QUESTIONS & ANSWERS
ABOUT
THE REFERENDUM
Q. What is the purpose of the Referendum? Why have it?
A. A referendum is required to authorize UPRD to issue long term bonds.
Q. Why is UPRD proposing to issue bonds?
A. To purchase the University Park Country Club, recreational facilities, sales center, and over 100 acres of land in the community.
Q. How much will it cost?
A. The bond issue will be limited to $24,000,000. The average cost per home will be $1,200 per year.
Q. Is this the same transaction that was promised during the formation of the UPRD?
A. Yes, it is exactly the same – $24,000,000 in bonds with an average payment of $1,200 per year for each home in University Park.
Q. Why should I vote yes on the referendum?
A. Purchase of the University Park Country Club, recreational facilities, sales center, and over 100 acres of land in the community puts these vital resources in your control. You are the UPRD and it is You. This protects the community, preserves its wonderful lifestyle, and protects the value of your home. Otherwise these are at serious risk. Need proof? Consider the recent article in the Wall Street Journal on golf course communities included with the other relevant information. It documents the sharp drop in home values in country club communities when the gold course closes.
Q. What happens if the referendum fails?
A. The community will lose control of the club, recreational facilities, sales center, and over 100 acres of land in the community. This will jeopardize your lifestyle and put the value of your home at risk. Need proof? Consider the recent article in the Wall Street Journal on golf course communities included with the other relevant information. It documents the sharp drop in home values in country club communities when the gold course closes.
Q. Why is it necessary for UPRD to purchase the country club, recreational facilities, sales center, and approximately 100 acres of land in the community?
A. The owners want to sell the club, recreational facilities, sales center and land. If UPRD does not purchase them, then one of three things will happen:
- Owners will close some or all of the facilities and the course, and then move to rezone the land and develop more homes.
- Owners will sell to a third party who would do the same thing.
- Owners will close some or all of the facilities and the course and then let them sit fallow until the community purchases them or supports redevelopment with more homes.
Any of these options would put your lifestyle and your home value at risk.
Q. Is the golf course and club facility self-sustaining?
A. Yes. As shown in the budget summary for the club, it not only covers 100% of its costs, but it also generates substantial net income. The net income is more than sufficient to cover all costs of the club and the UPRD and still provide a stream of funds for reserves and new projects.
Q. Will non-golf members and others in the community have to subsidize the club operations if the referendum passes?
A. No. The club has been and is self-sustaining. With UPRD ownership it will be even more profitable for it will no longer be burdened with paying property taxes.
Q. What about deferred maintenance expenses? The Snell Report identified some serious issues.
A. The Snell identified only three significant issues
- Aprons on the front and south side of the sales office have some deflection or settlement. The seller is correcting this and it will be rectified before any purchase.
- A structural beam in the attic of the Grill Room was damaged during construction. This item was corrected/reinforced during original construction as documented in the two subsequent engineering reports included in the relevant information section.
- Many of the internal rain gutters show signs of leaking. These leaks are easily resolved with special water proof sealer. This will not be a significant cost item.
Q. What other provisions were made to take care of future maintenance?
A. The bond issue includes over $2,00,000 in additional funds for a reserve to cover roof repairs, AC units, and similar items as they may be needed. In addition, the financial plan for the club envisions building up additional reserves for renovation and replacement costs.
Q. If UPRD decides to pay for the acquisition of the club facilities with short term debt later replaced by long term bonds, won’t that cost us an additional $300,000 in fees?
A. No. Whether UPRD only issues long-term bonds or decides to issue a short-term note that will be repaid through the long-term bonds, the ultimate amount of bonds will remain about the same. More importantly, the cost to homeowners will average $1,200 per year regardless of the funding structure. While it is true that cost of issuance would be higher if short term note is issued, these additional costs are offset by substantial savings in interest costs, that fully offset the higher cost of issuance fees. This is fully documented elsewhere on the website.
Q. Who pays for the costs of running the District?
A. The costs of the RD are estimated at about $150,000 per year. These costs are expected to be paid from the profits generated by the club facilities. The club has been cash flow positive and is expected to be so in the future. Once under UPRD ownership, the club profits will increase since property taxes will no longer be paid. The budgets demonstrate that not only will the club pay for itself, it will generate more than enough profit to offset the full costs of the District’s operations and provide funds for additional reserves.
Q. Who will manage and operate the club facilities if UPRD purchases them?
A. The same staff who manage and operate it today. The Planning Group asked the sellers to establish UPCC, LLC which will hire the current club staff when the club is sold to UPRD. At that time UPCC, LLC would be turned over to the HOA which would then own UPCC, LLC. UPRD will contract with UPCC, LLC for management and operational services. The seller will have no ownership in or control over UPCC, LLC. The draft management agreement is included in the information on the website.
Q. Why did the acquisition price increase from $16,750,000 to $16,975,000?
A. During the exploratory phase of the transaction, the seller agreed to fund the due diligence expenses of the Planning Group. If the transaction is consummated, the due diligence costs would be included in the ultimate purchase price. These costs total $225,000 which are now included in the acquisition price. There is no change in the total amount of bonds nor any change in the annual assessment of $1,200 per home.
Q. Why was the ballot sent to the owner’s address as shown by the Property Appraiser, instead of the address in University Park?
A. The referendum vote is one vote per home to be made by the legal owner of the home. Therefore, the ballot must be sent to the address of the legal property owner. In most instances the legal address for the owner is in University Park, but this is not always the case.
Q. Can I vote if I am out of the country or otherwise did not receive my ballot?
A. Yes. The website has a ballot that can be downloaded. The full instructions for voting are also provided.