“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 October 4, were approved.
The outstanding 2009 unpaid assessments have remained at 32. The 2010 unpaid assessments have declined to 91.
Mr. Kovach reported that the forensic review of the previous years’ books revealed nothing warranting a suspicion of fraud but instead indicated some very poor bookkeeping. The committee greatly appreciates the efforts of Alyson Culbertson in making this audit. She further recommended we engage the services of an accountant to provide periodic advice to the BOD, F & L Committee and staff. The committee and Mr. Sessions had previously recognized this need and the services of Mr. Richard Brough have been contracted on a retainer basis. Mr. Stucki questioned the need to have an annual audit. The rest of the committee shared his concern but was of the opinion we should continue the annual audits until we are completely satisfied with the accuracy of our financial records. Mr. Kovach and Mr. Sessions have been desirous of doing a “start over” on our books and Mr. Brough concurs in that need. Our previous records will be retained but a “start over” is needed. The effective “start over” date will be Jan. 1, 2010. The rest of the committee was in concurrence.
Mr. Sessions presented the “draft” 2011 Operating and Capital Budgets. Mr. Kovach explained that the BOD had approved a Capital Expenditure of about $320,000 to purchase, rather than lease, Turf Equipment. Funding for this will come from the Capital Fund. The Capital Fund will be replenished by “leasing” this equipment to the Operating Fund. Our previous lease for turf equipment was about $75,000 per year. The replenishment amount will be $67,720.39 per year. We expect further savings by being able to utilize the equipment longer than provided in the lease with the goal of achieving an average equipment turn over period of seven rather than the previous five years. Mr. Sessions has suggested we reduce our expected income, from assessments, by 5% in recognition of our not collecting all of our invoiced assessments. This, in effect, reduced the number of assessment paying lots to 1915.
The committee is satisfied that Mr. Sessions and his staff have given the 2011 budget a rigorous preparation with the intent of minimizing expenses and maximizing income. Operating expenditures however, exceed operating income, not including assessment income, by $457,048 or $239 per lot. The Capital Request for 2011, not including the purchase of turf equipment, is $97,455 or $51 per lot. These two amounts ($239 and $51) must be made up with assessment income. After considerable discussion Mr. Stucki moved and Mr. Hanck seconded to recommend to the BOD that the 2011 effective assessment be set at $290. If the BOD succeeds in reducing expected expenditures there should be a commensurate reduction in the assessment. Motion passed with Mr. Root voting no. Mr. Root explained that he wanted to maintain the assessment to no more than the 2010 amount of $275 and felt any difference could be covered by improving income from Golf and Lounge operations. Mr. Kovach will present this recommendation to the BOD. The committee is pleased with the professionalism Mr. Sessions and his staff devoted to the perpetration of this draft budget and wishes to commend them.
There are no more scheduled meetings of this committee during the remainder of this calendar year. The next meeting is scheduled for May 16, 2011. Members will be appointed/reappointed after the June election and formation of the new BOD. SVRA members interested in serving on this committee are encouraged to notify Chairman Kovach or other current members of their interest and qualifications.