Meeting Minutes:

Minutes

Falls Run Community Association Board of Directors Meeting

 

Date:  29 September 2008

 

Time:  10:00am.

 

Members Present:  Toni Brown, Don Webb, Harriet Schrader, Don Horan, Jake Bernard, Chuck Strub.

 

Members Absent:  Jack Mounts

 

I:  The meeting was called to order by the Board President, Toni Brown at 10:00am.

 

II:  Announcements: 

 

a:  Toni Brown announced that Jack Mounts was taken to Mary Washington Hospital and was undergoing tests and observation.

b:  Toni discussed briefly that the purpose of this special Board meeting was to review inputs and prepare a budget for the Falls Run Community Association for 2009.  She asked Don Horan, FRCA Treasurer, to chair the remainder of the meeting.

 

III:  Discussion of the 2009 Budget Strategy Overview:  Don Horan reviewed the budget process being followed for the development of the 2009 Budget with the Board. 

 

IV:  Review of Committee Budget Requests:  In each case, Don Horan reviewed the individual committee requests for funding and the comments/recommendations of the Finance Committee concerning those requests.  Each Committee was given the opportunity to have a representative present their views directly to the Board:

 

            a:  Property & Grounds Committee:   Ann Graf represented the committee and made the following points:

 

                        1/  She strongly urged the Board to fund the Master Landscaping Plan, Phase I, at the requested $50,000.  She stated that this would enable the appearance of the entire community to be enhanced which would benefit all residents.  Which portions of the remaining planned work would be accomplished would depend upon funding. The work to be performed could be broken up into packages which could be individually considered by the Board.

                        2/  She noted that the committee had been prudent in its requests and had not just requested similar amounts as received in 2008 for some items.

 

            b:  Community Center Committee:  Tom Bruns represented the committee. And stated that:

 

                        1/  The Committee agreed with the Finance Committee recommendations except in one case.

                        2/  The Committee strongly urges the Board to fund the surveillance system as requested.  They felt this was a safety issue and would provide protection to residents in the pools and also some ability to detect vandals at the Middlebrook Gate and waterfall area.  The Board noted the absence of a dedicated person to watch this system.

 

            c:  Social Budget:  The Activity Director, Ann Jones, represented the Social Committee.  After a brief review of planned activities, Ann Jones indicated that she had several questions for the Board regarding the budget, the process, and how she handles the social activities of the community:

 

                        1/  Can the money requested for the Social budget not be allocated towards any one event but used to encompass all social events?  Don Horan noted that the budget allocates money to a Social budget and not to any specific event.

                        2/  Why were some events recommended for approval and others for disapproval by the Finance Committee?  Toni Brown stated that she felt the Holiday Gala comments by the Finance Committee were editorializing and unnecessary as they did not relate to availability of funds.

                        3/  Can we discuss the use of funds as a form of subsidy and come to terms with what that means to the Social budget?  After a discussion where past use of funds to reduce event cost to residents was noted and the Board actions from 5 April 2006 approving this type of funding use mentioned; Harriet Schrader made a motion, seconded by Toni Brown, that the Activity Director be authorized to spend allocated funds as seen fit for social activities including using funds to reduce social events costs to residents by supplementing event fees provided the total expenditures do not exceed the amount authorized for the Social budget.   The motion failed to pass 3-3; Don Webb, Jake Bernard, Chuck Strub opposed.

 

            d:  Computer System Budget:  This was reviewed without significant discussion.

 

V:  Open Forum:  A spirited series of comments regarding the Board action noted above regarding the Social budget and use of funds ensued.  Most expressed strong support for the Activity Director and indicated displeasure at the Board’s action.

 

VI:  Use of excess retained earnings:  Don Horan reviewed the FRCA financial outlook for 2008 and stated that we would end the year with about $470,000 in retained earnings. This amount of retained earnings exceeds IRS guidelines and must be reduced.  He stated that the major reason we were in this situation was that the revised audits for 2005 and 2006 after the discovery of the Koger thefts revealed the true financial situation.  Don believes that $250,000 should be retained in bank accounts and the other $180,000 utilized.  Possible ways to use this money were:

 

            a:  Move money to the Replacement Reserve.  Discussion indicated that we are generally on track in contributions to the Replacement Reserve based upon the Mason & Mason study.  However, that study only assumed 3.5% inflation and this could lead to underfunding due to higher than anticipated prices.

            b:  Spend the money at this time. 

            c:  Reduce resident’s monthly assessments.  It was noted that without the deficit budget for 2008 resident’s assessments would have been $148 per month instead of the current $140.  Also, running a deficit budget is the only way to reduce this excess retained earnings.

            d:  Some combination of the above.

 

VII:  Draft Replacement Reserve Budget for 2009:  Don Horan reviewed this document with the Board.  He recommends it be adopted as is even though there is a high probability that item 9 [Storm Water Drainage System & Riparian Restoration] and item 10 [Streambank and Pond Evaluation] may be handled by Pulte/Del Webb in order to comply with Stafford County requirements before release of bonds.

 

VIII:  Review of Finance Committee’s Recommended 2009 Budget:  This document, dated 25 September 2008, was reviewed by the Board line by line.  The Board tentatively took the following actions on the items noted.  Any line item not mentioned was not modified by the Board during their review; however, some category totals must by modified due to Board actions and are not reflected below:

 

            a:  Line 15 – Resale income:  Reduced from $15,000 to $10.000 due to current real estate market.

            b:  Line 18 -  Cox Marketing Income:  Reduced from $15,000 to $12,000 due to market penetration by Verizon.

            c:  Line 48 – Social Budget:  Raised from $12,000 to $15,000.

            d:  Line 59 – Outdoor Trellis/Railing Repair:  Raised from $2,000 to $25,000 due to extent of job and quotations received from possible vendors.

            e:  Line 61 – Sidewalk Expansion Joint Repair:  Reduced from $5,000 to $0 due to complexity of repairs needed and possible use of Replacement Reserve funds.

            f:  Line 63 – Security System Maintenance:  Reduced from $7,500 to $3,000.

            g:  Line 65 – Street Light Maintenance:  Raised from $4,000 to $6,000.

            h:  Line 68 – Cleaning Supplies:  Raised from $0 to $2,000.

            i:  Line 72 – Waterfall Maintenance:  Reduced from $4,000 to $3,000.

            j:  Line 73 – Gate Repairs:  Reduced from $5,000 to $3,000.

            k:  Line 78 – HVAC Repairs/Maintenance:  Reduced from $7,500 to $5,000.

            l:  Line 94 – Landscaping:  Raised from $0 to $10,000 for erosion control.

 

IX:  The Board agreed to meet again on 8 October 2008 at 10:00am to continue work on the 2009 budget.

 

X:  The Board adjourned to Executive Session at 2:20pm.

 

 

THOMAS J WHALEN

Recorder