DRAFT

Finance & Legal Committee Minutes – June 8, 2015

Present: Directors Ron Denney, Mike Wardle, and Dennis Christianson.  Also present were Tallia Booker (GM-Ex Official), Bob Hayes, JC Colley, Jillaine Maes, Donna Thompson, Gene Root, and Ron Mueller.

Absent:  Director Bob Meikle, and members Kathy Dietz, Kathy Lynch, and Jim Vandel.

Agenda:

1. Review the Independent Auditors Report for CY 2014
2. Review SVRA financial report for April
3. Discuss VRBO’s  at the Ranch
4. Discuss status of vacated lots (Cedar Creek pavilion area and others)
5. Discuss status of Member Center with recommendations to move forward
6. Review spreadsheet for Golf Course Equipment replacement fund and its utilization for budgeting in years forward
7. Review Airstrip activities (Silverstar easement, plans to get a survey, plan to control access with fence, issues with trailer parking)
8. Discuss process for which major Maintenance Fund will be utilized
9. Time for board members to bring up issues

In the absence of Chairman Bob Meikle, Director Ron Denney started the  meeting with the 9 items on the agenda.

A, and B.  Auditors Report and Financial Report

GM Tallia Booker handed out the Financial Reports, which included the Independent Auditor’s Report.  Tallia reported  the auditor’s  financial statements of SVRA, which comprised the statement of  financial  position as of December 31, 2014, and 2013, and the related statements of activities and changes in our net assets, functional expenses, cash flows for the years ended, and the related notes to the financial statements.

It was suggested that Tallia add a cover sheet with a glossary of abbreviations as well as an explanation sheet for those areas that had a variance of more than 10% of expected budget.  She was also asked to send the monthly reports to the committee members in advance of the meetings so they could review the documents before the meetings.  Jillain will send the email addresses of the committee to Tallia.  The reports were tabled for discussion next month.

C.  Discuss VRBO

A complaint was filed by Robert Palmquist on a violation of DCC&Rs.  The VRBO (Vacation Rentals by Owner) website is advertising rentals on the Ranch which violates the DCC&Rs for single family residents and the prohibition for the operation of  a commercial business.

A proposal has been filed with the Lincoln County Commissioners and Zoning Commission to address the VRBO problem.

Gene Root moved that the F&L committee recommend to the BOD that we table any further action until the County makes their decision.  In addition, that in the meantime, that the BOD notify those people that we know of that are in violation by letter and by adding the information to our Website. Jilliane Maes seconded the motion.  After some additional discussion, the motion passed unanimously.

1. Vacated Lots – Ron Denney

Gene Root handed out the Town’s Zoning Ordinance on  Single Family Residential, with “NONCONFORMING USE”  which includes the 4 lots by the swimming pool.  The “NONCONFORMING USE” designation acknowledges a specific, grand fathered, nonconforming use of the lots.

Ron Mueller handed out a map showing Plat 17, Lots 11,12,13,& 14, which are designated in the Town’s Zoning Code as Single Family Residential Special Use.  SPECIAL USE (PRIOR AND GRANDFATHERED) means a USE that does not conform to the zoning requirements of the area in which it is situated, existing before the effective date of this Ordinance and planned for permanent continuation of the USE. (Ord. 2012-06; 9/11/2012).

Ron Denney:  The lots that we’re going to talk about are the lots by the swimming pool, the putting green, and on number 7 tee box at Cedar Creek.  Those lots were provided to the Association by the developer for common activities.  Before I got here the Association proceeded to getting those lots vacated.   The county agreed those that those lots are vacated, meaning they are vacated because they are common.

Ron Mueller:  No, they didn’t say that, they didn’t oppose them being vacated.  The county attorney wasn’t present at the meeting to rule whether it was legally and properly done.  But they were vacated.

Ron Denney: According to the county records they are vacated.  So those lots are no longer single family residential lots.

Gene Root:  Yes they are still single family; vacating lots doesn’t remove them from the DCC&Rs.  They are listed as single family and are still recorded as single family.  Vacating doesn’t remove them from the DCC&Rs.  Gene  talked to the Mayor and she can’t do anything about removing the vacated lots from the DCCRs, she said no that would have to go through the courts.

Donna Thompson:  Donna wanted to share what she knows from owning a title company for 31 years.  She said that, if all the owners of the plat were to sign and agree, they could change the designation of any lot.  All the owners of the plat must agree to modify.

Tallia Booker: She talked to Mayor Kathy Buyers who stated that in order for us to rezone a lot  that basically there would have be some sort of a change.  We maybe want to go the Town P&Z Board with a plan on what we want to do on those 4 lots.  The plan is that we want to move the playground equipment (to lot 14) so the kids are safer.  We could take our plan to the P&Z Board, with what we are looking to do, and have the Town Council vote on it. However, it would be still be single family residence with nonconforming use.

Gene Root:  We have one choice, get a Declaratory Judgment, go to a judge and get it done right. A Judge is the only one that can settle the issue on the DCC&Rs.  It’s a better spending money this way, rather than doing it wrong and getting sued.

Jillaine Mayes made the motion that the F&L committee recommend to the BOD that they instruct our lawyer to prepare paperwork for a Declaratory Judgment to remove the lots in question from residential, single family use.  Gene Root seconded the motion with the provision that the lawyer used is the one that knows and understands HOA law.  After additional discussion, the motion passed unanimously.

E.  Member Center

Ron Denney:  At the last Board meeting there were comments that we should have a vote and get moving forward.  There is a lot of sentimental feeling about the Barn, and some like it.  It has no winter use.  When I first moved here there was a restaurant, a bar and the Barn was one large facility for meetings.

In order for the membership to approve a capital expenditure – passage requires a 2/3 majority of the members present at the meeting in person or proxy.  A quorum of 60 % is required at the meeting.  If the quorum is not met, another meeting may be called that would require 30%.

There was discussion on a Special Assessment, how to pay for it, and the cost of the building.  Tallia said that we have about 1.2 million in the bank that could be used on the Barn.  The rest would have to be borrowed.

What we need are numbers on the various options of Member Center development.  We need to get a cost estimate on the various designs.  Before the members vote, they have to know what the costs are on all the options.

We could make recommendations that the BOD move forward with designs and pricing, so that the members know their options, what the various options would cost and how they would be paid for.

F.  Golf  Equipment

Tallia presented a spreadsheet that shows at least $44,500 being set aside each year for the replacement of golf equipment, so if there is an unexpected break down, we can replace it.  She also produced a spreadsheet with replacement plans for the next several years.

G.  Airstrip

The right of way for Silverstar propane tank has to be at least 100 feet from the well.  There is an issue boundaries, so the BOD is getting a survey done to make sure we have all the boundaries correct.

The next item is we have is the issue of people parking trailers at the entrances without authorization.  It was suggested that a gate be installed to keep vehicles from parking in areas where they are not intended to be parked.

There was discussion of parking RVs that cannot be parked on individual lots on the airstrip, and other possible locations.  There was the question that LVI still has some ownership, and has sold lots along the airstrip.  Discussion centered the logistics of parking there, whether there was sufficient space for everyone and how it would be maintained in way it would not distract the esthetics of the Town and the Association.

It was suggested that parking of RVs on the airstrip could help solve a lot of our DCC&R problems.  Others thought  it would cause new problems.

Bob Hayes:  He has presented to the BOD a proposal on the use of the airstrip, and turn it into an asset.  Part of his plan is to set aside a secure area for parking and storing RVs.

H.  Major Maintenance Fund

The BOD has started to look where the items should be put on the Major Maintenance priority list.  Part of the problem here is whether or not the money should be expended on renovation of the Association office and the Barn.  This goes back to the question whether or not the a new Member Center will be built.  In the meantime the BOD like suggestions for items to be added to the list.  No one had any suggestions at this time.

I.  New Business

Mike Wardle asked that the members review the recommended Requirements for Returning to the original DCC&Rs that were included in the Voting Mail out

There being no other new business, the meeting was adjourned.

Recording Minutes:  Ron Mueller and Jillaine Maes

“A committee is a thing which takes a week to do what one good man can do in an hour”

FINANCE & LEGAL COMMITTEE AGENDA

7/18/2011  3:00 P M  LIBRARY

 

 APPROVAL OF MINUTES

  DISCUSSION OF PARTIAL VACATION OF LOTS IN PROGRESS

  AUDITED 2010 FINANCIAL REPORT

  DISTRIBUTION OF JUNE FINANCIALS

  DISCUSSION OF CONSOLIDATING GOVERNING DOCUMENTS

MINUTES OF MEETING

The minutes of the 6/20 meeting were approved as written.  Mr. Kovach brought the committee up to date on the continuing process of trying to vacate a total of 6 lots from the plat maps.  He stated a hearing in front of the Lincoln County Commissioners was scheduled for the following day.

Copies of the 2010 audited financial report were distributed.  Mr. Kovach stated that 2009 comparable figures were not shown in order to get a qualified audited statement.  Future annual audited reports will go back to having the previous year’s figures shown.

 June, 2011 financial statements were distributed.  Committee members will study them and email any questions to Kirk.

The committee began a discussion of a process to consolidate the governing documents of SVRA.  The goal is to help the BOD be sure they are following correct procedures.

The meeting was adjourned.

FINANCE & LEGAL COMMITTEE

MINUTES

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

Tom Hensel                         

Ron Stucki

Ray Hanck

Eugene Root

 Jim Vandel-Secretary

Kirk Sessions- GM-Ex Officio       

ABSENT:     None

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.

Jim Vandel

Secretary

 

“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

Tom Hensel                         

Ron Stucki

Ray Hanck

Eugene Root

Jim Vandel-Secretary

Kirk Sessions- GM-Ex Officio       

ABSENT:     None

 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.

Jim Vandel

Secretary

FINANCE & LEGAL COMMITTEE

MINUTES

 

Monday, October 4, 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

                        Tom Hensel                         

           Ron Stucki

Ray Hanck

                        Jim Vandel-Secretary

Kirk Sessions- GM-Ex Officio       

                       

ABSENT:      Eugene Root

 

ALSO IN ATTENDANCE:   None

 

The meeting was called to order @ 3:00 P. M.

 

Note:  The meeting of Sept. 20 was held.  No motions were made and no minutes were kept.

 

The minutes of Sept, 13 were approved.

 

The outstanding 2009 unpaid assessments have remained at 32.  The 2010 unpaid assessments have declined to 94. 

 

Mr. Kovach handed out copies of an E-Mail from Mr. Stucki concerning assessments, a memo from our attorney, Mr. Sanderson, copies of the Articles of Incorporation and a summary estimate from Jerry Myers who is the Architect representing the Main Street Project.  In summary, Mr. Stucki is concerned about the size of the assessment and his desire to keep it as low as possible.  Mr. Kovach emphasized that the BOD and the members of this committee all are highly interested in keeping the assessment as low as possible but the BOD does have the responsibility to “improve, construct, maintain, operate and care” for our facilities in accordance with Article III of the Articles of Incorporation.  He further pointed out that until the formation of the Town and the Town’s assumption of responsibility for water and roads the assessment was insufficient for any expenditure other than operating expenses.  This resulted in a large backlog of financing needed to “improve, construct, maintain, operate and care” our facilities.  In other words prior boards were unable to fulfill their responsibilities due to a lack of funding.  Mr. Myers has estimated the cost to renovate the Barn and Silo at $2,457,229.  The Town and BOD are cooperating in an effort to get a grant from the State of Wyoming for $1,000,000.  In addition, there is a possibility of obtaining a low interest (2%) loan for another $1,000,000 from the state.  It will be about another year before we know the results of those applications.  In addition, we have obvious, but no cost estimates, needs for improvements to the office area and swimming pool.  Mr. Kovach is of the opinion that we need to begin building up cash reserves for these future expenditures and has proposed to the BOD that $25 of all future assessments be dedicated to the Capital Fund.  This would provide about $50,000 to the Capital Fund per year.  We have about $1,000,000 in various CDs that have been directed to the Capital Fund.  About $250,000 of that is being held for the eventual construction of a new pipe line from Green Canyon.  In summary, there is a need for considerable funding to “improve, construct, maintain, operate and care” for our facilities.  Many questions and decisions must be asked and made before proceeding.  It is obvious however, that future projects will need considerable funding. 

 

Mr. Sessions discussed the Golf “Falling Prices” program he implemented after Labor Day.  In summary the program has been a big success with increased revenue and rounds played as compared to last year.  Mr. Sessions is developing other plans to increase golf revenue for next year.  We still have the goal of making Golf self financed and possibly even a net profit center.  Considerable discussion ensued over the portion of the assessment that is now going to Golf.  It was agreed that we need to estimate all the costs attributable to all of our Operations and let the membership know the portion of the assessment that is being utilized for all of them including Golf.

 

Mr. Sessions distributed a draft “CAPEX REQUEST 2011”.  CAPEX is an abbreviation for “Capital Expenditure”.  Considerable discussion ensued over the issue of whether to lease or purchase new Golf course equipment.  The current lease for our equipment costs us about $75,000 per year and will expire at the end of this year.  After some discussion Mr. Stucki made the observation that buying is always preferable to leasing from an overall economic perspective.  At the present time we have over a million dollars in various CDs earning about 1.4% interest.  The new proposed lease would be carrying an equivalent interest rate of about 6.8%.  The committee agreed that it would be a good use of Capital Funds to purchase the equipment rather than lease.  It was also agreed that there would be included in the Operating Budget funds to replenish the Capital Fund on a multi-year schedule.  In essence the Operating Fund would be leasing from the Capital Fund and we would be recognizing the true cost of utilizing the equipment for Golf Operations.  It was moved by Mr. Stucki and seconded by Mr. Vandel to have Mr. Kovach recommend to the BOD that we proceed with a plan to purchase golf equipment rather than enter into a new lease.  The motion passed unanimously.

 

OLD BUSINESS: 

• DCC&R Balloting Incentive:  Mr. Kovach has discussed the recommended incentive with our lawyer and has been advised that the incentive is not only legal but is not a violation of our Articles of Incorporation or the Bylaws.
• Conversion of SVRA owned lots from Residential to Common:  This is still in the hands of the attorneys.  Our attorney is of the opinion that the conversion would be legal and not a violation of the DCC&Rs.  Mr. Hanck pointed out that there has already been a precedent for this in that we have converted a portion of a lot from residential to common.
• Forensic Audit:  This has not been completed but it continues to appear as though the differences in the bank statements and Balance Sheet are due to poor bookkeeping rather than fraud.
• Barn/Silo Grant:  Mr. Kovach reviewed the ongoing joint preparations of the Town and SVRA for requesting the grant from the state.  The grant will be submitted in Sept. 2011.  There is a possibility of obtaining some financing from a private foundation which is interested in preserving the character of the barn and silo area.  The issues are complex and it will take some time for them to be resolved.
• Delinquent Assessments:  Some discussion took place about the possibility of making public the names of members who are delinquent in paying their assessment.  No further action was taken.
• Bar:  Mr. Kovach has been doing some analysis of the bar operation and feels that it can be become more profitable but keeping it as an SVRA operation rather than leasing it out is still the way we want to operate. 
• Pro Shop:  Some discussion took place concerning the operation of the Pro Shop.  In general, it was agreed that a review of what we should carry in inventory needs to be made.

 

Mr. Sessions will have draft Capital and Operating Budgets available by Mon. Oct. 11 for distribution to all Committee members. A review of the two draft budgets will be made at our next meeting.  We expect to present the budgets to the BOD at a workshop in Nov. and at the regular board meeting on Nov 20.

 

Meeting was adjourned at 5:45 PM.  The next meeting will be in the library at 3:00 P. M. on Oct. 18.

 

Jim Vandel

Secretary