Finance Committee Minutes: August 15, 2017

Hidden Valley Lake Finance Committee
Meeting Minutes
August 15, 2017

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

Members Absent: Kyle Packer

Board Liaison: Bob Starks

Guests:   Bruce Keller

Approval of the June Finance Committee Minutes 

Motion by: Jennifer Reuter
Second by: Bonnie Starks
Voting record: all in favor

Review and Approval of the June & July Financial Reports

Questions presented in advance by John along with responses from Moe and Bruce are available in Appendix A. Additional questions from MaryAnna, Bonnie and Linda are included at the end of the list.

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

Report from Bruce Keller – Bruce distributed the first draft of the 2018 budget and asked everyone to review it and submit questions before the next meeting. He noted that the YTD numbers would be impacted by upcoming expenditures for paving, tree removal and required Crystal Lake dam upgrades. He also indicated that our salt supplier has waived the annual minimum purchase requirement fee for 2017 as we have signed a new contract with them. Bruce also recommended that the paving of the new handicapped parking spots in front of Willies be accelerated because the gravel base has settled and compacted better than expected.

Report from Bob Starks – Bob has agreed to chair a new task force focused on developing fund raising strategies for new outdoor activities and facilities. The group is considering having project initiators raise development and maintenance funds rather than have these funded by POA dues. If approved, the likely organizers of such projects would be the Civics Club. The focus will include new amenities for senior residents.

Old Business: John noted that there were errors in the financial information (dates and totals) presented in Echoes. Bruce will review the submission procedures to ensure accuracy in the future.

Since he was ill for the last meeting, John asked the committee to review how we determined the interest rate HVL is charging HVGC for the tractor loan. The rate was set to cover the opportunity cost of lost interest on the funds.

New Business: Main Source Bank and First Financial Savings are merging. As we maintain accounts at both banks, our total would exceed federal bank insurance guarantee limits. Bruce will investigate establishing a relationship with another bank to redistribute funds and present a report in October.

Jennifer Reuter presented and reviewed the comparative HVGC financial statements for the first half of 2017. Overall, net profit is lower for the first half of 2017 than for the comparable period in 2016 with the majority of the difference due to timing of insurance payments and prepayment of chemicals and fertilizer. Overall, membership/dues are stable. Income from golf activities, the pro shop, and the snack bar are slightly higher this year. Outing income is up for the first half of the year, but will likely be offset with some 2nd half cancellations. General expenses are up due to plumbing maintenance in the clubhouse, upgrades to the website, and the previously mentioned prepayments for chemicals. Equipment maintenance is down due to new capital purchases (golf carts and tractor). The planned capital replacement of the pump house was $9,500 less than anticipated.

Motion to accept the 1st half HVGC P&L statement:

Motion by: Bonnie Starks
Second by: MaryAnna Taylor
Voting Record: all in favor

Motion to Adjourn

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

Meeting adjourned at 7:00 p.m.

NEXT MEETING TO BE HELD ON TUESDAY, October 17, 2017 at 6:00

Appendix A – Questions on June/JulyFinancials

June questions from John
On the vehicles, it appears only small amounts appear for the second quarter of 2017 except for the $556 for a boat seat bracket. So, what is this?  John these were brackets and seats bought for the Lake Patrol Boat.

Can some of the funds allocated/adjusted be used for the repair of the Alpine Drive land slippage of $20,000 +/- rather than from the emergency fund?  Bruce can determine that – I have not received the bill as of yet.

On the exception report, I believe a line should be added for admin fees income which was over the budget for the month by $2.325. (actually $3200 over). Year-to-date we are over the budget by $8,710 ( $17.650 over), so I wonder if the fees could be $17,000 for 2017?  Sorry, Missed adding to exception report.

Good news?  We are over the budget for the year-to-date by $93,000 plus add in the $20,000 paid to HVGC for the tractor. Add to this additional assessment fees projected for the last half of 2017, so maybe I am too optimistic, but doesn’t it look good for 2017?  I agree.

July questions from John

Another beating the budget month in July by $14,000 and better yet year-to- date by $98,000. Am I too encouraged by this or are there some unforeseen items which might temper by enthusiasm? Bruce would have a better handle on that. I know of the Alpine slip that was fixed about $24,000? I will let him answer that. [Bruce Keller] Most of the big stuff left will come out of escrow, i.e. paving and Crystal Lake.

My basic questions for July refer to the charges as found on page 38 from Visa. I can’t read an explanation on the $3,526 charge from BYO Playground as listed at the bottom of page 38. Can you explain what this is for?  And if it is for a capital expenditure, would it not come from the escrow funds? Actually that is a shade structure that was purchased and will be reimbursed by the Civic Club. You will notice a note on the escrow sheet about the expenditure. It was accounted for as a capital item under swimming pool/beach since it will be owned by the POA. Check to date has not been received.

So what is a MailChimp charge and is it a monthly charge? Mail Chimp is our old list serve type service and we pay a monthly fee for that service. Allows us to send unlimited broadcasts to all.

Questions from Linda

Are the charges labeled NPC related to bank handling of monthly prepayments? Yes.

To what does the $4,938 deposit on the July statement refer (pg. 4)? It is labeled as HVL first billing pull. During the billing month, we have residents who  have an auto withdrawal taken out of their account for dues. We pull these on the 5th and the 25th of the billing month.

General question – our auditor has requested that someone other than Moe do bank reconciliations periodically throughout the year as an internal control. Has this been done this year? Bruce – has already done this 3 times this year and will also do July since this is a billing month.

On page 11 of the June exception report there is a line item that says “Adjustment to correct wrong actuals for current”. What does this mean? Moe –  I took the budget amount and divided by 12 months to equal budget, but I had to adjust that since the increase was coming in July and not the beginning of the year. This account 5010 is where the billing is generated, does not have cash actually received. That is reflected on the Income sheet. I just adjusted that number to reflect the correct amount.

On pg. 16, there is a $13,000 discrepancy between budget and actual in the Marina/Maint./Repair account. Is this due to the purchase of floating docks and if so, shouldn’t this be capital rather than expense? Yes, this will be adjusted and moved to escrow.

July statement – To what does the “mapping work” like item on the exception report (pg. 12) refer? Bruce- this was a special color- coded map detailing current land usage develop for the Land Use Task Force.

Questions from MaryAnna

What is the $3,527 expenditure listed as playground equipment? See response to John’s question above, this is for the shades structures on the beach.

General – there have been 9 write-offs due to sheriff sales in the past few months. Is this more than usual? Bruce – about the same as we have experienced over the past few years. The good news is that some of the properties that have been vacant longest are being sold. Bruce has been contacting banks when properties are removed from the preliminary sheriff’s sale lists and issuing fines for violations to HVL property rules. He gave an example of the A-frame on Ventura that has been vacant for 8 years.

On the July exception report, there are reversals of fines granted by the Judicial Committee. Why? Bruce – the Enforcement Officer is issuing significant fines for major violations of HVL property rules in order to get the violators to attend Judicial Committee meetings to discuss the fine(s). Fines may be reversed after the violator has corrected the infraction.

Questions from Bonnie

Did the expenditure for water wheel repair relate to the balance issue that we had several years ago? Bruce – this was for painting and general maintenance and was not related to any structural problems.