The Death of the Mutual Benefit Fee

The LARMAC board agreed that it would stop transferring the MBF to LARCS, effective November 1.  The move effectively cuts off the funding for LaderaLife and will cause LARCS to tighten its belt and become more focused on revenue-positive operations.  Even as a non-profit corporation, it must maintain sources of revenue equivalent to its outlay for the community.  LaderaLife has been a large draw for funding, and its future seems inevitably short.  LARCS may still request additional funds for specific projects, but LARMAC will have the final authority over those requests. 

You have been paying for LaderaLife
Did you know that $5 of your HOA dues every month was allocated to a relationship between LARMAC (the homeowners' association) and LARCS (the community service organization)?  $4 of it was actually transferred to LARCS, and of that, around $3.25 a month was spent on LaderaLife.  The budget published by LARCS earlier this year had LaderaLife's cost at around $314,000 for the 2005/2006 budget cycle.  

This gets a little hairy in the details, so let's try to lay it out as simply as possible.

The story of LaderaLife:
DMB Ladera is a partnership between DMB Associates, a master developer out of Arizona, and Rancho Mission Viejo (RMV), the land owner of much of the remaining free space in South Orange County.  When they were forming this community, they wanted to make the community services and benefits a key selling point.  LARCS signature events like the 4th of July and Harvest Festival were one part, and LaderaLife and Cox were another. 

The concept was to have a completely "wired" community (yes... this was conceived in the pre-wireless days) with its own "intranet"; an exclusive website for the residents of the community.  This was supposed to be one of the key value points for every home buyer in Ladera Ranch.

DMB Ladera is in the business of building master planned communities, not community websites.  Paul Johnson from RMV and Terry Randall from DMB teamed up as the directors of Planned Community Intranets LLC.,  and then they went out and hired a consultant who was an infrastructure manager at Microsoft.  Guess what kind of software he recommended.  Yep... Microsoft software.

The cost for operating LaderaLife had grown from a quarter million dollars in 2000 to over $430,000 in the 2004/2005 budget cycle.  In this timeframe, according to LARCS documents, the cost of operating LaderaLife was over $1.7 Million.

LARCS projected that it would take in about $360,600 from LARMAC sources, including the MBF and a commission from Cox that LARMAC assigns to LARCS.  The MBF was projected at $281,400 and the Cox commissions were projected at $79,200. 

Details are not available, but LARMAC is re-negotiating the Cox agreement and the new agreement may or may not continue to assign any finding to LARCS.  So with potentially all of the LARMAC funding sources for LaderaLife drying up, LARCS will need to make some changes to its basic operations.  A change for LaderaLife is anticipated, and an independent consultant has been contracted to provide recommendations for the future of LaderaLife.  No one from LaderaPortal has been contacted.

Will I get money back?
Short answer:  No.  There are a number of areas where LARMAC may need to increase funding.  One is in the area of private patrols.  We have only one or two private patrol officers on the streets at any given time in a community of 20,000 people and 6100 homes.  Their patrol areas stretch from Benjamin and Antonio to the far reaches of Covenant Hills.  The addition of the skate park in December will require significant increases in patrols to that LARMAC asset.

There are maintenance and enhancement issues as well that will likely consume most of the amount recouped, and LARCS can still request and receive funding from LARMAC.  One LARMAC Board member advised that we should think of it as a delay in any future increases in assessments.