FINANCE & LEGAL COMMITTEE
Monday, Aug. 16, 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 meeting of July 26 was devoted exclusively to a discussion of the Capital Improvement Program and no minutes were kept. There was no quorum for the meeting of Aug. 2 and no minutes were kept. The minutes of the Jul 19 meeting were approved during the meeting of July 26. The outstanding 2009 unpaid assessments have been reduced to 33. The 2010 unpaid assessments have declined to 127.
Mr. Stucki expressed his concerns about the accuracy of the financial reports and the ability to compare one time period to another. Mr. Sessions described, in some detail, the problems he has been experiencing and the changes he is preparing to adopt. It was also announced that Mr. Richard Brough, CPA has been contracted to review our accounting procedures once a quarter and provide opinions and suggestions for improvement. We believe that the profit and loss statements today, because of Jere, Kirk’s and Kathy’s efforts, are finally reliable and usable.
Mr. Kovach asked about the profitability of the bar. Mr. Sessions reviewed some of the difficulties he has experienced in assigning costs (electrical, trash) to Bar and Pro Shop but is of the opinion that we are now close to showing a profit and will most likely show a profit for the year. Considerable, time consuming and detailed, discussion took place concerning the operation of the bar.
Mr. Root brought up the operation of the Pro Shop. Again, considerable, time consuming and detailed, discussion took place concerning the operation of the Pro Shop (Golf). The amount of goods purchased and the existing inventory is a concern of Mr. Root and this in turn impedes the ability of Golf to reach our goal of it becoming self sufficient. It is apparent that our overall Golf revenue will be down considerably from last year while our expenses will remain fairly stable. Some serious decisions will have to be made to keep the Golf Operation from having to be further subsidized.
Mr. Stucki expressed his concerns about the responsibilities of this (F & L) committee and whether we were addressing issues that are our responsibility. After some discussion Mr. Vandel produced copies of Article IX Section 12 of the association by-laws which states the responsibilities and membership of each of the four Standing Committees. Mr. Vandel expressed his opinion that Financial and Legal does not have the responsibility for the management oversight of either the Bar or Golf. It is his opinion that Financial and Legal should be kept informed about the financial results of both operations but that House and Entertainment has responsibility for the Bar and Golf has responsibility for Golf Operations. He further expressed his opinion that the only responsibility F & L had in regards to these two operations was to make recommendations to the BOD as to whether the BOD should subsidize these operations and, if so, the size of the subsidy.
Mr. Stucki suggested and the rest of the Committee agreed that Mr. Kovach, as our Chairman and as a member of the BOD, present a statement to the BOD that this committee would like the Golf Committee to provide financial oversight of Golf Operations and House and Entertainment provide financial oversight of the Bar. We further request both committees keep this committee informed quarterly as to the financial condition of both operations so this committee can advise the BOD concerning the financial impact of these operations on the annual Operating Budget.
Mr. Sessions complimented Rebecca Hutchins for her efforts in making the swimming operation profitable. Ms. Hutchins: This committee very much appreciates your hard and intelligent work.
Mr. Kovach informed the rest of the committee that the forensic audit being conducted has, as of this date, produced nothing suggesting anything other than less than diligent bookkeeping. The audit however, is not yet complete.
Mr. Kovach reviewed the DCC&R committee’s request to provide a financial incentive for the membership to respond to the upcoming vote to amend the DCC&Rs. It has been determined that this would be illegal. THIS COMMITTEE HOWEVER, STRONGLY ENCOURAGES OUR MEMBERSHIP TO RESPOND TO THE PROPOSAL TO AMMEND THE DCC&R’S AND RETURN THE BALLOT ASAP.
Mr. Kovach discussed the 33 lots that are in arrears for 2009 and for which we either have a judgment or are in the process of receiving a judgment and the possibility of filing for a foreclosure on them. Quite a lot of discussion ensued with some doubt being expressed concerning the likelihood of receiving any financial return from the foreclosed properties.
Mr. Kovach has discussed lease terms and costs with the owner of the building where the Town of Star Valley Ranch now leases space for the Town. There was some thought being given to leasing a portion of the building for the Association Offices and closing down the Aspen Hills office during the winter. The costs proved to be prohibitive however, and, at least for the coming winter, SVRA offices will remain where they are at present.
Mr. Kovach suggested that both September meetings be devoted to the development of a “Capital Improvement Program” and a 2011 “Capital Budget”. Concern was expressed about our not, as yet, addressing the 2011 Operating Budget. Mr. Sessions stated that he would like at least 9 months of operating data before he develops a draft budget. The committee is very appreciative of Mr. Sessions accepting the responsibility for preparing the draft budget. Our experience in former years has been very little General Manger review of the draft budget prior to the committee’s preparation of it. We are concerned however, that we will have very little time to review and present it to the BOD prior to the departure, for the winter, of most of our members. Both of the September meetings will be devoted to the CIP and Capital Budget.
Quite a lot of discussion ensued concerning Association owned lots and the authority of the association to convert the lots from residential to common usage property. Legal action is anticipated and this committee might have to address the issue in the future but no action was taken at this meeting.
Meeting was adjourned a 4:45 PM. Due to Labor Day being on Sept. 6, the first Monday of Sept., the next meeting will be on Sept 13 at 3:00 in the Library of the Aspen Hills office.