Finance Committee Winter Update
sfb...@gmail.com
Dear Campowners,
In response to the Annual Meeting presentation over Labor Day weekend and the follow up email requests on October 17 and November 5, 2025, the Finance Committee received over 20 emails with comments, suggestions, and questions from Campowners.
The purpose of this email is to respond to the membership’s feedback. Accordingly, this response reflects the questions and concerns shared by the community so the subjects being addressed do not reflect the Finance Committee’s prioritization of issues.
For your convenience, attached are the documents previously distributed in person and electronically:
(a) the initial memo on short- and medium-term capital infrastructure needs;
(b) the initial memo on long-term capital issues, principally the 98-year lease; and
(c) the initial memo on possible financing mechanisms for capital and infrastructure needs.
The Finance Committee thanks all Campowners for taking the time to read through the Finance Committee materials and to those who submitted feedback — we are glad to see such commitment to our community and thoughtful engagement. In addition, this email addresses the full range of issues raised. As a result, no additional round of comment is anticipated before the Finance Committee hosts a hybrid Town Hall meeting in mid-May (more information to be supplied in the Spring) to present our findings and solicit membership feedback. Nevertheless, if anyone has additional thoughts they would like to submit to the Committee, please email them to sfb-f...@googlegroups.com
Capital Projects & Budgeting
We agree that the purpose of forming this committee is to "get a handle on our capital expenses". We will present to the SFBCOA Board a final Capital Infrastructure requirements listing that will be scheduled out as near term, short term and long term. We have built a comprehensive listing of all expected items that will need repair or replacement over the next 75-100 years. It addresses date last repaired/replaced, item’s expected lifespan, estimated costs for repair/replacement based on lifespan and date it should be serviceable through.
Some years small items are expected to need repair/replacement (such as tennis court fencing at $5K) while other years large items will need repair/replacement (such as replace entire south road surface $60K) however, every year we should be saving an amount per line item to fully fund that item when it is needing repair/replacement. The budgeting spreadsheet we built reaches out 25 years in the future, but also includes items such as the seawall which should last past 25 years, however funds need to be saved yearly to be ready to replace portions when needed.
Infrastructure costs will continually be re-assessed for accuracy in budgeting and due to unforeseen needs and changing circumstances. It is an ongoing process that will pass to the Grounds Committee to maintain current estimates. Currently, the Grounds Committee and Board brings to the members for vote, infrastructure items beyond the Grounds Committee budget. The Committee currently expects to recommend that the SFBCOA Board and Treasurer begin setting aside between $500-$750 annually as an effective way to stay ahead of future projects and reduce the immediate financial burden when repairs are needed. For major projects with longer timelines, holding these funds in a High-Yield Savings Account over a 25-50 year (or longer) horizon allows for extended interest accrual, further minimizing the required cash injection.
The near-term infrastructure items planned for 2026/2027 are the front entryway drainage issue which affects all drivers coming and going and the south road repair/repavement project. The entryway drainage repair is estimated at less than $8K and therefore this project may be undertaken with existing reserve funds if the members vote to repair the drainage. Since we do not have sufficient capital improvement funds set aside for the large expenditure of completely replacing the south road (approximately $60K for the entire road) we can either delay replacement until funds are ready, repair in a piecemeal fashion with available funds to prolong the life of the entire road and put off full repair completion until funds are available, or we can assess each cottage now and repair the entire road at once. These decisions are part of the entire budgeting process the SFBCOA is going through.
Ground Lease
The Committee received responses in favor of extending the lease back to 98 years (from the 71 years where it is now) and that such an extension is where efforts should be focused. The Committee is analyzing all alternatives and agrees that the lease term is an issue that needs to be addressed now given the impact that is already occurring with potential lenders not being willing to lend to purchasers. That said, as discussed below, the approach, and the strategy of the approach, require further evaluation of all alternatives including decanting/acquiring the land, and how the approaches might be sequenced. It is therefore premature to determine now where efforts should be focused although we expect to be able to make that determination before reporting back to Campowners.
A comment was also circulated to both the Committee and all Campowners regarding the issue of trying to decant the Flynn Trust to obtain ownership of the land and the consequences of obtaining ownership of the land for year-round use, including the “look and feel” of Starr Farm Beach and speculated tax consequences. This comment resulted from a misunderstanding of the likely consequences of decanting. First, Campowners should know that there has been no discussion whatsoever by the Subcommittee, or the full Committee, of attempting to obtain year-round use of the land, nor any thought of doing so. Moreover, under the terms of Mr. Flynn’s will, and the new Vermont law regarding decanting of trusts, it is believed that we cannot obtain ownership of the land for year-round use and that the use will need to be limited to summer/seasonal use if we obtain it. We will be fortunate if we can accomplish decanting limited to summer/seasonal use, and year-round use is believed to be impossible. Moreover, even if it were possible to obtain year-round use through decanting, which, again, it is not believed to be possible, a restriction to seasonal use will be included in the deed resulting from the decanting to avoid any issue of year-round use. We emphasize that the ability to decant the Trust is a result of a new law in Vermont and the law is not well-settled or developed, and, furthermore, the willingness of the Trustee to do so, even if it is possible to do so, remains uncertain and the Committee is still evaluating the potential to achieve it for summer/seasonal use.
The Committee also received a comment that expressed surprise that the Trustee listed the value of the land (after subtracting the value of our lease from it) at $1 on their tax return and discomfort in using that against the Trustee in negotiations. First, regarding the surprise at the Trustee’s position, the Trustee has an incentive to take this position on the tax return because tax law requires the Trustee to distribute 5% of the value of the Trust every year. A larger value puts the Trustee in a position of distributing more money to the beneficiaries which in turn makes it more difficult for the Trustee to maintain the value of the Trust going forward. Regarding potential negotiations, it is not being suggested that we offer the Trustee $1. Rather, it is being suggested that the Trustee will realize that if they make an offer to us at a relatively high value, they will realize that either the $1 on their tax filing or their offer is in bad faith. This is not expected to be a fundamental point in any negotiation, but it is relevant to the overall context, if, for no other reason, the amounts discussed would likely put the Trustee in a position of having to use a larger amount on the tax return going forward if negotiations fail. In short, it is always a good idea to understand the perspective of the person with whom you are negotiating, and that is the main point.
The Committee also received a comment asking for the identity of the current beneficiaries of the Trust. According to the Trust’s most recently available tax filing, the beneficiaries are:
1. Fanny Allen Hospital, c/o Covenant Health Stephen Forney, 100 Ames Pond Drive, Ste. 102, Tewksbury, MA 01876
2. Vermont Catholic Charities, Attn: Mary B. Pinard Exec. Dir., 55 Joy Drive, South Burlington, VT 05403
3. University of VT Medical Center Inc., Attn: Stephen M. Warren P. O. Box 1902, Burlington, VT 05402
We also note that the tax filing shows that the present Trustee is M&T Bank, P. O. Box 1504, Buffalo, NY 14240, and the Trust’s accountant is Ernst & Young US LLP, 155 North Wacker Drive, Chicago, IL 60606.
Capital Financing Mechanisms
The responses the Committee received on the funding mechanisms all concerned the 2% Initiation Fee. The comments largely fell into three categories: (1) opposition to, or support for, the Initiation Fee; (2) whether there should be a family exemption; and (3) whether we should rely on dues for capital/reserves support.
Regarding support for, or opposition to, the Initiation Fee, this will be resolved by the votes Campowners will cast later this year.
On the issue of a family exemption, it is reiterated that there is no fee on an inheritance or gift because there is no sale in those circumstances. There has, however, been one recent instance of an arms-length sale between family members, so the issue could come up that way again. Another comment was that even in an inheritance situation, when a camp is left to multiple descendants, one descendant might want to buy out the other. It should be noted that in this circumstance, the descendants could likely avoid a sales transaction by utilizing disclaimers within nine months of the decedent’s death. The Committee will discuss a family exemption for the relatively rare instance of a financial transaction among family members so that Campowners can decide the issue when they vote.
On the issue of relying on dues for financial support, it has always been noted that the 2% fee would be insufficient by itself to support the needs of SFB, and the Committee regards the comments as consistent with that expectation. Still, the fee, if in place from 2020 to 2024, would have generated approximately $60,000 for SFB, which is significant. In fact, this money would have covered the approximately $16,000 and $17,000 operating deficits of the last two fiscal years, and largely, but not entirely, paid for the approximately $29,000 needed for the new pumps being purchased now. The Committee will consider the role an initiation fee might play, including using it in conjunction with dues such that any time there is a sale, each Campowner will get a 1/34th credit of the Initiation Fee collected on their next capital dues statement reducing the amount they would otherwise owe. For example, for a typical $10,000 fee collected, each Campowner would receive a reduction of approximately $300 on their annual capital dues. That would have amounted to $1,800 per Campowner over 2020 to 2024. While this may not be financially significant for some Campowners, it is believed to be significant for others.
While the Committee has largely been focused on financial considerations, one Campowner shared their community-minded thoughts on what it means to be a part of SFB: “Current (and past) owners have put money and many hours of their own time and effort into keeping the common land and shared infrastructure as nice as it is. And all of this is, in part, what attracts new buyers to want to be a part of Starr Farm Beach. It stands to reason that in addition to paying for a camp structure and the use of a lot, they contribute to the current status and existence of the shared amenities and spaces.”
Governance
Prudent management of any organization requires operating with a balanced budget, and for a homeowner’s association this responsibility is heightened by the Board’s fiduciary duty to the membership. While our reserves exist to address long-term capital needs and unforeseen expenses, they are not intended to subsidize ongoing operating shortfalls.
The Finance Committee was created by a vote of the membership to explore approaches to address the erosion of the reserve for operating costs and to ensure that a capital budget is created and funded. Governance documents are under review to ensure fiscal compliance as well as exploring the implementation of controls to prevent reserve funds from being used for operating expenses in the future.
The Corporation Bylaws state that “The total amount of assessments to be paid by the Members shall be apportioned among them on the basis of 1/34 for each Lot.” (Article § 8.1) For the current Fiscal Year, each camp is required to pay $2,500 in dues for annual operating costs. As to the frequency of the payment of dues, the board has discretion to collect dues as a single annual payment or more frequent payments on a semiannual or quarterly basis. (Article § 8.3) Consideration of changes to dues structure would be guided by principles of fairness, transparency, and the long-term financial health of the community, and would be communicated clearly to members well in advance of any decision.
Balancing Renting and Community at Starr Farm Beach
We share the concern about preserving the sense of community that makes Starr Farm Beach such a special and cherished place. The feedback reflects a deep care for the character, traditions, and connections that define life at SFB, and we appreciate that commitment. Within the scope of the Finance Committee’s mandate, we are dedicated to supporting the long-term health and sustainability of Starr Farm Beach in ways that honor and strengthen the community we all value. Questions about rental policies and their broader impact on the feel of the community are important and thoughtful, and they extend beyond the Finance Committee’s specific role. We are grateful for this input and for the shared desire it represents to protect and advance the unique spirit of Starr Farm Beach.
Thank you.
The Finance Committee
Jeff Noyes, Camp 3
Ed Starr, Camp 5
Kelly Allen, Camp 7
Eileen Shovlin, Camp 10
Carol Cluff, Camp 14
Bill Parkhill, Camp 17
Mike Simoneau, Camp 22
Ann Cloutier, Camp 23
Carmela Monaco, Camp 27
Carla Van de Walle, Camp 28
Craig Avedisian, Camp 28
Conor O’Brien, Camp 34