Columbia Association Budget Committee Minutes (September 20, 2007)
Monday October 29, 2007
In attendance:
The meeting began at approximately 7:30pm. The agenda was approved and no other residents were in attendance (for resident speak-out).
James Howard apologized for the late notice of the meeting to the villages, and announced that the next scheduled meeting of the BAC could also be attended by any village representative that missed this meeting. This is scheduled for September 26th.
James distributed a spreadsheet of the budget information from the villages from 2003 - 2007 (actuals) and 2008-2010 (projected). It was later determined that the projections had some formulation issues, and should be ignored. James also explained that in the Expense listing, the “Other operating expenses/donations” line item was redefined during the 2004-2006 time frame.
James stated that the medical insurance issue portion of Charge #1 is actively being worked between the CA and the villages, and may be settled soon. The BAC will monitor this activity.
The meeting was then opened up to the village representatives to discuss their view of items to be re-evaluated for this 5-year update in the assessment share formula for the community associations. Several issues were raised including: 1) census data not really up to date; 2) village personnel salaries have not kept pace with rest of community ; 3) contingency fund cap of 15% was too low and the contingency fund was too complex.
The villages informed the committee that a salary compensation study was in progress, but unfortunately, the final report is not scheduled to be available until too late in the budget process for next year. They are requesting a preliminary report that they would like to have considered as part of both the budget process and the BAC’s review.
Further discussion on the contingency fund revealed that the villages wanted a mechanism to “save up” for larger expenditures scheduled for a future year. The villages are a cash-basis operation on a yearly basis, and so the 15% contingency is their only mechanism to “save”. However, if they drop below 10%, a flag is raised on their operations. This leaves a very narrow band in which to operate and plan. The example given for types of expenditures that are impacted are the re-upholstering of furniture. This is not a capital expense, but the cost is quite high. There was some discussion on sinking funds, capital flow and cash reserves related to this issue.
There seemed to be some confusion on how to put some expenditures into the various budget line items. Reimbursements from the CA to the villages for energy costs, insurance costs, and so on, should be reflected in the assessment share rather than decreasing the line for the energy costs, etc. The actual expenses for these items should be what appears in the budget report.
Villages reported that rental income continues to decline in general.
Villages stated that the Facility Usage Report was not really accurate and was of little use. They would like to see it changed or discontinued.
Following the meeting with the village representatives, Andy Stack remained to discuss the details of the existing assessment share allocation and its derivation and rationale. He also provided a copy of the complete recommendation and the base year detailed calculation methodology which was missing from our database.
In addition to the meeting discussions, copies of correspondence from the following villages to the CA related to the village assessment share formula and base year definition were forwarded to the BAC members in advance of the meeting: Jackie Felker (DS), Barbara Wertman (RH) and OM.
The meeting was adjourned at approximately 9:00 pm.