agencies
that impact the community is shown in Appendix k.
4. Infrastructure Maintenance and Improvements – ALCA has grown into a very
large community that requires significant infrastructure maintenance and
improvements in five major areas:
a. Roads and Surface Water Management – we now have 41 miles of
roads to maintain with significant drainage and deterioration issues to
address over the coming years
b. Maintenance – In addition to the continuing need to maintain equipment,
common areas, and pools and buildings, there remains an ongoing
interest in further common area infrastructure and beautification
c. Wastewater Management – The need for adequate long-range waste
water treatment both for the current Arrowhead Sewer Company customer
base and the remainder of the community is pertinent to the future
environment and financial stability of the community. Homes that are
more than 30 years old may find their on-site septic systems have failed.
In addition, the existing sewer lines are aging and damaged, causing
infiltration of storm water into the sewer system along with improper
draining of some gutters and sump pumps into the system, affecting water
processing loads and capacity.
d. Buildings – The new Lodge is a great asset to the community that will
require careful planning and oversight to realize its full benefit. In addition
to maintaining the recently built Member Services/Welcome Center
building and other facilities, planning for the future use of the Clubhouse
will continue to support community needs.
e. The Lakes – Perhaps the single greatest physical assets of the
community, the lakes and associated streams and tributaries, are
vulnerable to a full range of negative environmental impacts that require
constant monitoring and control.
5. Recreation – A fundamental element of ALCA’s Mission is and has been to
provide multi-generational recreation options for members. The key in providing
these activities is to both maintain traditional activities while adapting to the
changing needs of the community, whether it is greater senior citizen activities,
new games for younger members, adequate sports facilities, etc.
6. Security – As a gated community, ALCA differentiates itself from other
communities in its focus on security. At the same time, Arrowhead is not immune
to the growing social problems that impact all communities. With growth and
demographic changes, in addition to an adequate Security force greater attention
to emergency preparedness and advanced tools for use by Security will be
required to maintain our high level of security.
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7. Governance – The basic internal governance structure of ALCA and ASC has
not changed significantly over the years with an elected Board supported by
various advisory committees and a management team reporting to the Board
through a General Manager. The community is guided by reviewing and
changing the Bylaws and Rules & Regulations, as needed. The lack of member
participation is a great concern, with fewer than 40% of owners voting in recent
elections and fewer new volunteers for committee work. The key to our
continued success will be retaining and attracting candidates for each area with
the experience and knowledge to perform their duties in an increasingly complex
organization. In addition, the tools we use to communicate with and receive input
from all members have become more important, as the low voter turnout and
meeting attendance demonstrates.
External regulatory governance has become increasingly complex. Arrowhead is
situated within two townships that frequently have different regulations that need
to be considered when codifying ALCA/ASC rules and regulations. PADEP and
other environmental agencies change regulations with greater frequency,
impacting issues especially with sewer treatment and lake management.
Relations with these and other State agencies have become more essential to
assure compliance and support of the Association’s development.
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B. ALCA SWOT ANALYSIS – The following exhibits summarize the current
Strengths, Weaknesses, Opportunities and Threats to the Association.
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5. Objectives, Goals and Strategies for Areas of Strategic Importance
The following sections describe the specific goals and related strategies to
achieve the Mission and Vision of ALCA over the coming years.
A. Governance
B. Infrastructure Requirements for Preservation, Protection
And Maintenance of the Community
a. Comprehensive Master Plan
b. Wastewater Management
c. Roads and Surface Water Drainage
d. Maintenance of Facilities
e. Lakes Management
C. Community Involvement and Communications
D. Quality of Life
E. Security and Safety
F. Financial Management
a. ALCA AND ASC Revenue Strategies
b. ALCA AND ASC Operating Costs and Capital Reserves
Management
G. Major Funding Priorities
H. Strategic Plan Implementation Process
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5. A. Governance
Background
ALCA/ASC has both an Internal Governance structure and External Governance and
regulatory agencies that guide and regulate the activities and development of the
community.
External Governance
Regulatory compliance has become more complicated over the years resulting in
greater need for close coordination with a growing number of government agencies.
Since Arrowhead straddles both Tobyhanna and Coolbaugh Townships, a number of
situations occur where Township ordinances do not agree. We have had to carefully
define our Bylaws and Rules and Regulations to comply with both.
In addition, significant environmental and other regulatory activity has emerged over the
years with county, state and federal agency requirements impacting our lakes,
groundwater/septic, buildings, Sewer Company Management, and most other
maintenance and development activities in Arrowhead. The growing intrusive nature of
government agencies at all levels demands greater reliance on professional experts in
many areas, i.e. attorneys, CPAs, engineers, wetland experts, etc.
Internal Governance
The foundation of ALCA’s and ASC’s future success has not changed since the original
Boards of Directors and key committee volunteers established a strong governance
framework. Over the years, volunteers have been the backbone of Arrowhead’s growth,
strategic direction and service to the community. Fortunately many early board and
committee members were forward looking, highly skilled, professionals who provided
sound fiscal control and direction to the management team.
Most long-term members talk about how active and involved the majority of members
were in the past and how volunteering and general participation has lagged in recent
years. This issue is most evident in the participation level in recent Board elections
where fewer than 40% of eligible voters participated. Not many members regularly
attend Board meetings. And members who served in the past feel the need to step up
again to run for the Board or return to committees they served on for years due to lack
of new participants.
Arrowhead has members with considerable professional experience in finance,
engineering, environment and other skills that can greatly benefit ALCA. Without the
increased participation of members who can contribute their skills and experience to the
evolving needs of ALCA, we risk looking backwards and not addressing the new
challenges that must be managed to assure Arrowhead’s future growth and continued
success.
The increased complexity of managing ALCA and ASC has required adding more
experienced staff in all areas and complementing their skills with professional outside
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consultants when needed. Many activities previously handled by committees have
transitioned to management. This is indicative of the changing needs and desires of the
current member demographics, as well as the increased complexity of running a large
community containing multiple amenities. The community is experiencing a natural
evolution from being member-run to being professionally managed, which is a
necessary evolution that occurs in small communities as they grow in size, complexity
and member diversity. We see this change in process today evidenced by the reduction
in new volunteers for events and committees, and a low participation in election voting
and board meeting attendance.
The following charts contain the current organizational structures of ALCA and ASC.
While there have been some changes in management and committees over time, ALCA
and ASC have remained the same.
ALCA Organization Chart
PRESIDENT
VP
SEC.
TREAS.
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
TO MODIFY THIS CHART:
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Chart toolbar.
TO CREATE YOUR OWN CHART:
On the Insert menu, point to Picture, and then click Organiza
GM
ROADS
&
DITCHES
FACILITIES
MAINTENANCE
SECURITY
CONTROLLER
RECREATION
MEMBER
SERVICES
AQUATICS
ASC Organization Chart
PRESIDENT
VP
SEC.
Tres.
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
TO MODIFY THIS CHART:
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Chart toolbar.
TO CREATE YOUR OWN CHART:
On the Insert menu, point to Picture, and then click Organ
GM
SEWER
PLANT MANAGER
In summary, a different governance process will be needed for ALCA/ASC as the
Association moves towards more long-range strategic planning, community-wide
infrastructure master planning, reserve requirements and major project funding. A
strategic plan by its very nature is modified significantly only under unusual
circumstances or major external environmental changes. The unique structure of a
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community association’s board, advisory committees and operating management
requires a specific, agreed to governance process to assure a level of continuity, fiscal
control and compliance over time.
Objective and Goals
ALCA must rely heavily on an effective elected Board of Directors and committee
volunteer participation to assure continued success. Where needed, members recruited
with specific skills and experience will further enhance committee support of the Board.
This will be achieved through increased communication methods to both inform
members and solicit greater input and participation from a majority of members. We will
work closely with all government agencies to assure compliance and positive relations.
The governance structure, policies and approach will be refined over time to reflect
current best practices and regulatory requirements. (This Objective statement is
considered strategically important and requires eight out of nine Board Members’ approval to
change per the Governance Section, Strategy 7)
Strategies
1. Configure committees to fit the requirements of their advisory function
a. Review committee structures and establish specific optimum size needed
to function.
b. Establish and recruit for special desired skills and experience needed on
the committee.
c. Determine if more or less than three meeting attendance or other criteria
are necessary to join a committee.
d. To assure full participation and avoid possible stagnation, committees will
reorganize every year at the time of Board elections by submitting a new
roster of members for board approval, voting for Chairperson, Secretary
and other roles and the Chairperson will not serve for more than six
consecutive years with the last year ideally being a transitional year during
which the Chairperson trains the next person on how to carry out the
duties of the Chair.
e. All committees will develop a Mission and Vision Statement and specific
goals on how they can support the Board and staff in carrying out the
Strategic Plan.
f. The Board will work to maintain close communication with all the
committees on a regular basis.
2. Increase member participation in standing and ad hoc committees.
a. Define the goals, issues and impact of the committees on the Association.
b. Communicate risks/costs to the Association if the committee cannot
perform its role adequately without needed member support.
c. Reach out through all available Association media requesting applicants
for the committee.
d. Use new technology for part-time members to participate remotely.
e. Provide special recognition to active committee members.
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3. Periodically assess and modify the structure of the Board of Directors to
maintain effective governance of ALCA/ASC.
a. Use member expertise, management and outside resources such as legal
counsel and the Community Association Institute (CAI) to continuously
review best practices in homeowner association governance.
b. Review Board size, term limits and related structural elements to maintain
effective governance of both ALCA and ASC.
4. Provide appropriate levels of oversight, authority and responsibilities for
management to perform its duties effectively and efficiently
a. As the expertise and qualifications of the ALCA/ASC management teams
increase, continue to delegate greater authority and responsibility to these
professionals.
b. Require Department Managers to prepare annual work plans and goals
that are aligned with the Strategic Plan, and monitor performance against
plans for each department.
c. Work through management with outside professional consultants
approved by the Board.
5. Dedicate resources and personnel to maintain relations with external
regulatory agencies and elected officials
a. Establish Board and management Liaisons to both townships.
b. Regularly communicate Arrowhead plans, issues and needs to all related
government agencies and elected officials.
c. Engage regulatory consultant experts as required.
6. Commitment to a Strategic Plan and Community-wide Infrastructure Master
Planning requires a more stable governance process. The defined
governance process includes:
a. Annual confirmation by all current and new board members of agreement
with the Strategic Plan.
b. All committee members will be asked to confirm support of the Strategic
Plan.
c. A clear delineation of the authority of management staff to execute
aspects of the plan based on documented annual action plans.
d. Strict limitations on using earmarked reserves to offset increased
operating costs or reduction in dues. (For specifics on such limitations,
see # 7 below and pages 60 & 61, Strategies 4, 5, 6 and 7 in ALCA
Expense and Capital Reserve section)
e. A formal process to review financial and other community impacts of any
proposed changes to plan priorities by Management, Budget Committee,
and affected committees and expert consultants if needed. ( See # 7
below)
f. Bi-annual Strategic Plan review.
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7. Require a formal process to review financial and other community impacts
of any proposed changes to major plan priorities
a. Any proposed changes to the following areas in the Strategic Plan will
require review and approval by a super majority (eight out of nine) vote of
the Board:
1. Mission, Vision and Values;
2. Objective and Goals statements in each section of the Plan;
3. Governance -- all strategies in Governance that become part of Bylaws
and/or Rules and Regulations;
4. Comprehensive Master Plan, Wastewater Management Master Plan,
and all
additional infrastructure Master plans that are recommended
in the plan and commissioned;
5. Entire Funding Section G of the Plan that is approved in the final
version;
6. Any change in documented reserve funding and investment policy (#11,
page 75);
7. Any non-emergency use of reserves for other than defined purpose;
8. Any proposed reduction in annual reserve funding requirements greater
than $100,000 not contained in independent reserve study;
9. Reserve elements contained in Strategies # 4, 5, 6, 7 of section F. b for
ALCA (page 60 and 61) and 1,4, 5, 6, & 10 for ASC (page 63 & 64);
10. The timely execution of a plan and funding document for all future
mandatory regulatory requirements issued by local, state or federal
agencies;
b. If the Board of Directors determines that one of the above changes to the
Strategic Plan should be considered, it first must be submitted to
Management, the Budget Committee, Strategic Advisory Team and any
affected committees for comment and analysis of any financial impact
c. After reviewing the comments and financial impact assessment, the Board
must pass any changes to the Strategic Plan by a super majority vote of 8
of the 9 members.
8. Increase member participation in the election of Board members
a. Expand the communication channels used to announce candidates and
provide membership with more access to each candidate by using multiple
types of media, including social media, blogs, website and live chats with
the candidates.
b. Implement an electronic balloting process that can be used via computer,
internet and/or mobile device (See also Community Involvement and
Communications Strategy 8).
c. Communicate the importance of getting all members with e-mail accounts
to provide and maintain current addresses with the Association.
19
d. Provide more candidate information to the community members, including
answers to specific policy and strategy questions.
e. Televise or record and post candidates’ night interviews on the Arrowhead
cable channel 80, YouTube and other available media so that all members
have the opportunity to see and hear what each candidate said.
9. Establish Strategic Advisory Team of experts in their field similar to those
established at major Corporations
a. Form an Advisory Team to provide expert advisory support to the Board
and to standing committees at the direction of the Board. This Team will
have no organizational authority.
b. Membership on this group will include the Board President, acting as
Chairman, General Manager, ALCA Budget Chairperson, ALCA/ASC
Engineering Consultant Sr. Representative, Lawyer and selected ALCA
members with professional experience and skills that will benefit the
strategic direction of the Association.
c. Reach out to the ALCA community to find professional expertise in key
strategic areas, including Civil Engineering, Lake Management, Finance
and Accounting, Environmental Management, Regulatory Compliance,
Planning, Association Management and other specializations to be part of
the Advisory Team.
d. Only candidates will be eligible who can demonstrate relevant expertise
and qualification in their field and a commitment to participate as needed.
e. Members will be selected by the Board and reviewed annually to
determine if they should continue to participate.
f. The Strategic Advisory Team will meet semi-annually or on-call with the
ALCA/ASC Board to review status of major projects, issues that may
impact ALCA/ASC or the strategic direction of the community.
10. Immediately following adoption of the Strategic Plan form an Ad-hoc
Bylaws committee to amend the ALCA Bylaws necessary to implement the
approved plan strategies.
11. Retain counsel to begin the process to develop and gain member approval
of a new Master Covenant Agreement for the Association.
12. Implement a project screening system as outlined in the following exhibit
for all projects or services being considered by ALCA and ASC to address
the following key elements at each stage in the process:
a. Accuracy of project costs
b. Level of detail for project scope, specifications and drawings
c. Addressing all permit requirements
Completeness of the financial plan including sources of funds and timing
of available funding
20
Proposed
Project Idea
Define Scope
& Ball Park
Estimate
Abandon Project
Rejected
Preliminary Proposed
Project Review by
Committee & BOD
Continue
Prepare Level C
Cost Estimate & List
Permits
Rejected
Mod
Rejected
Continue
BOD Review &
Approval
Mod
Pass
Prepare Plans &
Spec .
& Level B Cost
Estimate & Obtain
Rejected
Mod
Approved
BOD Review &
Approval In SP &
Master Plan
Rejected
Approved
Place In Annual
Work
Plan
Advertise & award
Contract During
YEAR Plan Cost
Place Project In
Service
21
5. B Infrastructure Requirements for Preservation, Protection
and Maintenance of the Community
The infrastructure in Arrowhead represents the majority of annual operating
costs, capital expenditures and reserve requirements. The many amenities
developed over the years from buildings to the pools, tennis court and common
areas require annual maintenance and periodic upgrades. The lakes and
streams must be of quality for full swimming, fishing and recreational boating
access.
In many instances, ALCA and ASC are in a catch-up mode due to the age of
these facilities and their having gone beyond their useful life without repair or
replacement.
Whether it is updating the wastewater facilities, lake reclamation, road repairs,
building and equipment maintenance or the beautification of our common areas,
significant long-term investment will be required.
In addition, all of these essential infrastructure investments need to be
coordinated under a Comprehensive ALCA/ASC Master Plan.
The following section contains the infrastructure strategies required for the
preservation, protection and maintenance of the community.
a.
b.
c.
d.
e.
Comprehensive Master Plan
Wastewater Management
Roads and Surface Water Drainage
Maintenance of Facilities
Lakes Management
a. Comprehensive Master Plan
Background
ALCA and ASC historically have never addressed infrastructure and other amenity
requirements and strategies under a Comprehensive Master Plan. Roads and surface
water drainage issues have been worked on separately from ASC’s expansion of the
sewer lines. Management and preservation of the lakes has not adequately addressed
the impact on water quality of run-off, erosion and septic system failures. Building
maintenance, repair and replacement have been funded and managed outside of any
Consolidated Master Plan guidance or direction. The net effect of this has been lost
opportunities to lower costs through a coordinated effort to complete work
simultaneously or in an orderly fashion. In addition, funding priorities, reserving and
resource allocations have lacked long-range strategic focus and planning. With current
demands for spending in these areas and desired enhancements to member services
and facilities in addition to normal operating cost increases, the community needs to
develop, set priorities and coordinate efforts under a Comprehensive Master Plan.
22
Objective and Goals
As part of its Strategic Plan, ALCA and ASC will develop and coordinate all future
infrastructure investments and work plans under a Comprehensive Master Plan. In
addition to the main infrastructure areas, investments in Communications, Quality of Life
and Security initiatives will be undertaken and funded in compliance with the Master
Plan. (This Objective statement is considered strategically important and requires eight out of
nine Board Member approval to change per the Governance Section, Strategy 7)
Strategies
1. Develop and periodically update the Community-wide Comprehensive
Master Plan
a. All Association-owned property will have detailed site plans showing existing
and future facilities and activities with a development timeline including
concept and cost.
b. Each plan will include documentation of how it is being coordinated with other
infrastructure initiatives and the savings derived from that coordination.
c. Infrastructure implementation schedules will be completed in compliance with
the Master Plan and Strategic Plan.
d. The Master Plan also will include detailed concepts for the coordination of the
architecture of facilities, activities, signage and landscaping guidelines.
e. Master Plan infrastructure initiatives will follow the natural landscape of lots.
f. The Master Plan will provide education on the protection of the community’s
natural resources and wetlands.
2. In addition to infrastructure initiatives, all proposed enhancements for the
beautification, quality of life and security at Arrowhead and other strategic
initiatives will be undertaken in compliance with the Master Plan.
b. Wastewater Management Strategies
Background
A major infrastructure concern for the community is the need to assure adequate
wastewater treatment whether through the Arrowhead Sewer Company or existing onsite homeowner septic systems. Currently, the Sewer Company serves homes in only
part the community while Sections 1 through 13 homes are mainly on septic systems
maintained by the homeowner. The Sewer Company has long and short range plans in
process to upgrade and maintain the existing system.
However, there is considerable concern that a hidden danger exists from the likely
deterioration of many very old septic systems in the community. This pollution of the
aquifer and lake is a real and hidden risk to the entire community that must be
addressed over the coming years. The problem is compounded by the recent change in
23
PADEP rules for Arrowhead that severely limits new sewer hook-ups in the old sections
of the community requiring changes to the current Act 537 plans prior to any resumption
of extending the sewer system to Sections 1-13. Current rules and regulations
governing on-site septic systems at ALCA and both townships lack the necessary
enforcement and fine structure that considers the age and condition of the system.
While the existing sewer system is the current focus, a more comprehensive approach
is needed to address the significant sewage treatment issues facing the entire
community. We know that there are very old septic systems that are likely leaking and
that our community does not perc well in most areas. When a septic system fails and a
septic field no longer percs, a major homeowners expense is needed to replace the
septic system and field or sand mound. When residents cannot afford the expense and
cannot use the home anymore, they stop coming to the lake and subsequently may stop
paying their dues. Homes with septic systems that do not pass inspection cannot be
sold. So they can become worthless and eventually end up as abandoned and blighted
properties. This problem is costly to the remaining members in the form of higher dues
and lower home values. Expansion of the sewer system throughout the community
provides a second option for homes and landowners with properties that do not perc, or
with known and unknown on-site septic systems that are failing or have already failed,
to remain at Arrowhead, sell their property or convert them back to dues-paying owners.
And as we know, reasonable sewer customer fees can be maintained more easily by
increasing the customer base.
The most efficient way to deal with major improvements to the sewer system is through
close coordination with the infrastructure improvements on roads and drainage systems
so that needed work is not done multiple times in the coming years.
Objective and Goals
The vision and long-term objective of ALCA is to deliver quality service to ASC
customers at reasonable fees and see the entire community serviced by a cost-effective
central sewer system while maintaining and upgrading the system as new and
innovative processes are developed and implemented in compliance with Pennsylvania
Department of Environmental Protection (PADEP) requirements. This will be achieved
in coordination with other infrastructure strategies under the Comprehensive ALCA/ASC
Master Plan. (This Objective statement is considered strategically important and requires eight
out of nine Board Members’ approval to change per the Governance Section, Strategy 7)
Strategies
1. Provide strategic direction to ASC on how best to grow and serve the
ALCA community.
a. ASC will retain an experienced wastewater engineering consultant as
Company Engineer of Record. Selection will be based on relevant
experience and professional qualifications.
24
b. Maintain a knowledgeable and experienced Sewer Committee to act in an
advisory capacity to the Arrowhead Sewer Company Board of Directors,
providing guidance and making recommendations to the Board in a variety of
areas related to sewage processing and treatment.
c. Include the Sewer Company directly in the Community Master Plan
development process.
d. ASC will develop a Comprehensive Strategic Plan.
e. Work with professional sewage treatment consultants to assure that the
policies and procedures for use in the operation of ASC are reviewed,
modified and expanded as needed to reflect the changing nature of our
community.
2. ASC will prepare a Master Operations and Maintenance Plan (O&M) for the
entire system
a. The Plan will address all required and recommended daily, weekly, semimonthly, monthly, quarterly and annual servicing and calibration for all
equipment and facilities (See also Strategy 2 in the Maintenance and
Facilities Section).
b. Compile and digitize all reports, specifications, drawings and equipment
O&M manuals.
c. The Master O&M Plan shall include safety methods, testing procedures
and overview of all systems. It will include a list of all equipment O&M and
calibration manuals and all as-built drawings.
3. Establish and monitor reserves in three areas for specific projects and the
unknown.
a. 5 to 7 years obsolescence in sewer treatment technology which PADEP
generally requires us to replace at some point.
b. The availability payments made each year by customers should be directed to
reserves.
c. New PADEP requirements that are difficult to anticipate but we expect to
occur and need to comply within a reasonable time period.
d. ASC shall engage a consultant to prepare a reserve study on all element of
the system.
4. Correct short range issues with the existing Sewer System in order to meet
and exceed regulatory requirements.
a. Install back-up generators for sewer plant and pumping stations.
b. PADEP requires us to identify and correct by 2017 the sources of significant
water inflow and infiltration into the sewer system. Some problems may be
caused by an unknown number of homes on the current Low Pressure
System (LPS) being in violation of our current rules and regulations and
contributing to the problem by hooking up sump pumps and downspouts to
25
c.
d.
e.
f.
g.
the sewer system. In addition, manholes with water seepage require raising,
and improper connections to lateral lines, must be repaired.
Rules and regulations will be reviewed and updated periodically to regulate
compliance with ASC policies including permission to conduct home
inspections and provide specific fines to any homeowner found in violation.
Assure timely compliance with all PADEP requirements.
Increase community education efforts both on the central wastewater system
and on-site septic system operation, maintenance and useful life.
Investigate the possibility of each Township’s Sewer Enforcement Officers
(SEO) delegating to the ASC Sewer Manager limited authority to inspect
septic systems and take action on those out of compliance with full reporting
to the SEO.
Develop more aggressive inspection and pumping regulations for all homes
within 300 feet of the lakeshore that have on-site septic systems older than 15
years. (See Lakes Strategy 2).
h. Institute and enforce significant fines for Owners who do not repair or replace
failed septic systems in a timely manner
5. Address major long-range sewage treatment issues for the community that
will require careful planning and significant capital investment.
a. Implement changes to current sewage treatment system based on BCM
Master Plan recommendations.
b. Develop and manage a process to work with PADEP and the townships to
modify the current 537 plans in order to reverse or modify their recent
decisions limiting our ability to complete circling the lakes and allow more
ALCA members the option to connect to our system.
c. Implement methods to identify and correct failed or failing on-site septic
systems in Arrowhead until the entire community has access to sewer
system.
d. Re-establish preferred septic inspection and cleaning relationships with
qualified service companies that will provide discounts to owners to perform
mandated 3 year inspections and cleaning and will certify the condition of
owner septic systems to ALCA for better documentation, and possible
additional income to the Association.
e. Maintain a positive relationship with the PA PADEP and other government
bodies that impact ASC operations.
6. Secure major funding for Master Plan implementation.
a. Based on comprehensive Master Plan, determine near and long-term funding
requirements in concert with other ALCA infrastructure funding needs.
b. Address impact on customer fees, connection and other costs.
c. Seek best funding terms through Grants, PENNVEST, DOA Rural Authority,
banks and/or other agencies.
26
c. Roads and Surface Water Drainage Strategies
Background
All American Realty Incorporated was the developer of sections 1–7 beginning in late
1964 and later in 1970 developed sections 8-12. Sections 13-21 were opened for sale in
later years. All American Realty Inc.’s central focus was on selling lots, building homes
on those lots and attracting buyers. The main roads were tar & chipped, and then
asphalt paved following existing ground contours with a minimal amount of sub-grade
material. The secondary roads were rough graded with some stone surfacing roads
through cleared trees in order to give buyers access to lots.
After the Association took over the common property, including the roads, little was
done to improve the roads other than required maintenance caused by storm water
damage to lots or roadways. In1980 the Board of Directors made an effort to ensure
that all lots would be within 3 blocks of a paved street. This resulted in 12 miles of
paved roads being constructed with minimal drainage improvements. The community
has an additional 29 miles of gravel roads throughout the subdivision. Work that was
done to the roads consisted of returning the drainage and roadways to pre-storm
conditions and minimal work on secondary roads to remove large rocks and boulders
and re-grading for a more reasonable travel way. Basically, secondary roadwork was
limited to the minimum necessary to correct damage within the road right-of- way or to
address complaints received from members. In 2005, the primary asphalt roads were
again resurfaced with asphalt paving.
Despite its small geographical area, Arrowhead Lakes has more roads than any of the 4
Boroughs within Monroe County and 5 of the 16 townships within the county.
Current Situation
In 2012, management, with the approval of the Board of Directors, separated Roadway
& Surface Water Drainage Maintenance from the Facility Maintenance department in
order to directly address improvement of the roads and storm water runoff. A limited
roadway maintenance plan was developed under the guidance of an experienced
engineering firm that addressed both the roadway conditions and their associated
drainage issues. The $167,731 road and ditch repair expenditures in 2012 exceeded
the combined expenditures from 2007 through 2011 ($120,942). So far in 2012 and
2013, 2.88 miles of roadway right-away have been improved. The cost of the roadway
work in 2012 was $574,472 and the projected budget costs for 2013 is $637,172.
27
Roads and Maintenance Budget History
Year
Roads
Maintenance
Total
2013**
$637,172
$529,840
$1,167,012
2012*
$574,472
$612,274
$1,186,746
+/- $ from
Budget
--+ 73,040
2011
$
932,454
- 3,535
2010
$
802,824
- 44,568
2009
$
705,160
- 54,160
2008***
$
760,030
+ 28,127
2007
$
703,259
- 10,600
*Unaudited December report -- ** Budget-- ***Significant winter storm expenses
At the current rate of improvement to the roadways, the remaining 38.12 miles of
roadway should be completed by the year 2037.
Also included in the budget are snow removal cost and any restoration of roadways due
to storm or wind damage causing blockage of roads.
The following paved roads are scheduled to be tar and chipped in the next two years:
Lehigh Drive from Orono to North Arrow; Paxinos Drive; Maxatawny from Lehigh to
Moshannon Drive to Minisink; Minisink Drive; and sections of Arrowhead Drive.
The current ALCA Program is intended to provide well-maintained roads throughout the
community by providing for paved surface roads around the perimeters of the North and
South lakes, Orono, Lehigh, Paxinos, Maxatawny and Minisink Drives. The Roads
Department has proposed to resurface all paved roads every 7 years.
All other gravel covered roads will be kept free of potholes in an effort to maintain
country-like appeal while offering comfortable passage for all. All roads and drainage
improvement projects will be planned using sound engineering, design and best
construction practices and be approached in the most cost-effective manner. Stormwater management, road repaving and repair projects and sewer line installation
projects will be addressed in conjunction with one another, so that drainage and ditching
efforts and cost are minimized. Current PADEP requires all drainage improvements to
be done by best practices manual that currently covers only the Chesapeake Bay
drainage basin but will soon cover the entire State of Pennsylvania.
28
Objective and Goals
ALCA will develop a comprehensive program for roads & surface water drainage that
integrates the requirements for maintenance of the Arrowhead Sewer Company‘s
collection system in the community, construction of walking and biking paths within the
existing road right-of-way, construction of the best management practices for surface
water systems within the community, and accommodation of any decision to place the
entire community on the Arrowhead Sewer Company’s system. The program will
address the most severe road deficiencies and delay any paving until after decisions
are made concerning the above items to be integrated. These programs will be
scheduled, planned, designed, and constructed under the supervision of a professional
engineering firm and will be in compliance with the ALCA/ASC Comprehensive Master
Plan. (This Objective statement is considered strategically important and requires eight out of
nine Board Members’ approval to change per the Governance Section, Strategy 7)
Strategies
1. The Association will obtain aerial photography that will produce 1 foot contour
mapping. This aerial map may then be plotted on an as-needed basis or
completely depending upon the planning schedule. This will be more costeffective than current land surveying being conducted.
2. Engage a professional engineering firm to prepare a master schedule that
incorporates all approved design and construction elements contained in the
strategic plan for the next 10 years.
3. Accelerate the annual upgrading of drainage and roadway construction with
sound engineering, design, and construction until the entire community is
completed within the next 10 years instead of the projected completion in
2037.
4. Incorporate current state-of-the-art best management practice for surface
water drainage into the roadway construction program to assure higher water
quality standards of streams and lakes within the community. This will include
strategically placed sediment and nutrient traps to minimize discharge to our
lakes and streams. (See also Lakes Strategy 10).
5. Master Plan requirements should take into consideration the statewide building
code requirements such as Americans with Disabilities Act (ADA, hazard
materials, FHA and so forth).
6. As part of drainage and roadway programs, raise all sewer manholes above
surrounding ground to limit surface water flow into manholes and paved area
immediately around manhole to prevent snowplow damage.
7. As part of the drainage and roadway program, delay any paving until a
29
decision is made about possible construction of a collection system for central
sewerage system for the entire community and design of the surface water
drainage system.
8. In the event that sewer lines are intended to be extended to new sections of
the community, approach the road repaving/repairs, ditching and drainage and
sewer line installation projects in a coordinated fashion, maximizing the use of
engineering expertise for the digging and installation of sewer pipes while
simultaneously addressing the roadside drainage issues.
9. Ascertain the most cost-effective and fastest path toward achieving the roads
and drainage goals, to include exploring use of independent contractors for
specific parts of the project.
10. Using PENNDOT Pervious Pavement Design, consider paving a portion of all
parking lots located at various community facilities to improve dust control
throughout the community. This also will segregate golf-cart, car and vehicles
with boat trailers. ADA must be addressed including site walkways and road
crossings.
11. Design and build a walking/biking path system throughout the community that
allows members to get around the lake safely by avoiding walking and riding
on main roads.
12. The vehicle dispatch and operator maintenance program should be digitized
and/or computerize so that repairs and accidents can be documented to
determine the condition of each vehicle, which will assist in making a
determination of how long the vehicle maybe retained past its estimated
useful life. The reason for this is we have a lot of construction equipment and
a few vehicles that have low hours and/or mileage.
13. All documents generated for design and construction shall be digitized and
stored in a records management system or central file. As-built drawings
should be prepared as drainage and roads are constructed to serve as base
mapping where future repairs may be recorded.
d. Maintenance of Facilities Strategies
Background
Maintenance of common areas and ALCA buildings around Arrowhead provide the
greatest visible aesthetic appearance and safety to members and guests. Previously,
the Association did not practice preventive maintenance. If something failed, it was
either fixed or replaced. The Association never had a maintenance program that
addressed preventive maintenance, proper lubrication, timely calibration and a program
that anticipated necessary maintenance and replacement. Improvements had been
limited over the years as reflected in the fact that their combined budget was essentially
30
flat at around $370,000 from 2007 through 2010. (See details in section 5.c.) Needed
repairs to the Clubhouse have not been made nor reserved for. While vehicle and major
equipment has been reserved for and replaced as needed, other major projects, like the
Island Pool reconstruction, were not. In summary, the overall appearance of the
common areas and buildings were showing their age with little in reserve to maintain
them. (See appendix l. for current status of reserve fund as of 2013.)
Current Situation
Maintenance has been budgeted separately from roads and drainage in 2012. Since
2010 the maintenance wage and benefits budget has increased over 14% in 2012 and
another 6% in 2013. Four members have been added to staff in order to provide
sufficient staff to catch up with needed improvements and added responsibilities. The
maintenance director is now responsible for maintaining all community facilities
including the Lodge and its landscaping. Also included in his responsibility is the
operation and maintenance of both dams and their appurtenances.
A structural integrity assessment of the Clubhouse has been completed in the effort to
determine what repairs are needed. The assessment found the Clubhouse to be
structurally sound, but in need of some repair, primarily with re-grading of the grounds
surrounding the building and water damage to the chimney. Members who responded
to the recent survey indicated a desire to retain the multi-purpose use of the Clubhouse
with a strong emphasis on increased youth activities. All common areas have been
improved with 20 new picnic tables, stainless steel grills and umbrellas. Roadside trees
have been trimmed back. And the overall “curb appeal” appearance of Arrowhead has
improved dramatically.
Objective and Goals
ALCA will provide all necessary maintenance, repair and improvement of Arrowhead
buildings, common areas and equipment in order to maintain and enhance the
appearance and beautification of Arrowhead facilities and common areas. Adequate
reserves need to be set aside annually to have sufficient funds for the orderly repair and
replacement of facilities and equipment consistent with documented guidelines and
manuals. All maintenance strategies will be managed in compliance with the
Community Comprehensive Master Plan. (This Objective statement is considered
strategically important and requires eight out of nine Board Members’ approval to change per
the Governance Section, Strategy 7)
Strategies
1. Maintain digitized documents that provide detailed requirements of all
maintenance for all Association facilities and land.
a. Manufacturer’s equipment maintenance, repair and replacement manuals for
all facilities and systems.
b. Detailed as-built and altered architectural, engineering and construction
31
drawings.
c. Special reports related to facilities and equipment maintenance or repairs
above and beyond normal requirements.
2. Prepare a Master Operation and Maintenance Plan for all Association
owned areas and buildings.
a. Due to regulatory requirements maintain the dams and dike and
appurtenances and equipment in a separate document. The Arrowhead
Sewer Company also will maintain a separate master operation and
maintenance plan since it is a separate company with extensive regulatory
requirements.
b. As a minimum, the plans will include an overview of the process and
procedure to be used to implement the program including property
maintenance, safety and regulatory requirements.
c. As a minimum, the document will include a master schedule by building and
each of its systems with each system a listing of lubrication, oil change,
calibration, and unique requirements for each element in the system for the
daily, weekly, biweekly, monthly, quarterly and yearly maintenance
requirements. This document should also include specialty requirements that
must be contracted out on a regularly scheduled basis.
d. The document will also include a listing of all manufacturer and supplier
operation and maintenance documents, which should be keyed to the
schedule. In addition it should include a listing and indexing of all digital asbuilt drawings and reports for each of the facilities.
3. Work closely with Landscaping Committee on the further beautification of
Common Areas with low maintenance plants and other landscaping options.
4. Provide regular staff training on the use and maintenance of equipment and
buildings.
5. Protect the Lakes and groundwater through use of eco-friendly, non-toxic
fertilizers, weed-killers and other materials.
6. Engage experienced maintenance consultants, engineers and service providers
as needed based upon competitive bidding for contractors or selection based on
experience qualifications for professional services.
7. Kick off the new operation and maintenance program by conducting a one-time
walk-through inspection and operation of all systems along with qualified building
system engineers to assess the condition of the facility relative to its current age.
The recommendation should include continued use, demolition or complete or
minor renovation. Each season afterwards, the Maintenance staff will coordinate
a detailed walk-through. All deficiencies will be documented for follow-up.
8. Review all vehicles and major construction equipment to see if a lower cost item
can perform the same functions. If the major function is transportation, other
forms of transport should be considered. If a piece of equipment has low mileage
32
or limited hours on the meter, consider extending its useful life and not replacing
it as scheduled.
9. Investigate a computer-based Facilities O&M program to determine if it is
adaptable to ALCA at a reasonable cost.
10. After initial phases of the Strategic Plan have been implemented, the General
Manager should conduct a comprehensive review of the vehicle and equipment
program to ensure that proper maintenance, functional efficiencies and
replacement schedules are at the optimum.
e. Lakes Management Strategies
Background
Arrowhead Lake and North Arrowhead Lake clearly are the focal point of our community
and are resources that must be managed to ensure continued health of both lakes for
the enjoyment of all.
Arrowhead Lake is a man-made lake with a dam constructed by previous owners. It was
originally corporate-owned land, lake and a hunting lodge, later purchased in 1963 by
All American Realty, Inc. As part of the development a second lake, known as North
Arrowhead Lake was constructed, and included a dike and dam with spillway and outlet
structure. Statistical information on both lakes and dams is contained in Appendix f.
Both lakes are near the headwaters of each of their respective drainage basins
(Watersheds). North Arrowhead Lake is fed by Brady’s Lake and has a very limited
drainage basin of one square mile with most of it located within the development.
Arrowhead Lake has a much larger drainage basin at 14.74 square miles, which drains
not only a major portion of our community and state game lands no. 126, but also drains
into a portion of Locust Lakes development, Brady’s Lake, Locust Ridge Quarry, a large
peat bog, and H- K equipment maintenance yard. (See Appendix g for Drainage Maps
including inundation maps for both dams.)
Currently both lakes are considered part of the headwaters of Lehigh River watershed.
Other areas of the Poconos have developed smaller watersheds that drain into the
Lehigh River under EPA Watershed Program.
North Arrowhead Lake has a normal pool surface area of 87 acres (Spillway Crest
Elevation). The lake surface area for the top of the dam embankment is 133 acres.
The Arrowhead Lake surface area at the spillway crest is 217.6 acres for Arrowhead
Lakes and the lake surface area at the top of dam is 364.6 acres. Both lakes are
shallow mountain lakes that are used for boating, sailing, fishing and swimming. During
winter months the lakes can be used for ice skating, ice fishing and ice sailing. The
Pennsylvania Fish and Boat Commission is responsible for boating and fishing
regulations on the lakes. The commission routinely stocks the upstream Brady’s Lake
which provides some fish to our lakes. Arrowhead and North Arrowhead Lakes are
33
stocked annually by the Anglers Committee acting on professional recommendations
from Bill Kirkpatrick (Aquatic Environmental) and forwarded to the Board for approval.
Both dams come under the control of Pennsylvania Department of Environmental
Protection, Bureau of Waterway Engineering and Wetlands, Dam Safety Division which
requires inspection by a qualified engineer engaged by the owner, each year no later
than December 31. The dam safety division also conducts an annual inspection of the
dams. PADEP has classified both dams as high hazard dams. Arrowhead Lake dam
has been classified as category B-1, which means its height is 40-100 feet and the
hazard level is substantial if it were to fail. North Arrowhead Lake dam has been
classified as C-1, which means its height is less than 40 feet, and the hazard level is
substantial if it were to fail. PADEP has determined that Arrowhead Lake is required to
pass 50% of the Probable Maximum Flood (PMF) but is actually capable of passing a
higher level of 75% of the PMF. North Arrowhead Lake was required to pass a full PMF
and it does. PADEP, under Pennsylvania law, can require necessary corrective action
be undertaken by the owner. If PADEP is not completely satisfied with corrective
actions by the owner, PADEP can require the lake to be drained. Currently PADEP
requires a bond made out to the Commonwealth of Pennsylvania in the amount PADEP
has estimated as the cost to breach the dam. County Emergency Operations Center
and the Pennsylvania Emergency Operations Center retain oversight of the dams
during times of declared emergencies. The swimming beaches also come under the
control of the State and County Departments of Health which requires periodic testing to
specified standards. If these standards are not met, the beaches are required to be
closed until corrective action brings the water quality to within acceptable limits.
The lakes serve as the heart of the community. To keep the lakes healthy it is important
to avoid algae blooms, rising levels of nitrogen and other chemicals in the lakes and
septic leakage from on-site septic systems at homes that surround both lakes. ALCA,
as owner, is fully responsible for funding and O&M of the dams in accordance with
PADEP Bureau of Dam Safety Rules and Regulations.
Current Situation
The lakes serve as the heart of the community. Currently the Association does not know
the health of our lakes. The only testing done involves the limited testing at each of our
public beaches. The Association has done algae boom monitoring and elimination. To
keep the lakes healthy, it is important to avoid algae blooms, rising levels of nitrogen
and other chemicals in the lakes, and septic leakage from on-site septic systems at
homes that surround both lakes. ALCA, as owner, is fully responsible for funding and
O&M of the dams in accordance with PADEP Bureau of Dam Safety Rules and
Regulations.
(For further information regarding National and PA dams and levee classifications and
quality, please refer to the following documents on file with Arrowhead management.)
DamsLevees FINAL with NAT.pdf
PADam Classification System.pdf
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The continued health of Arrowhead Lake and North Arrowhead Lake depends on a
number of areas not strictly related to the lakes. These factors include the following:
1. Condition and maintenance of on-site septic systems for homes that surround
the lakes.
2. Effectiveness of the surface water drainage program currently underway to
prevent sediment and nutrients from entering the lakes.
3. The ability to limit nutrients and sediments from outside of the development.
4. The inability of the Association to find alternative solutions to on-site septic
systems that have completely failed. Two homes on the secondary ring of homes
surrounding the lakes received grinder pumps and were connected to the central
sewerage system. As soon as the excavator dug soil at the street it encountered
sewerage from that point back to the existing on-site septic system, indicating
that the on-site septic system had completely failed.
5. Shallow portions of the lake have become un-navigable by some boats due to
increased sediment over the years.
6. The recent Fish Population Survey conducted by Aquatics Environment
Consultants, Inc. indicated a balance population of fish with some issues related
to the size and condition of large-mouth bass, and confirmed that there too many
Carp in North Arrow Lake that must be removed. The intent is to introduce
Walleye in 2014. They also recommended stricter enforcement of minimum size
requirements for Bass. Water quality was indicated as good for fishing and
recreation.
7. ALCA does not have any comprehensive baseline assessment and monitoring
program on the health of the lakes.
8. Homeowners may not be fully aware of the impact from the use, storage and
disposal of household items such as oil, gas, lubricants, batteries, insecticides,
medical drugs, etc.
9. FEMA has been aggressive in doing flood area mapping that can affect
homeowners on the lakefronts and stream fronts. If a homeowner has a
mortgage, lenders may require flood insurance for those areas impacted.
Objective and Goals
ALCA will be proactive in all activities that relate to the health and recreational benefits of the
lakes both within the community and with upstream neighbors. And we will strive to ensure
continued compliance with all regulatory agencies at all levels that govern dam safety, stream
and lake water quality. (This Objective statement is considered strategically important and
35
requires eight out of nine Board Members’ approval to change per the Governance Section,
Strategy 7)
Strategies
1. Because the association does not know the current quality of the Lakes, conduct
a comprehensive testing of the water column and bottom samples around the
shorelines and critical areas of the lakes to serve as a baseline to measure the
health of the lakes. The baseline water quality testing should include total
suspended solids, metals such as cadmium, copper, lead and zinc, nutrients
such as TP, TN, OP, NO3, and NH4, Pathogens such as coliform, E. coli and
Cyanobacteria. Along the shoreline in the vicinity of on-site septic systems, take
drive soil samples and test full range of parameters. The scope of testing should
be complete as done for other watershed organizations.
2. ALCA will obtain all necessary signatures by authorities for the Emergency
Action Plans for both dams and submit to the appropriate authorities at all levels.
(Currently underway).
3. Increase monitoring of all on-site septic systems and develop more aggressive
inspection and pumping regulations for all homes within 300 feet of the lakeshore
that have on-site septic systems older than 15 years.
4. Update the operations and maintenance manual for both dams that reflect
information from the more current inspection monitoring reports.
5. Advise Monroe County Emergency Operations Center and PADEP Dam Safety
Division and the Pennsylvania Fish and Boat commission that, as the owner of
both dams, ALCA will draw down both lakes in advance of severe weather
storms, hurricanes and tropical storms to create more reserved capacity, as part
of our standard operating procedure.
6. Upon completion of the current study, develop and implement the Arrowhead
Lake reclamation program.
7. Establish adequate reserve funding in accordance with selected reserve study for
both dams and the water quality of both lakes.
8. Prepare a maintenance and operation plan in the format that was recommended
for maintenance of facilities as part of their existing operation and maintenance
plan.
9. Develop a plan for emergency spill response, including necessary equipment and
tools.
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10. Current state-of-the-art best management practice for surface water drainage will
be incorporated into the roadway construction program, to meet high water
quality standards of streams and lakes within the community. This should include
strategically placed sediment and nutrient traps to minimize discharge to our
lakes and streams.
11. Continue educational programs on the environment, especially that which relates
to streams and lakes, including household products that can damage fish and the
health of the lakes. Periodically invite professional lecturers to reinforce their
educational programs.
12. Continue to limit boating on the lakes to non-gas motorized boats, sailboats,
kayaks and other environmentally safe recreational vessels.
13. Work with the Anglers to assure adequate stocking of fish in the lakes, control of
the Carp population, and enforcement of catch and release regulations for
undersized fish.
14. Currently the headwaters of the Lehigh River are under a 501(c) (3), nonprofit
organization known as North Pocono Care, which includes Trout Creek and its 5
lakes. Consideration should be given to becoming more active in this watershed
organization or request that Trout Creek be separated from the organization,
which may give ALCA more control over the health of the Lakes and possible
grants for testing water quality and bottom samples. This should allow for grants
to monitor watershed conditions on a more extensive basis.
5 C. Administration and Communications
Background
Internal Communications
Communications with members of Arrowhead Community have historically been limited
to the quarterly Smoke Signals publication, Channel 80, the website, board meetings
and paper fliers. Minutes from the board of directors’ meetings were published only
once per quarter in the Smoke Signals, resulting in a 3-4 month delay in getting
important information and board decisions distributed to members. Use of postal
service to keep members informed proves too expensive (3261 property owners at
$0.46 per letter costs over $1500 per mailing). The delay and lack of communication
resulted in misinformation and rumors among membership, and resulted in low
involvement of members, particularly part-time weekenders who do not live at the lake,
and were cut off from the small amount of communications that did exist.
During the past two years, the use of email was added, and administration has collected
approximately 2000 member email addresses to date, which are actively used to
distribute minutes, meeting agendas, activity announcements and other important
information to the members in a timely and cost effective manner. Despite this great
37
improvement, there is still much work to be done. Members are generally not well
informed about what is going on in the community and the issues it faces. Additional
channels of communication using current technology can be employed to help reach
more members and facilitate more involvement. As the demographic composition of the
Arrowhead population changes, use of social media, text messaging, teleconferencing,
watching videos on the internet, mobile applications and mobile devices are more
prominently used among members and these media are the means of communication
for a majority of today’s members. 87.6% of survey responders indicated they have
access to the internet and almost 80% have and use smart phones, tablet computers or
similar mobile devices. People are accustomed to instant information and to always
staying connected. Arrowhead has not yet caught up with the times when it comes to
these forms of direct and instant communication.
External Communications
Arrowhead does no advertising or outside promotion to help attract new members
and/or to positively affect the reputation of the community in the Pocono region.
Arrowhead’s reputation in the Pocono region affects its ability to attract new, financially
sound buyers. Communities that have built a reputation of being a highly desirable and
sought after place to own experience increased demand for the properties within those
communities. This helps keep property values up, which encourages people to want to
buy a home, or purchase a blighted property to renovate it. Existing members make
investments in fixing up their homes because they know the properties around them are
getting cleaned up, and because they know their money is going into a good
investment. These actions improve the appearance of the neighborhood, and convert
blighted and un-sellable homes into dues-generating properties, which is a benefit to
every owner.
Objective and Goals
To have well-informed members who actively participate in the activities and
governance of the community and contribute their time, knowledge and expertise to
help the community prosper. To establish ALCA as a highly desirable community in
which to own and live, attracting new buyers and financial investment that will enhance
the appearance of the neighborhood, increase dues-paying owners, and improve
property values. To use current technology and creativity to expand and maximize the
reach and effectiveness of communications as well as provide easy and accessible
forums for two-way communications and feedback to the Management and the Board.
Work towards a paperless office environment. (This Objective statement is considered
strategically important and requires eight out of nine Board Member approval to change per the
Governance Section, Strategy 7)
Strategies
1. Begin using social media tools (Official ALCA Facebook page, Twitter), blogs,
and text messaging to increase the reach of information sharing with members.
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2. Develop aggressive strategies to obtain and update e-mail addresses for all
owners with e-mail.
3. Digitally record monthly Board of Director’s meetings and explore ways to
broadcast the video though multiple distributions channels such as hosting the
video, YouTube and an embedded link on the ALCA Website, posting link to
video on Facebook page, Twitter and broadcast on Blue Ridge Cable’s Channel
80.
4. Update the website to include more promotional information about the benefits of
ownership and vacationing in ALCA. Provide an attractive, professional look and
feel. Include current information for owners, electronic registrations and website
payment capabilities and features. Include information about the Pocono region
and all there is to do here. Offer information about how to rent or buy in ALCA.
5. Use video teleconferencing technology to allow owners to attend meetings
virtually and provide teleconferencing option for all board and committee
meetings.
6. Increase the use of member surveys to keep in touch with the changing priorities
and desires of the membership.
7. Partner with outside Real Estate professionals on advertising and promotion of
ALCA’s great amenities, features and value for potential new buyers. Encourage
paid advertising by the realtors.
8. Implement an electronic balloting process that can be used via computer, internet
and/or mobile device (See also Governance Strategy 8).
9. Provide greater recognition to ALCA Volunteers who are an essential asset to the
community.
10. Prepare written Standard Operating Procedures for management of contractors
and professional service contracts that provide supervision and interaction
guidelines -- i.e. monthly progress reports, milestone charts, funds management,
completions dates, transfer of all contract documents generated under contract to
ALCA/ASC, punch list resolution before claim for final payment.
11. All professional services (Attorney, CPA, Engineering and Architectural) shall be
selected based on their professional qualifications. All other services shall be
obtained through a competitive bidding process.
12. Prepare a written contract format for all of the following and review these
documents with the Association’s attorney:
a. Purchase orders
b. Professional service contracts
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c. Service and maintenance contracts
d. Construction and major repair contracts
e. Rental of facilities
13. While many improvements have been made to facilitate administration, two areas
requiring attention are the weekend registration of renters and guests and the
related backlog of cars on Locust Ridge Road trying to enter Orono Drive.
a) To accommodate traffic congestion, reconfigure the Orono entrance using
the adjacent lot to add 2 additional entry gates and one additional exit
gate. Move the existing building to the vacant lot along with an expanded
parking area to use for issuing gate cards to those renters who have preregistered and prepaid on-line.
b) Provide on-line registration of all guests and renters who then can obtain
their gate cards at either the Orono Gate House or a special window at the
office.
14. For both ALCA and ASC, add special digital and archival programs for
engineering and architectural drawings in order to retrieve color documents,
photographs and full-size drawings – i.e. CADD and TIF formats as a minimum.
Obtain plotter of sufficient size to produce full-size construction drawings and
print color technical documents.
5 D. Quality of Life
Background
Life is good at the lake. Members and guests enjoy living and vacationing at the lake
because of its natural beauty, relaxing atmosphere and great amenities and activities.
In fact, when people come to the lake, they want to stay at the lake, and only leave the
community area to go shopping, go out to dinner or seek recreational activities that are
not offered within the lake community.
In a recent survey of ALCA members, 75% of the respondents said they’d purchased at
the lake for the purpose of vacationing and relaxation, and 20% indicated they live at
the lake full time. The activities members enjoy most include staying at home and
gathering with friends, using the lakes, beaches and pools, and walking, running or
biking around the community. This indicates that life is good at the lake, and the more
our members can do and enjoy while staying within the community, the happier they’ll
be.
This concept is reinforced by the survey responses regarding priorities for future
projects in the community and in the open comments section, where input on future
priorities was sought from members. The top priorities for projects related to activities
(road repairs, sewer expansion and lake reclamation infrastructure projects were rated
in the top five priorities and are covered in separate sections of this plan), other
priorities centered on building a bridge over the waterway below the dam and making a
biking/walking path to make traversing the community by means other than a car a safer
and more enjoyable experience. The open comments, where specific projects that were
40
not identified by the survey were sought, indicated a very strong desire to have a
restaurant/café/bar social gathering place and an indoor pool. These two ideas were
proposed by members as future uses of the Lodge and Clubhouse facilities. In addition,
when asked specifically what the Clubhouse should be used for in the future, 80% of
respondents selected youth activities, which aligns with the fact that there were 903
children under the age of 18 within the families of the survey respondents. Also, a large
number of responses indicated the Clubhouse should be used for either a
restaurant/bar or for events that will generate supplemental revenue. However, many of
the open-ended survey responses seemed to confuse talking about the Clubhouse but
meaning the Lodge.
Therefore, people want to come to the lake to enjoy all of the existing activities and
amenities here, and not have to leave to go have dinner or take their kids for mini-golf
and ice cream at outside entertainment attractions. They want to the community to add
features that offer members a social gathering place and a recreational place for the
kids.
The Lodge is a terrific new amenity for adults. Over 70% of Survey respondents agreed
strongly or somewhat that the Lodge is a great amenity that enhances the community
and adds value for the ownership. It is a great gathering place for social events. Dinner
dances, wine & cheese BYOB events, fund raisers, and casual dinners on Friday nights
have been a successful start. Members do not want to leave the community to have
dinner or drinks. They would prefer to have a place to go within Arrowhead Lake. In a
nearby community called Pocono Farms, they have their own community lounge that
serves food and alcoholic drinks. This lounge is extremely successful for the
community and is a favorite amenity and central gathering place for its members.
Having a place to eat dinner and buy drinks within the community would keep the
money that members are now spending out on Rt. 940 within the ALCA community.
Strategies that support creating a bar/restaurant or café in the lodge to serve as a
central gathering place for members should be explored to increase the quality of life,
and to generate supplemental revenues for the community.
Families are a very important part of ALCA, and they come to the lake for entertainment
in the daytime and evenings. Many families use the pools and lakes during the day,
and then head out to RT. 940 for entertainment in the evenings, getting dinner and then
going to the Dairy King for mini-golf, arcade games and ice cream before heading back
to the lake for a late night campfire. If the community offered a recreational center with
arcade games, ping pong, mini-golf, and an ice cream stand, parents would stay at the
lake, and simply ride their golf cart over to the recreational center to engage in these
activities with their kids. The money families are currently spending out on Rt. 940
would instead be spent inside the community, and create a significant source of
supplemental revenue. Strategies related to maintaining the Clubhouse as a multipurpose facility (cards, Bingo, exercise classes, etc.) while also repurposing its
emphasis to be a recreational center for youth, as well as a source of revenue
generating income for the community should be explored.
Many residents and visitors to the community enjoy walking, running, biking and riding
golf carts around the lakes. The paved roadways that circle the lake (Arrowhead Drive,
41
Orono Drive and Lakeshore Drive) are 22 feet wide -- the minimum width for a two lane
roadway to handle daily volume of 200 -400 vehicles at 25mph. Often times if there are
pedestrians or bicyclists on the roadway, near-collisions occur, and the walkers/bikers
are in harm’s way. This is also true for golf carts, where there is no adequate room on
the road for cars and golf carts to ride together safely. With paved road right-of ways of
40 feet in Sections 1-13 and 50 feet in Sections 14-21, it may be feasible to widen parts
of these roads along with paving parts of less traveled roads to provide safe bike and
walking paths as part of the Roads and Surface Water repair strategy.
There currently are approximately 500+ golf carts registered in the Association. This
large number of carts increases the potential to cause conflicts among vehicles, carts,
walkers and bikers on the same narrow roads. Members are currently unable to circle
the lake on bike, golf cart or on foot. It is unsafe to go out onto Locust Ridge Road to
get across the spillway behind Welcome Center. Residents who live on the north side
of the spillway cannot access the trash center, welcome center or mailboxes without
getting in their cars and driving out of Orono gate, back in the Arrowhead Drive gate,
and parking there.
The members that responded to the survey ranked installing a path system for
bikers/walkers and building a bridge over the spillway in the top 5 priorities for future
projects. These projects to address these safety, enjoyment and convenience issues
should be planned for, and strategies that will encourage healthy lifestyle and
discourage use of cars, while increasing safety and convenience for our members as it
pertains to getting around at the lake, should be explored.
An even greater danger to the community is along Locust ridge Road due to high
vehicle speeds, limited sight distances, adverse grades and frequent flooding along the
Trout Creek Bridge. PENNDOT inspected the LR 4003 Bridge over Trout Creek in April
2013 and found the bridge superstructure, deck and abutments to be in poor condition.
In addition, the inundation mapping completed for the lake shows that Trout Creek
Bridge and the Orono entrance is flooded during only half the probable maximum flood.
The Locust Ridge Road Trout Creek Bridge is in such poor condition that in the near
future it could essentially cut the community in half due to either reduced load limits or
closing until a replacement can be constructed. This situation could provide an
opportunity for the Association to convince PENNDOT to provide a cart, walking and
bike path for the safety of members while replacing the bridge and improving the road.
An additional quality of life issue is the number of trees in the community which create
our woodland environment. Over the past fifty years, trees have more than doubled in
size presenting potential safety issues that could damage homes and property. A major
cause of damage is from the wet roots of dead trees caused by sump pumps and other
devices draining onto adjacent properties. As dead and dangerous trees are removed
from properties the Association needs to maintain the policy of replacing these trees
with trees native to the area in order to maintain the 50% requirement for that important
woodland environment.
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Objective and Goals
Provide for many of the conveniences, amenities and entertainment activity in which our
members and guests wish to participate, so that member enjoyment at the lake is
maximized. Create a stronger sense of community with a central, social gathering place
for members. Provide features and amenities that support keeping residents and
members inside the community and generate supplement sources of revenue to pay for
these additional amenities while simultaneously offsetting member dues. Provide for
the safety of pedestrians, bicyclists and golf carts traversing the lakes. (This Objective
statement is considered strategically important and requires eight out of nine Board Members’
approval to change per the Governance Section, Strategy 7)
Strategies
1. While maintaining its multi-purpose use for some current member activities,
repurpose the Clubhouse and surrounding grounds to be a youth center.
a. Provide arcade games and air hockey inside the clubhouse with vending
income, provide ping pong and foosball tables for free.
b. Construct mini-golf, batting cages, and/or electric race car track, and
charge fees for using each.
c. Add an ice cream stand selling dip and soft-serve, and packaged ice
cream treats.
d. Upgrade basketball courts; add a skate boarding park or roller-blade
hockey rink.
e. Review legal, insurance and licensing requirements and related costs for
all proposed activities prior to implementation.
2. As part of roads project engineering in the Master Plan, evaluate the cost and
feasibility of building a walking/biking path system throughout the community that
allows members to get around the lake safely by avoiding walking and riding on
main roads. (See also Strategy 11 in Roads and Surface Water Management).
3. Build a bridge over or below the dam/spillway area behind the Welcome
Center/MSB and/or work with PENNDOT to achieve the same amenity at no or
reduced cost when they replace their bridge. Bridge should be designed to
handle golf carts, walkers and bikers – no cars.
4. Explore costs and benefits of adding a café or light-fare restaurant in the Lodge
facility. Seek input from surrounding communities who have restaurants on-site
to identify all of the costs, benefits and issues.
5. Test different catered lunch and dinner events for members and request
feedback on results.
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6. Look at strategies for adding a bar/lounge in the Lodge by analyzing the cost of a
liquor license and the expected revenues and future pay-back period from sales
to determine whether it is financially feasible.
7. Assure that all Quality of Life strategies are in compliance with Comprehensive
Master Plan and coordinated with other Infrastructure programs.
8. Require that all sump pumps and other point discharges be directed to ditches in
the street right of ways so that trees are not killed due to wet roots and best
management practices can be incorporated into the surface water drainage
system.
9. Establish a political action group to begin work immediately in order to have
Locust Ridge Road alignment and the Trout Creek Bridge rebuilt in the near
future to ensure that the community has a safe ingress and egress, especially
during emergencies such as local flooding. This group also should work on
proposal to move Bridge or replace it in such a way as to not close it to all traffic
and provide cart and walking path in its plan.
5 E. Security and Safety
Background
ALCA has relied on its own Security Department working with State and local law
enforcement agencies to provide basic patrolling, monitoring, protection and rules
enforcement in Arrowhead. Owners have placed a high value on the personal and
property security protection provided by a gated community and around-the-clock
service provided by this Department. Over 90% of survey respondents agreed with the
statement “The fact that ALCA is a secured and gated community is important to me”.
In recent years this service has become even more important as the crime rate in
Monroe County has risen. According to the Pennsylvania Crime Reporting System, the
crime rate in Monroe has risen 18% since 2007. Monroe County now has the dubious
distinction of being among the top 10 crime rate Counties in Pennsylvania per 100,000
people. Closer to home, in just the past three years, the rate in Tobyhanna and
Coolbaugh Townships is up over 8% according to Pocono Mountain Regional Police
statistics.
During this period, Arrowhead Security has increased the number of citations with paid
fines up by 46% since 2010. This was achieved within a budget that has risen only
5.5% since 2007 compared to the overall ALCA Operating Expense increase of almost
20%. This low increase was achieved in large part due to the significant change in staff
make-up from 11 full-time and 1 part time members in 2007 to the 7 full-time and 7 parttime officers as of September, 2013.
At the same time, some residents have noted increased speeding, break-ins and other
incidents that may require greater enforcement. Maintaining the desired level of security
in coming years will require continued improvement in officer training and available
technology.
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Objective and Goals
ALCA will provide a safe environment for its owners, their families and guests through
strict enforcement of Association rules and regulations, relying on a professional
security force and controlled access to the community. The Security Department will
have the best available training and technology to perform its functions with community
support of its efforts. Provide the community with educational programs that will
enhance a safe environment. (This Objective statement is considered strategically important
and requires eight out of nine Board Members’ approval to change per the Governance Section,
Strategy 7)
Strategies
1. Maintain optimal security force size and training to provide superior service to
community.
a. Adjust full and part-time component security staff over time as Arrowhead
member demographics and usage change to assure coverage of the
community.
b. Update department policies and procedures to ensure effective operations,
professional work ethic, and high standards of performance and execution of
routine security duties.
c. Recruit and retain the most qualified security officers.
d. Provide regular training for all new and existing officers in best practices and
use of new technology.
2. Fully enforce all ALCA Rules and Regulations
a. Properly complete citations to assure fines will be levied upon appeal.
b. Allocate sufficient staff resources and fines to reduce speeding in community.
c. Increase community awareness of strict enforcement of rules through added
signage where needed and use of media.
3. Research and acquire advanced security technology
a. Add remote observation cameras in areas of high vandalism.
b. Develop community e-mail, cell phone, SMS text messaging, and other
automated warning systems.
c. Install speed monitoring and violation equipment to slow traffic.
d. Upgrade security system to prevent sharing/double swiping of gate access
cards.
e. See also Section 5.F page 54 Strategy #9 regarding member photo ID
technology to replace wristbands
4. Involve the community in supporting security efforts
a. Expand Neighborhood Watch participation and coverage, especially during
summer weekends and other periods of increased population.
b. Train and deploy volunteers to assist in enforcing minor violations.
c. Build rapport with the community through increased visibility during events
and employing customer service model in security services.
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5. Discourage use of cars and encourage healthier, safer and more
environmentally-friendly ways of getting around the community such as biking,
walking, running and use of golf carts.
a. Provide preferred, designated parking spots for golf carts.
b. Continue to offer golf cart rentals through outsourced company.
c. Develop a path system that allows walkers, runners and bicyclists to
get around in the community without walking on the main roads.
6. Participate in Pocono Mountain Regional Police Community Outreach Program,
SWAT demonstrations, K-9 Demo, fingerprinting children, bicycle safety, stranger
danger, crime prevention programs and neighborhood watch programs.
7. Develop Communication, Evacuation and Member Support Guidelines during
Emergencies
a. Develop written guidelines for what residents should do during fire, storm
long-term power outages and other major emergencies.
b. Provide transportation to designated shelters.
c. Publish cellphone hotline for members to contact Management for
updates.
d. Coordinate program with Pocono Mountain Regional Police, local fire
companies, and local rescue squads along with the Township and County
emergency operations centers.
F a. ALCA and ASC Revenue Strategies
Background
5.F.a.1. ALCA Revenue Strategies
ALCA relies primarily on member dues to support operations, infrastructure
development and maintenance and investment in new facilities and programs.
While House dues were $370 in 1985 in today’s dollars dues have risen 92%
($792 to $1522). In the same period Lot dues have risen almost 400%. Also,
from 1987 through 2003 the dues discount ranged from 15% to 21% until
lowered to the current 10% in 2004.
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As the chart below shows, collected member dues have risen 25.3% since 2007
after discount which has reduced collected dues a little over 7% each year. Prior
year collections have risen dramatically in the past two years due to more
aggressive legal and collection agency pursuit. Part-time renter income has
become the largest non-dues source of revenue in recent years.
Discount
-234,077
-228,744
-246,909
-250,145
-252,864
-292,690
Current
Prior Year
Year
Collected
2,997,824
65,566
3,095,549
61,220
3,175,449
63,807
3,207,239
71,319
3,333,174
102,328
3,758,957
168,825
Other
Renters
Revenue
131,377
348,810
164,961
309,333
196,154
285,671
210,057
254,908
218,367
283,232
232,643
341,294
Many newer owners consider the level of current dues a true bargain when
considering all of the services and amenities provided. But a number of early
settlers, lot owners and retired members have difficulty keeping up with rising
dues or are unwilling to recognize the cost to maintain and enhance the value of
the community. And at some level no one wants to experience high annual dues
increases.
In recent years, dues collections have been adversely impacted by the removal
of properties from the dues base.
510 Green-belted Properties are no longer generating revenue
298 ALCA Community-Owned Properties are unavailable for sale
147 Properties are in the Monroe County Repository
29 properties are held by the developer (the Bank)
11 properties owned by ASC
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These properties now represent 23% of the original 4330 ALCA lots or over
$800,000 in lost annual lot dues. A recent change in Greenbelt fees now
charges ½ lot dues on 4 properties.
In addition, delinquencies have increased 236% since 2007 to $658,441 and
equaled 14% of billed dues in 2012. Many of these delinquencies are vulnerable
to potential owner abandonment.
One issue that has affected both delinquencies and the growth in abandoned
properties is the lack of sewers in sections 1-13 when compared to sections 1421. Some statistics that clearly demonstrate this issue are:
Sections
1-13
14-21
Total Properties
Houses
% Built
2760
1266
46%
1570
1147
73%
ALCA Owned
County Owned
% Owned by ALCA/County
262
109
13.4%
36
38
4.7%
Installing sewer lines will allow properties that do not currently perc to be available for
building and could alleviate abandonment. For example, installing sewer lines on
Adobe Place made about 20 lots buildable. It also is estimated that about 25% of the
current wetland properties might be recoverable if they meet the criteria in PA DEP GP15 for building, if sewers were available in Sections 1-13.
Below is a quoted portion of the Pennsylvania DEP GP–15 concerning filling in wetlands
on residential properties which is only permitted for lot purchases by the permitee prior
to November 22, 1991.
“The Pennsylvania Department of Environmental Protection (DEP) has developed the
general permit 15 (GP-15) which authorizes the placement and maintenance of fill in, or
the excavation of, non-tidal wetlands for the construction or expansion of a single family
home for the personal residence of the permittee, including reasonable and necessary
features such as a driveway, storage shed and utilities on a residential lot purchased by
the permittee prior to Nov. 22, 1991, where activities do not impact greater than 0.50
acre of non-tidal wetland.”
(For further information see the following permit instructions on file with ALCA
Management)
3150-PM-BW EW0515 Complete Package.pdf
3150-PM-EW0515_Instructions (1).pdf
48
But we also have properties that have wetlands on them that can be built on because
the sewer would be available and the size of the wetlands is minimal and no
encroachment into the documented wetlands on the property is necessary for
construction of the home and driveway. In the past they may not have been candidates
on which to construct an on-site mound or on-site septic system. With the sewer
available the area needed would be much less for a house and driveway. The Controller
has identified some properties that have had a wetlands determination which shows the
delineation of wetlands on the property. If the wetlands are minimal and you can put a
house and driveway on the property without encroachment into the wetlands or violation
of any building code, the lot is buildable.
Assuming future increases in infrastructure reserve requirements and operating cost,
alternative revenue sources need to be developed to limit dues increases. The
following exhibit shows the potential for additional revenue from some proposed
strategies.
POTENTIAL ADDITIONAL REVENUE
OVER $750,000 ANNUAL REVENUE
$50k
$780k
$80k
$150k
$500k
SEWER 1-13
REDUCE
DISCOUNT
ASSOCIATE
MEMBER
AMENITIES FEES
INCREASE PRIOR
YEAR
COLLECTIONS
ADDITIONAL
REVENUE
POTENTIAL
ASSUMPTIONS
SEWER 1-13 – 500 additional built homes in sections 1-13 to equal 73% after reduction of current GB (421), ALCA Owned (262),
Repository (147)
DISCOUNT – Reduce Early payment Discount 50%
ASSOCIATE MEMBER AMENITIES– Increase Associate fees
PRIOR YEAR COLLECTIONS – Increase collections 30%
Objective and Goals
ALCA will continue to assess reasonable membership dues while generating sufficient
funds to maintain and enhance property values. To be fiscally responsible, revenue will
cover both reasonable increases in operating costs, recreational activities and reserves.
In order to limit dues increases, income from alternative sources will provide a larger
share of revenue. (This Objective statement is considered strategically important and requires
eight out of nine Board Members’ approval to change per the Governance Section, Strategy 7)
49
Strategies
1. Review member dues requirements annually – Member dues will continue
to be the major source of funds for ALCA. Except for unusual unforeseen
circumstances requiring significant increase in revenue, member dues will be
increased each year to cover normal inflation in operating costs and to
maintain adequate reserves.
2. Determine optimum mix of increased annual dues, bank financing and
one-time member assessments – Increased operating costs, reserve
funding for major infrastructure projects and new amenities will require some
combination of funding options that will generate the greatest benefit to
members at the lowest long-term costs.
3. Aggressively pursue strategies to lower delinquency rate – The current
trend in delinquencies will be reduced through greater emphasis on new
pricing options to lower lot dues, new payment plans and collection
strategies that include reporting to rating agencies, collecting some portion of
delinquent dues when property is surrendered to ALCA, and providing
effective incentives to collection agents and lawyers used to pursue
delinquent accounts. In addition added monthly and quarterly dues and
delinquency payment flexibility will be offered.
4. Sell buildable ALCA properties – Continue recent practice of evaluating
properties deeded back to ALCA to determine if they can be sold before
designating them as Community Property.
5. Implement plan to expand sewer system – Potentially the most significant
source of increased dues revenue and reduction in abandoned properties,
the Sewer Company working with outside consultant support will resolve
current regulatory and funding issues to restart effort to provide sewers in
sections 1-13.
6. Look to move discount period to sometime earlier than March – As online credit card dues payments grow and relieve office workloads, look to
changing discount period to January or February to increase cash flow.
7. Add supplemental revenue generating amenities -- Provide arcade
games, mini-golf and ice cream stand (see Quality of Life section for more
details) and a bar/restaurant to help keep the money our members currently
spend outside of the community inside Arrowhead.
8. Implement a fee for additional Associate member and guest wristbands
-- Issue maximum of 2 free associate and guest wristbands to members per
voting household. Additional amenities wristbands can be purchased for
established daily, weekly and monthly rates paid by other guests to the
community.
50
9. Explore the replacement of wristbands and gate cards with photo IDs –
New technology is available to replace the high annual cost of wristbands
and gate cards with member photo ID cards that can last for 5 years and be
used at gates and to gain access to all Association facilities. Additional
technology exists similar to E-Z Pass that can allow faster vehicle entrance
to Arrowhead. Both solutions would also increase security and lower the
cost of surveillance to limitaccess by non-members and unregistered guests.
10. Work with real estate agencies and builders to rent and sell properties
– Maintain ongoing dialogue with local real estate agents, incorporate their
suggestions to improve rentals and sales, and communicate important
changes that enhance the value of owning in Arrowhead.
11. Pursue available grants for project funding – Funding strategies for all
major projects will include evaluation of and application for any potential
grant funds available that might offset some costs. This will require
experienced staff or consulting support in finding and pursuit of large grants.
12. Maximize Lodge Revenue Opportunities to Offset Operating Costs –
Current income projections cover 55% of the operating budget. Lodge
revenue should offset operating costs and budgeted reserves. This will be
accomplished primarily through increased rentals for weddings and other
occasions and income producing events.
13. Increase Greenbelt Income – While ALCA has long looked upon greenbelting as beneficial to the environment and land use, the loss in dues from
the current 512 greenbelt properties represents a significant reduction in
annual dues. Any future green-belting fees need to provide greater
compensation to the association than current fees now generate. In
addition, one-time assessments are implemented on a lot basis which could
generate future income from all green-belted lots. In the interim consider
freezing future green-belting until an analysis of options can be completed.
14. Develop remaining ALCA Owned lots – Consider strategies to turn some
of the 309 ALCA owned lots into income producing rental or recreational
properties that increase the value of ALCA ownership. ALCA lots with
wetlands can be considered for environmental educational programs.
15. Explore multi-tiered rental boat dock at Beach 1 for boat slip seasonal
rental.
51
Background
F.a.2. ASC Revenue Strategies
Arrowhead Sewer Company (ASC) is a wholly owned-subsidiary of ALCA that is
intended to be a self-funding entity covering its operating costs, improvements
and reserve funding primarily through sewer fees, line extensions and New
Branch Tap-in fees. Major extensions, repairs and upgrades to the system have
been funded through bank loans paid from fee income.
The chart below includes a breakdown of revenue sources from 2007 through
2012. Due to a significant reduction in Line Extensions, new Connections and
Tap-ins there has been a large drop in revenue since 2008 that has not been
made up in major increases in sewer fees until 2013. In addition, the annual
budget process had not anticipated this drop in revenue and has been under
budget from 2009 through 2012. To compensate for this negative variance,
capital expenses have been under budget from 2010 through 2012 in order to
operate at a profit in those years.
YEA
R
2007
2008
2009
2010
2011
2012
SEWER
FEES
619,27
0
642,49
6
657,48
9
656,28
7
646,69
5
662,24
9
DISC.
24,03
4
24,36
0
25,83
0
26,75
2
28,08
0
28,63
1
FEE
REVENU
E
EXTEN
.
CONNEC
T
NEW
TOTAL
INCOM
E
VARIANC
E
108,873*
966,474
224,123
36,900
TAP-IN
180,40
0
163,70
0
OTHER
REVENU
E
595,236
34,990
46,975
618,136
30,054
54,590
903,380
85,031
631,659
0
9705
28100
45,136
714,600
-101,279
629,534
0
6,000
0
45,970
681,504
-21,296
618,615
-135
7600
16,300
51,663
694,043
-26,206
633,618
96
1800
47,500
46,076
729,090
-115,635
*
*Includes one-time recovery of prior year expenses -- $42,500
During this period, full-pay fees remained at $445/Home and $222/Lot until 2012.
Although the indicated fee increase was substantial, Sewer fees were raised only
2.9% for both full and quarterly pay in 2012. Full-pay customers receive a 10%
discount if paid by January 31.
In 2013, fees were raised 25% based on the recommendation of the Budget
Committee and Company management. Based on first quarter results, the one
notable change is the 38.7% increase in early pay discounts from $28,631 in
52
2012 to $39,710 through March 2013. Our fees remain lower than other local
Sewer Companies.
Major improvements have been funded through a large bank loan that was with
Wayne Bank and moved to PNC in 2010. The loan balance at the end of 2007
was $1,119,870. As of 12/31/2012 the loan balance with PNC was $371,107.
Operating profit has not contributed significantly to held reserves during this
period. Currently the Sewer Company will be borrowing additional funds to cover
the costs of improvements required by the PADEP because no reserve funds
were established over prior years in anticipation of these required changes.
Current Situation
Due primarily to unanticipated lack of growth in new customers, ASC is in a
difficult position of needing to increase revenue significantly in order to cover
both current operating costs, reserves and near term major expenditures to
upgrade the system. A good current credit rating should allow more borrowing.
But greater focus on strong fiscal management will be required in the coming
years, especially if ASC continues the current pattern of slow growth. New
construction has improved, but not nearly at the levels prior to the recent Great
Recession. Recent PADEP prohibition to extending the sewer lines to Sections
1-13 has been the greatest impediment to growth and to solving the failing septic
systems problem that is and will continue to threaten groundwater contamination
and quality of the Lakes. If and when ASC can return to connecting these
owners, careful planning will be required to determine the fee structure and costs
of any rebate program to avoid a loss similar to the $86,000 loss at the end of
2010 when the expansion was abruptly ended by PADEP.
The double digit fee increase in 2013 of 25% was needed because fees had not
been increased for five consecutive years prior to 2012. Given the projected
near term increased funding required, additional increases to current customers
will be needed and should be done in a manner that lowers the impact of large
double-digit changes beyond 2015.
There are only 283 sewer reserved lots remaining, mostly in Sections 14-21. If
all are built it would increase fees a maximum of $81,222. This excludes tap-in
and connection fees but those are a one-time charge and should not be counted
in the same way. It was part of what caused the issue after 2008 when new tieins dropped. There are 1138 houses on septic in Sections 1-13 and another 635
lots. Most homes are on septic systems well over 30 years old. Without tapping
into this base, current fees may need to rise significantly to cover the costs to
upgrade and maintain the current system.
The Sewer Company Comprehensive Plan and Reserve Study will document the
requirements and potential costs to ASC and its customers and will serve as the
foundation for projecting necessary fee increases and long-term borrowing for a
fiscally sound business. Based on the results over the past six years, while the
53
operations of the Sewer Company have improved significantly, financial
management needs to address the ongoing revenue projections prudently to
avoid the shortfalls encountered each year.
A critical PADEP mandate is to reduce the Inflow and Infiltration (I&I) into the
collection system by 2017. If not done in a timely manner, it could have an
adverse impact on renewing ASC’s permit in 2017.
ASC has no reserve funds. All available funds have been used for necessary
repairs to the plant and collection system with significant funds having been
spent to expand the collection system into Sections 1-13 prior to that being
stopped. A recent loan of $250,000 was secured in order to complete mandated
retrofits.
Objectives and Goals
ASC needs to generate sufficient revenue to be self-sustaining through adequate
annual revenue generation from its customer base. As needed, new funding
through loans will be secured through conservative assessments of customer
growth and periodic fee increases while remaining close to comparable rates
being charged by surrounding municipalities and Sewer Companies. Total
Revenue will be targeted to provide sufficient funds to meet full compliance with
all regulatory requirements. (This Objective statement is considered strategically
important and requires eight out of nine Board Members’ approval to change per the
Governance Section, Strategy 7)
Strategies
1. Raise customer fees annually to provide sufficient funds to cover operating
costs, reserve funding and make loan payments
a. Increase sewer fees to competitive levels over next two years in
order to fund reserves and qualify for government loans
b. After this necessary period of rate increases, avoid future double digit
increases if possible by smaller, regular incremental fee changes
c. Conservatively estimate increase in new customers in budgeting
process to better project adequate fee increase.
2. As the most significant customer and revenue growth strategy, aggressively
pursue the necessary PADEP and Township changes to permit ASC to
extend the Sewer Company to Sections 1-13, starting with remaining
properties around the Lakes but ultimately allowing all properties the option to
hook up.
3. Evaluate low-cost PennVest or USDA RUS long-term or other financing
options in concert with ALCA funding requirements to determine optimum
funding options for major long-term improvements and maintenance
54
requirements that could provide lower annual increases in fees to cover loan
payments than other incremental funding options.
4. Analyze PADEP mandated improvements to determine the most cost
effective funding approach without major increase in fees (See 5.G Funding
Priorities)
5. Correct all PADEP concerns and return to a sound financial basis before
undertaking expansion into Sections 1-13.
6. Work with CAI and local government representatives on legislation to adopt
New Jersey type tax rebate to private communities like ALCA.
F.b. ALCA and ASC Expense and Capital Reserve Strategies
ALCA EXPENSE AND CAPITAL RESERVE STRATEGIES
Background
The past six years have been marked with significant investment in new facilities for the
benefit of ALCA owners and visitors. Starting with the new Administration Building and
Island Pool and with the recent completion of the Lodge, the Association has spent
almost $6.4 million to replace and update these facilities. In addition, over $400
thousand in reserves were needed for the North Arrowhead Lake Intake structure work
in 2007-2008.
During a period prior to 2007, no funds were placed in reserve accounts and even
drawn down to keep dues low. Capital Improvement Fees (CIF) and Reserves have
been complemented by two large loans to cover costs for the Administration Building
and the Lodge because no reserves had been established prior to construction. With
early retirement of the Administrative Building Loan and acceptable P&L, ALCA has
maintained a good credit rating.
However, these costs plus increasing operating expenses and other capital
expenditures had placed a significant strain on Capital Reserve adequacy. This
resulted in a continued drop in reserves until dues and other revenue increased in 2011
and 2012 after 4 years of moderate increases. With this recent increased dues
contribution, Capital Reserves are growing again but remain well short of earlier years.
55
Operating Expenses also have risen in the past two years adding 10 staff members to
address aging roads and other maintenance needs and recreational activity
requirements.
As noted in the Revenue Strategies, careful attention will be needed to match future
Operating Expenses to available funds while maintaining adequate Capital Reserves to
cover projected equipment and facilities maintenance. The contribution of member
dues to both capital and debt service are at an all-time high.
Currently ALCA and ASC have outstanding loans totalling $3,603,646 as of July 1,
2013:
Loan
Date______
Interest
_____Rate*
ALCA Lodge Loan LIBOR +2.35%
(Baloon)
Original
Amount
Balance
$3,271,000 $3,063,062
Mature
April 2017
ASC Loan 1
LIBOR +2.35%
$695,000
$290,585
November 2015
ASC Loan 2
LIBOR +2.35%
$250,000
$250,000
April 2017
*Current one-year London Inter-Bank Offered Rate (LIBOR) is 0.67319%
While loans may continue to play a significant role in major project funding, the
Association must continue to be fiscally responsible in rebuilding reserve funds to
acceptable levels and not extend costs beyond reasonable revenue growth projections.
Current Situation
The recently completed reserve study indicates the need to raise the current ALCA
reserves of $1,216,799 to $4,813,594 over the next ten years to cover an estimated
56
$4,403,038 in Capital Expenditures. While there are alternative annual funding
methods for building these reserves, the minimum alternative assumption in the report
is $280,000 per year in 2013 dollars. This does not include the estimate of the required
capital expenditures for Road and Surface Water improvements and maintenance which
was raised to $637,172 in the 2013 budget. Looking out 20 years, the reserve
requirement for the existing facilities listed will be $9,413,608. (See Appendix f.
Reserve Study July 2013 for details).
However this reserve study did not include the major Sewer Projects mandated by
PADEP, Roads and Ditch Surface Water Drainage Improvements and other initiatives
discussed in the following Section 5 G. -- Major Funding Priorities.
Operating Expense and Capital Reserve Objectives and Goals
To assure the long-term value of ownership in Arrowhead, ALCA will operate within
budgetary constraints of projected revenue while maintaining adequate reserves to
maintain and enhance the infrastructure, facilities and other assets of the Association.
Working with the professional staff and outside consultants as needed, ALCA will
manage resources efficiently and control costs, setting aside sufficient capital reserves
annually to cover known future repair and replacement requirements along with
emergency funds. Reserve funds will be invested in a manner that provides safety of
principal, immediate liquidity and the highest possible returns in both the current and
future economic environments. (This Objective statement is considered strategically
important and requires eight out of nine Board Members' approval to change per the
Governance Section, Strategy 7)
Strategies
1. Align operating costs with revenue projections – While operating costs
should rise with normal inflation and new functions, they will be contained within
a reasonable share of revenue
2. Attract and retain experienced professional staff – The best approach to
assure efficient operations is to have the best professional staff available.
a. Maintain competitive salaries and benefits for qualified staff
b. Review individual performance against existing standards and work
plans regularly
c. Provide recognition in the community of outstanding staff performance
3. Pursue new cost-saving methods and technology – Invest in new equipment,
processes and materials with proven cost-benefit advantages.
a. Continue to develop internet-based processes that reduce staff work by
passing transaction functions to owners and vendors
b. Purchase equipment that directly increases staff productivity
c. Evaluate outsourcing and in-sourcing options to lower costs
57
4. Maintain adequate Capital Reserves – The long-term viability of ALCA requires
adequate reserves to cover future infrastructure, facilities and other maintenance
requirements as they arise.
a. Complete current and conduct periodic community-wide reserve studies. It is
important that reserve studies include roads, dams, dikes and sewerage
collection system and plant.
b. Any amounts required under $50,000 should come from Operating Budget
and not reserve requirements.
c. Develop and implement the necessary annual funding strategy to build and
maintain reserve adequacy. (See section 5.G)
d. Establish reserve requirements during project planning and begin funding
upon completion of major projects or equipment purchases
e. Preclude use of reserves to offset reduction in dues or excessive operating
cost
(This strategy is considered strategically important and requires eight out of nine
Board Members’ approval to change per the Governance Section, Strategy 7)
5. Invest reserve funds according to written investment policy – The board will
adhere to the written policy unless there is a major change in association
finances or an emergency situation dictates a temporary diversion from the policy
or the development of a new written policy. (This strategy is considered strategically
important and requires eight out of nine Board Members’ approval to change per the
Governance Section, Strategy 7)
6. ALCA’s investment priorities are safety, liquidity and yield in that order –
Each investment vehicle will support priorities and guaranteed return of principle.
(This strategy is considered strategically important and requires eight out of nine Board
Members’ approval to change per the Governance Section, Strategy 7)
7. Use reserves as designated – Except for emergency repairs, dedicated
reserves will be used exclusively for the timely repair and replacement of
materials, equipment and facilities established and updated in periodic reserve
studies. Any transfer of a designated reserve to a different use requires Board
approval. (This strategy is considered strategically important and requires eight out of
nine Board Member approval to change per the Governance Section, Strategy 7)
8. Manage dues impact of debt service – Debt service now represents over 3%
of dues, the highest level in recent history. While this is manageable within the
new dues structure, future loans need to be secured only if serviceable through
reasonable increases in dues or through other funding methods
ASC Operating Expense and Reserve Strategies
Background
Tie-ins and Connection fees in 2007 and 2008 created a short-lived sense of profit that
shifted rapidly in 2009 and future years. As noted above, during this period of rapid
58
decline in revenue, annual fees were not raised to compensate for lost income. Instead,
expenses and capital expenditures were deferred each year after the operating loss in
2009 in order to show a modest profit in ASC. This trend did not change significantly
until the 2013 budget year when fees were increased and many needed Capital
Expenses were once again budgeted to be funded. As revenue shortfalls were seen,
Sewer Operations and Capital Expenses were reduced from original budget in each
year.
ASC OPERATING AND CAPITAL RESERVE EXPENSE HISTORY 2007 - 2012
YEAR
2007
2008
2009
2010
2011
2012
2013*
SALARY
&
RELATED
81,561
84,833
102,180
75,476
97,699
118,984
125,839
ALCA
OFFICE
FEE
INSURE OTHER
65,000 20,000 24,820
75,000 25,000 20,564
80,000 30,000 18,125
100,000 30,000
9,180
101,500 30,000 14,403
105,000 34,000 13,919
108,000 34,000 18,900
SEWE
R
CAPITAL TOTAL
BUDGET
PROFIT/
OPS.
EXPENSE EXPENSE VARIANCE
LOSS
135,673 470,260 789,798
52,210
350,724
161,111 538,241 901,674
157,275
235,097
134,919 453,317 826,037
-3143
(100,356)
111,238 269,255 595,149 -110,000
90,690
134,739 225,832 604,173 -115,202
90,160
118,855 238,585 629,343 -215,558
99,972
151,063 445,377 882,929
849
*Budget
As the second chart shows, although budgeted in 2009 and 2010, no significant reserve
contributions were able to be made after 2008 due to an unanticipated drop in revenue
resulting in a rapid decline in reserves. Debt service on the loan grew from 19.9% of
expenses in 2008 to 26.2% in 2012. The recent ASC loan in July 2013 will raise 2014
debt service to $252,750.
ASC RESERVE FUNDING 2007-2012
YEAR
2007
2008
2009
2010
2011
2012
2013
(Budget)
RESERVE
CONTRIB
150,000
225,000
0
0
0
0
ENDING
RESERVE
182,021
415,258
311,189
315,373
315,512
291,880
BUDGET
VARIANCE
-49,609
105,000
124,000
50,000
0
0
BANK
LOAN
179,481
179,393
176,765
169,091
159,999
165,000
0
200,000
?
165,000
59
The following graph shows that the significant drop in revenue was accompanied by the
cessation of reserve contributions in 2009 with debt service having a greater share of
revenue and operating costs.
ANNUAL ASC P&L TRENDS
2007-2012
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2007
2008
2009
TOTAL REVENUE
RESERVE CONTRIBUTION
2010
2011
2012
TOTAL EXPENSE
DEBT SERVICE
Current Situation
The ASC Board has begun to address the need to catch up with many deferred costs,
especially those improvements mandated by the PADEP. The Master Plan prepared by
BCM provides critical guidance to the ASC long-range strategies and related costs.
The 2013 budget included much needed Capital Improvement funds. However,
important items like the generators for the pumping stations were removed from the
proposed budget presented by the Sewer Committee and Management due to the
remaining shortfall in sufficient revenue to fund necessary improvements. As covered in
the following Funding section, the Master Plan indicates a minimum estimate of $15.9
million required to repair the mandated I&I problem in the ASC gravity lines. And over
$1 million additional funds are required for other mandated changes.
While the current budget has reduced debt service to 18.6% of total expenses, ASC is
seeking additional loans to cover the costs of near term improvements and there is little
potential for projected fee income and customer growth to cover significant near term
contributions to reserves. Therefore in coming years ASC will continue to require
significant additional borrowing to fund needed infrastructure expenditures
60
Objectives and Goals
ASC will manage costs within revenue constraints in order to avoid operating losses
while providing superior customer service and full regulatory compliance. While
significant funding will continue to come from bank loans, reserves will be maintained at
a level that assures adequate funds for repair and replacement of equipment and
facilities. ASC’s credit rating will be maintained through prompt payment and limiting
debt service to a reasonable percentage of revenue and expenses. (This Objective
statement is considered strategically important and requires eight out of nine Board Members’
approval to change per the Governance Section, Strategy 7)
Strategies
1. Provide sufficient funds for the immediate changes required to be in regulatory
compliance (See “Funding Priorities” section for details). (This strategy is
considered strategically important and requires eight out of nine Board Member
approval to change per the Governance Section, Strategy 7)
2. Continue to manage expense budget to conservative revenue estimate
a. Assure that sewer fee annual increases are adequate to cover needed
expenditures and debt service
b. Work with local builders to better gauge new construction at ALCA
3. Improve communications with Budget Committee and Board during budgeting
process to assess the impact of proposed reductions in funding for proposed
projects and equipment.
4. Place all future sewer reserved annual fees into reserves to provide funds for
future tap-ins and connections. (This strategy is considered strategically important
and requires eight out of nine Board Members’ approval to change per the Governance
Section, Strategy 7)
5. Build sufficient reserves to fund known equipment and facilities repair and
replacement requirements. (This strategy is considered strategically important and
requires eight out of nine Board Members’ approval to change per the Governance
Section, Strategy 7)
6. At a minimum each year all available connection and tie-in fees must go into
reserve funds and not be used for normal operation and maintenance costs.
(This strategy is considered strategically important and requires eight out of nine Board
Members’ approval to change per the Governance Section, Strategy 7)
7. Establish reserve dedicated to unknown future PADEP mandated requirements
in order to avoid emergency funding to the extent possible.
8. Develop detailed cost estimates and funding options to expand sewer system to
sections 1-13.
61
9. Determine whether ASC can support the required expansion funding or if ALCA
will need to secure funding if PADEP approves expansion to Sections 1-13.
10. The Budget Committee and Management will conduct a detailed review of the
reserve program over the next two years before the next reserve study in order to
select a method in accordance with CIA guidelines and addressing the following:
a. Should future reserve studies include end of life reserves for facilities that go
beyond the 20 years used in the current study
b. Include dams, roadways and ditches
c. Include the sewer system
(This strategy is considered strategically important and requires eight out of nine
Board Members’ approval to change per the Governance Section, Strategy 7)
5. G Major Funding Priorities
Background
Until the dues increases of 2011 and 2012, ALCA was not raising sufficient funds to
increase needed reserves significantly. For many years, management of financial
resources has focused on providing services and improved amenities while limiting
member dues increases and sewer fees. From 1985 through 2010 dues increases
averaged less than $35 per year, woefully inadequate to provide any significant
contribution to the reserves required for the future repair and replacement of the aging
infrastructure and common areas of ALCA. As the following chart clearly shows,
moderate annual dues increases, many even below the inflation rate, have been
interspersed with periodic double digit increases to cover needed current cost shortfalls.
ALCA DUES INCREASE HISTORY 1990-2012
20
15
10
5
-5
62
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Even worse, no significant reserve contributions were established for ASC over the
years as rates have been held at a level substantially below required funding and those
of other local sewer companies, leaving the sewer company with no funds for needed
repairs or expansion.
This “pay as you go” policy has led to the frequent requirement to secure loans to cover
new facilities needed or desired by members such as the Administration Building and
new Lodge, or depletion of reserves for unfunded renovations like the Island Pool.
Major changes at ASC also have required borrowing as no reserves were available.
With the recent $250,000 loan ASC loan balances now total almost $550,000 and no
reserve funds are available for the estimated $20 million mandated improvements that
must be addressed by 2017.
Current Situation
The current financial situation for both ALCA and ASC must be improved significantly
over the coming years if the aging infrastructure, Lakes quality and other desired
improvements are to be addressed. Delaying or further deferring these actions into
some future years in order to hold dues and fees down has significant downside risks to
the quality of life at Arrowhead. Gradual replenishment of reserves over many years or
the historic “pay as you go” approach has serious consequences to consider.
PADEP fines or other sanctions in obtaining ASC renewal in 2017 are likely if the
I&I problems are not adequately addressed by a protracted repair of the gravity
system
At the current rate of expenditure, road and drainage repairs will take 24 years to
complete and likely cost more over this extended period
Difficulty to coordinate road work with sewer line work will increase costs
Delay in ability to modify current restrictions on sewer extension to sections 1-13
will
o Harm lake quality by further allowing failed septic systems to leak
o Force residents on old septic systems that likely have already failed to
replace them over the coming years at costs greater than projected sewer
hook up
o Lead to continued lot abandonment in Sections 1-13 as owners see no
value in retaining or selling the property and the related cost of dues
increases to remaining members.
The chart on page 69 contains the major proposed projects identified through a
combination of required ASC improvements mandated by PADEP, critical infrastructure
needs and member survey input. The priority rankings were set on the basis of
mandated changes having precedence followed by major infrastructure priorities and
those amenities and improvements ranked highly in the member survey.
Project screening level factors are noted on the following page.
63
64
ESTIMATE BASED ON 100% DOC.
NA
100% CONTRACT DOCUMENTS
PROJECT UNDERWAY
A
DETAILED ESTIMATE ON PLANS
70% SPECIFICATIONS & DRAWINGS
B
QUANTITY & UNIT PRICE
ESTIMATE
BALLPARK
WELL DEFINED SCOPE WITH DRAWINGS
WRITTEN SCOPE
D
COST ESTIMATE
C
SCOPE OF WORK /
SERVICES
LEVEL
5%
10%
15%
20%
25%
PERMITS IN HAND
IN CONTRACT
$ OVERSIGHT
AGREEMENT
REQUESTED PERMITS
BOD MUST APPROVE
BOD MUST CONFIRM ALL PERMITS
BEFORE ADVERTISING PROJECT
BOD MUST APPROVE NEXT LEVEL &
FUNDING PLAN
BOD MUST APPROVE NEXT LEVEL &
FUNDING PLAN
ID FUNDING SET ASIDE
OVERSIGHT & MONITOR PREPARE AFTER ACTION REPORT
FOR PROJECT
ALL SOURCES CONFIRMED BOD MUST APPROVE
FINAL FUNDING PLAN
BOD MUST APPROVE
ID POSSIBLE SOURCES COMM. RECOMMENED BOD MUST APPROVE NEXT LEVEL
CONSULTANT CONFIRMS DRAFT FUNDING PLAN
LIST of PERMITS
9%
15%
15%
20%
CONTING ENGR, LEGAL &
PERMITS FUNDING PLAN BOD ACTION REMARKS & NOTES
ENICES ADMIN
PROJECT /SERVICES PROJECT SCREENING LEVEL FACTORS
65
150,000
100,000
75,000
16,933,850
AMEND 537 SEWER PLAN
SHUT OFF VALVES PRESSURE SYSTEM
VIDEO CONDUIT/UPDATE EAP,BOND
TOTAL REGULATORY REQUIREMENT
3,770,000
5,000,000
STORMWATER REPAIR AND ROADS RELATED TO GRAVITY SYSTEM
STORMWATER REPAIR AND ROADS IN REMAINING SECTIONS
300,000
400,000
POOL RENOVATIONS
REPLACE MAINTENANCE BUILDING
n/a
n/a
n/a
n/a
n/a
n/a
C
D
D
D
D
D
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
0
0
0
0
0
0
0
4
8
4
8
12
6
16
16
8
16
8
6
0
0
0
0
10
4
0
10
0
6
10
10
10
10
10
6
6
10
10
10
10
10
6
8
6
10
6
10
10
10
10
10
2
6
10
10
10
10
2
4
10
4
10
4
8
8
8
10
10
NON-REGULATORY PROJECTS
0
0
0
0
0
0
0
4
0
4
0
0
10
0
0
8
2
16
18
20
20
20
20
22
22
26
28
28
28
44
44
44
46
48
D
D
D
D
D
D
D
D
D
D
D
D
C
D
C
C
C
REGULATORY
SURVEY
AGE &
MEMBERS HEALTH & REVENUE TOTAL COST
REQUIREMENT RANKING CONDITION BENEFITING
SAFETY GENERATER SCORE LEVEL
YES/NO
16 to 0 10=END NEAR 10=100%
10=HIGH
10=HIGH
A,B,C
or D*
YES
YES
YES
YES
YES
YES
REGULATORY REQUIREMENT
REGULATORY
SURVEY
AGE &
MEMBERS HEALTH & REVENUE TOTAL COST
REQUIREMENT RANKING CONDITION BENEFITING
SAFETY GENERATER SCORE LEVEL
YES/NO
16 to 0 10=END NEAR 10=100%
10=HIGH
10=HIGH
A,B,C,
or D*
FUTURE RESERVES
FUTURE RESERVES
RESERVES
RESERVES
RESERVES
RESERVES
FUTURE RESERVES
FUTURE RESERVES
PENNDOT
RESERVES
FUTURE RESERVES
FUTURE RESERVES
FUTURE RESERVES
FUTURE RESERVES
LOAN
LOAN
LOAN
RESERVES
RESERVES
RESERVES
RESERVES
LOAN
PROPOSED
FUNDING
SOURCE
COMMENTS
COST LEVELS SEE TABLE ENTITLED PROJECT /SERVICES PROJECT SCREENING LEVEL FACTORS (Page 70)
Must be done at some point
Must be done at some point
KEY ELEMENT OF STRATEGIC PLAN
KEY ELEMENT OF STRATEGIC PLAN
KEY ELEMENT OF STRATEGIC PLAN
KEY ELEMENT OF STRATEGIC PLAN
Must be done over projected time
Lower Ranking but some revenue potential
High Life Safety Ranking/ Determine timing of Penndot repairs and fund through combined effort
Interim fix to build reserve
High ranking/timing issue due to need to seek funding separately from Stormwater repair project
Higher ranking tempered by fewer boaters
Significant revenue potential. High priority due to water safety and health concerns
Highest Survey Rank with greatest potential for increased revenue and reduced lot abandonment
Highest Survey Rank for roads and significant savings if done in conjunction with Sewer Line Replacement
Significant lake quality, water safety and health concern/Timing tied to available funding
Highest Survey Rank for roads and significant savings if done in conjunction with Sewer Line Replacement
MANDATED MUST DO
MANDATED MUST DO
MANDATED MUST DO
MANDATED MUST DO
MANDATED MUST DO
MANDATED MUST DO Apply for 40 Year Loan
COMMENTS
Mandated Repair of Gravity Sewer System and extension around Lake will cost $27 million
56,667,884
100,000
PREPARE MASTER OPERATION & MAINTENCE PLAN FOR ALCA & ASC
GRAND TOTAL
100,000
COMPREHENSIVE REVIEW OF RESERVE PROGRAM
39,734,034
150,000
LAKE COMPREHENSIVE BASELINE TESTING PLAN
TOTAL NOT MANDATED
200,000
1,490,590
RESERVE STUDY REPAIR & REPLACE
COMMUNITY MASTER PLAN
2,500,000
300,000
BRIDGE OVER SPILLWAY
CLUBHOUSE EXPANSION PHASE 2 OR REPLACE
500,000
3,000,000
3 MILE WALKING AND BICYCLE PATH
CLUBHOUSE REPAIR PHASE 1
1,025,000
RECLAIM LEWIS CREEK,EASTERN COVE COVE & TROUT CREEK
14,000,000
5,844,144
SEWER LINES RINGING THE LAKE IN SECTIONS 1-13
SEWER LINES IN REMAINING SECTIONS 1-13
1,054,300
STORMWATER REPAIR AND ROADS RELATED TO RINGING LAKES
PROJECT
COST
$
300,000
UPGRATE PLANT/GENERATORS
PROJECT
600,000
15,708,850
PROJECT
COST
$
REPLACE NORTH LAKE SPILLWAY
REPLACE GRAVITY WITH NEW GRAVITY
PROJECT
PROJECT PRIORITY RANKINGS
As the chart indicates, ALCA will not be able to fund all desired new and improved
amenities in the near term. Mandated Sewer company improvements alone far exceed
ASC’s and even ALCA’s ability to fund with dues and fee increases alone over the next
three years. So the Association and ASC must again look to securing funding through a
very large long-term loan likely from one of two government agencies – PENNVEST or
the USDA RUS and possibly a Consortium of banks indicated by BCM as a group that
also lends funds for wastewater management projects. The following chart from the
Sewer Master Plan shows the differences in these potential lenders:
Alternative
Bond Issue
Bank Loan
PENNVEST
Rural Development
Interest Rate
5.5%
6.0%
1% to 4%
3% to 4%
Maximum Term
20 years
15 years
20 years
40 years
However, the current financial position of ALCA and ASC would not warrant such a loan
without significant improvement in reserves, ability to meet debt service, demonstrated
fiscal responsibility and continued membership payment of dues and sewer fees. Based
on the expert opinion of BCM a loan large enough to cover the approximate $27 million
required to fund the mandated ASC changes plus all storm water repairs and sewer
extensions to ring the Lakes in sections 1-13 will be difficult to obtain.
Assuming these major necessary infrastructure improvements are funded, most, if not
all, of the remaining improvements may have to be deferred for a number of years until
adequate reserves are available or alternate funding methods are adopted.
Over time the historic pattern of obtaining loans for new amenities, major repairs and
replacement of facilities is not sustainable and must be replaced by sound reserving
policies and procedures. Unfortunately, this will take years to achieve but must begin
immediately to forestall future deterioration of the infrastructure and member services.
Objective and Goals
The primary funding objective for ALCA/ASC is to establish a strong financial foundation
to manage required infrastructure improvements, repair and replacement of existing
facilities and new amenities and services for the enjoyment of current and future
members. The goals include maintaining sufficient dues and fee levels to cover
documented reserve requirements and to demonstrate the fiscal responsibility and
capacity to qualify for needed loans. Over time, the build-up of reserves should replace
the recurring need to secure large loans for future projects. (This Objective statement is
considered strategically important and requires eight out of nine Board Members’ approval to
change per the Governance Section, Strategy 7)
66
Strategies
The following strategies are contingent on the amount and source of required ALCA and
ASC loans for replacing the Gravity system and high priority project to ring the Lake.
Dues and Fee increases were projected to qualify for either a 40 or 20 year loan. While
we will apply to USDA RUS, PENNVEST and a Bank Consortium at the same time,
moving from a 40 year loan with RUS to 20 years with PENNVEST will have a
significant impact on reserve funds available for other future projects. (The strategies
below are all considered strategically important as they pertain to achieving the reserve
goals necessary to succeed in the plan. If comparable strategies arise that still achieve
the targeted reserve goals, they can be substituted for the strategies herein.
Modifications that alter the modeled outcome and intent of these funding strategies
require eight out of nine Board Members’ approval to change per the Governance
Section, Strategy 7)
1. Based on the options discussed with BCM and analysis of alternative scenarios
the following funding method is the most feasible to pursue:
a. Secure all or majority of $27,723,841 Gravity System and Ringing the Lake
Sewer line loan requirements from USDA RUS. The 40 year loan will provide
funds above required RUS debt service to increase reserves over time to fund
other ALCA and ASC projects.
b. Develop plan to gradually extend sewer system to remainder of Sections 1-13
by identifying clusters of homes and lots needing hook-up. Given the
projected $14 million cost and limited additional borrowing options BCM
suggests this strategy to work “from the center out” from existing sewer lines.
c. Fund additional projects over time as reserves are built from collected dues
and sewer fees.
2. Implement dues and fee level strategies to qualify for 40 year, 4% interest
wastewater loan from USDA RUS or 20 year 3% loan from PENNVEST(see
detailed exhibits below)
a) Raise ASC rates to local competitive level in 2014 to meet fundamental
agency requirement
b) Increase ALCA dues rapidly over next three years in order to both
increase needed reserves to qualify for loan and demonstrate members’
ability to absorb higher dues levels
c) Maintain dues increases at level of inflation thereafter
d) Lower Lot dues to help mitigate abandonment
e) Lower early payment house discount rate to $100 and Lot discount to $50.
f) Accumulate sufficient reserves to pay off all Lodge and Sewer Company
Loans by 2017 in order to qualify for new loans.
g) ALCA will cover $17 million of loan debt service and ASC $10 million so
that both entities can add to reserves
67
ARROWHEAD SEWER COMPANY
FEE RATES FORECAST 2014 THROUGH 2018
Rates
House at Discount - Annual
House Quarterly
Lot at Discount - Annual
Lot Quarterly
$
$
$
$
Total Sewer Fees
% Increase
$
2013
Budget
573
158
286
79
$
$
$
$
786,178 $
25.00%
2014
Forecast
800
220
400
110
$
$
$
$
1,100,649 $
40%
2015
Forecast
824
227
412
113
$
$
$
$
1,133,668 $
3%
2016
Forecast
849
233
424
117
$
$
$
$
1,167,679 $
3%
2017
Forecast
874
240
437
120
$
$
$
$
1,202,709 $
3%
2018
Forecast
900
248
450
124
1,238,790
3%
ARROWHEAD LAKE COMMUNITY ASSOCIATION
DUES FORECAST 2014 THROUGH 2018
House-Face - $
% Change
House-Face - #
Total Collected
2013
2014
2015
2016
Budget
$
1,522 $
1,750 $
1,900 $
2,000 $
15.0%
8.6%
5.3%
$
419
419
419
419
$ 637,718 $ 733,250 $ 796,100 $ 838,000 $
2017
2,060 $
3.0%
419
863,140 $
2,120
2.9%
419
888,280
$
1,382 $
2018
House-Discount - $
% Change
House-Discount - #
Total Collected
1,650 $
1,800 $
1,900 $
19.4%
9.1%
5.6%
$
1,870
1,870
1,870
1,870
$ 2,584,340 $ 3,085,500 $ 3,366,000 $ 3,553,000 $
1,960 $
3.2%
1,870
3,665,200 $
2,020
3.1%
1,870
3,777,400
Total Collected - Houses
% Change
$ 3,222,058 $ 3,818,750 $ 4,162,100 $ 4,391,000 $
18.5%
9.0%
5.5%
4,528,340 $
3.1%
4,665,680
3.0%
Lot-Face - $
% Change
Lot-Face - #
Total Collected
$
1,126 $
875 $
950 $
1,000 $
-22.3%
8.6%
5.3%
145 $
145 $
145 $
145 $
$ 163,270 $ 126,875 $ 137,750 $ 145,000 $
1,030 $
3.0%
145 $
149,350 $
1,060
2.9%
145
153,700
Lot-Discount - $
% Change
Lot-Discount - #
Total Collected
$
1,024 $
825 $
900 $
950 $
-19.4%
9.1%
5.6%
$
469
469
469
469
$ 480,256 $ 386,925 $ 422,100 $ 445,550 $
980 $
3.2%
469
459,620 $
1,010
3.1%
469
473,690
Total Collected - Lots
% Change
$ 643,526 $ 513,800 $ 559,850 $ 590,550 $
-20.2%
9.0%
5.5%
608,970 $
3.1%
627,390
3.0%
Total Dues Collected
% Change
$ 3,865,584 $ 4,332,550 $ 4,721,950 $ 4,981,550 $
12.1%
9.0%
5.5%
5,137,310 $
3.1%
5,293,070
3.0%
68
3. USDA 40 Year Loan Results – As the following Exhibits show, both ALCA and
ASC are able to cover debt service beginning in 2016. By the end of 2018
cumulative reserves available to fund other ALCA and ASC priorities have
grown to over $7.3 million and are projected to grow at about the $1.2 million
rate shown in 2018 based on assumed annual rate increases of 3% for both
ALCA and ASC. Note that the difference in reserve build-up for ALCA and ASC
is due to the $17 million ALCA and $10 million ASC split in loan obligation which
can be adjusted based on where future reserves are to be used.
ALCA CUMULATIVE AVAILABLE RESERVES
Reserve Savings Beginning of Year
Addition to Reserves
Reserve Savings End of Year
2014
Forecast
2015
Forecast
2016
Forecast
2017
Forecast
2018
Forecast
$ 1,500,000 $ 2,253,120 $ 3,213,740 $ 3,393,637 $ 3,755,140
$ 753,120 $ 960,620 $ 179,897 $ 361,504 $ 407,616
3,393,637
3,755,140
4,162,756
2,253,120
3,213,740
ASC CUMULATIVE AVAILABLE RESERVES
Reserve Savings Beginning of Year
Addition To Reserves
Reserve Savings End of Year
2014
2015
2016
2017
2018
Forecast
Forecast
Forecast
Forecast
Forecast
$
200,000 $
625,646
1,111,300 $ 1,668,377 $ 2,318,607
425,646
485,653
557,077
650,230
822,223
$
625,646 $ 1,111,300 $ 1,668,377 $ 2,318,607 $ 3,140,830
Note: This calculation of reserves assumes no use of capital reserves, and is not intended to
represent a target end-of-year goal for reserves balance. It is simply an illustration of potential
reserves available for planning of future projects. Target ending reserve balances are to be
determined by the Board and Management.
If a RUS 40 year loan is not available, using the same dues and sewer fee
increases, a 20 year 3% PENNVEST or other funding source loan will reduce
the cumulative available reserves by over $1.3 million at the end of 2018 to
$5,975,276
ALCA CUMULATIVE AVAILABLE RESERVES
Reserve Savings Beginning of Year
Addition To Reserves
Reserve Savings End of Year
2014
2015
Forecast
$ 1,500,000
$ 753,120
$ 2,253,120
Forecast
$ 2,253,120
$ 960,620
$ 3,213,740
2016
2017
Forecast
Forecast
$ 3,213,740 $ 3,114,855
$ (98,885) $
82,722
$ 3,114,855 $ 3,197,576
2018
Forecast
$ 3,197,576
$ 128,834
$ 3,326,410
ASC CUMULATIVE AVAILABLE RESERVES
Reserve Savings Beginning of Year
Addition To Reserves
Reserve Savings End of Year
2014
2015
2016
2017
2018
Forecast
Forecast
Forecast
Forecast
Forecast
$
200,000 $
625,646
1,111,300 $ 1,504,389 $ 1,990,631
425,646
485,653
393,089
486,242
658,235
$
625,646 $ 1,111,300 $ 1,504,389 $ 1,990,631 $ 2,648,866
Note: This calculation of reserves assumes no use of capital reserves, and is not intended to
represent a target end-of-year goal for reserves balance. It is simply an illustration of potential
reserves available for planning of future projects. Target ending reserve balances are to be
determined by the Board and Management.
69
To reach the same level of available reserves as the USDA 40 year loan, ALCA House
undiscounted dues would need to be increased $175 in 2015 and smaller increases
through 2018.
ARROWHEAD LAKE COMMUNITY ASSOCIATION
DUES FORECAST 2014 THROUGH 2018 with 20 Year Loan
2013
Budget
2014
2015
2016
2017
2018
House-Face - $
% Change
House-Face - #
Total Collected
$
1,522 $
1,750 $
1,925 $
2,060 $
15.0%
10.0%
7.0%
$
419
419
419
419
$ 637,718 $ 733,250 $ 806,575 $ 863,140 $
2,160 $
4.9%
419
905,040 $
2,230
3.2%
419
934,370
House-Discount - $
% Change
House-Discount - #
Total Collected
$
1,382 $
1,650 $
1,825 $
1,960 $
19.4%
10.6%
7.4%
$
1,870
1,870
1,870
1,870
$ 2,584,340 $ 3,085,500 $ 3,412,750 $ 3,665,200 $
2,060 $
5.1%
1,870
3,852,200 $
2,130
3.4%
1,870
3,983,100
Total Collected - Houses
% Change
$ 3,222,058 $ 3,818,750 $ 4,219,325 $ 4,528,340 $
18.5%
10.5%
7.3%
4,757,240 $
5.1%
4,917,470
3.4%
Lot-Face - $
% Change
Lot-Face - #
Total Collected
$
1,126 $
875 $
963 $
1,030 $
-22.3%
10.0%
7.0%
145 $
145 $
145 $
145 $
$ 163,270 $ 126,875 $ 139,563 $ 149,350 $
1,080 $
4.9%
145 $
156,600 $
1,115
3.2%
145
161,675
Lot-Discount - $
% Change
Lot-Discount - #
Total Collected
$
1,024 $
825 $
913 $
980 $
-19.4%
10.6%
7.4%
$
469
469
469
469
$ 480,256 $ 386,925 $ 427,963 $ 459,620 $
1,030 $
5.1%
469
483,070 $
1,065
3.4%
469
499,485
Total Collected - Lots
% Change
$ 643,526 $ 513,800 $ 567,525 $ 608,970 $
-20.2%
10.5%
7.3%
639,670 $
5.0%
661,160
3.4%
Total Dues Collected
% Change
$ 3,865,584 $ 4,332,550 $ 4,786,850 $ 5,137,310 $
12.1%
10.5%
7.3%
5,396,910 $
5.1%
5,578,630
3.4%
4. Secure $1.6 million short term loan to immediately begin process outlined below
with BCM to apply for loan at all three potential lenders. These funds will be
reimbursed upon approval of funding by either RUS or PENNVEST
70
71
Task Plan and Schedule for Securing Loan to Fund the Projects
5. Upon BCM completion of the project design and obtaining required permits
approach all three lending agencies – USDA RUS, PENNVEST and Bank
Consortium to determine best available loan options.
6. Raise proposed dues and sewer fees in 2014 to demonstrate ability to fund loan
debt service, retire PNC loans and add to reserves
7. Determine desired timeframe for accumulating sufficient reserves for remaining
priorities (see Exhibit on page 68) and match to projected reserves over coming
years.
8. Continue to build adequate reserves beyond 2018 for repair and replacement of
existing facilities and for new desired facilities and improvements at both ALCA
and ASC. The following exhibits show available reserves beyond 2018
assuming a 3% annual increase in dues and sewer fees.
ALCA Available Reserves
Reserve Savings Beginning of Year
Addition to Reserves
Reserve Savings End of Year
2019
Forecast
$ 4,162,756
$ 434,912
$ 4,597,669
2020
Forecast
$ 4,597,669
$ 462,120
$ 5,059,789
ASC Available Reserves
Reserve Savings Beginning of Year
Addition To Reserves
Reserve Savings End of Year
2019
Forecast
$
3,140,620
632,046
$
3,772,666
2020
Forecast
$
3,772,666
671,297
$
4,443,963
2021
Forecast
$ 5,059,789
$ 489,194
$ 5,548,983
2021
Forecast
$
4,443,963
711,956
$
5,155,919
2022
Forecast
$ 5,548,983
$ 516,089
$ 6,065,072
2022
Forecast
$
5,155,919
754,070
$
5,909,990
2023
Forecast
$ 6,065,072
$ 542,755
$ 6,607,828
2023
Forecast
$
5,909,990
797,764
$
6,707,754
While this available reserve accumulation appears significant, the other
mandated and Project Priorities in the chart on page 69 far exceed these
potential reserves. Any additional project funding beyond these levels must
come primarily from increased dues and/or Sewer fees.
9. Retain independent Engineering consultant in 2014 to provide a second opinion
on BCM proposed options, strategies and cost projections of major
infrastructure improvements
10. Document reserve funding and investment policies and procedures for both
ALCA and ASC. (This strategy is considered strategically important and requires eight
out of nine Board Members’ approval to change per the Governance Section, Strategy
7)
72
H. Strategic Plan Implementation Process
Given our long history of changing course every few years, it is imperative that
implementation of the Strategic Plan be done in a manner that all key personnel and
stakeholders buy in to the scope and direction of this plan. In combination with the
Comprehensive Master Plan, the Strategic Plan should stabilize the direction of the
community so that the Mission and Vision may be achieved.
After initial approval by the Board of Directors it is important to receive comments from
the staff, committees, and members so that the plan represents the direction in which
the members would like to see Arrowhead move forward during the next 10 years. This
will include a series of meetings to review the plan, answer questions and provide a
greater understanding of the reasons for elements of the plan that may be a concern for
certain members.
This will require acceptance by the majority of members, key committee members, all
staff personnel, and the Board of Directors. After the review and approval of any
changes by the Board of Directors, all key personnel will be asked to make a personal
commitment in the form of a pledge to personally work for the implementation of the
strategic plan so that the Arrowhead community can stay on course to a better
environment and community that all can enjoy through more efficient fiscal
management. It is proposed that the Board of Directors, Chairpersons of Committees,
and staff personnel all be afforded the opportunity to sign their pledge for support of the
Arrowhead Community Strategic Plan and its resulting annual work plans. (See
appendix m. for draft of personal pledge.)
It will still be possible for committees to recommend changes to the strategic plan. Any
recommendation from the committees should be supported by more than a simple
majority of the committee members.
If the Board of Directors determines that a change to the Strategic Plan should be
considered, it first must be submitted to Management, the Budget Committee, Strategic
Advisory Team and any affected committees for comment and analysis of any
community and financial impact. After reviewing the comments and financial impact
assessment, the Board must pass changes to Objectives or Strategies that are clearly
delineated in the plan by a super majority vote of 8 of the 9 members. To reiterate,
these sections are as follows:
1. Mission, Vision and Values;
2. Objective and Goals statements in each section of the Plan;
3. Governance -- all strategies in Governance that become part of Bylaws
and/or Rules and Regulations;
4. Comprehensive Master Plan, Wastewater Management Master Plan,
and all
additional infrastructure Master plans that are recommended
in the plan and commissioned;
5. Entire Funding Section G of the Plan that is approved in the final
version;
6. Any change in documented reserve funding and investment policy (#11,
73
page 75);
7. Any non-emergency use of reserves for other than defined purpose;
8. Any proposed reduction in annual reserve funding requirements greater
than $100,000 not contained in independent reserve study;
9. Reserve elements contained in Strategies # 4, 5, 6, 7 of section F. b for
ALCA (page 60 and 61) and 1,4, 5, 6, & 10 for ASC (pages 63 &
64);
10. The timely execution of a plan and funding document for all future
mandatory regulatory requirements issued by local, state or federal
agencies;
Each annual work plan developed as a result of this Strategic Plan should be guided by
the various constraints imposed by the Strategic Plan. Those constraints include the
following:
First – Guidelines for increasing dues and sewer fees
Second – Requirements to fund reserves
Third – Constraints on Operations and Maintenance funds
Fourth – Limitations on the funding of Capital Improvement projects
Each annual work plan should show the impact on the 10 year plan both from a
scheduling and a financial review. The Strategic Plan does not rule out any increase in
revenue for any activity that is required due to regulatory impacts or is in the best
interest of the community that meets the overall goals of the strategic plan.
Many strategies will require changes to the ALCA Bylaws in order to be implemented. A
Bylaws committee will be formed by the Board and supported by Legal and other
Professional support as needed to draft new Bylaws for approval and implementation.
Upon the Board’s approval of the Strategic Plan the following key implementation
projects need to be funded and completed within the first few years
a.
b.
c.
d.
A Community Master Plan
Comprehensive Baseline Testing of both Lakes
Comprehensive Review of Reserve Program
Master Operations and Maintenance Plans
for ALCA and ASC
74
$200,000 estimated cost
$150,000 estimated cost
$100,000 estimated cost
$100,000 estimated cost