Financial Statements
Last month, I reported the following:
Mike Donoghue reported that the Finance Committee expected a “surplus of $100,000 at the end of the year assuming no unexpected emergency spending during the second half of the year”.
Three months ago, the Finance Committee forecasted being on budget for the year; including the budgeted $300,000 contribution to the road fund. If we are now $100,000 ahead of that forecast, that would be good news. I am still working on determining how this happened. If there is anything further to report, I will do so in a separate post.
I was still in the process of looking more closely at this when the subject was brought up at this meeting. Mike Donoghue reported that, after meeting again with the Finance Committee, it was felt that this prediction should be amended to remove the reference to a possible $100,000 positive variance and indicate that the committee expects to be on budget for the year.
(Editorial Comment: My impression is that, due to several areas of substantial savings (such as snow removal costs) and $24,000 of one-time income from the sale of an easement, there may very well be a positive variance for the year; but that any such funds would be best allocated towards our ongoing list of stormwater drainage and road repairs. At this point, it appears as if our drainage and road repair budget numbers will, due to several unexpected repairs, be maxed out before dealing with all the projects on the “to-do” lists in these two critical areas. If no more funds were available, those unaddressed projects would be put off until next year. Therefore, using funds from any positive variance to help address those projects this year would seem to make sense.)
Long Range Plan
The focus group sessions have been held and a summary of comments posted on line. The focus group for community leaders will be held shortly. The committee’s time line still calls for Board review and pre-approval by October 15th.
The plan will then be made available on the web site for community review, and this will give residents a chance to offer comments to Board members before the plan is given final approval after the Annual General Meeting.
In the context of the long range plan, there was a general discussion about the issue of promoting “one community”; including such topics as providing amenities, having country club facilities made available to the entire community, and creating a “social activities committee”. One suggestion was to put some of these ideas out on the GC Chat page to gauge community interest and reaction.
(Editorial Comment: If you have not already done so, it is probably worth reading the summary of the focus group comments. If I understand it correctly, invitations were sent to over 180 people totally at random. Out of those, 42 people responded with a desire to participate; and all of them were included in the groups. You may or may not agree with the consensus reached on various issues, but it certainly makes for interesting reading.
Certain issues covered in these groups were included in a survey done by the POA earlier this year; which survey received over 400 responses. At least a few of the conclusions reached by the 42 people in these focus groups could arguably be considered at odds with the results of that survey. If some of the more unusual “consensus items” of the focus group participants become a major part of the long range plan, it could be a very interesting document.)
The focus group report can be found here: Focus Group Report
I can’t find the January 2012 survey results on the POA web site, but I downloaded the document earlier this year. If anybody wishes a copy, please e-mail me at:
[email protected]
Contingency Policy
There was a rather lively discussion regarding a proposed policy for handling the “contingency” line item in the budget. The Finance Committee was recommending a policy which tries to limit the use of contingency funds to unexpected, “emergency type” items. However, several directors felt that the Board should have more discretion to draw on these funds for something it felt was appropriate. No specific examples were discussed. It was more the idea that the Board should have the discretion to spend the money on items good for the community.
The contrary opinion from the Finance Committee seemed to be that, if the Board wants to spend money for something, it should be made a line item in the budget clearly showing the nature of the expenditure and the amount spent; and that this is not the function of the “contingency” account.
In the end, the policy was approved; because the directors agreed that the language used ultimately gives the Board the prerogative to deal with expenditures as it sees fit whether or not something is deemed a “contingency” item. Further, it was noted that, if the Board decides to spend more than is allowed in the budget, it simply means that the contribution to the road reserve fund for that year will be lower than budgeted.
(Editorial Comment: If you were confused by that last sentence, then this entire issue might not make much sense. Frankly, it is somewhat confusing and arguably just a case of semantics and accounting practices. Understanding this requires a good understanding of our financial statements. I have been promising a written explanation of those statements, and, believe it or not, I’m about halfway through the attempt. I will include this “contingency” issue in that explanation and try to cover both subjects at once. I hope to have this done in the next several weeks and will send out a separate message once it is posted.)
Budget Workshops
Two budget workshops will be scheduled for early September. These will allow for a limited number of residents to attend a workshop and apparently provide input on the budgeting process. It will be handled on a first come, first served basis. Look for an e-mail from the POA announcing these sessions.
Nominations and the Annual General Meeting
The Nominating Committee expects to announce a slate of candidates in early September. That announcement will include information on the procedures and deadlines for any write-in candidates.
The Annual General Meeting is set for November 12th with the voting to be completed by the 5th or 6th.
The Board has expressed the desire to start the committee recruitment process a little earlier this year and has also expressed the hope that more people will step up and volunteer to help out by serving on a committee.
Regarding the nomination process, one director floated the idea that the POA should consider only nominating a number of candidates equal to the number of open slots on the Board. The net result would be that, if nobody entered the election as a write-in candidate, there would effectively be no election.
There were several reasons given as to why this was not necessarily a bad idea. First, it has become increasingly difficult to find people willing to run; and one of the reasons is the desire to avoid being the losing candidate in an election. Second, anybody who loses will most likely never run again; meaning that we have lost the opportunity to have them serve at a future date. Third, the ability to have write-in candidates means that nobody will ever be barred from running. In other words, such a move would not prohibit an election from taking place.
The idea was floated and discussed; nothing more. No decision was made to pursue the idea. It was simply left for possible future consideration.
GC Realty Property
The Board voted to approve making an offer to buy the vacant land outside the front gate. This is the vacant property that essentially surrounds the current G.C. Realty building (which is being marketed separately). The Board felt that the asking price for the building was too high and so decided to make an offer on just the vacant land.
If the offer is accepted, there will be a period of time for the POA to carry out its due diligence investigations.
In discussing how this purchase might be funded, there were four options presented; obtaining a bank loan, borrowing through a private bond issue, borrowing from our own reserves or assessing the community members. No decisions on this issue were made at this meeting.
During this discussion, there was no mention of the overall strategy or goal in terms of purchasing this property. For example, the goal might be to keep the land vacant simply to protect our entrance; or it might be to eventually sell the land but to tightly control its development to ensure it was to our satisfaction.
I made a separate inquiry of the Board on this subject after the meeting. The answer given was that the intent is to purchase the land to protect the front entrance and with no immediate plans as to its use. The answer further said that, should it be purchased, future Boards could consider using it for amenities depending on cost and community support.
Miscellaneous Issues:
Front Gate to Manly Road Project: Still proceeding along. Expect to have the engineering study and bid packages by the end of November and for bids to be in hand by mid-December. It appears the Board has decided to create an ad-hoc sub-committee of volunteer residents to oversee the engineer hired to be the project manager. The project manager, in turn, will oversee the contractor.
Joint POA/Country Club Committee: Reported that this committee is meeting and discussing items of common interest. It was noted that the idea of a summer pool membership for non-member residents was rejected by the country club. It was also noted that the country club is proceeding with its own marketing program; apparently without any input or assistance from the POA.
Truck Access: Management is still working on a proposed policy for heavy truck access that will minimize wear and tear on our roads. Jeff Allen mentioned that one of our engineers gave the opinion that heavy trucks do not necessarily cause as much damage as we might believe. Several board members countered that it intuitively made sense that heavy trucks would cause more of a burden. One director broached the subject of heavy trucks other than those used in construction; delivery trucks, service trucks, etc; and offered the idea of charging a fee at the gates (based on size and weight) for trucks to enter the community. The logic is that these delivery and service trucks cause wear and tear on our roads, and the fees collected would help pay for road maintenance. The idea did not seem to receive an enthusiastic reception from the other directors.
Pedestrians: A resident addressed the Board regarding what he felt were unsafe practices on the part of pedestrians in the community. These included walking in the street on blind curves; walking two and three abreast in the street, walking with dogs and/or baby strollers in the street and running in the street just adjacent to a sidewalk. The Board recognized this as a problem and felt it might be a good idea to issue a note to club residents reminding them of safe walking practices.
Foreclosures: The Board gave approval for management to institute foreclosure proceedings on three properties. It was noted that the owners had been given more than enough time to make good on paying their dues and that this was our only recourse at this point.
Flags and Banners: This subject was not considered, so there is nothing new to report from prior meetings.
Vandalism: From the management report: “No additional reports of vandalism have been reported since the incidents in July.”
Water Line Construction: The Chatham County Water Department is going to put in a new water line which initially was going to require closing and excavating 600 feet of one lane on Governors Drive. At this meeting, it was noted that the closure of that one lane will no longer be necessary. Instead, the water department will bore underground to place the line instead of tearing up this section of the street.