8.5 – MPOA Post Town Incorporation

An incorporated town of Massanutten may include many different variants in terms of town services, governmental make-up, and budgeting to include taxes. It could also include many different variants in the transfer or turning over of assets and services functions from the Massanutten Property Owners Association (MPOA) to an incorporated town of Massanutten. If the Massanutten community were to incorporate into a town, this subsection provides a framework for how MPOA may look afterwards. It should be first recognized that, if Massanutten incorporates, the MPOA Board and the Massanutten Town Council must jointly determine what, when, and how any assets would be legally turned over or transferred. That is, the MPOA Board would have to vote to turn over or transfer assets and a Town Council would have to vote to accept them. As a result of any turning over or transfers of assets, the post incorporation MPOA budget might be dramatically less.

Subsections 8.2 – Incorporated Town of Massanutten Expenditures and 8.3 – Incorporated Town of Massanutten Revenues of this report discussed five (5) possible alternative scenarios for services that could still be provided if Massanutten were to incorporate into a town. The amount of town provided services increased from alternative 1 (T1) to alternative 5 (T5). And, the number of town professional staff, expenditures, and revenues also increased from alternatives T1 to T5. Conversely, the amount of MPOA provided services and the associated number of MPOA professional staff, expenditures, and revenues would largely decrease from alternatives T1 to T5. This is because MPOA would essentially be transferring responsibilities for services over to an incorporated town of Massanutten. With a reduced workload, the MPOA Board would have to determine the cost of remaining services and the amount of revenues that need to be raised.

Using the same alternatives defined in Subsections 8.2 and 8.3 for an incorporated town of Massanutten, corresponding expenditure profiles were also developed for MPOA. These MPOA alternatives provide a framework of what MPOA might look like from an expenditure standpoint and then allow associated revenues to be analyzed. Each MPOA alternative is designated with the letter «M» for «MPOA» followed by a distinct number. The designations along with abbrs were created for the tabular summary of MPOA expenses shown below for each alternative. Please note that the abbrs related to services provided by MPOA (described in the text in this subsection) are different than the abbrs related to services provided by an incorporated town of Massanutten.

Please note that the MPOA Timeshare Rental Program, an MPOA commercial venture that helps defray the costs of MPOA essential services, was not considered as a viable service for an incorporated town of Massanutten. It was determined that this program would best remain with MPOA to continue generating net revenues to help defray the costs of providing services after any town incorporation. The Timeshare Rental Department was considered to be a separate cost center with expenditures not shown in the table. Similarly, the MPOA Recreation Department was also considered to be a separate cost center with expenditures also not shown in the table. The MPOA Recreation and Timeshare Rental Program Department configurations, as related to income and operating expenses, were considered to remain the same, as currently managed by MPOA.

Please also note that the estimated MPOA expenditures in alternative M1 are close to the actual MPOA expenditures in 2009, less the trash collection and recycling service chosen to be provided by an incorporated town of Massanutten. This helps to confirm the budgeting analysis because the expenditures in alternative M1 should be nearly identical to the expenditures currently experienced by MPOA, less the trash collection and recycling service. This is because the actual services provided by MPOA will be identical, less the trash collection and recycling service. Furthermore, please note that the MPOA expenditures, specifically for the Maintenance Department, increased from alternative M1 to alternative M2. This is because it was assumed that an incorporated town of Massanutten would contract the limited maintenance services for its few town roads and that the contract would be given to MPOA. Thus, MPOA would begin to maintain the town roads which are currently in the VDOT Secondary System along with all of the Massanutten Village roads.

The MPOA department expenditures for each alternative summarized in the table above were derived from a more detailed analysis. These detailed analysis results are shown in the table below. The analysis began with the staffing profiles for each alternative presented in SECTION VII. Massanutten Community Government of this report. Then, appropriate salary levels were applied to the various positions in the staffing profile table — actual salaries of MPOA employees were not available for this study. Next, an administrative multiplier was determined for each department, which is shown in yellow highlights next to each department heading. These multipliers, which are applied to only staffing, factor in estimated annual overhead (to include employee benefits) and general administrative costs for each department. The MPOA multipliers used in this report were derived from actual MPOA budgeting information and the appropriate salaries noted in the table. Finally, major annual recurring costs, such as road resurfacing, were added to the total cost of loaded staffing (staffing salaries times the multiplier) resulting in subtotal expenditures for each department, which were then summed for total MPOA expenditures for each alternative.

Detailed MPOA Expenditures — Detailed Expenditures for the Five MPOA Alternatives.

The revenues to pay for MPOA essential services currently come from property owners assessment fees, developer (Great Eastern Resorts) contributions, and net revenues resulting from the operation of commercial ventures. These same revenue sources and associated amounts were utilized to determine the revenue profile for various levels of MPOA services provided to its members after a town incorporation of Massanutten. Using the alternatives defined in Subsections 8.2 and 8.3 for an incorporated town of Massanutten, revenue profiles were also developed for MPOA. The MPOA alternatives provide a framework of what MPOA might look like from a revenues and fees standpoint after town incorporation. Each alternative is designated with the letter «M» for «MPOA» followed by a distinct number. The designations along with abbrs were created for the tabular summary of MPOA revenues shown below for each alternative.

MPOA Revenues — Revenues for the Five MPOA Alternatives.

It should be noted that the progressive town real estate tax rates and the fixed MPOA assessment fees are also shown in the table for each alternative. The derivation of the progressive town real estate taxes have already been detailed in Subsection 8.3. A summary of the analysis for MPOA revenues and associated fees along with a description of the abbrs used in the tables of this subsection are given as follows:

M1 — Administrative Services (AS), Road Maintenance (RM), Law Enforcement (LE), & Recreation (REC))

This alternative is an incorporated town of Massanutten that just provides its citizens with the services of comprehensive planning and zoning. MPOA provides its members with similar services as provided in 2009 (less trash collection and recycling).

MPOA Assessment Fee = $535 per property. This is the same fee currently being paid by all property owners in Massanutten Village.
Developer’s Contribution = $77,500. This is the same contribution currently being paid by Great Eastern Resorts.
Commercial Ventures Net Revenues = $431,197. This is roughly the same net revenues currently being generated by the rental of the MPOA communications tower, operation of MPOA recreation facilities, and rentals of MPOA timeshares.
Office Space Rental = $50,000. This is rental income would come from an incorporated town of Massanutten for office space.

No new taxes would be levied in an incorporated town of Massanutten and the fixed MPOA assessment fee would remain at $535 per property. The total MPOA revenues for this alternative were determined to be $1,698,240 per year.

M2 — Admin Services (AS), Expanded Road Maintenance (ERM), Law Enforcement (LE), & Recreation (REC)

This alternative is an incorporated town of Massanutten that provides its citizens with the services of comprehensive planning and zoning along with limited maintenance services for roads already in the VDOT Secondary Road System (see SECTION IV. Massanutten Community Infrastructure for details) plus Massanutten Drive and Del Webb Drive. MPOA provides its members with similar services as provided in 2009 (less trash collection and recycling) plus receives a contract from the town of Massanutten to provide maintenance for its town roads.

MPOA Assessment Fee = $385 per property. This is fee $150 lower than that which is currently being paid by all property owners in Massanutten Village.
Developer’s Contribution = $77,500. This is the same contribution currently being paid by Great Eastern Resorts, who would no longer contribute to resurfacing of Massanutten and Del Webb Drives.
Commercial Ventures Net Revenues = $431,197. This is roughly the same net revenues currently being generated by the rental of the MPOA communications tower, operation of MPOA recreation facilities, and rentals of MPOA timeshares.
Office Space Rental = $50,000. This is rental income would come from an incorporated town of Massanutten for office space.
Road Maintenance Contract = $405,000. This is a maintenance contract from an incorporated town of Massanutten for its few roads that are already in the VDOT Secondary Road System (see SECTION IV. Massanutten Community Infrastructure for details) plus Massanutten Drive and Del Webb Drive.

No new taxes would be levied in an incorporated town of Massanutten. But, the fixed MPOA assessment fee would be reduced to $385 per property — a savings of $150 per year for each property (lot) in Massanutten Village. The total MPOA revenues for this alternative were determined to be $1,795,440 per year.

M3 — Administrative Services (AS), Law Enforcement (LE), and Recreation (REC)

MPOA Assessment Fee = $260 per property. This is fee $275 lower than that which is currently being paid by all property owners in Massanutten Village.
Developer’s Contribution = $77,500. This is the same contribution currently being paid by Great Eastern Resorts, who would no longer contribute to resurfacing of Massanutten and Del Webb Drives.
Commercial Ventures Net Revenues = $431,197. This is roughly the same net revenues currently being generated by the rental of the MPOA communications tower, operation of MPOA recreation facilities, and rentals of MPOA timeshares.

No new taxes would be levied in an incorporated town of Massanutten. But, the fixed MPOA assessment fee would be reduced to $260 per property — a savings of $275 per year for each property (lot) in Massanutten Village. The total MPOA revenues for this alternative were determined to be $1,083,940 per year.

M4 — Administrative Services (AS) and Recreation (REC)

This alternative is an incorporated town of Massanutten that provides its citizens with the services of comprehensive planning and zoning along with maintenance services for all qualifying town roads and maintenance services for all town parks, including those in Massanutten Village. Additionally, the town would also provide all town citizens with law enforcement services. MPOA only provides its members with administrative services and the operation of the commercial ventures.

MPOA Assessment Fee = $0 per property. There is no annual assessment fee for property owners in Massanutten Village.
Developer’s Contribution = $0. There is no annual contribution paid by Great Eastern Resorts.
Commercial Ventures Net Revenues = $431,197. This is roughly the same net revenues currently being generated by the rental of the MPOA communications tower, operation of MPOA recreation facilities, and rentals of MPOA timeshares.

Essentially, a progressive town real estate tax is levied for law enforcement services, in lieu of the fixed MPOA assessment fee per lot — there would be no MPOA assessment fee in this alternative and 91% of property owners would save at least $230 per year for each property (lot) in Massanutten Village. The total MPOA revenues for this alternative were determined to be $446,197 per year.

M5 — Administrative Services (AS)

This alternative is an incorporated town of Massanutten that provides its citizens with the services of comprehensive planning and zoning along with maintenance services for all qualifying town roads and maintenance services for all town parks plus operations services for all town recreational facilities, including all those roads, parks, and recreational facilities in Massanutten Village. Additionally, the town would also provide all town citizens with law enforcement services. MPOA only provides its members with administrative services primarily paid for by the operation of its Timeshare Rental Program.

MPOA Assessment Fee = $0 per property. There is no annual assessment fee for property owners in Massanutten Village.
Developer’s Contribution = $0. There is no annual contribution paid by Great Eastern Resorts.
Commercial Ventures Net Revenues = $71,336. This is the same net revenues currently being generated by the rentals of MPOA timeshares.

Essentially, a progressive town real estate tax is levied for law enforcement services, in lieu of the fixed MPOA assessment fee per lot — there would be no MPOA assessment fee for this alternative and 91% of property owners would save at least $320 per year for each property (lot) in Massanutten Village. The total MPOA revenues for this alternative were determined to be $81,336 per year.

It should be noted that the last alternative (M5) has the least likelihood of ever becoming a reality. It was determined that the MPOA recreational facilities generate valuable net revenues that help defray MPOA administrative costs plus help offset the costs of operating MPOA amenities for exclusive free use by its members. These benefits likely outweigh any benefit of transfer to an incorporated town of Massanutten.

It is worth further noting that the transfer of any assets to an incorporated town of Massanutten must consider any existing debt and equity of MPOA. It is also worth noting that the ownership status of the current MPOA Administrative Building is something which must be assessed both by the MPOA Board and incorporated town of Massanutten officials. It might be transferred to the town with space rented (like $1 per year) to MPOA for use by the Board, and for the tasks remaining with MPOA staff. It is believed that the details of these considerations are beyond the scope of this feasibility study and are only being mentioned.