Lake Monticello faces grim financial picture over next decade

By Heather Michon

Lake Monticello residents may be facing tough choices in the coming years, the LMOA Board of Directors learned at their monthly meeting on Thursday (Oct. 26).

Finance Committee Treasurer Jay Hinkle shared some grim findings from the most recent 10-Year Outlook. 

The bottom line? 

“We will spend more than we take in over the next ten-year period,” said Hinkle. “We will need to increase dues to address the situation, or cut services.”

Inflation has had a significant impact on LMOA finances, particularly when it comes to personnel costs. Liability insurance and the costs of goods and services have also climbed.

Hinkle highlighted the ways the association has worked to drive down costs. More money has been shifted to investment funds to take advantage of higher interest rates on savings. It has stepped up collections on delinquent dues and fees and invested in solar to cut energy costs at Lake facilities. The golf course and restaurant, long a drain on the annual budget, are both projected to at least break even within the year.

But even taking these factors into account, the LMOA is projected to spend at least $4.3 million more than it receives over the next decade, and cash reserves could fall by 76 percent. 

To close the gap, the association will have to tackle hard questions on what is most vital to the community.

Earlier in the meeting, Director of Public Safety David Wells gave his own sober assessment of his department’s long-term viability. While he will come in below his $525,000 budget this year, he sees some significant challenges in the future.

As one of only eight remaining private police departments in Virginia, LMOA offers lower pay than nearby localities, and its officers are not eligible for benefits and protections offered by local or state police forces. This makes recruitment and retention challenging in an environment where localities are increasing pay and bonuses to draw viable candidates.   

“We’re a value-added service,” Wells said. If the LMOA ever decided to shutter the department, policing would shift to the Fluvanna County Sheriff’s Office.

Hinkle didn’t address police or security costs but said the directors might have to look at increasing fees for amenities, revisiting the sale of the campground, and increasing dues.

He pointed out that home values have increased an average of $60,000 over the past four years, while dues have only increased by less than $100 in the same period. 

The LMOA automatically increases rates by three percent per year. This generates an additional $140,000 in revenue annually – an amount that is no longer even meeting the rate of inflation. 

Hinkle said adding $100 per year to the dues for all 4,600 property owners would generate $4.6 million and close the projected shortfall.

The board is slated to begin working on the budget in the coming weeks. Any dues increase beyond three percent would require approval by the membership at the annual meeting in June 2024. 

Meanwhile, Lake residents are facing a potential 30 percent increase from Aqua in base water and sewer rates. The company filed with the State Corporation Commission in late July and could implement interim rates as soon as February 2024.

“The board will be involved – but the residents have to get involved in this thing and get behind it,” said President Larry Henson. “This rate hike is a big deal. So all residents need to have a voice in this rate increase.”

The Aqua Water Council will meet on the second Tuesday of each month at 10 a.m. at the Ashlawn Clubhouse for residents who want to learn more about the process and meet with Aqua representatives.

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