THE FINANCIAL SITUATION OF CNCS

Upon taking on the leadership of club in March of 2004, the new Deliberative Council inherited the difficult task of getting the CNCS out of the red.

The Club's debt was alarming, and it was felt that even with stringent controls and belt-tightening there would be no way to balance the budget without increasing the club's revenues.

Currently, besides monthly fees, the Club gets revenue from the following sources:

1. Maintenance fee.

This fee is used only for maintenance, as its name indicates.  In the Club's line budget certain amounts are supposed to be earmarked for certain purposes, but in practice this does not happen.
 
2. Gate fee.

Visitors (over 12 years old) pay R$5,00 per person on their first visit and R$10,00 after that.  Clearly the number of visitors depends on the weather and the season.  One cannot count on a fixed stream of revenue.

3. Transfer taxes

This tax is charged when a Residential Concession (right to use a piece of land), a Living Concession (right to build on a piece of land) or a Patrimonial Title is transferred from an owner to another. Patrimonial Member Celso Rossi is exempt from these fees: the club gets no no revenue when he sells a concession or title.

The books are available at the Club's Office to show that these combined revenues are not enough to maintain the club throughout the year in a condition satisfactory to those who have invested their money and often their lives here.  There is no reverse for an emergency or for improving the Club's conditions.  Such improvements would benefit those who live here and make the Club more attractive to visitors and future investors.

It is necessary to undertake a thorough examination of the documents whereby the Club acquired the land (these are a Intention Contract signed in 2000 and a Public Deed of Conditional Donation, signed in 2001).  These documents only became part of general knowledge when the new Deliberative Council took over. The previous Fiscal Council had already mentioned them on several occasions, and it was the Fiscal Council's opinion that the conditions of the donation are contrary to the best interests of the members, because they left the Club with numerous financial burdens without the revenues necessary to meet them.  Unfortunately, at the time very few members had access to the document and it's only now that it's being examined and evaluated by everyone.

In the main, because of the many financial burdens inherited by the Club, the Deliberative Council decided that some new revenue to offset the increase in expenses as new members acquire Patrimonial Titles or Residential Concessions.  These expenses include creating streets, extending the water, power, phone and internet lines, etc.  If on the one hand it is good that the Club show grow and attract more visitors more residents, it is also the case that the funds for that must come from somewhere.  It is natural, then, that these funds should accrue to the club at the same time people join and start to enjoy
 - all that was done in the past by the founders of Colina do Sol, and
 - the effort of current members in maintaining it.

There is no question that the founders should be rewarded for their initiative and effort.  However, the maintenance and growth of the club is a result of many years of contribution on the members' part.  Both founders and the Club should benefit from any sales of Patrimonial Titles or Residential Concessions.

The Council concluded that there was no other way to increase revenue.  That is, it was necessary to obtain funds from the potential activity of the Club itself, and the most rational way that was found was to levy a service fee on those who join the Club from now on to enjoy all it has to offer.

When someone acquires a Patrimonial Title or a Residential Concession he or she must come to the Club's office to record the purchase, before it takes effect.  It is at that point that the buyer must pay a Registration Fee that will not be calculated a percent basis but simply amounts to R$3,000.00 (three thousand reais) for each transaction.

Keep in mind that one need not have a Patrimonial Title in order to live in the Club.  One can just be a Priority Member and this allows one to buy a Residential Concession.

The Founders suggested that the 20 Residential Concession that were part of the Club's initial endowment would, if sold, provide enough funds to cover the debt and allow for investments.  Previous Club administrations had never considered this possibility, and had always left the Founders an open field for selling their own concessions.  These previous administrations even considered a large loan of US$ 20,000.00 (twenty thousand dollars), just before the most recent elections for Deliberative Council, in order to try to cover other debts, rather than thinking of selling its endowment as the Founders have now suggested.  The current Council, too, finds it very unwise to sell the Club's only liquid asset in order to pay the debt.  Moreover, it is the Council's belief that new members should contribute towards increasing the well-being of all in the club, whether residents or visitors. 

It is the unanimous opinion of the current Deliberative Council that the R$ 3,000.00 fee will be the fairest way of obtaining the revenue needed to balance the Club's budget and pay for the improvements that must accompany the Club's expansion.  As shown above, new members of Colina do Sol will then be rewarding the work of the Founders and members, and ensuring that they themselves will benefit from improvements in the Club they're joining.