The Sky is Not Falling, but Planning is Key
Parker Owen, TVPOA Chief Financial Officer
The rapid spread of the COVID-19 virus and the responses seen and heard around the world have dominated the 24-hour news cycle and affected every person in this country in ways big and small. From mere inconveniences to life and death decisions, every aspect of our lives has changed. While we all are being asked to do our part by being Safer at Home, TVPOA staff leadership and your Board of Directors are changing our operations and making contingency plans to keep Tellico Village POA financially strong and viable through this immediate crisis to an eventual return to normal. My purpose in this article is to share some of the actions we are taking to ensure the financial health of Tellico Village.
By now you are all aware of the operational adjustments we have made, including closing the Wellness Center, Recreation facilities, and the golf Pro Shops, closing the lobbies of the POA Administration building and the Welcome Center, closing the Yacht Club and clubhouse restaurants’ dining rooms, closing Board and committee meetings to property owners, conducting virtual meetings via live streaming or video recording, and operating the golf courses via electronic check-in.
You may be wondering, “What about the overall health of TVPOA and the financial impact of these operational changes? How will management and the Board mitigate the financial effects of these changes?”
We are beginning the year 2020 from a position of financial strength. We finished 2019 with strong positive net income and good cash balances. Considering we had just completed the most ambitious capital plan in recent years, we finished the year with over $2 million in Operating Cash and over $2.3 million in Reserves, resulting in more than $4.3 million total cash. Through the end of February, those balances have increased to more than $4.7 million total cash.
Our low debt levels are getting lower as we continue to make payments to principal on our long-term debt and capital lease obligation. The Wellness Center note will be paid off in August of this year and our line of credit has a zero-balance outstanding.
Most of our revenue stream is stable and affected very little by the current disruptions. Assessment revenue accounts for over half of our total revenue (52%). Water/Sewer/Tanks make up almost one-fourth (24%) and Docks/RV revenue has mostly been paid in advance for the full year (4%). Therefore, over 80% of our total revenue is highly stable and relatively unaffected by current events.
As we near the end of the first quarter, we are still early in the year and have not committed to many of our planned capital projects or major maintenance projects. This means we can delay portions of these plans for weeks, months, or even into next year without compromising the operational health of the Village. It gives us extraordinary degrees of freedom to manage the budgeted capital, expenses, and cash flows until life returns to some semblance of normalcy. We will continue to fund and build our reserve balances into 2021 to pay for projects that may be deferred from 2020. We are running various contingency scenarios using our budget system to help guide our financial planning. We will make determinations on individual projects over the coming weeks and months as this situation unfolds.
So, what can you do to help care for the health of the Village as you take care of yourselves and your families?
- Heed the cautions and CDC guidelines regarding physical distancing and Safer at Home recommendations.
- Continue to make your regular assessment payments and water/sewer payments on time.This is an excellent time to convert to auto-draft payments if you have not already done so. If you need help signing up for auto-draft, call the POA office at (865) 458-5408.
- Support your Yacht Club and Kahite carry-out and delivery services.Our Food Service operations have taken a hard hit by the closures and restrictions, and their carry-out and delivery operations can make a big difference in how they weather this storm and come out on the other side.
- Play golf!While the Pro Shops are closed, our golf courses are open. Electronic check-in and one rider per golf cart (except for residents of the same household) allow golfers to maintain the recommended six-foot distance while enjoying an activity that gets them out of the house and into some beautiful weather and scenery. While some courses around the country have closed temporarily, many others have continued to operate while following guidelines and safe practices similar to those we have implemented.
- Walk the TVPOA hiking trails and walking paths or take a stroll around your neighborhood.It’s free and beneficial for your physical and mental health.
- Summit Medical Group at Tellico Village continues to operate both in person and by video call in the medical office building that they lease from TVPOA. If you need medical assistance, call them at (865) 205-3025 to make an appointment to utilize this valuable service located right here in the Village.
- Thank a POA employee.While our operations have been modified, the business of the POA continues as we follow CDC guidelines for cleaning, distancing, and minimizing person-to-person contact. Your accounts are being maintained, checks are being deposited, bills are being paid, water and sewer services are being provided, buildings, grounds, roads, and hiking trails are being maintained, and our golf courses are open and available for play. These services continue because the dedicated employees of the TVPOA continue to report to work and do their jobs.
Even in these challenging times, Tellico Village is a great place to ride out the storm. To each Tellico Village property owner, we wish you and your family good health as we work through the COVID-19 crisis together and look forward to better days ahead.