ABI 501(c)7

Not-For-Profit

Arden Beaches, Inc. is a registered 501(c)7. This is a not-for-profit organization and by IRS definition is considered a social club exempt from federal income tax under IRC 501(a). As organizations, these are described in IRC 501(c)(7) if they are "organized for pleasure, recreation, and other nonprofitable purposes." They were originally granted exemption from federal income tax in the Revenue Act of 1916.

What are the IRS rules for 501(c)7?

A 501(c)7 must be primarily supported by dues, fees, charges, or other funds paid by members. That said, 501(c)7 donations are permissible. A 501(c)7 social club may receive up to 35% of its gross receipts, including investment income, from sources outside its membership while retaining tax-exempt status. All lot owners and residents who pay dues, fees, and charges are considered members.

ABI MEMBER vs. ABI SHAREHOLDER MEMBER

What is a Member in ABI?

ABI Members include ALL lot owners required to pay the annual deed-mandated $22/lot. All ABI Members/Lot Owners are eligible to purchase shares in the organization. Non-Owner residents who pay fees and charges to ABI are also members. While members may attend regular and annual meetings and ask questions, they may not vote on any ABI business matters or serve as a volunteer on the ABI Board unless they are shareholder members.

What is a Shareholder in ABI?

ABI Shareholders are Members who have purchased shares in the organization in accordance with ABI Bylaws (Article III - Membership; Article IV - Voting). Shareholder Members may serve on the ABI Board and may vote on ABI Business. ABI Shareholders DO NOT own ABI properties.

USER FEES? WHY AND WHAT FOR?

A Letter to the Editor was published in the December 1987 NewsBuoy providing some insight to the continued financial struggles of the organization (ABI) in their operational and maintenance requirement of Arden's beach and park properties. There are many more historic references to this ongoing financial problem since the purchase of the maintenance corporation and creation of ABI in 1976. Please take the time to read the referenced documents and do your own research to become more educated as to why the organization has taken the necessary steps to increase its revenue stream to provide the essential services required to keep Arden's beach properties open for safe and private use.

During the March 1988 Annual Shareholder meeting, shareholders approved an amendment to the ABI Bylaws authorizing ABI to levy user fees to support the maintenance and improvement of ABI property. See ABI Update published in the April 1988 NewsBuoy.

Had inflation been recognized over time as stipulated in the ABI Bylaws, the increase implemented through the 2023 shareholder vote would not have seemed so drastic. This current user fee should set ABI on the path for success in its operational and maintenance charge for Arden's private beach properties.

Perspective: In 2023, the annual revenue obtained through the deed-mandated lot assessments generates $29,600 (includes the mandatory $10/lot user fee implemented in 2018) IF everyone pays on time. In 2022, the Ramp 4 fishing pier replacement cost alone was $34,400. Current user fees average an annual revenue stream of $29,200 while annual general operations and minimal maintenance costs average $102,600.

CAN ABI REQUIRE PAYMENT OF MANDATORY ANNUAL USER FEES TO ACCESS ABI PROPERTY?

The answer to this question is "YES". ABI (Grantor), as identified in the deeded covenant, is the owner of fees charged for the use and maintenance of the beaches in Arden. Reasonable use of ABI properties is a privilege only by ABI's written approval (issuance beach and amenity passes) in accordance with the organization's rules and regulations and governed by organization Bylaws. ABI has the authority to deprive individuals access to its properties (temporarily or permanently) for any infraction of said rules and regulations as stipulated in the deeded covenant. The mandatory annual user fee and optional amenity fees are set in the organizations rules and regulations through ABI Bylaws, ARTICLE XIII – USER FEES. The legal recorded deed covenant references these rules and regulations as it pertains to authorizing reasonable use of ABI properties, thereby recognizing ABI's authority to dictate requirements for the use of said properties and implementation of user fees. Payment of the required $22/lot annual assessment does not automatically grant access to ABI properties and amenities and is required by all lot owners regardless of authorized use status. 

ARE ABI MANDATORY USER FEES ATTACHED TO SUNRISE BEACH LOTS AS WITH THE $22 DEED-MANDATED ASSESSMENT?

NO. Annual mandatory user fees are billed per property Tax ID and payment of such fees are required per ABI regulations prior to the issuance of beach passes and before optional amenity passes can be ordered. Multiple lot owners will not be overcharged for said user fee as combined billing has been established in ABIs financial system. Mandatory user fees are not subject to property lien and non-payment thereof will be tracked in ABI's financial system in consideration of equity amongst all lot owners who benefit from the privilege regardless of desires use, and in granting future use of and access to ABI properties.

WHO OWNS ARDEN'S PRIVATE BEACH AND PARK PROPERTIES?

Arden Beaches, Inc. (ABI) owns all of Arden's private beach and park properties. These properties ARE NOT owned by Sunrise Beach lot owners or ABI shareholders. Refer to the property ownership [DEED] for verification. ABI is the owner of said properties and also serves as the collector and owner of related fees, as well as the maintenance corporation for said properties. ABI shareholders may serve on the ABI Board of Governors and vote on ABI business matters related to the maintenance of said properties.