Contents

1. Road Reconstruction Project
2. Long Range Plan
3. Snow Maintenance/Removal
4. Finance Committee
5. Communications – Splinters Column
6. Realtor Relations – Market Information
7. Safety Committee – Speed Indicators
8. Covenant Re-Write Project
9. Community Activities Committee

1.  Road Reconstruction Project

Bids have been received from three contractors. One was eliminated due to pricing issues. Roy Thornton is going over the bids in detail with the remaining two contractors and should be in a position to meet with the Board within ten to fourteen days. Until then, no numbers will be available for discussion.

2.  Long Range Plan

This is still on hold pending finalization of the cost information on the road reconstruction project. The Infrastructure Committee is still analyzing the Rest of Roads Survey; which also needs to be confirmed before finalizing the plan. The current best estimate for the plan to be available for review is April.

It was noted that no projected expenditures were in the draft plan for IT systems upgrades. Apparently, these will be needed within the next five years and probably should be included. This prompted the suggestion that, since there is time available, all committee chairs should be asked to re-review their long range plans to ensure that necessary expenditures are included in the five year plan.

3.  Storm Maintenance/Snow Removal

The 2013 budget for Storm Maintenance is $50,000. To date, $40,000 of that has already been spent just for January and February; and it hasn’t been a particularly severe winter. In fact, we have had only one mild snowstorm. That leaves $10,000 to cover the balance of this winter plus possible summer storms, hurricanes or December snowstorms. This prompted an extended discussion of cost management and snow removal policies/standards. What follows is my attempt to paraphrase comments made in this discussion:

• With snow removal standards, safety is the first priority. Right now, the goal is to keep the streets clear and passable all the time. Such a high standard can end up costing a great deal of money.

• It was noted that clearing our roads may not be that helpful unless the roads outside the gates are cleared as well. That led to the idea that we might match our snow removal standards to those of the highway department; in other words, simply follow their lead and do what they do.

• Is there a balance to be struck between cost and time it takes to clear roads? Or do we make sure the roads are clear regardless of the cost.

• Accurately predicting winter weather is obviously not possible. Should we simply do the best we can in terms of budgeting for snow removal and, if there is a particularly bad year, have a small, special assessment to cover any additional costs (probably in the range of $20 to $40)? Alternatively, when these costs are high, should we cut costs and services elsewhere to avoid any assessment?

• Given how much has been spent to date on relatively mild snowstorms, are we currently getting the best price for snow removal services? One director suggested that, to answer this question, it would help to look at historical data; none of which was offered during this discussion.

No decisions were made, and no determination was made as to why the current costs appear to be unusually high. It was left for Jeff Allen to obtain recommendations and advice from Bland and to make a formal report to the Board on this subject.

(Comment: I looked at the Storm Maintenance accounts in old statements and found that in 2009, we budgeted $32,000 and spent $46,000. In 2010, we budgeted $46,000 and spent $90,000. In 2011, we budgeted $54,000 and spent $61,000. In 2012, we budgeted $70,000 and spent $4,000. Without more detailed information, it is hard to draw absolutely firm conclusions from these numbers for two reasons. First, they include rainstorms as well as snowstorms. Second, a winter’s worth of snow removal spans two years’ worth of statements. For example, we had a bad snowstorm on December 26th in (I believe) 2010, and the removal cost for that storm would have been allocated to 2010 even though it was part of the winter of 2011. That said, there is probably enough historical information to have a rough idea of how much we spend to clear roads after a snowstorm; and this information would allow a better assessment as to whether amounts spent over the past two months are in line with previous costs.)

4.  Finance Committee

The year end 2012 numbers are still being finalized to ensure that the amounts shown in the Fund Balance and reserves are accurate. There is apparently some discrepancy which needs to be sorted out. Therefore, the numbers that were posted to the web site last month may be slightly off.

As noted last month, the financial statements have been revised, and the January statements are now available for review. The changes have to do with placement of recurring infrastructure maintenance costs within the Operating Statement and timing of the yearly allocations to the Replacement Fund accounts (otherwise referred to as our Reserves). At the end of this summary, I will try to briefly describe these changes.

5.  Communications

In the past, the Board has sent out an e-mail announcing that the “Splinters” column has been posted to the web site. For those not familiar with this item, it is the Board’s official communication summarizing items discussed at Board meetings.

A director claimed that it was not clear that everybody was able to access the Splinters column through a link in an e-mail. Therefore, to ensure that everybody gets their information, the Board decided to put the entire column in the e-mail itself. This will now happen with all future “Splinters” e-mails from the Board.

6.  Realtor Relations – Market Information

This committee has been working on a method of allowing anybody (but primarily realtors) to determine if a house is for sale by spotting an unobtrusive marker from the street. It appears that the marker being proposed is a small, rectangular, flexible magnet (roughly 3 inches by 4 inches) that can be attached to a mailbox. It would have a Quick Response image that would allow realtors to scan the card with their phones and obtain information on the house.

This marker would not stand out, but it would still be easily seen from a car. If approved, owners of houses for sale could use this tool; but only if they wished to do so.

Data from committee meeting minutes state that 39 homes sold this year compared to 30 last year. There are currently 66 homes and 71 lots for sale. Also, new home construction picked up substantially in 2012, and there are currently 17 homes under construction.

7.  Safety Committee – Speed Indicators

This committee is examining ways of dealing with cars speeding within the community. Under consideration is the purchase of up to four speed indicators to be placed at strategic road positions. These would flash speeds to passing cars, hopefully deterring speeders, and also accumulate data. No, they will not take photos or note the identity of the cars or drivers. Rather the accumulation of anonymous data will allow the POA to see just how many cars are speeding on a community wide basis.

This is still being discussed, but the preliminary cost estimate for acquiring and installing these signs seems to be in the range of $20,000.

8.  Covenant Rewrite Project

To date, 704 consents have been received. The magic number is 960. If you have not sent in your form, please do so. If you still need to understand why, here is an explanation:  Covenants Rewrite Proposal

9.  Community Activities Committee

Mary Lou Drake, the chairperson of this committee, reported on the most recent event at the POA Building. For those not aware, it was a combination new resident social and artist open house; allowing everyone to see artwork for sale done by some of our residents. In addition, representatives of Habitat for Humanity were in attendance to talk about their program. Food and drinks were provided at the expense of the community.

The following figures were provided. 102 people signed in. 44 new residents were invited, and 24 attended. The cost to the POA for this event was 27 cents per lot.

(Editorial Comment: That somewhat unusual figure of “27 cents per lot” is exactly what was reported to the Board, and nobody asked for a total expense. It appears to be the way this committee and the Board wish to present the cost of these events; presumably to show that, while the entire community is footing the bill, it is not that much on a “per lot basis”. This is consistent with financial logic given to me by one director to justify the committee’s total budget of $4,400. I was told that this was less than $4.00 per lot and that nobody should have a problem with that.

For those interested in the actual cost, we have roughly 1,200 lots in the community. So the 27 cents presumably translates to a total of $325.00. A similar community-wide metric can be used to look at the attendance. If you take the 100 attendees and deduct related committee members, Board members and the artists, the actual number of independent participants was probably somewhere between 75 and 85. This compares to a total adult population within the community of somewhere between 1,600 and 1,800 people.)

 

Financial Statements – Notes on Recent Changes

The changes that have been made to the financial statements make them much easier to understand. Previously, the problem was that ongoing, recurring infrastructure maintenance expenditures were lumped within the Replacement Fund (Reserve) accounts below the Operating Income/Loss line. Those expense categories have now been moved above that line. From now on, one will be able to more easily determine how well total operating expenses are tracking the budget.

For example, if there is a significant variance in routine road repairs, or storm drainage maintenance, it will now show up in the total Operating Income/Loss figure rather than the separate Replacement Fund accounts. You will no longer have to look at two sets of numbers to determine where we stand against the operating budget.

There is one other change. Each year, our annual assessment income at the beginning of the year exceeds our projected operating budget. The excess represents that year’s projected contribution to our Reserve Fund; primarily for the upcoming road reconstruction project. For 2013, this contribution of $488,714 has already been deducted from the Operating Statement and placed into Reserves. In essence, it is no longer a projected figure that might change due to operating variances during the year.

These changes also mean that one should be able to look at the monthly financial statements and understand them reasonably well without having to read that long explanation I posted last August.