An open letter to the POA Board

Dear members of the POA board,

I listened with dismay on Wednesday as the board members pontificated for two hours and proceeded to destroy a ferry plan that had high satisfaction and created high revenues. I object to it procedurally, financially, from a position of trust and community, from a sales and marketing standpoint, and from an environmental standpoint.

I object to this decision procedurally:

 Your decision violates a number of procedures.

  • This was a last minute proposal with no opportunity for input from the community. The board has a policy which has not been repealed that agenda items be disclosed a week in advance.
  • The finance committee presented an existing plan with a cost increase spread consistantly across all tiers and the board completely dismissed that. There is, indeed, a precedent of the board over-ruling the finance committee.  However, the year that the board adopted 98% of the finance committee’s recommendations, increasing rates on top riders and providing relief to the bottom riders, the board members had had zero opportunities to participate in finance committee discussions.  The only change the board implemented to the recommended plan was to omit the addition of a new top tier (for 5 individual owners) with much higher rates. The narrative that the board had “completely overthrown” the recommendations of the finance committee was false: the board implemented a compromise. You can see my explanation of this over-ride here.

Since then, the “finco” meetings have been open meetings, and board members who could have contributed to the discussion at the finance committee level were present, and yet remained silent.  When you then adopt a last minute addition to the meeting with no chance for owner input, you raise issues of trust and transparency.

I am stunned that every member of the finance committee hasn’t raised publie concerns about the procedural waste of their time and efforts.

  • There was no second reading of this plan. The substantial increase to a handful of owners would seem to fall under the decision the board made last year of not implementing new policies without a second reading.
  • The board ignored the manager and the accountant’s presentation of the numbers and the manager’s assertion that this was currently an economically successful strategy, when the new paradigm was something that wasn’t addressed or vetted in terms of the assumptions that were made.

I object to the decision financially:

Your decision is likely to affect the finances of the island in negative ways.

    • The ferry is a fixed cost.  The only variable is how we pay for it.  When we instituted passes, we were able to capture the costs up front, which helped with budgeting.
    • Over the years, as the ferry cost per ride increased, ridership decreased and revenues stayed constant.  People changed behavior, so revenues didn’t change.  But satisfaction did.   For years, as the board increased the per ride cost, ridership decreased accordingly.
    • The ability to divide the total cost of the ferry by the number of rides is an accounting strategy that is fundamentally flawed.  Reduction in the number of passengers does not lead to a significant reduction in costs. The model that was used to calculate the cost per ride assumes that there is a variability in the number of rides, rather than in the number of riders. 
  • The logical fallacy that the rides are what costs money instead of the entire running of the ferry is being used to fool people into thinking that they are being over-charged. That our system looks like this:

when this is the actual scenario:

Very few runs have a single high-use rider: in fact, most families usually ride together and the costs of the second, third, … seventh riders are negligible.  Many high end users ride the ferry together.

    • From a financial standpoint, I fear that this decision will lead to fewer pass holders adopting the plan, leading to lower up-front revenues.  And since I have heard multiple expressions of dismay from new owners who feel the rug has been yanked out from under them, the anger and pushback may substantially change behavior, leading to significantly less use of the ferry in general, and less revenues.  There is at least one owner who proved this the last time there was an increase. High use riders could work together to avoid the ferry in terms of private boats, which then shifts costs to a new tier of high users and leaves us with a budget shortfall in the interim.

I object to the way this decision ERODES our TRUST and sense of COMMUNITY:

 

  • The punitive language around high users is completely unnecessary.  I am saddened by the divisive language around high users, and the insistence of looking at the ferry as a “per ride” expense. Nobody needs to be “penalyzed” for high use when there is not an actual shortage of rides.  As a community, we are all literally in the same boat. While I recognize that the DUC is out of this board’s control, full time owners got a one-two gut punch from the same type of disproportionate raise of costs ON THE SAME DAY. 

 

  • Often, those touting per ride use patterns return to the developer’s original document that suggests the island was built for second homes and not primary residences.  Cherry-picking developer documents is ridiculous: at the same time the ferry was included in annual fees with no per ride costs. It is not the choice of the board to discourage full-time ownership~ you should be encouraging ALL types of ownership.  With your language and your policies, you imply that the only way to be a Dewees owner is the way you, yourselves are.  Four out of five board members are secondary home owners. Surely you can put yourselves in the shoes of others.

 

  • Everything that discourages the use of the ferry erodes our sense of community. The ferry is an accidental meeting place that builds our community.  It is where we meet new neighbors, greet each other at the beginning of a vacation or the end of a day.  It puts us all, literally, in the same boat.  We learn that what connects us is stronger than what divides us.

As a former realtor, I object to this decision from a sales and marketing standpoint.

  • One thing I hear over and over from new owners is that they feel they have been slapped, hard, with unpredictable and inequitable price changes.  The beauty of the cap was that people could predict future expenses as they planned their finances.  

 

  • I have heard from some of you that it is the “cap” that requires the board to keep shifting costs into “user” fees. Yes, this is a math problem that the developer left us with, and we have certainly gone to court at least once on accusations that there were creative ways to avoid the cap and still increase fees.  Why not have an actual problem solving meeting on this?  Surely there are options:
    • Have a referendum to increase the cap to a certain point and then reinstate it, creating future predictability of expenses.
    • Add the ferry to the Utility
    • Agree not to raise the user costs of the ferry on ANYONE more than 10% per year
    • Agree not to raise other significant costs without a vote of the membership
    • Ask specific questions of the membership, spelling out “Would you support lower services or higher costs in X area? (show that the lower service or higher cost equates to y dollars)”
  • Unpredictability of costs combined with unexpected repeated historical increases may catastrophically undermine future sales. You are focusing on the short term over the long term viability of the island.

I object to this decision ENVIRONMENTALLY:

Indirectly encouraging private boats creates more wave erosion along the waterway, adds to accidental pollution, and goes against everything sustainable we say we stand for. Running the ferry with fewer passengers squanders the opportunity to reduce our impact.

I urge you to walk back the current model you just approved and reinstate the finance committee’s plan.