Opening Statements 2

Transcription

1 Meeting Agenda Introduction 6:35pm Establish a quorum (25%) 6:45pm Approve 2017 Annual Minutes 6:50pm Opening Statements (Communication / ARB) 6:55pm Financial Review 7:10pm Board Election 8:00pm Adjournment 8:15pm 1

2 Opening Statements 2

3 2017 Funds were spent in the following manner -($684M) / 70% on repairs and maintenance. Items that, in many cases were long overdue. -($287M) / 30% spent on improvements to the community. RESERVE EXPENDITURES Community Enhancements 30% $287 Deferred Repair & Maintenance 70% $684 Deferred Maintenance projects on Club House, Fitness Center (termite damage), swimming pool and pool house, and Mansion (various small repairs) took priority as well as recovering from the tornado damages we encountered. Accomplished improvements at the Club House, new/replaced fencing and painting, added fountains to all our lakes, and lit up the entrance way on Governors Way. As well as resurfacing our tennis courts and adding new screens and a backboard. 3

4 Communication Update Weekly e-blast -Monthly updates in Magazine -Update communication board at the Concord exit -Emergency e-blasts -Focus group meetings Develop alternative communication tools (text program, etc.) -Update owner s for the e-blast system. -Review website deficiencies 4

5 ARB Improvements 5

6 6

7 Financial Review 7

8 Dave Lindsay 30 years with CLARCOR Inc., a $1.5B manufacturer of filters and filtration systems. Publicly owned company traded on the NYSE. Chief Administration Officer Responsible for human resources, risk management, property & casualty insurance, compensation & benefit programs, management development program and a variety of other administrative functions. Retired March Director of Wahl Clipper Corporation, a manufacturer of clippers and shear, from 1999 to present; Chairman of the Compensation Committee. Professional certifications CPA (Certified Public Accountant) and CFP (Certified Financial Planner). B.S. in Accounting from the University of Illinois. Variety of community experiences Police & Fire Commissioner, Chair of Health Care Coalition, Numerous non-profit boards. Originally from Rockford, IL. Moved to Brentwood, TN in June 2004 with relocation of corporate headquarters. 8

9 Treasurer Since November 2017 Initial Actions Assure that appropriate controls in place segregation of accounts signing authority. Review process flows data entry / invoices / dues. Monthly financial statement process Kemper corporate review and sign off Board Review. 9

10 Treasurer since November 2017 Financial Objectives Practice financial conservatism Prepare and implement an annual budget that recognizes both short and long term needs of the community Adhere to accepted business / financial practices tight expense control cash flow policy / discipline multiple quotes for vendor services negotiate, negotiate, negotiate Continuous improvement / improve service and reduce costs Prepare for long term plan that utilizes 2017 engineering study as the basis Transparency and meet with anyone who has questions / concerns and provide whatever documents requested. 10

11 Overview Financial operations are running smoothly Cash position is strong On-site accounting function (KemperSports) is far more efficient than previous arrangement Dedicated efforts of Jodie Anderson (Controller), Matt Reilly (Regional Controller in Chicago), Shawn Richter (Director of Accounting in Chicago) and Jim Fitzsimmons (GM) provide better control, better analysis, and more timely reporting. 11

12 Y/E 2018 Income Statement Forecast 2018 Forecast REVENUES Association Fees 1377 Golf Club Shared Expenses Income 78 Easement Revenue 54 Insurance Clain Funds 0 Other 48 TOTAL REVENUES 1,557 OPERATING EXPENSES GENERAL OPERATIONS/COMMON AREAS Landscape Expense 413 Repair & Maintenance 61 Snow Removal 27 Other 78 TOTAL GENERAL OPERATIONS/COMMON AREAS Forecast SECURITY OPERATIONS Security 419 Repair & Maintenance 43 Utilities 11 Other 3 TOTAL SECURITY OPERATIONS 476 MANSION / FITNESS / POOL OPERATIONS Repair & Maintenance 17 Utilities 33 Other 31 TOTAL MANSION / FITNESS / POOL OPERATIONS 81 ADMINISTRATIVE EXPENSES Management Fee & Payroll 165 Taxes & Insurance 42 Homeowner Relations 29 Other 38 TOTAL ADMINSTRATIVE EXPENSES 274 TOTAL EXPENSES 1,410 NET OPERATING INCOME

13 GOVERNORS CLUB - POA RESERVE ACCOUNT 2018 Forecast 2018 Forecast End of Year Reserve Balance 561,724 Reserve Expenses Incurred in 2017 and Paid in , Additions to Reserve 149, Transfers from Reserve FORECAST RESERVE YEAR END TOTAL $449,215 13

14 2018 Major Unexpected Expenses Expense Analysis Item Budget Actual Variance Gate Repairs $8 $46 $38 Tree Removal $0 $16 $16 Snow Removal $18 $28 $10 R&M Roads $12 $20 $8 Insurance / Deductibles $19 $44 $25 Legal $2 $9 $7 Total $59 $163 $104 14

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16 Y/E 2018 Balance Sheet Forecast 16

17 Shift to

18 Dues There are divergent opinions on dues The members of the ad hoc Finance Committee strongly believe dues should move to $350 / monthly The residents who attached the November Focus Group Meeting generally agreed that $350 / monthly was appropriate. In the last two weeks I ve met with several residents who range from concerned to upset that the Board is proposing an increase to $330 / month. 18

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20 Repair & Replacement Cost GAP Dues & Costs 20

21 Reserve Study Recommended every 3-5 years POA authorized in 2009, 2014 and 2017 Cost of 2017 study.. $12,000 Evaluates assets and estimates future costs to repair and / or replace assets Does not include the cost of new assets The basis for determining annual funding rate 21

22 FINANCIAL PROJECTION Totals for (000's) $330 Dues TOTAL REVENUE $16,497 OPERATING EXPENSES -$14,583 NET OPERATING INCOME $1, Reserve Study Expenditures -$3,726 Est. Reserve Balance 12/31/18 $450 A/R Country Club due 1/15/19 $100 GAP -$1,262 Annual Reserve Funding to Eliminate GAP $140 ($1,262 / 9) THIS ANALYSIS ONLY INCLUDES REPAIRS AND REPLACEMENT OF EXISTING ASSETS NO NEW OR ADDITIONAL ASSETS ARE INCLUDED Revenue includes $150K/year Misc. Income Operating Expenses are increased 2% per year 2019 Reserve expenditures are increased $111K (Board's proposal to include minor road repairs, mansion repairs and completion of Gov Way lighting project). 22

23 $330/Dues Per Month Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast TOTAL REVENUE $1,833 $1,833 $1,833 $1,833 $1,833 $1,833 $1,833 $1,833 $1,833 OPERATING EXPENSES -$1,495 -$1,525 -$1,555 -$1,587 -$1,618 -$1,651 -$1,684 -$1,717 -$1,752 NET OPERATING INCOME $338 $308 $278 $246 $215 $182 $149 $116 $ Reserve Study Expenditures -$211 -$367 -$205 -$566 -$380 -$282 -$683 -$720 -$312 NET INCOME AFTER RESERVE EXP. $127 -$59 $73 -$320 -$165 -$100 -$534 -$604 -$231 Est. Reserve Balance 12/31/18 $450 A/R Country Club due 1/15/19 $100 Yearend Reserve Balance $677 $618 $691 $371 $206 $106 -$427 -$1,032 -$1,262 23

24 2019 Budget Income Statement Percentage Forecast Budget Variance REVENUES Association Fees ('19 Budget $330) ,683 22% Golf Club Shared Expenses Income % Easement Revenue % Insurance Claim Funds 0 0 Other % TOTAL REVENUES 1,557 1,830 18% OPERATING EXPENSES TOTAL GENERAL OPERATIONS/COMMON AREAS % TOTAL SECURITY OPERATIONS % TOTAL MANSION / FITNESS / POOL OPERATIONS % TOTAL ADMINSTRATIVE EXPENSES % TOTAL EXPENSES 1,410 1,494 6% NET OPERATING INCOME % * Accrual Accounting 24

25 GOVERNORS CLUB - POA RESERVE ACCOUNT 2019 Budget Golf Club Loan Payment January , Additions to Reserve 336, Transfers from Reserve -211, FORECAST RESERVE YEAR END TOTAL $674,215 25

26 Operating Expense Analysis (000's) Forecast Budget % Change Department Security $476 $ % Landscaping $413 $ % Administrative $294 $ % General Operations / Common Area $166 $ % Mansion/Fitness/Pool/Tennis $81 $ % Total $1,430 $1, % 26

27 OPERATING EXPENSES Mansion, Fitness, Pool 10% Admenistration 16% Security 28% Repairs & Maitenance 16% Landscape 30% 27

28 Observation We have Reserve Funds, not Restricted Funds By-Laws are clear on this issue. Provides great flexibility to Board(s). Institutions evolve over time to remain healthy they need to periodically review their governing documents. Balance between Board flexibility and resident certainty regarding ability to meet future community obligations is critical Board should make this the #1 priority and bring a recommendation to residents no later than the 1 st quarter community update meeting (March 2019). 28

29 2018 Annual Meeting Minutes 29

30 2018 Annual Homeowners Meeting Minutes Monday, December 17, 2018 The Governors Club held its Annual Homeowners Meeting was scheduled to begin at 6:30 PM on Monday, December 17, 2018 at the Governors Club Palmer Room, 19 Governors Way, Brentwood, TN The meeting was called to order at 6:33 PM by President, Tim Stinson. Board members in attendance were the following: Tim Stinson-President, Greg Cantrell-Vice President, Bill Freels-Secretary, Dave Lindsay-Treasurer and Mel Moore-Member at Large. Representing KemperSports were Mark Freemont-Vice President of Operations and Jim Fitzsimmons-General Manager of the Governors Club. Also, present were Kristan Ward-Community Manager and Lindsey Farmer-Community Assistant. As defined by the By-Laws, it was determined a quorum was present. MINUTES: The 2017 Annual Homeowners Meeting Minutes were reviewed. A motion and second was accepted from the floor. The minutes were approved. PRESIDENT S REPORT: Tim Stinson provided an overview of several of the Association s deferred maintenance projects completed in He also reviewed and clarified the importance of the improvements made in Tim stressed the importance that the condition of the club and golf course have on property values. He reviewed the KemperSports agreement and the associated contributions required by the agreement. He also pointed out that KemperSports had contributed $540,627 more than their contract requires. This covers the period of years COMMUNICATION REPORT: Mel Moore provided an overview of the communication improvements and 2019 communication goals. Goal 1 - Develop alternative communication tools (text program, etc.) Goal 2 - Update owner addresses in the system. Goal 3 - Review website deficiencies ARB CHAIRMAN S REPORT: Greg Cantrell provided an overview of the 2018 architectural improvements completed by the homeowners. Greg noted since the ARB reduced the application fees that homeowners have invested an estimated $4m plus into their homes. Only two out of all requests in 2018 were denied. TREASURER S REPORT: Dave Lindsay provided an overview of, 1.) Projected 2018 results, 2.) The 2018 Year End Reserve Balance and 3.) 2019 Budget. He also reviewed the dues history, 2017 Engineering Study and Reserve / Restricted fund differences BUDGET: The Board and Homeowners discussed the 2019 budget which included a monthly dues increase to $330. Jay Steinberg, representing the ad hoc finance committee, made a short presentation advocating a dues increase to $350 per month. A motion and second was accepted from the floor to reject the 2019 budget. Ballots were distributed to residents to vote with, or against, the motion to reject the 2019 proposed budget. The motion did not carry by the required margins. Thus, the 2019 budget as recommended by the Board became effective BOARD OF DIRECTORS RESULTS: Tim Stinson announced the results of the 2019 Board of Directors election. The new members elected to two year terms were Michael Music, Rick Carter and Rick Lundgren. ADJOURNMENT: There being no further business a motion and second were made to adjourn the meeting. The meeting was adjourned at 9:42pm. 30