Finance Committee Minutes: August 15, 2016

Hidden Valley Lake Finance Committee
Meeting Minutes
August 15, 2016

Members Present:  John Reiniger, Bonnie Starks, Mary Anna Taylor, Jenifer Reuter, and Linda Hartmann

Members Absent: Kyle Packer

Board Liaison: Bob Starks

Guests: Bruce Keller

Approval of the July Finance Committee Minutes

Motion by: Jennifer Reuter (subject to correction of Second by name)
Second by: Bonnie Starks
Voting record: All in favor

Review and Approval of the July 2016 Financial Reports

Motion by: Mary Anna Taylor
Second by: Bonnie Starks
Voting record: All in favor

QUESTIONS

  • John Reiniger August 2016

The Main Source payroll account for the first half of 2016 was about $50,000 per month.  I know some months have five weeks, but why did we have payroll withdraws of $96,600 in June and $70,200 in July?  June (Five weeks) , July and August will all be higher due to additional pool employees and the payout of an employee who left and received additional pay for vacation, severance.  The dollar amount will go back down in September.

Why were additional monies paid out for wages – general for employee who left? Yes – .see answer above

I have worked up a report for estimated cash balances at the end of the year.  Pease review and correct as necessary.

                                                                       (In thous)

     Cash – 7/31/16                                         $1,278
     Deferred income – dues                      (   723)
     Deferred income – golf course         (     76)
     Performance bonds                             (     10)
     Escrow due year end  per report    ( 126) +25 for Crystal Lake which is not showing paid out) = (101)
     Additional escrow – Security Cars & Crystal Lake & Dredging   (60) ( 60) +(25) = (145)

Budget for last five months 2016:      Thru      Year     July

          Income   2,178   1,320                          858 + 44 credit on dues 2017= 902
          Expense 1,843   1,184                          (   659)
          Emergency Funds                                (   325)
          Estimated cash 12.31/16                    $     157

This has to be reduced by:
44)  credit for dues paid for 2017

My estimated cash based on your numbers above is $97.  Our budget for 2017 already shows a deficit of $57K .  No money for any additional projects to be completed other than paving, dredging, picnic tables and fitness equipment for 2017.  Just my input.

Bruce Keller noted that the correct amount for Crystal Lake Expenditures will be closer to $45,000 than the $25,000 noted by John.

Jennifer pointed out an error in the budget for Road Repair and Maintenance in the Street and Parks Master Report (pg. 17). Linda noted that the YTD budget for this account was listed as $20,600 on the detailed report on page 39. Bruce indicated that the $20,600 amount was correct and noted that the actual expenditure of $22,086 includes pending reimbursements from REMC and VRUC.

Linda asked for clarification on the $1000 payment to Cincinnati Insurance Company labeled as deductible for ins. Parrish. Bruce indicated that this was related to the lawsuit Parrish filed against HVL.

Report from Bruce Keller

Bruce indicated that we are within $14,000 of expenditures at this time last year with the only remaining major expenditure projected for this year being dredging. The dredging contractor has asked to do both this and next year’s budgeted dredging this fall, but the 2017 planned work will not be paid until next year. Bruce’s assessment is that we are in good shape for this year.

Report from Bob Starks

Bob presented a copy of the HVL Operations Manual (Ethics Manual) along with the Project Request Form and suggested that the form be included as a part of the manual. On behalf of the BOD, he asked for finance committee recommendations for use of the Project Request form. (See discussion under old business.)

Linda also suggested that departmental purchase order approvals be defined as a documented procedure.

Bob indicated that the BOD is considering hiring an attorney to review the codification of our by-laws and Deeds, Restrictions and Covenants to clarify and remove redundancies and discrepancies. Bonnie asked what the estimated cost would be for this work. Bob said that it was not finalized, but that the planning estimate was around $10,000. Discussion followed on the example of ATVs and golf carts where there are three different places/rules in our existing documents and differences between old/new document revisions and between our bylaws and state law.

Bob stated that our Articles of Incorporation will be refiled with the state after the public vote to approve codifying the 15% approval rule.

Bob asked for committee recommendations on the timing of a dues increase. John indicated that we need to have updated 2017 budgets and escrow statements before we can finalize this decision and that this is planned for the September meeting. Bruce was concerned that there would be insufficient time to roll-out and get BOD approvals for a January dues increase.

Old Business:

  • Rate increase: John asked the committee for their recommendations on a rate increase. Jennifer felt that an increase could be postponed until mid-year based on projected end-of-year positions. Per John, Moe feels that a January increase is needed. John questioned if a rate increase should be assessed by lot or by membership. Bruce indicated that there are 2036 members vs 3300 lots. Linda noted that increased costs relate to services that relate more to individuals rather than number of lots owned. Since lot owners also pay a membership fee, Bruce recommends that any increase be tied to membership rather than lot ownership.
  • Escrow: The document was updated as requested by the committee in July.
  • Budget: Linda discussed specific items on the proposed 2017 budget that may need to be revised. Bruce will discuss these with Moe.
  • Security Vehicle Purchase: Linda discussed the estimated costs and savings related to the purchase of three new vehicles and noted that the costs to modify the vehicles for use as security vehicles was not included in the escrowed amount. With the anticipated fuel and maintenance savings, there is still a slight increase in costs over the current method of leasing vehicles from the county; however, Bruce and Bob indicated that there are currently no county vehicles available for us to lease, so the issue of purchase vs. lease is moot. Linda suggested that monies be moved from the escrowed Property Purchases for 2016 to the security line.
  • Suggested usage of the Project Request Form: As requested in the July meeting, Linda submitted proposed guidelines/circumstances where usage and approval of the Project Request Form should be required. Suggestions were 1. Any new capital equipment purchase, 2. Major, non-emergency expense items not previously considered in budgets or escrow, 3. Changes in financing strategies for capital expenditures, and 4. Changes in land usage. Bob asked about dollar limitations for new capital expenditures. After discussion on dollar limits, new vs. replacement equipment, emergency vs. non-emergency expenditures, non-recurring expenses vs. rebidding recurring items, specific examples like road slippage, the tree farm, the pickleball court, and the security vehicle purchase, various dollar cut-offs were suggested for each category. We reviewed the original intent of the form to force requestors to plan and budget for ongoing maintenance costs. Bob thought that a single cutoff was better than different numbers for each category. Bruce suggested $10,000 regardless of whether it is an expense or new capital item (except for any new project/land use change). The dollar limit would be based on total anticipated expenditures over a 5 year period rather than initial cost. Linda also noted that the Finance Committee is available to help committee members complete the financial analysis form.
  • Golf course financials: Jennifer noted that the golf course has 282 members. They have completed the cart barn and path paving projects. Income is $12,000 over budget and expenses are on track. Bottom line numbers are consistent with last year. $30,000 has been escrowed each year for new equipment. New members tend to be younger, outings are booked, rounds of golf are increasing.

New Business:

none

Motion to Adjourn

Motion by:  Jennifer Reuter
Second by:  Linda Hartmann
Voting record:  All in Favor

Meeting adjourned at 7:40 p.m.  

NEXT MEETING TO BE HELD ON TUESDAY September 19th, 6:00

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