By Susan Thompson | Lake Panorama Times
John Rutledge
John Rutledge is in his 20th year as LPA general manager. In this month’s Q&A, he offers a historical look at LPA dues and assessments and how that history can inform the future.
Q. As LPA looks ahead to a future dues and assessments strategy, it would be helpful to understand how we arrived at this point. Can you highlight the history of LPA dues and assessments?
A. I’ve reviewed the history of LPA’s dues and assessments, and it is an interesting journey. I’ve had a front-row seat for the last 20 years, but I’ve pieced together the lake’s first four decades from information in our archives and what I’ve gathered from some of our community’s long-term residents.
From 1969 to 2005, dues and assessments could only be increased by a vote of the LPA membership. The board of directors did not have the authority to increase dues and assessments annually.
In 1969, LPA dues were a flat $50 for all classes of lots. This changed in 1974, when an LPA assessment of $50 was added to the $50 charge for dues, totaling $100 annually for all classes of lots.
Beginning in 1978, there was a “CIPCO Assessment,” designed to help fund Central Iowa Power Cooperative’s dredging of Lake Panorama. This was in addition to the $100 in dues already being paid by all members.
This assessment was weighted with waterfront homeowners paying $200 annually and undeveloped C lot owners paying $50 annually. This marked the first time LPA membership classifications were established and different rates applied.
From 1980 to 1993, the dues and assessments were increased five times, which resulted in the following schedule becoming effective in 1993: Waterfront Home – $750; B Home (offshore) – $600; C Home (offshore) – $475; Waterfront Lot – $350; B Lot (offshore) -$250; and C Lot (offshore) – $200.
LPA dues and assessments remained unchanged from 1993 to 2005. At the 2005 annual meeting, the LPA membership voted to grant the LPA board of directors the authority to increase dues and assessments by up to 5% annually.
The first increase of 5% was applied in 2006 with the board increasing dues annually over the last 20 years. In 15 of the last 20 years, the increase was the full 5%. In the other five years, increases ranged from 2.5% to 4%.
Q. Are there some lessons to be learned from this history?
A. I think it’s unfair to second-guess our predecessors, as the political and financial climate of that era was far different than what exists today. Still, there are some timeless principles I believe apply to both then and now.
As leaders, it is essential we differentiate between reducing or eliminating an expense and deferring that expense. These two things look similar in the moment but are quite different in the long term.
When I joined the organization in 2007, it rapidly became obvious to me that LPA had been deferring expenses throughout much of the 1993 to 2006 period. To put it bluntly, I recognized on day one that we had a lot of catching up to do.
Over the last 20 years, I’m very proud of how our staff, board and membership have come together to support critical projects, such as seven-figure investments at the water plant and shop. These projects have been an investment in the future of Lake Panorama and replaced aged facilities that had long exceeded their life expectancy.
The lesson learned? LPA management should always be honest with the board and membership about whether we’re balancing the budget by cutting expenses or by deferring expenses.
Q. So, are we deferring expenses or cutting expenses to make the budget work today?
A. Candidly, we’re doing both, which is why we’re having this discussion.
Cutting and controlling expenditures is something we must always practice in our line of work. It is an essential part of the job. Every year our team looks for more efficient ways to serve the membership, without sacrificing the services we provide.
But admittedly, there also is some deferral of expenses. The two most obvious examples of deferred expenses are LPA’s roadways and LPA’s water distribution infrastructure.
LPA’s roadway system involves about 35 miles of roads, most of which are seal-coated. Twenty years ago, we were surfacing nine to 10 miles of roadways each year. This year, we’re scheduled to seal-coat slightly more than seven miles of roadway, and we’ve dipped below the seven-mile threshold in recent years. This isn’t a cutting of expenses but rather a deferral of expenses. This is unsustainable at its current level.
LPA’s water infrastructure provides another good example. The LPA water department is divided into two subcategories, production and distribution.
On the production side, we are in great shape. This includes our wells, our water plant and the reverse osmosis system that treats the water. All these investments still have ample remaining life and should serve LPA well into the future.
Water distribution infrastructure is a mixed bag. There are more than 46 miles of water mains and lines under LPA’s ownership. This does not include everyone’s home line that feeds from the shutoff through private property.
LPA depends on three water mains located underneath the lake. These transport drinking water from the plant, which is on the west side of the lake, to residents on the east side of the lake. Two of these three critical water mains have been replaced since 2020.
The remaining main, located near Christmas Tree Point, is more than 55 years old. This artery of the drinking water distribution system must be replaced in the next few years. It has already exceeded reasonable expectations of its lifespan, and we need to replace it before it experiences a critical failure. Doing this proactively rather than reactively will not only achieve a more competitive price for the project, but it will also avoid a situation where LPA members on the east side of the lake are temporarily without drinking water.
Q. Final thoughts?
A. When we look at the financial health of our community, we have much to celebrate. LPA members continue to invest their time and resources into their Lake Panorama properties with confidence. We should not take this for granted, as there are many communities that will struggle to survive the next 10 to 20 years. LPA’s future is certainly bright.
With that being said, LPA must periodically revisit our funding model to ensure we are on the right track. My philosophy is to bring this conversation to the surface sooner rather than later. Admittedly, I’m a product of my professional experiences, and I’ve seen how hard it was for LPA to quietly overcome deferred expenses.
I am protective of the progress we’ve achieved over the last 20 years, which is why we’re focusing now on member education. We expect to roll-out suggested solutions to the membership later this summer.