Improved finances
For the past four or five years, successive administrations have been working towards improving the financial situation of Isla de Oro. The efforts have been successful but there is still work to do before we are where we want to be.
DEBT REDUCTION
Virtually all debt has been cleared. In 2001, Isla de Oro owed money to suppliers and providers, and had a huge debt burden with its employees, including unfunded pension liabilities and a debt to the government's social security administration (IVSS, by its Venezuelan initials).
In 2002, most of the debt to providers and suppliers was paid off and in 2003 and 2004 the IVSS debt was cleared. There is no longer any structural debt or cronic liabilities.
OWNERS IN ARREARS
Unpaid accounts receivables represent owners of apartments who, for various reasons, have stopped paying their bills and who do not respond to our attempts at collection. In 2001, they represented approximately 10% of total ownership and collectively owed Isla de Oro more than $150,000.
Between 2002 and 2004, most of these owners were persuaded to sell and the new owners settled the bills. We still have a core of these types of apartments, but they can now be counted on one hand. Our goal is to convince these owners to pay their bills, sell, or else pursue the matter in court; in that order.
To prevent this problem from re-appearing we want to continue attracting international owners. In 2001, Isla de Oro was 99% owned by locals. This has changed now, and we would like to continue this change. Isla de Oro is currently 70% to 80% relying on domestic owners who in turn rely on the health of the domestic economy. With oil prices high, the economy is currently strong, but the past 25 years tell us that this can change. To insulate ourselves from the effects of future domestic recession, devaluations or a potential downturn, we would like a broader mix of international owners from a wider variety of countries.
FUTURE GOALS
Too much of our monthly income goes towards payroll and too little is spent on infrastructure maintenance and improvements which directly benefit the owners and the value of our real estate. This has been a problem for well over a decade, but has been identified and the board has taken steps to revert this situation.
Isla de Oro has a bloated payroll, with a number of workers past retirement age who are performing non-essential functions. The current board's policy is to ease these workers out without hiring new staff to fill these positions. As part of this policy, our goal is to lower the number of workers on payroll and to lower the average age of these workers. So far, this goal is being met. Half a dozen employees have already left, most of them voluntarily, and more will follow.
In addition, as just mentioned, we want to continue to increase the share of international ownership versus ownership by locals, as this will produce a healthier financial base less prone to the sort of downturns which volatile Latin American economies experience on a regular basis.
Offers of help from any owner with any of the above is encouraged: Please contact us.
