TREASURER’S REPORT - For the Period January 1 thru June 30,2008
Don Backer, Treasurer
1/ Revenue – Cash Collections and Performance
- From January 1 through June 30 we have collected $588,660, which includes $401,626 from current and prior year Assessments, $6,208 from Tax Sale Proceeds, $29,113 from the NRC, $4,882 in volunteer payments from Exempt owners, $9,744 in collections from other receivables, and $137,087 from Supplemental revenues which is the Resort revenue.
- Resort revenue for the first half was almost identical to last year. Resort expenses were below budget for the quarter by $19,122, and we had a Net Operating loss of $39,759, well below the projected shortfall of $59,103.
- For the total operation for the first half, including the Assessment side and the Resort, we achieved a Net Operating Revenues to Capital Reserve of $111,069. There are three primary reasons for this performance. First, we collected 78% of our budgeted annual assessment collections in the first half, second, we held back on spending due to the uncertainty of the TRMA election ballot; and third, we continue to have limited resources in the local area to fill the open positions that we have.
2/ Ranch Expenses
- On the Assessment side operating expenses were $4,651 over budget.
- Most expense categories were either on budget or slightly under budget, with the exception of Payroll and Professional Fees. Payroll was almost $40,000 under budget primarily for the two reasons mentioned above. Professional Fees were over budget by $44,000 and this consists of the use of legal services.
- Expenditures for legal services were for a number of projects which included the dedication of the last 3 miles of the Ranch road to the county, late fee interest rates, gate/real estate/and foreclosure issues, preparation of the TRMA ballot, the IRP procedure and for legal council to provide information related to legal issues at our quarterly meetings.
- The need for legal counsel regarding these and other issues results from the risks coming from the recent lawsuit and newly threatened lawsuits and the need to do preventative maintenance. We must be sure that as we deal with difficult issues and make policy decisions, that we do not increase the risk of further lawsuits.
3/ Non Recurring Expense Charge (NRC)
- NRC payments continue to come in and we received $29,113 in NRC payments during the first half.
3/ Short Term Line of Credit
- During the second quarter Operations borrowed $22,900 from the Contingency Fund for Operations cash flow requirements.
4/ Financial Reports
- I want to remind everyone that all of our financial statements and other reports are available on the web site, and those without computer access may request a copy from the office.
5/ Comments on the 2008 Budget
- The 2008 budget issues will be discussed as a separate topic.
Budget and Finance Committee Report
July 25, 2008
By Don Backer, Treasurer
At this July meeting the Budget and Finance Committee (BFC) would normally present the proposed budget for 2009. This year, because of the TRMA Election Ballot, the presentation of the 2009 Budget has been delayed until the October meeting.
Since the TRMA Ballot has been voted down, the immediate focus of the BFC is to revise the 2008 Budget with budget cuts that can be made for the rest of 2008, within the guidelines that will be established by the Board. We have been analyzing possible budget cuts, trying to be prepared for this possible outcome, and our preliminary findings are that even with all possible budget cuts, we will still need additional funds to reach a balanced budget for 2008.
To understand our current financial situation, and to hopefully answer a number of questions, I will briefly review what has happened with the budget process over the past year:
- One year ago the BFC presented, and the Board approved by unanimous vote, the current 2008 budget.
- This budget required property owner approval for an increase in the Assessment level, and the BFC recommendation was to include an Assessment Ballot in last December’s election package. This would have enabled property owners to approve or disapprove of the Assessment increase at the beginning of this year and if required, appropriate budget cuts would have been made at that time.
- However, the Assessment Ballot was not done in December due to the proposed solution to the pending lawsuit, which was supposed to be concluded by the January Board meeting. The judge subsequently determined that Ballot was to be sent to property owners to accept or reject the amended TRMA, including the Assessment increase.
- However this Ballot also did not happen because the lawsuit was non-suited, and dismissed, but not until the end of February.
- With the lawsuit finally out of the way, the Board did send out the amended TRMA with the proposed Assessment increase to property owners.
- Because of the delays resulting from the lawsuit, we have only five months remaining this year in which to get the benefits from the budget cuts. And, as I said previously, we cannot reduce expenses enough at this point to balance the Revised 2008 Budget.
- The Budget cuts will result in reducing services, and the choice to maintain or reduce services is to be made by property owners. It was necessary to have this Ballot Election before the Board took action to reduce services in order to reduce costs.
- The Board will implement all possible reductions in expenses. However, it is necessary to implement a budget variance assessment of $65 per property owner in order to meet the remaining expenses for 2008.
- The Budget & Fianance Committee will begin meeting in August to develop a 2009 Budget for presentation at the October Board of Directors meeting.
|