HERONS GLEN RECREATION DISTRICT BOARD OF SUPERVISORS BOARD BUDGET WORKSHOP WEDNESDAY, JUNE 20, 2018, 10 a.m. Card Room C MINUTES
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1 HGRD Board Budget Workshop, June 20, 2018, Page 1 of 7 HERONS GLEN RECREATION DISTRICT BOARD OF SUPERVISORS BOARD BUDGET WORKSHOP WEDNESDAY, JUNE 20, 2018, 10 a.m. Card Room C MINUTES PRESENT PRESENT Chair Larry Cummings X Controller Lynn Garcia X Vice Chair Conrad Weyer X District Counsel Tom Hart Absent Treasurer Don Misener X Vice Chair Finance Jayne Schwarz X Secretary Mary Ann Polvinen X Finance Committee Tom Delache X Asst Sec/Treas Jim Gormley X Clubhouse Maint. SuperInt. Dan Parker X Gen. Mgr. Loraine Vienne X Residents, Sandy Dunham 1 I. CALL TO ORDER Chair Cummings called the workshop to order at 10:05 a.m. II. PRESENTATION OF BUDGETS General Manager, Loraine Vienne Controller, Lynn Garcia Overview GM Vienne stated that the cost of Tennis Maintenance has increased for a yearly basis from $10,000 to $15,000. She noted that the cost of the 5 Th year maintenance has increased to $25,000. The budget shows skipping every other year for the Annual Tennis Maintenance and only purchasing Clay based for the interim years on (3) evaluations from vendors and completing a 5 th year maintenance. She stated they still need to collect the $12,000 each year to cover the maintenance with this format. The Tennis Association has requested discussions regarding the tennis fees due to declining memberships A. Clubhouse Maintenance Cover Page and Budget Assumptions (overview of attachments): GM Vienne stated the Tennis maintenance has increased on a yearly basis. She noted that from inspections done on the tennis courts, it was noted that our staff is doing a good job of maintaining the court so the recommendations noted that we could skip and do every other year maintenance. The 1 st year, we would do annual maintenance. The 3 rd year, we will do the Welch s maintenance. The 4 th year would be skipped, and then they will do the 5 th year Welch s maintenance. We will still collect from the Tennis Association the yearly fee. This will give us the estimated money needed to cover Welch s fees and additional costs for water and labor. Dan Parker noted that Welch s bid from last year, for the same amount of money, that the amount of clay per court went from 5 tons to 3.7 tons. The price continues to increase. Discussions with Sandy Dunham, The President of the Tennis Association: Sandy Dunham reviewed the Rules and Regulations (See attachment). She asked why there is one rule policy for Tennis, and a different one for the other sports. She noted that tennis memberships are declining but the fees continue to increase. Sandy suggested bundling all amenities into one budget. Chair Cummings noted that the original agreement with the Tennis Association was that they wanted to change from asphalt to clay, and they agreed to pay the extra costs. He suggested it should stay the same. Sandy Dunham reviewed the formula on how it was determined for the Tennis Association to pay
2 HGRD Board Budget Workshop, June 20, 2018, Page 2 of 7 the differences in cost from the asphalt to the clay. She noted, that the calculations on the first year was done incorrectly, and the fees were doubled by mistake which is the current fees still being paid and that needs to be reviewed. Supervisor Weyer reviewed the historic reasons for the current fees. He noted that the issues with the asphalt courts for insurance claims due to injuries was another reason for the change from asphalt to clay. GM Vienne stated the fees included cost for water, labor, clay, and the annual Welch maintenance fees, and described the calculations for determining the Tennis Associate fees based on the 5-year plan. Supervisor Polvinen questioned how the fees are paid. Sandy Dunham explained that all fees are paid by the Tennis Association, and that there is a separate fee charged to non-resident members to play tennis on a league. Supervisors discussed the issues, if it should be an amenity to eliminate the Tennis Association fees, and paying a Social Membership to play. Supervisor Misener suggested charging the 94 members to pay $100 per membership. Supervisor Gormley mentioned that the additional costs for maintenance of the tennis courts cannot be paid only by membership dues that would not cover the costs. Supervisor Polvinen suggested putting it into the assessments. Chair Cummings asked for a decision from the Supervisors. Supervisor Gormley made a motion to charge the Tennis Association $10,000 this year, and all Supervisors voted unanimously to approve. Line 6202-Payroll Benefits Supervisor Gormley asked the reason for the decrease. Controller Garcia stated it was because 1 employee has waived taking the insurance. There are only 2 employees in that department taking the insurance. Line 6500-Casual Labor Supervisor Gormley asked the reason for the increase. GM Vienne explained since the windscreens and acoustic Block are so heavy that they pay for extra labor to take them up and down in Spring and Fall. Line 6550-Chemicals Chair Cummings commented on the increase that he thought by going to salt water, this would eliminate the extra costs. GM Vienne stated that salt water does not dissolve the suntan lotion so they still need to do the extra cleanings. Line 7450-Lease Controller Garcia noted the increase is due the Capital lease of the security cameras. Supervisor Misener questioned the number of security cameras being leased and how many we have. GM Vienne reviewed the locations of the cameras being leased. Line 7685-Maintenance, Pool & Spa Supervisor Gormley asked the reason for the decrease, and noted that this year s increase was due to fixing a leak in the pool. GM Vienne stated there is money in deferred for potential leaks. (Break in workshop for lunch at 12:00 pm to 1:04 pm) Line 8300-Service Contracts Supervisor Gormley asked about the costs of the energy management, and is there any money put back into it when it needs replaced. GM Vienne stated the money for energy management needs to be put into the Capital for the future. GM Gormley asked about the EcoLab Pool Equipment and purchasing that in the future. Dan Parker stated that he will be putting that information together for the board to review and that they need to decide on purchasing that equipment. Line 8450-Telephone Chair Cummings asked about the increase. GM Vienne stated it was for new cell phones for Dan and his employees. They decided they did not want to use walkie-talkie s using the
3 HGRD Board Budget Workshop, June 20, 2018, Page 3 of 7 same channels as all the rangers, that it was cheaper and easier to manage to purchase the flip phones for Dan and his employees. She noted in the past, they used their own personal cell phones. Line 8701-Effluent Water Supervisor Polvinen asked the reason why this is not part of the Golf Course Maintenance budget. Jane Schwarz explained the reasons for moving certain items from the Golf Club Maintenance to the Clubhouse budget. GM Vienne noted the discussions on putting gutters on the Range Barn, and she requests that if there is money available for this, not to put it into the deferred budget and to go ahead and install the gutters. Chair Cummings asked for the Supervisor approvals and all Supervisors approved doing the install of the gutters on the Range Barn. Chair Cummings ask about putting in LED bulbs, and he stated it would be 10% reduction in light bills. GM Vienne noted that these changes to LED bulbs should be done all at the same time as a Capital budget. Supervisors request to see one room done first. Dan Parker noted that there are estimated bulbs that would need to be replaced, and the costs could be paid off in less than a year. Supervisors agreed to have Card Room C lights bulbs changed to LED bulbs first. B. Administration Cover Page and Budget Assumptions (overview of attachments): (with Wendy Shea, Executive Assistant to the GM) GM Vienne stated they are looking for Physical Therapy Vendors. She has a list of 50 to contact. Supervisor Gormley noted the issues with finding a Physical Therapy vendor, they need to be in both insurance networks of United Health Care and Blue Cross/Blue Shield. GM Vienne noted that once they determine who to bring into to interview, they can set up meetings with Supervisor Misener. GM Vienne stated the main increases that affected Administration are the 401K participants, Property Insurance, Professional Fees, Northstar, and Client Servers. She also noted, that there are estimated 10 computers that will need to be replaced this year that are not currently in the budget. The Northstar upgrade and training, that needs to be completed this year, is also a significant cost that is not in the budget. GM Vienne suggested with the saving in the current budget, they should do the Northstar upgrade this year since this upgrade is mandatory. She noted they are also replacing the server this year, this server is a Capital item. There are additional monies that need to be added to the budget for postage costs for the Bond mailings for next year s budget. GM Vienne noted that there is $10,000 in the Capital currently as a place holder for a new Website design. GM Vienne suggested for the new Website and bringing this management in-house, to change Wendy Shea s Title to Marketing and Membership and taking over the responsibilities for the News Letter and the Website maintenance, and changing the Board Secretary responsibilities for taking over all committee meetings and notes, and the reception desk coverage as a full-time position with benefits. Line 4920-Concert Series Revenue - Wendy Shea, Executive Assistant to the GM, reviewed the concert series program. The price of the series tickets will remain the same; the package tickets are limited to 130 packages since that is the limit in the restaurant capacity. The package tickets will increase by $25 due to increase in food costs. Line 6100-Payroll Supervisor Gormley asked if the increase included the change in Wendy Shea Title change and The Board Secretary s position to full-time. Controller Garcia stated it is in included into the budget. Supervisor Polvinen asked that be added to the notes. Supervisor Misener asked about the
4 HGRD Board Budget Workshop, June 20, 2018, Page 4 of 7 change in Title and responsibilities for Wendy Shea, and GM Vienne explained the future responsibilities and changes needed, that it is only a Title change for now. Line 6202-Payroll Benefits Supervisor Polvinen asked about the 401K increase. GM Vienne stated this increased is due to more participation, and she explained the breakout for the program for the costs to the budget. Supervisors discussed the 401K program. Line 6625-Computer Support Supervisor Gormley asked about the new Website program with Northstar and how that is going to be accounted for. GM Vienne and Controller Garcia noted those costs would be in Computer Support but it s not currently showing in the budget. Supervisor Gormley suggested putting some money into the budget starting in January to have some money available for the new Website design. GM Vienne noted her concerns with hiring Northstar for the design of the new Website due to current issues they have with the current POS System. She mentioned she is not opposed to hiring Northstar, only that they to need to make sure that they use a Club Oriented type Website design and review the vendors and compare to Northstar. Chair Cummings noted that Karen Mars had been doing the Website management for free. GM Vienne stated that for the new Website, we would need to complete training for Wendy and the users, and she reviewed the extra costs for having the management of the Website in-house using Northstar. Supervisors agreed to put a $1,000 a month into the budget starting in January. Line 6830-Contingency Supervisor Gormley noted this was put in as a line item and right now we have to pay for all 15 lots. Supervisor Polvinen asked who is responsible for paying the taxes on the lots when Taylor Woodrow purchases the rights to build on the lots. Controller Garcia explained when the property changes hands, they pay the Bond a head of time and costs are pro-rated. Supervisor Misener questioned when DR Horton buys the lot, do they pay assessments. Supervisor Gormley stated that when the house sells, that is when the assessments are paid. Supervisor Weyer mentioned the homeowner pays the property taxes and for all assessments other than irrigation. GM Vienne asked where they are getting the $100,000 for DR Horton. Supervisor Gormley noted, the only way to get the money back is from the residents. GM Vienne reviewed the current costs to residents. Supervisor Weyer noted there will be a special assessment to residents and suggested using the money from the Fitness Center assessments. Chair Cummings agreed they do not want to charge the residents more. Supervisors agreed to use the excess money from the Fitness Center funds to cover the $100,000. Line 6650-Continuing Education Chair Cummings inquired on the costs, asked what a CAM license is, and is it required for the current GM position. GM Vienne stated it is the Community Association Management License. Supervisor Polvinen and Supervisor Gormley stated that it is recommended the GM have this license. GM Vienne stated that she currently does not have the CAM License but that getting this license was listed in the expenses for her position. Chair Cummings asked what the BMI education is, and GM Vienne stated it is the Business Management Institute Program needed to get her next designation, she needs to take one of those a year to get her Certified Club Executive. GM Vienne reviewed the costs included in her dues. Line 6850-Dues and Subscriptions GM Vienne noted there was a discrepancy for the same renewal in both lines for the CAM License renewal. The one from Continuing Education line item is the same. Controller Garcia noted to make the corrections to the budget for a savings of $279. Line 6902-Employee Appreciation Chair Cummings asked reason for the costs. GM Vienne explained the expenses related to the Employee Holiday party, and the giving away of prizes. The resident
5 HGRD Board Budget Workshop, June 20, 2018, Page 5 of 7 donations go the Christmas Fund and Employee Holiday Fund, and these amounts are not included in the budget. Supervisor Misener asked why the complimentary meals, since there is a value to it, is not included in payroll for the Controller and GM. Controller Garcia stated this is not included in payroll. GM Vienne explained the process for complimentary meals. She also reviewed the new program for the Employee of the Month, and the award would usually be a food or a gas card. Supervisor Misener noted tax laws required on the awards that have a dollar value. Line 7755-Bank Charges Supervisor Weyer asked what fees are included. Controller Garcia stated it is for the credit card fees, fees for the HCH s for online payments, and the auto debits. She also noted the extra charges from the bank when balances fall below a certain level. GM Vienne explained the low levels in the operating fund were due to the change in accounts to a Capital and Deferred accounts. Line 7870-Postage Controller Garcia asked if they needed to include the money needed for the Bond mailings. GM Vienne stated they must have postage needed for the mailings. Supervisor Misener and Supervisor Weyer suggested putting the costs into the Professional Fees for the Bond. GM Vienne noted the need to have better communications with residents. Supervisor Gormley suggested putting $1,400 into November for additional postage budget, and the Supervisors agreed. Line 8300-Service Contracts GM Vienne noted this might not be done by the end of the year but needed to do the ERC Monitoring report to continue the contract. They need to add trees to the left side of the bunkers. GM Vienne noted that Jeff Adair, who is doing the work, recommended that we don t do the report yet, for those costs, until he can do an evaluation with Tim Kortanek. GM Vienne stated the report fees go into the Administration Budget. Line 8550-Uniforms Supervisor Polvinen asked what this fee is for. GM Vienne stated it s for Logo uniform shirts. Supervisors discussed the dress codes. Supervisor Polvinen asked about having casual Friday s, if the administration staff is permitted to wear Heron s Glen Logo shirts to work. GM Vienne stated, that the dress code for the administrative offices is Professional, and having casual Friday s would be ok. Chair Cummings asked if Joe Ceci wearing short sleeved shirts is not allowed due to his Tattoo s. GM Vienne noted, if they wanted to change that requirement, then they would need to change that policy in the Employee Handbook for all staff. Supervisors agreed not to change the Tattoo policy. Supervisor Polvinen asked the reason why the projected amount was so much higher than the actual in the Administration Budget for total expenses. GM Vienne and Controller Garcia noted that the increases in payroll taxes and fees, payroll benefits, and professional fees are some of the line items that were unfavorable to the budget. Controller Garcia stated they are at $ per quarter. Supervisors discussed Salaries and Benefits. Supervisor Weyer asked for clarification of the $2500 performance bonus for the Controller in February. Controller Garcia noted the salaries listed on the left are current, and the 3% salary increases are listed on the bottom of the worksheet (See attachments). GM Vienne explain that is the amount that is budgeted for, and at the point in time that Controller Garcia becomes eligible to receive that amount, then GM Vienne gives her recommendation to the Board, and then the Board has to approve it. GM Vienne stated this amount must be in the budget. GM Vienne reviewed the process for paying of the 3% salary increase that starts at the anniversary date in February. Supervisor Weyer questioned if everyone gets the 3% increase along with the performance bonus. GM Vienne explained the 3% is not a performance bonus, it is a cost of living increase. Supervisor Polvinen noted that 3% goes into their base salary, but the $2,500 is separate. GM Vienne stated this 3% is not automatically given out, that it is still up to the Department Managers to determine
6 HGRD Board Budget Workshop, June 20, 2018, Page 6 of 7 if their employees receive the 3% increase. GM Vienne stated that employees received a 2% to a 3% increase in the past for staff employees. She stated most Department Managers did give their employees the 3% increase, with the exception of employees that received a pay increase to their general salaries, then they did not also receive the 3% increase. GM Vienne noted, in the past, they had staying bonus, if a department manager stayed on during the year, then they received the $2,500 staying bonus, and this was written into their job offer letters. GM Vienne stated that this year, the Board eliminated the staying bonus, and added the performance bonus of $2,500 that Department Managers could receive up to, and also receive the 3% increase in addition to the performance bonus on their anniversary date. Supervisor Misener noted that he does not agree with this process for giving a 3% increase to all employees. GM Vienne noted that the employee evaluation forms are outdated and need to be updated, and the 3% increases are not based on performance. GM Vienne reviewed the department sub-managers. She noted in the IRS Rules, a person has to manage 2 or more people to be a department manager. GM Vienne stated that for Rich Link, they put into the budget to increase his salary due to his responsibilities. Supervisor Misener inquired regarding a written policy and procedures. GM Vienne noted that she will be working on creating a Internal Control Manual, and she has already created the Employee Handbook. Supervisors discussed the Golf Pro program. GM Vienne noted that she asked Nathan Wilson to hire a merchandising manager for the Pro Shop, and adjusting the Golf Pro s schedules to have one in the morning and one in the afternoon to close up the Pro Shop. Supervisor discussed having a PGA Pro, and Chair Cummings noted that having a Golf Pro will increase cost for golf memberships. Supervisors discussed the positions for the Head Golf Pro and Assistant Golf Pro. Supervisor Polvinen asked GM Vienne if severances were paid out with approval of the Board. GM Vienne stated that she talked to Oasis and Supervisor Polvinen, and since the employees were not fired and the business was just making a change, then they were paid a week of severance and a week of vacation. GM Vienne noted, from hiring practices before, that since they were not given a counseling plan for the 30 days that is typically given to correct the behaviors issues, they created the agreement for them to sign that included one week of severance pay and one week of vacation. GM Vienne stated that is shows on the agreement that they would not come back on HGRD for the decision being made and it is noted that they will not be filing unemployment or making a claim for a lawsuit. Debbie has 6 days remaining to sign the form. Dan refused to sign so he did not receive the severance pay. She noted that for the form that is used, the employee has 21 days to review, when the 21 days is up, they have to either sign or not sign it and return the form. They then have 7 days after that to make any changes. Jim signed the agreement and filed for unemployment in another state, and he cashed the check that was offered to him. Supervisor Polvinen stated that since this is a legal problem, then it is an Oasis issue. This is not a Board decision to make. Chair Cummings asked what is Oasis, and GM Vienne explained the Oasis outsourcing program. Chair Cummings stated that anytime there is money being given, then the Board needs to be informed. Supervisors agreed but it s the legal team and Oasis that needs to make the decisions. GM Vienne stated in the handbook, if an employee is fired, they do not receive vacation pay. Supervisor Misener asked about the 3% increase, and how to present it to the residents. He noted that residents on fixed income are not going to want to pay the 3%. Supervisor Gormley stated that the cost of replacing and re-training is more expensive than the 3%. GM Vienne will review the report for salaries tomorrow. Supervisor Misener asked if the budget to budget for the O&M cost center is showing. GM Vienne stated they will review and bring a new cover page for tomorrow s meeting.
7 HGRD Board Budget Workshop, June 20, 2018, Page 7 of 7 III. ADJOURNMENT The workshop was adjourned at 5:54 p.m. /jh APPROVED: Date Larry Cummings, HGRD Chair
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