FINANCE & LEGAL COMMITTEE
Monday, Oct. 12, 2009
“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
Randy King-Acting-GM-Ex Officio
ABSENT: Eugene Root-Vice Chairman F & L Committee
ALSO IN ATTENDANCE: Chuck Hewins, John Daulton, , Gayland Archibald-BOD Member, & Jan Jonson-BOD Member
The meeting was called to order @ 3:00 P. M.
The minutes of the Sep. 28, 2009 meeting were approved as amended.
Mr. Kovach introduced Dave DeCoria and Wade Herchie of the firm Herchie and DeCoria. They made a short presentation concerning their Accounting/Audit experience and expertise along with a few preliminary observations concerning the SVRA financial reporting system. Herchie and DeCoria intend to present SVRA a proposal to provide Audit Services for 2009. After a short question and answer period Mssrs. DeCoria and Herchie departed the meeting.
Mr. Archibald, in his capacity as Chair of the Greens Committee, reviewed the Greens Committee’s and Department request for the Capital Budget. There was an original request of $56,000 for a rough mower to be purchased in 2010. After further review Mr. Archibald recommends delaying that purchase to 2011 but would like half of the purchase price to be “earmarked” in 2010. Another requested Capital Budget item discussed was the requested purchase for $26,000 of a used tractor. Considerable discussion took place concerning our policy of owning, leasing or renting equipment. It was generally agreed that we need to give a rigorous examination to utilizing the rental option prior to making any capital purchase.
Mr. Kovach presented a proposal from BOD member Ron Meeks to drop the effective assessment to $250 for 2010 along with a revised fee schedule for our recreational facilities and equipment. Mr. King pointed out that the BOD in their July meeting had given the F & L Committee a preliminary assessment figure of $334 to utilize in developing a budget. It was pointed out that we have 2014 lots which are subject to the assessment. Every dollar of the assessment therefore equals $2014 of revenue to SVRA.
Mr. King made a short review of the 2010 Operational Budget including changes made by the BOD during their workshop meeting on Sept. 30. The changes were minor and for the most part involved some shifting of funds from one budget item to another It was additionally pointed out that there are always a few members who either by oversight or intent do not pay their assessment. SVRA will be aggressive in collecting delinquent assessments but they might not be collected in the current year. Members should be aware that any expenses incurred by SVRA in making the collection will be added to the total amount owed by the delinquent lot owner. It was agreed that the BOD is now doing their review of the 2010 Operational Budget and there is little need for the committee to make any further review unless it is desired by the BOD. Mr. Vandel pointed out that Operational Budgets are, by their nature; year to year and ordinarily don’t have large variations one year to the next. If forecasted income is less than needed for forecasted operational expenditures then forecasted expenditures must be reduced. If forecasted operational expenses are less than forecasted income then assessments or fees can be reduced. Capital Budgets, on the other hand, must be multi-year as a great number of capital purchases cost a great deal more than the income received in any one year. The financing of these capital purchases can be obtained through savings, which comes out of current income or by debt which must be serviced from future income. A creditable “Capital Improvement Plan” therefore must have some assurance of multi-year funding.
Chuck Hewins, as Chair of the Long Range Planning Committee, was than introduced. Mr. Hewins then presented the “Capital Improvement Budget” as developed by the Long Range Planning Committee. Mr. Hewins pointed out the need for defining maintenance versus capital expenditures so LRP would have better direction for what to include in the forecasted utilization of Capital Funds. Considerable discussion took place concerning the various projects included in the “Capital Improvement Budget”. It was apparent that many decisions must be made by the BOD prior to expending large amounts of capital funds. It was however, agreed that our capital assets have suffered many years of neglect due to our lack of available funding during those past years. The formation of the town has enabled us to begin the long process of correcting that neglect as long as there is a predictable source of funding. After some discussion it was agreed that this committee understands the BOD has approved the expenditure in 2009 of $10,000 to replace two fuel tanks at the CC Golf Maintenance Shop, $4500 to install two exhaust fans in the Golf Maintenance Shop, $6500 for irrigation supplies and seed for the Cedar Creek Park Ball Field, and $5,000 for a fuel tank at the Aspen Hills Maintenance Shop. The planned expenditure of $6,000 for a new communications system is still waiting resolution. $17,750 has been authorized for the engineering study of our buildings and about $25,000 has been spent on our golf cart path improvements. Mr. King stated that once he receives approval to proceed, on any project, from the BOD then he begins the process of getting the various projects or purchases moving toward completion.
At various times, during this meeting, it became apparent that the various subjects under discussion will be further discussed at the BOD workshop to be held on Tues. Oct. 13 in the Library. This will be open to the rest of the membership.
Meeting adjourned at 5:00 P. M.