FINANCE & LEGAL COMMITTEE
Monday, June 6, 2011
“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: Karen Segraves, Potential new member of committee
The meeting was called to order @ 3:00 P. M.
The outstanding 2010 and prior unpaid assessments are at about 50. The 2011 unpaid assessments are at about 200.
The meeting opened with a discussion of DCC& R enforcement. There remains a distinct possibility that the current effort to modify our existing DCC & Rs will fail due to a lack of the currently required 70% of all lot owners voting for approval. Failure to vote is essentially the same as casting a “no” vote. At this time about 65% of our lots have been voted. We expect a tabulation of the ballots cast will reveal that an overwhelming majority of our lot owners will have voted for approval of the suggested changes. Conversely, a small minority of our lot owners, due to their failure to participate, will thwart the will of the much larger majority. The BOD, as the elected representatives of the membership, has the responsibility to enforce the DCC&Rs. With this in mind, the committee was asked to consider recommending that the BOD adopt a policy of selective enforcement. Hanck asked if our attorney had been consulted as to the BOD’s authority to “selectively” enforce the DCC&Rs. Kovach assured this committee that the attorney had been consulted and had advised that the BOD did in fact have that authority. After considerable discussion, Vandel moved and Hanck seconded that we “Recommend to the Board of Directors that, if the current DCC&R referendum fails, they formulate and adopt a policy of selective enforcement of the DCC&Rs.” Vandel, Hanck and Stuckey voted AYE. Root and Hensel voted NAY. Motion passed. This committee, if asked, will provide assistance to the BOD in establishing the policy.
The subject of our “Election of Directors” then was discussed. None of last year’s Election Executive (Chair, Vice-Chair and Secretary) Committee is able to participate this year. In the past it has been the responsibility of the BOD Secretary, with the approval of the BOD, to appoint an Election Chair who in turn would appoint the Election Vice-Chair and Secretary. Mr. Kovach is of the opinion that our by-laws give the authority for the election to the Finance and Legal Committee. He proposed that the Election Committee serve as a sub-committee of F & L. After further discussion no action was taken but it is assumed that Mr. Kovach will proceed with the election as he proposed.
The subject of the Community Center Project was then discussed. Copies of a draft “Management Agreement” and the “Community Facilities Grant and Loan Program Application” were distributed. Karen Segraves is also a member of the Community Center Project Committee. She pointed out that the grant application(s) require management agreement(s) and the Town and Association will have to formulate their joint agreement. It is anticipated that the Town Economic Development Board (TED) and this association committee will be heavily involved in the preparation of the final agreement. No further action was taken.
Mr. Sessions then handed out copies of 1) Balance Sheet (April 30, 2011), 2) Summary & Detail of the P & L with Previous Year comparisons (April 2011), 3) Summary & detail of the P & L Budget vs. Actual (Jan-April), 4) Unaudited 2010 end of year Balance Sheet, 5) P & L for 2010 with comparison with 2009 and 6) 2010 end of year P & L. Mr. Sessions assured the committee that all bank statement are being reconciled monthly and the balances shown on the balance sheet are in agreement with the bank statements.
Highlights of end of April Balance Sheet are:
- Total Checking and Savings $1,470,203
- Total Fixed Assets $2,116,337
- Total Equity $3,832,338
Highlights of end of 2010 Balance Sheet are:
- Total Checking and Savings $1,032,740
- Total Fixed Assets $2,116,337
- Total Equity $3,364,828
Considerable clarifying discussion took place concerning the financial statements. Mr. Sessions pointed out that the purchase of the Turf Equipment was considered a Capital Expenditure. Golf/Greens is being assessed an annual amount for the purpose of replenishing the Capital Fund. It is the intent of this committee to have all Capital Expenditures replenished by charges to the various operating units on an annual basis. Vandel pointed out that the annual cost of $25,000 for improving the Cart Paths is being shown as a Capital Expenditure but there is no annual offsetting charge against Golf/Greens to replenish those funds in the Capital Fund. This is also true for the pond liner. No further action was taken.
Some discussion took place concerning the legality of the Association utilizing association (common) owned lots for recreational purposes. The BOD is of the opinion that this is legal but anticipates a
challenge. No action was taken but consensus opinion of this committee was to encourage the BOD to resolve the issue. Non-judicial means would be preferred but legal action may become necessary.
Jim Vandel pointed out that he could no longer serve as Secretary.
Meeting adjourned at 5:00.