Finance Committee Minutes, March 17, 2009
The Finance Committee of the Falls Run Homeowners’ Association met this afternoon in the Center.
Personnel in Attendance: Don Horan, Bill Barnes, John Frisch, Bill Trzyna, and Casey Naatjes. Also in attendance, for a portion of the meeting, was Ann Jones.
Variance Between Reserve Fund and Reserve Assets:
It was noted that AMS had not responded yet to our request that they reconcile the variance of $756.07 between the Reserve Fund Balance and Reserve Assets. This is the second straight month with this variance. February Financial Reports have not yet been issued.
Late Fees
The Don Horan message describing late fees for monthly homeowner assessments was circulated for information purposes.
Pond Contracts
We noted that a contract to fix pond problems has not been awarded. A Board decision to wait until the county inspection was noted. One exception may be the repair of an erosion problem in Pond 4a.
Sound System in the Fitness Center
The committee agreed with funding this initiative from the Operating Budget for up to five transmission devices.
Social Check Book Balance Versus AMS General Ledger Account Balance
Bill Tryzna and Casey Naatjes defined a procedure to calculate any variances between these two balances. There are definite reasons for the variance since Check Book Transactions aren’t necessarily reported to AMS with accounting month integrity. It was agreed that we would continue this monthly reconciliation. If the current variance can be stabilized for two successive months, we will make a recommendation to the Board for an adjustment to the AMS Cash Balance.
Purchase of 20 New Chairs
The initiative to purchase 20 new chairs for use around the card tables was discussed. This discussion centered on appropriate decision criteria as to whether early use of reserve funds should be recommended to buy the new chairs.
We noted that there are several reasons why the current lounge chairs should be replaced at the game tables:
Existing chair seats are so low that many of our shorter residents are uncomfortable while playing cards.
Existing chairs are heavy and therefore difficult to slide up to the tables.
Arms on the existing chairs get in the way when playing cards.
Chairs have noticeable wear: some of the backs are “broken down.”
There are some reports that the existing chairs are not comfortable: this may be more a case of ergonomics.
The committee was generally supportive of the initiative to replace 20 lounge chairs with the selected “dining room” style chair. At issue was whether early use of the Reserve Fund was appropriate.
We noted that Risk Pool 4.19 was scheduled for first cycle use in 2014. We noted that over $11,000 is being contributed to that pool each year. Accordingly, by the end of 2009 at least $33,000 (plus interest) would be available for that risk pool.
We noted at least three criteria for early use of reserve funds in any specific risk pool. Those reasons are (1) Safety, (2) Failure to function, and (3) Economic Analysis. A fourth criterion may be the Democratic Process. Simply stated this fourth criterion would mean the Board had determined that the common good dictated use of Reserve Funds for some purpose. The committee also noted that Operating Funds could be set aside to fund these chairs.
The committee did not believe the first two criteria for use of Reserve Funds were germane to the chair issue. However, economic analysis and a desire to maintain high standards of decoration in the Center made use of Reserves germane. First, we noted that a few of the chairs were near the end of their useful life (broken down backs and worn upholstery). Second, we noted that the replacement chairs cost about $330 per chair while the existing lounge chairs cost well over $500 per chair. It seemed likely that the existing chairs would require replacement or reupholstering before 2014 at a significant cost. The new chairs may, at some point, require reupholstering as well, but at a much lower cost. Finally, the committee noted that we did not believe a mix of old and new chairs in the game room would be attractive (even satisfactory). Accordingly, we supported use of Reserve Funds if that is the Board’s decision.
More time was spent discussing the disposition of the current lounge chairs since there is not an effective way to store them at the Center. We recommend the Center Committee place an attractive sale price on these chairs and open up a sale on a first come first served basis to residents. The proceeds from this sale should offset the purchase of the new chairs. If some of the chairs do not sell, they should be donated to good will, but only after an attempt is made to sell them.
Adjournment: 4:50 pm.
Casey Naatjes, Chair