FCC White Paper Report

16. What is the cost of doing nothing? Answer:

When considering facility improvement, the question is sometimes asked, “What’s wrong with what we have? It won't cost us anything if we don’t do anything.” We recognize the importance of addressing life safety, building code, and ADA issues for the clubhouse as a priority. In addition, the following needs to be considered: • Maintenance: o The cost of maintaining old facilities increases with age. o More goes wrong, parts become difficult or impossible to access, and repairs take longer. o The monetary cost continually increases, and the loss-of-use cost impacts the maintenance budget and member satisfaction. o The effect of delay is to invest ever -increasing maintenance dollars in a holding action while increasing the final capital cost (see “Construction Cost” below). • Insurability: o As stated earlier in this white paper, insurance will be difficult to obtain due to changing weather patterns that increase the risk of catastrophic storms and the increasing cost of repairing or replacing damaged facilities. o Insurance companies are already refusing to write new policies in many disaster-prone areas. o Facilities whose construction is decades behind current codes are likely to become uninsurable. o If we are forced to self-insure some or all of our facilities because they do not meet the current code, a major or total loss would cause a financial impact from which recovery would be unlikely. o By improving or replacing our major facilities to current standards, we maximize our chances of obtaining insurance coverage now and in the future, protecting your investment.

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