Contents
1. 2014 Operating Results
2. Reserve Fund
3. Borrowing for the Next Road Project
4. Long Range Plan
5. 2015 Budget

The Annual Meeting was held on November 18th, and there were somewhere between 100 and 150 residents in attendance.  There were a few items worth noting.

1.  2014 Operating Results

The figures presented for 2014 were projections to the year end and subject to adjustments. The slides containing figures can be found here starting on page 27 of the presentation: Annual Meeting.   Highlights of the 2014 results were as follows:

Expenses were higher than expected due to expenditures deferred from 2013 that were not in the budget, storm maintenance (primarily for snow removal), the $35,000 spent on the Immortology study and unexpected storm drain repairs. But income was slightly higher than expected, too. The numbers are still fluid, but the projected deficit for the year is around $40,000. This amount will be covered by dipping into the Operating Reserve.

As noted in last month’s summary, the Operating Reserve is somewhere between $135,000 and $160,000, so it appears that any deficit we incur in this year’s operations will be adequately covered and that we will not need to access the Reserve Fund.

2.  Reserve Fund

The Reserve Fund is projected to be at $428,000 at year end 2014 and at $891,000 at year end 2015.

We contribute approximately $490,000 per year to the Reserve Fund out of our Annual Assessment (our yearly POA dues). That contribution usually takes place at the beginning of the calendar year after the majority of annual assessment payments are received.

3.  Borrowing for the Next Road Project

Bill Colton presented a proposal to borrow money to fund the next road project as opposed to waiting to accumulate all the necessary funds in the Reserve Account. The next project would most likely be the stretch of Governors Drive between the end of the first project and the intersection at upper Morehead. This was discussed in the August and September Board meetings, and I did a write-up on this topic in the September meeting summary here:  9/16/14 Meeting Summary  The reasons given for borrowing were as follows:

• Savings in constructions costs; which the Board has been told are expected to rise over the next four years.

• Savings in maintenance costs that we would otherwise incur repairing that stretch of road over the next several years.

• The Board feels that these savings would more than offset the interest cost on the loan.

• The Board feels that having the road completed earlier would improve the community and help the home re-sale market. It believes that the condition of the roads has stopped people from buying homes here and has, in general, negatively affected our selling market.

The Board has the authority to borrow money on behalf of the POA without the requirement of a vote or other community approval. However, even though community approval is not required, this presentation made it clear that the Board would like to obtain some indication of consensus from the community that it supports the concept.

The numbers presented can be found in the Annual Meeting slide presentation starting on page 39. However, this is just the outline that accompanied Bill’s oral presentation. It might be best to wait for the presentation that the Board sends out to the entire community, to read that information and then to offer any comments to the Board.

Assuming the Board feels comfortable pursuing this option, the next steps would be to obtain a firm loan proposal and more accurate cost estimates for the next project.

4.  Long Range Plan

The most recent Long Range Plan, approved in April of this year, was mentioned during the meeting. The Board is adopting a new attitude towards this plan. In the past, the plan was completed every four or five years, and the Long Range Plan Committee was not a standing committee. Rather, it was created only when the need for a new plan arose.

The existing plan recommends that it be reviewed every two years for possible updating. But the committee is not only still in existence, it has been reconstituted with a large number of new members. Perhaps the plan will be revisited more often than every two years, but I suspect we will hear from the Board if that is the case.

I believe these names of the new committee members were approved at the October meeting, but there was no mention of this in the Splinters summary. I neglected to write all of the names down either at that meeting or the Annual Meeting. But they will be in the October Board minutes; which will be available after the December Board meeting.

5.  2015 Budget

For those who are interested, the full 2105 budget has now been posted to the web site and can be found here:  2015 Budget.  The budget you received in the mail with the ballot is condensed; because that is the minimum requirement of the NC Planned Community Act.  The link above will take you to the full, detailed operating budget.