Colleton Skeptic

During the town hall meeting in June, the Board reported that the Club had about $26 million in cash on hand. But financial analysts focus on funds flow, rather than the balance sheet: Where did the money come from? Where will the money go? Make no mistake--having $26 million on hand (and no debt) is great news. My opinion is that the Club is well positioned to have a significant cash balance by the end of 2023--but the Board needs to be vigilant to ensure that this COVID bonus doesn't fall through the Club's hands. Where did the money come from? Here's some  history  on the finances of the Club. Simply put, COVID has been great for the Club. Leaving aside the $850,000 paid to the Club by Uncle Sam through the "Paycheck Protection Program" (a truly stupid program--but I'm willing and eager to take advantage of any federal government program that actually personally benefits me--they're few and far between!), COVID stimulated the Low Country real estate mar...

There are many new Owners here at Colleton River and a review of our history may be helpful in understanding the challenges facing our Club today. This post is background only and does nothing more than summarize facts and provide some historical background for newer Owners. Here’s the short story: ·            Facts o     Over the past 24 years, annual assessments have increased at well over the rate of inflation. o     During the past 17 years, there have been three “special assessments,” totaling about $50,000 per Owner. o     Despite recent significant increases in the “replacement reserve” assessment, the current replacement reserve assessment does not provide sufficient funding for routine maintenance and replacement. During the past three years, transfers of funds from the real estate fund to the replacement reserve fund, and periodic special assessments were necessary to adequately maintain the Club. None...

The Club has been sued by 12 seawall lot Owners about who should bear the costs of maintaining and replacing the portion of the Colleton River seawall running from the 17th hole of the Nick to Seven Oaks--the Owners who border the seawall or all of the Club's owners? The Club has been advised by its attorneys that the cost of repair and replacement is the responsibility of the Owner adjacent to the seawall (i.e., the Club for the 17th hole and the Community Dock and the individual seawall lot Owners for the rest of the seawall). The seawall lot Owners disagree and claim that the Club has acted improperly and should bear the bulk of that cost and they seek compensatory and punitive damages that could run into the millions of dollars. Here's some  background  on the lawsuit. Why should you care? The total cost of replacing the seawall (for all three segments of the seawall (J-Lots, M-Lots (along High Ponds), and Phase II (the lots along Oak Tree))) would be millions of dollars (...

As most Owners know, 12 Owners have sued the Club seeking millions of dollars in compensatory and punitive damages. It's been nearly five months since the J-Lot Owners filed suit and it's worth updating the Owners on the status of the dispute. I'll have more to say about the substance of the seawall dispute in a second post. But many Owners don't understand the litigation process and I thought it would be worthwhile to explain the process before we discuss settlement issues. On May 23, 2022, the Club "answered" the Complaint filed by the J-Lot Owners on February 18, 2022. Here are links to the  Complaint  and the  Answer . The "Complaint" is the document which initiates a lawsuit. Once the J-Lot owners filed the Complaint, the Club was required to file a responsive pleading. In this case, the Club filed an "Answer," which also stated defenses and counterclaims. On June 30, the J-Lot owners "replied" to the Club's counterclaims...