By Heather Michon
Correspondent
Lake Monticello board president Larry Henson urged residents to be patient as the association deals with a potential $646,000 government loan repayment dating back to the COVID era.
“There has been ongoing discussion on unofficial social media regarding the potential repayment of the PPP loan,” he said in an email statement sent out to all residents on Friday afternoon (Jan. 31). “We understand that this situation raises questions, but we kindly ask our residents to hold off on any premature conclusions for now.”
In April 2020, LMOA received a $646,843 government loan under the Paycheck Protection Program (PPP), a $950 million program designed to cover payroll and other business expenses for businesses struggling in the sudden economic downturn.
Even before the pandemic began, the association was facing financial headwinds.
That year, the Board of Directors asked members to approve a $180 dues increase and an annual $50 stipend to support the restaurants. Both measures were rejected when the membership voted in September 2020.
Board minutes from that spring show that the directors were concerned about loss of revenue due to COVID.
Dues were not suspended during the crisis, but increased unemployment was expected to lead to increases in nonpayment of dues. Other sources of revenue, including home transfers and new construction, were also projected to fall. The shutdown also exacerbated losses at the golf course and restaurants, which were already a drag on the budget.
PPP offered a lifeline to keep all staff on the payroll and cover qualifying business expenses.
Under PPP rules, if the loan was used as intended, the Small Business Administration could forgive it entirely. When the SBA informed LMOA that the loan had indeed been forgiven in May 2021, “we removed the obligation to repay from our books,” Henson said. “Future budgets and spending plans were then developed based on the assumption that these funds would not need to be repaid.”
Then, in mid-December 2024, the Department of Justice sent a letter to LMOA saying that, as a 501(c)(4) HOA, it was “ineligible” for SBA loan forgiveness and needed to resolve the issue – or face potential litigation.
“Like any business, potentially having to cover a significant, unplanned expense in the near term will impact our planned spending going forward,” he said.
LMOA has already been cost-cutting to help close the long-term budget gap. This projected shortfall also led to the approval of a permanent $150 annual dues, which started in the 2025 billing cycle.
Now, Henson said, the staff was seeking out even more ways to cut costs and “explore other measures to offset the potential financial impact of any loan repayment.”
He said a special assessment “would be LMOA’s very last resort, and is something we don’t want to consider.”
He asked people not to speculate without the facts and promised transparency as the process moves forward.
“We also strongly encourage you to come to the Board meeting,” he said. “Attendance is surprisingly low, and it is the best way to understand our decision-making process and guide us with your comments before a final decision is made.”
The next meeting is scheduled for Feb. 27 at 7 p.m. at the Fairway Clubhouse. The meetings are also broadcast on the Lake’s TV channel and livestreamed on YouTube.
