Frequently Asked Questions
Below is a list of FAQs received from members. Information will be updated as the project progresses.
FAQs last updated November 2021.
For the FAQ created from the September 8, 2021 special board workshop, click here.
What is the current state of the project? And what did the board of directors decide on?
At the October 22 regular board meeting, the board adopted the following motion concerning 30% design of the replacement ski lodge:
Move to direct staff to complete 30% design currently underway for the downhill ski lodge with the following guidelines:
1. The lodge size does not exceed 27,990 square feet
2. At the completion of the 30% design stage the projected project costs do not exceed $21.3 million in inflated costs plus 10% contingency on construction cost.
3. The projected project costs are inclusive of site preparation, construction and soft cost, with design considerations for
a. ADA and CBC improvements
b. consolidating the yurt and ski school functions into the main lodge
c. accommodating contemporary best practices
d. accommodating operational efficiencies
e. accommodating user needs for both skiers and those that accompany them
4. Inflated dollars will be computed using either 4.5% or the Federal Reserve forecast for PCE inflation, upper end of the range, in place as of the conclusion of the 30% design phase, whichever is higher
5. Further, that the project team be challenged to highlight potential cost savings to the 2023 projected project costs approximating $1 million (and their consequences) in the 30% design presentation and what tradeoffs were accepted or rejected.
What does the current ski lodge look like?
The current lodge, dating back to Tahoe Donner’s earliest days, was originally used as a sales office. It has served us well over the past 50 years, but it is at the end of its useful life with a myriad of service, access and functional issues. To take a virtual tour of the current ski lodge, click here. To see how overcrowding is an issue at the current ski lodge based on a video recorded on Monday, December 23, 2019, which was a 646-skier-visit day, click here.
How many users are public users, and how much revenue does the public generate at the Downhill Ski Area?
How many days is the current ski lodge over capacity?
Based on existing services the current lodge provides, such as food and beverage services, rentals and more, the capacity is 450 users.
With this 450-skier capacity, the percentage of skiers visiting at a time when the current ski lodge was overcrowded has been frequent.
What is driving the exterior design?
Staff have received mixed feedback regarding the building design, which is in the early stages and anticipates being updated and fine-tuned. The goals the design team is trying to achieve include:
- Blending the building into the steep hillside and bringing the building to the same elevation as the ski lift
- Containing and safely controlling snow shed, ice and stormwater runoff from the roof
- Harmonizing the look and feel of the design into the immediate surroundings
- Minimizing the environmental impact to maximize efficiency using building orientation and appropriate materials
- Selecting the most cost-effective solution for Tahoe Donner
Is Tahoe Donner trying to change the winter operating model and increase peak period use with this project?
The association is designing a new lodge to accommodate the current operational needs of the ski resort. The design accommodates the current lodge deficiencies, including California building code and ADA requirements, kids ski school moving from the temporary yurt to the new building and appropriate dining, rental and back-of-house space.
The proposed building is being designed to better maintain current use and capacity; it is not trying to grow the Downhill Ski Resort operation.
Are we looking at other uses besides downhill skiing?
Potential off-season use is not influencing the design and sizing of the project; it is only noted that the building could accommodate off-season use if the association decided to move in that direction. Three off-season ideas were modeled based on ideas generated by the membership survey and focus groups conducted in late 2020, and no decision has been made on if we should pursue them.
Does the Downhill Ski Area make money, and how does it financially compare to other Tahoe Donner public amenities?
Yes. The Downhill Ski Area is the most profitable public amenity in Tahoe Donner.
The first graph below shows the three-year (2017-2019) average revenues and expenditures per public amenity. The second graph shows the net operating revenue after capital expenditures are removed. Capital expenditures are the replacement reserve costs that are invested back into the amenities to keep them maintained and current.
What will the cost of the project be, and how can we better understand cost?
At the October 22 regular board meeting, the board adopted a motion concerning 30% design of the replacement ski lodge that included the following:
“At the completion of the 30% design stage the projected project costs do not exceed $21.3 million in inflated costs plus 10% contingency on construction cost…. Further, that the project team be challenged to highlight potential cost savings to the 2023 projected project costs approximating $1 million (and their consequences) in the 30% design presentation and what tradeoffs were accepted or rejected.”
How does Tahoe Donner pay for projects of this nature, and what is the current status of savings for this project?
As discussed and presented in the 2022 budget meetings in October 2021 and in the recent board meeting, we can fully fund the project without a special assessment or debt (which the bylaws prevent the association from having) by making an increase to the Development Fund portion of the assessment over the next three years.
As a reminder, the ski lodge project will be funded by both the Tahoe Donner Replacement Reserve Fund and Development Fund. As of today, Tahoe Donner has a total of $12.4 million saved, which is made up of $3.5 million in the Replacement Reserve Fund dedicated to this project and $8.9 million in the Development Fund after the forecasted spending for all 2021 Capital Projects. The Association should have approximately $23 million available for the project completion in 2024.
The above charts were updated on October 15, 2021.
Note: 2026 projects are placeholders. Part of initiative #5 in the 2021 Workplan includes developing a 10-year capital improvement plan that prioritizes projects and includes preliminary budgets that are both fiscally responsible and attainable by Q3 2021.
Will there be a special assessment?
As discussed and presented in the 2021 budget meetings in October 2020 and previous board meetings, we can fully fund the project without a special assessment or debt (which the bylaws prevent the association from having) by making an increase to the Development Fund portion of the assessment over the next three years (see above).
What is allocated overhead?
Allocated overhead is defined as a business organization’s overhead support for multiple amenities. For example, Human Resources supports multiple departments, as does IT, Communications, Finance and Maintenance departments. Some organizations comprehensively apply allocated overhead in their budgeting process and some do not. The association’s practice is not to systematically allocate general overhead in its published financial reports. It is important to note that allocating overhead does not affect the Annual Assessment.
How does my use of amenities affect my assessment?
Amenities are integral to Tahoe Donner. As specified in governing documents, amenities are paid for through a combination of Annual Assessments and user fees. These documents specify that the full assessment applies to all members, even if a particular member does not use some or all of the amenities.
Governing documents require the association to prepare an annual budget that covers common expenses less projected income from sources other than assessments, such as optional fees. Common expenses include both operating expenses and reserve funding. The resulting formula is:
[Common Expenses] – [Non-Assessment Revenues] = [the Assessment]
 Declaration (C&Rs) Article II, Section 1(a); regarding fees, uses the words “shall have the right to,” “if”; i.e., fees are allowed, but not mandatory, nor is there a requirement that fees be charged to cover the cost of operating the amenities (common facilities)
 Declaration (C&Rs) Article II, Section 4(g) and Declaration (C&Rs) Article IV, Section 1(c)
 Declaration (C&Rs) Article I, Section 9; “Common Expenses” include without limitation all expenses, operational and otherwise, including funding of reserves for the maintenance, repair, expansion and replacement of the Common Areas and Common Facilities (amenities)
 Declaration (C&Rs) Article IV, Section 2(b)
 As cited in footnote 3
Is Tahoe Donner expected to make a profit on amenities?
Tahoe Donner is a 501(c)(4) nonprofit organization and, per IRS regulations, must not be operated for profit. Amenities will either result in an operating surplus by which operating revenues exceed operating expenses or an operating deficit, whereby operating revenues do not exceed operating expenses.
If operated as a for-profit organization, the association would likely have market-rate pricing for all its amenities without any consideration for member or guest rates. A recent study completed by Russ Branson and Associates points out that members and guests enjoy an estimated $1.1 million benefit annually from this pricing approach.
 https://www.irs.gov/charities-non-profits/other-non-profits/social-welfare-organizations “…an organization must not be organized for profit and must be operated exclusively to promote social welfare. The earnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual.”
How does the association handle an operating surplus/deficit per year?
At the conclusion of the fiscal year, all amenities and HOA operations are consolidated as an operating “entity.” In the event of an Operating Fund surplus, the surplus may be transferred to the capital funds at the discretion of the board. In the event of an Operating Fund deficit, additional assessment revenue for the following year will be required to cover the shortfall. In addition, the association maintains an Operating Fund balance contingency to ensure financial stability.
What is NOR?
NOR is an acronym for Net Operating Result, which you will frequently see within the association’s financial reports. NOR is the difference between operating revenues and operating expenses, which ultimately determines whether an amenity is in a surplus or deficit position. NOR is one measure of an amenity’s operating performance. Surpluses in one amenity can offset deficits in another.
What are capital funds?
Tahoe Donner manages three capital funds to which a portion of the overall assessment is allocated, depending on funding needs. These capital funds are the Development Fund, Replacement Reserve Fund and New Machinery + Equipment Fund. To learn more about each fund, click here.
What is the definition of capital charge?
Capital charge is that portion of the Annual Assessment that is allocated to the Replacement Reserve Fund (“RRF”) and can be attributed to each amenity and/or department. Examples of RRF investments include replacing an aging snow grooming machine, snowmobile, golf course tees and greens, etc.
Is each amenity responsible to fund their prospective capital charges out of their revenue streams?
No, all capital charges come out of the Annual Assessment in the form of funding for the Replacement Reserve Fund.
If capital charges are funded through assessments, why are they shown as an expense on slide 14 of the September 8 presentation?
Capital charges included on slide 14 of the September 8 board workshop presentation are Replacement Reserve Fund expenses and used to illustrate how a new facility might impact future Reserve Replacement Fund requirements. As a reminder, these Replacement Reserve Fund charges are already accounted for in the Replacement Reserve Fund. For an HOA with a dedicated replacement reserve study for capital charges, this is a common practice.
Why does the $1.1M capital charge in the 2019 budget report differ from the $1M capital charge for the existing building in the September 8 workshop presentation?
The capital charge in the 2019 budget report represents the entire Downhill Ski Resort. These capital charges include lodge assets, lifts, snowmaking, related equipment, grooming, etc. Capital charges fluctuate year over year depending on specific asset replacement(s).
The total capital 30-year replacement reserve amount from 2021-2051 at the Downhill Ski Resort is $29,178,601. The $1M figure used for the existing building in the pro forma on slide 14 of the September 8 board workshop presentation represents this future 30-year average based on the association’s replacement reserve study on the Downhill Ski Resort alone.
Why does the income statement for the proposed new buildings not include allocated overhead when the 2019 budget report includes allocated overhead?
The income statement in the Downhill Ski Resort pro forma reflects the Net Operating Result (NOR), which does not include allocated overhead. The 2019 budget report was the only year the association allocated overhead costs to amenities in its published financial statements. This expense had not been allocated prior to 2019 and has not since. The association defines NOR for a specific amenity as direct revenue generated by fees less the direct expenses of that amenity. As stated earlier, allocated overhead does not impact member assessments.
How do I get involved or find more info?
Your member feedback is important. You can provide feedback by completing our online form.
ARCHIVED FREQUENTLY ASKED QUESTIONS
WHY DOES TAHOE DONNER DOWNHILL SKI RESORT NEED A NEW LODGE?
The current lodge was originally built in 1971 to be the Dart Corporation real estate sales office and was later converted to a ski lodge. At 49 years old, the lodge has reached the end of its useful life, unfavorably impacting operational demand, member/guest experience and Tahoe Donner’s vision. Tahoe Donner Association has a fiduciary responsibility to keep its amenities updated, current and functional. Tahoe Donner has a program to bring its facilities into compliance with current regulations, and building experience has shown that such alterations reduce the usable space of renovated structures, which would be due in our case to its unique snowflake design.
WHY DID THE BOARD DECIDE TO REBUILD VS. REMODEL, AND WHAT IS THE CURRENT STATUS OF THE SKI LODGE PROJECT?
In December 2019 at an open board meeting after extensive analysis, the board voted to rebuild, not remodel. Remodeling the existing lodge was seriously considered and researched. One of the primary challenges of rebuilding the current ski lodge is its unique snowflake design. It would require significant expense to attempt to remodel the building to meet today’s building codes, ADA standards and usage requirements. Additionally, the roof is poorly designed, causing snow to shed on the deck and entrances. This requires extensive snow removal during storm cycles and delays in operations, both being a danger to staff.
As of November 2020, the Tahoe Donner Board of Directors and management have embarked on extensive two-way member outreach to address the ski lodge and learn what the members and users need and want in the future lodge. Member outreach includes focus groups and member surveys as well as regular updates on the feedback we are receiving and statuses as progress continues. A survey report will be completed in December and published in the January issue of Tahoe Donner News.
WHAT WORK HAS BEEN DONE TO DATE?
Over the past several years, the General Plan Committee, Task Force, staff and several consultants have assisted to work through the Capital Projects process. View some of the key milestones.
WILL THE SKI HILL CLOSE DURING CONSTRUCTION?
Throughout the construction process, the lodge will stay open for the 2022/23 ski season. The day-to-day operations will feel similar to the 2020/21 COVID-19 ski year in food, beverage and recreation opportunities.
ARE THERE HOMEOWNERS INVOLVED IN THIS PROJECT?
Yes! The General Plan Committee, Downhill Ski Resort Task Force and board of directors are made up of homeowners. In addition to these working groups, PROS Consulting completed a member survey and focus groups to gather additional member feedback regarding the Downhill Ski Resort Lodge Replacement Project. Ongoing communication, education and outreach will continue to be a key part of the project.
We will continue to provide updates on the project via emails, board meetings, updates on the downhill ski lodge webpages, member task force meetings and information in Tahoe Donner News.
HOW WILL MEMBERS BE KEPT INFORMED OF THE PROGRESS?
The Downhill Ski Resort Lodge Replacement Project Page is your one-stop shop for updated reports and information regarding this project. Please check back often, as new information will be uploaded as it becomes available.
Staff will continue to update the membership via emails, discussion groups and Tahoe Donner News articles.
WHAT IS THE MEMBER/GUEST/PUBLIC PERCENTAGE USE OF THE DOWNHILL SKI AREA?
Based on the average of the previous 2 seasons, the makeup of the Downhill Ski Area use is approximately 30% member, 30% guest and 40% public.
WHAT IS THE PUBLIC CHARGED TO USE THE AREA COMPARED TO MEMBERS, AND HOW MUCH REVENUE DOES THE PUBLIC GENERATE AT THE DOWNHILL SKI AREA?
The public lift tickets are approximately 50-140% higher than member rates, depending on age and time of the ski season. Approximately $2.24 million (56%) of the annual $4 million in revenue comes from the public.
WHAT WOULD THE DOWNHILL SKI AREA LOOK LIKE AS A MEMBER-ONLY RESORT?
The cost to run the ski area is a relatively fixed expense that does not vary greatly with reduced attendance. For example, the ski area needs the same amount of lift attendants, ski patrol and maintenance workers whether there are 50 or 1,000 skiers on the hill. Without the public, we estimate expenses could be reduced by approximately 20% or $600,000. However, without the public, we would lose approximately $2.24 million in annual revenue, and the Downhill Ski Area would lose money. Member assessments would go up approximately $240 per year (less cost of goods sold and public-related expenses) before inflation to cover the reduction in revenue.
IS THE 4,000-SQUARE-FOOT KITCHEN NECESSARY?
The proposed 3,843-square-foot area is not just a kitchen; it includes every aspect of the food and beverage operation, including a space where customers select and purchase food, food service area, prep kitchen, storage, office space, dishwashing area and necessary refrigeration space.
Jon Mitchell, Director of Capital Projects, further addresses this at the June 25 board meeting here.