FINANCE & LEGAL COMMITTEE
Monday, June 21, 2010
“Responsible for the annual operating and capital budgets, determination of fees and assessments, definition of member and guest privileges, and all related legal, taxes, insurance, zoning, and organizational matters affecting the Association.”
PRESENT: Jere Kovach-Chairman & Member Board of Directors
Kirk Sessions- GM-Ex Officio
ALSO IN ATTENDANCE: None
The meeting was called to order @ 3:00 P. M.
The minutes of the June 7 meeting were approved. The outstanding unpaid assessments for 2009 and prior years have been reduced from 93 to 46. Of the 46 we have received a court judgment on 22 and the remaining 24 will be going to court in the near future. The 2010 unpaid assessments as of June 16 have declined to 192.
Tom Hensel was asked to present a briefing on a methodology he has developed for prioritizing the numerous projects currently being considered by the Long Range Planning Committee. It was agreed that project prioritization is a necessary first step for the development of a Capital Improvement Program and Capital Budget.
Mr. Kovach briefly discussed his concerns about the association’s ability to initiate foreclosure action for non-payment of assessments. Mr. Sessions stated that SVRA has had some success in placing a lien on delinquent lots. In order for the lots to be sold the liens must be satisfied. This problem will receive more discussion in the future.
Mr. Kovach distributed copies of the “Auditor’s Report and Financial Statement” for December 31, 2009 prepared by our Auditor Hirschi DeCoria & Company, PC. Committee members will examine this report and further discussion will take place at the next meeting. The Auditor is expected to make a presentation at the Annual Membership meeting on June 26.
Mr. Sessions handed out copies of 1) “Profit & Loss Budget Performance-Jan. through Dec. 2009”, 2) “Balance Sheet-As of Dec. 31, 2009”, 3) “Profit & Loss Budget Performance-May 2010” and 4) “Balance Sheet-As of May 31, 2010”. Many questions were asked about these reports and it was agreed that further refinement is necessary if clarity is to be obtained.
There have been a series of discrepancies, going back several years, that have caused our Balance Sheet to over state the funds in our various bank accounts. These discrepancies were not discovered by our former Auditor or by any other of the former responsible parties. They were discovered by this committee and the present auditor late last year. After an extensive review by Director/Treasure Meeks and Director/Chair Kovach it was concluded that the possibility of fraud was very remote and the errors were an accumulation of erroneous entries, less than diligent bookkeeping and lack of oversight. It was decided to forego an extensive and expensive forensic audit and instead balance the books, as of Dec. 31, 2010, and make sure they remain balanced going forward.
A discussion took place concerning the historical level of assessment and how we arrived at the present “base assessment”. Further discussion will take place. This committee will attempt to get historical data and attempt to provide clarity.
The meeting was adjourned at 4:35. Due to the Independence Day holiday the next meeting will be held on July 12 at 3:00 in the Library. Future meetings are still scheduled for the first and third Mondays of every month during the “season”.