Spring is here. Flowers are blooming and Villagers are ready to enjoy our outdoor amenities, including beautiful tennis and pickleball courts and a new bocce court complex. Our golf courses are refreshed with new bunkers where the sand is so beautifully white that it makes you want to bring out your sunglasses. I continue to be impressed when I drive into The Villages down Villages Parkway and view these outdoor amenities. 

As your governing Board, spring is a time for us to look back at our goals and objectives and see what we need to complete before the new board takes office in June. It’s also a time for us to set the goals for next year to keep continuity. 

1) Working with the Club and Association boards to present a united front for our community is an ongoing commitment for us and one we are proud to say we are accomplishing.

2) We tried something new this year, having board directors serve as non-voting chairs of our two committees, Architectural Control, and the Estates District Advisory Committee. This action served its purpose this year to help in committee organization. We are, however, proposing for next year to give ourselves the option of appointing Board directors or committee members as chairs. Flexibility to make sure the committees meet the needs of the community, and the Board is our goal in determining chair appointments. 

3) Community communication is a continual goal for us. We accomplish this through periodic emails updating homeowners on pertinent information, providing welcome letters to new residents and participating in New Resident Orientation. Today’s social is a goal we’ve carried over for a few years now and are thrilled to finally be able to accomplish it. 

4) Management did some great work on the budget this year separating the funds of the three corporations so that in the future when all the required legal steps are taken, homeowners will pay their fair share of Villages amenity expenses, but only their share. This has been a personal goal of mine as a Board director for several years, so I am excited to see this budget step made.

5) The goal we are carrying forward to next year that we couldn’t accomplish this year is legal review and a membership vote on our governing documents. There have been unforeseen delays in this effort, but I am confident that the 2025-2026 Board will complete this project. 

In closing, we are beginning the recruitment process to fill two vacancies on the Board. Advertising begins this month. I have served on the Board for three terms and though I am eligible to run for another term, I am stepping aside and encouraging others to consider serving on the Board. I’ve learned so much in my nine years, met many wonderful people, been challenged a lot, but it has been a rewarding volunteer experience. I look forward to seeing what the next directors can accomplish.

—Teddy Morse, Homeowners’ Corporation Board President

The Greek proverb, “A society grows great when the old plant trees whose shade they know they shall never sit in” is an apt guide for The Villages three Boards and management as we prepare to implement The Villages Strategic Plan 2025-2028. 

This coming year’s budget will be a commitment to maintain our existing programs and facilities and prepare for improvements that are needed and desired by Club members—some of which will not be finished for years but will be treasured by future residents. They may thank us for keeping and making The Villages Golf and Country Club live up to its name and reputation. The near-term benefit of this strategy is maintaining and increasing the value of our homes for ourselves or our heirs.    

The next step in our strategic planning process, supported by the three Boards, begins with a detailed Member Satisfaction Survey starting with focus groups in May. These will be followed by an online and printed survey. The Boards have also committed to a branding exercise coordinated with the survey. We will consider revising our mission and visions statements and define how we would like the Villages to be regarded by South Bay communities and potential new members and residents. The results of our strategic planning, member survey and branding exercise will set the standards we expect for our community, and guide policy and budgeting to meet community needs and expectations for the future. 

The Club Board’s part in this effort, will include approving Goals and Objectives for the FY26 Board at the May Board meeting. Our intent is to provide continuity from one board to the next based on the Strategic Plan and our shared vision of the future. 

Please read the Villager Article the General Manager and I have published this week on next year’s budget. Also, login to the Members Budget Review Zoom meeting on Friday, March 28 at 1:30 p.m. The Zoom link is in the Member Portal. 

Thank you for your participation and support. Together we may even enjoy the shade of new trees plus refurbished and new facilities.

—Richard Zahner Villages Golf & Country Club Board President

Welcome everyone to the March Association Board of Directors meeting.

Spring is here and the weather is finally turning warm and sunny. It is a busy time for all three Boards as we are working hard here in the middle of budget season. Even though we are not done, I would like to thank all the Board members, all the DACs and all the staff for their continuing hard work on the budgeting. We have approved our insurance renewal for 2025-2026 and are in the process of firming up all of the numbers for our operating and reserve budgets for next year. Of our big three expenses on which we focus most, insurance is under control with a reasonable increase next year. I again extend my thanks to our insurance committee for all its hard work. Landscaping will be going into the second year of a three-year contract, so that is also under control.  

Water is another story. Water is expected to see a substantial increase of about $1.6 million next year, which is mostly for irrigation. This is a combination of an increase in water rates and our significant increase in water usage once the water restrictions were lifted. We listened to our homeowners. They wanted green grass. When the water restrictions were lifted, the water was turned on and they got green grass. Now we are paying the price for all the greenery. Remember, in 2029 that water is going to be turned off, so we still are required to do our turf reduction and eliminate non-functional turf. The greenery is only temporary. Right now, we have tasked BellaVista with reviewing all of our valves and sprinkler heads, which are computerized, to get them online and then to automate them appropriately to ensure they are watering the correct amount at the correct time. We are hoping this will save us substantially on our water bill.

When it comes to reserves, I believe that we need to get each Village up to their burn rate if The Villages is going to survive financially in the future without falling into disrepair. The burn rate is how much our units depreciate each year, considering each and every depreciable item contained in our units. For example, I live in Fairways. Right now, we contribute $68,000 per year to our reserve funding which covers everything from roofs to mailboxes. However, our burn rate, as calculated by Ryan Bell, is $82,000 per year. Thus, our little village of 22 units is falling in the hole at the rate of $14,000 per year.  What that means is fairly obvious. At some point we will not be able to replace our roofs or do some other repair and will either have to defer maintenance or come up with a special assessment—a large special assessment. And we saw what happened in Florida as a result of deferred maintenance.  However, with an increase now of $53 a month, which equals $636 a year, we hit our burn rate, pay our fair share and save us the pain of that special assessment at some point in the future. Those are my calculations.  Certainly they are not official but I think it gives us a good idea of what it costs to get us on the right track. And I don’t think $636 per year is a lot to pay to point the ship in the right direction.    Each Village is going to have to assess how to get its contributions up to its burn rate.    

After sitting through many budget meetings, and with a few more to do before we are done, those are my thoughts.   

Thank you all for being here and as usual, my phone, my email and my door are always open and available for questions, comments or discussions.

—Association Board President Michael Schwerin

At the March 20, 2025 meeting, the Homeowners’ Corporation Board voted to place a moratorium on architectural applications for six weeks while the Firewise recommendations are reviewed. Owners are encouraged to submit their applications, but if the project falls within the area where there are Firewise restrictions, such as building a wood fence connected to your house structure, those applications will be held while the Architectural Control Committee and the Homeowners’ Corporation Board review the new rules required for Firewise implementation.

The board recommends homeowners contact Mary Tatum, mtatum@the-villages.com to schedule a free Firewise home assessment. The assessment information is not shared with others, so your privacy is maintained. It simply provides you with information as to what you can do to protect your property and your neighbors. 

In April, the Fiscal Year 2025-26 budget will be submitted to the Club Board for approval. An increase in Club Dues is expected due to rising costs, regulatory requirements, and necessary financial adjustments in both the Operating and Capital accounts. Leading up to the final budget presentation, we will hold two open member budget meetings to discuss key factors, gather input, and walk through the details. It is important that we communicate to Villages Club members the considerations that have shaped the recommendation and Board review. Along with inflation and regulatory impacts, we have also addressed past accounting errors, process improvements and best practices identified through the most recent annual audit. 

Our responsibility is to operate, maintain and improve Club facilities in the most cost-effective manner possible. We know that maintaining the value of members’ homes depends on the quality of Club facilities and services. As we plan for next year and the future, the Club Board commits to spending no more than is necessary and not less than is needed.  

After a detailed review of the conditions of our buildings and finances, we now know that we must increase next year’s Club Dues for both Operation and Capital accounts to address increased operating costs and long-term capital needs. The recently completed Strategic Plan for 2025-2028, and last year’s audit, highlighted weakness in our current financial practices and we recommend addressing them this year.  

Issues addressed in next year’s budget include: 

The Cost of Operations. Like every business, our cost of operations has increased. Contributors include inflation and major increases for insurance, water, electricity, and waste disposal. 

Regulation and Code Compliance. Requirements from city, county, and state government including turf reduction, wildfire safety, and modifications to meet building and health codes, i.e., Wildland Urban Interface (WUI). 

Staff Compensation and Benefits. We expect a salary increase in wages that addresses the cost-of-living and persistent labor market pressures, especially in high-cost regions like the Bay Area. Our wages increasingly fall short of what is required to remain competitive in recruitment and retention. We anticipate an increase in health benefit costs this coming year driven by rising medical costs and structural pressures on health plans. 

Repair and Maintenance. We will begin to correct the allocation of routine repair and maintenance of Club facilities to the operating budget, not the Capital Replacement account, as has been done in previous years. This correction may be a one-time correction, or with a better understanding of the impact to the budget, it may need to be implemented over multiple years. 

Inter-Company Transfers. With the implementation of our ERP system(s) and true separation of accounts, we now have real-time analytics and dashboards providing a clearer view of operational data. This enhanced visibility allows for better separation of financial accounts, ensuring allocations are more accurate and transparent. By separating previously co-mingled Club, Association, and Homeowners’ Corp. monies, we have improved our sightline into The Villages’ day-to-day operations, enabling more precise tracking of expenses and cost-sharing between the Club, the Association, and the Homeowners’ Corp. This data-driven approach strengthens financial accountability and supports more informed decision-making. 

For example, Public Safety, Communications, and The Villager were not included in inter-company transfers, leaving the Club to cover 100% of these costs. With this data, we can now adjust and fairly distribute expenses, improving financial accountability and transparency. 

Underfunding Capital Needs. The current annual Capital Replacement Dues revenue of $2.7 million does not cover the $3.9 million required annually to maintain existing facilities. There is a need to increase the Capital Replacement Dues to at least match the depreciation rate. At the current rate, the Capital Replacement Fund will be exhausted in approximately four years. Our buildings, roads, and underground utilities require significant ongoing repair and enhancement to maintain the quality of our environment. In effect, our capital “burn rate” to maintain these services exceeds the available revenue.  

Capital Improvement Fund. The Club needs to sustain a Capital Improvement Fund by collecting Dues dedicated to improvements and/or new amenities requested by the Club Members. Currently, we collect nothing for this purpose.  

Additionally, an increase in Club Dues is warranted due to constraints imposed by Club policies and bylaws that limit our ability to invest Club Capital Funds to keep pace with inflation. For years, interest earnings from investing in these funds have fallen behind inflation rates, eroding the real value of our Capital Replacement Fund. Also, the decline in purchasing power is estimated to have reduced the fund’s value by over $1 million. Additional revenue and flexibility are required, and the Board intends to revise bylaws and policies in FY2025-26. An additional source of revenue to raise Capital Funds could assist in lowering our monthly dues. 

As Board President, I can attest that the budgeting process of this year is the most thorough and professional we have experienced in the last four years. Our staff, using new software and detailed analysis of all operations, produced an excellent budget presentation for The Villages community at the April 18 Members FY26 Budget meeting.  

Please attend the April 18 budget meeting which will be available via Zoom.  

Starting April 1, 2025, Villagers will notice a change in the way monthly statements are provided. To ensure compliance with Davis-Stirling regulations, members who reside in condos will begin receiving two separate monthly statements—one for Club dues and account charges and another for Association assessments.

If you live in a single-family home, your statement process will remain the same, with one consolidated statement from the Club.

With The Villages’ new online business operations system, the Accounting team provides breakdowns of each financial category, so you will have a clearer view of where your contributions are allocated. This update ensures compliance with the segregation of accounts as required by Davis-Stirling regulations while enhancing clarity for our members.

Delivery Methods Remain Flexible

Your preferred method of receiving statements—online, by mail, or both—will remain unchanged. This ensures continuity and convenience as we transition to the new system.

Stay Updated

More details about the new statement process will be shared in the coming months. Look for updates in The Villager, FastNews and other communication channels.

Questions? 

If you have questions or would like to update your Membership accounting information, feel free to contact the Accounting team:

• Email: accounting@the-villages.com
• Phone: (408) 223-4639
• In Person: Visit Building A to speak with an Accounting representative.

We trust that these improvements will provide a better accounting experience with The Villages.