Summary of Finance Committee Meeting of 17 April 2007
Present:
Finance Committee: John Frisch, Nancy Garner, Dottie Fields, Don Horan, John Lynch, Paul Rankin
Board of Directors (BoD): Mal Malo, Chuck Heath
Contracts: It was noted that the Waste Management contract expires on 31 August 2007. To prevent automatic renewal of the contract for 3 years, 90-days written notice must be given to Waste Management. Therefore, if the trash removal contract is to be put out for bids, written notice must be sent by 31 May 2007. Also, the present contract contains the following clause: “In the event the agreement expires and is put out to bid, as the incumbent Waste Management would have the opportunity to match or beat the competitor’s price.”
Discussion of Finance Committee’s Charter: The BoD recently requested that each committee review its charter and suggest changes for any wording that implies that the committee has governing authority in the community. After discussion, the committee believes that its charter should not be changed. Mal will communicate this opinion to the BoD.
Question Concerning Wind Damage to Fencing at Tennis Courts: Mal asked for the committee’s opinion on whether the repair of wind damage to the fence around the tennis courts should be paid for from Replacement Reserve funds or from operating funds. The opinion of the committee is that the fence repairs should not be paid for from the Replacement Reserve funds.
Discussion of January / February Financial Reports: A collection of questions and comments concerning the January and February 2007 financial reports was prepared by Jean Strub and Don Horan and sent to Armstrong Management Services (AMS) on 16 April. Jim Armstrong responded that he had forwarded them to the AMS accounting department for their action. The Finance Committee discussed this briefly and suggests that a meeting between the FRCA Finance Committee and AMS accounting personnel might be beneficial after the response is received from AMS. It was learned that the March financial reports had been received by the BoD shortly before today’s Finance Committee meeting. Mal will forward them to the Finance Committee.
Investments: The BoD directed AMS to purchase CDs as recommended during the 3 April Finance Committee meeting. However, AMS has been unable to purchase the CDs because the identification presented by the two BoD signatories is not yet satisfactory to the banks. This is being remedied. Paul Rankin said that the mechanism for purchasing US Treasury bills should be put into place so we can use T-bills as another safe investment opportunity. There was general agreement and this will be pursued at a later meeting.
Discussion of 2007 Mason & Mason Response to How Annual Contribution is Determined: During their explanation of their 2007 report on 21 March, Mason & Mason said that the key set of information in determining the annual contribution is the Component Method Funding Analysis, Table 4, of their report. The key point seems to be achieving a matching Ending Reserve Fund Balance in 2026 on both the Cash Flow Method Funding Analysis, Table 3, and the Component Method Funding Analysis, Table 4. It was noted during discussion, however, that the Ending Reserve Fund Balance was always different on the two tables for every year between 2007 and 2025, with the value on the Cash Flow Method Funding Analysis table always lower than the value on the Component Method Funding Analysis table. This point was discussed at the 3 April and today’s Finance Committee meetings with no insight into the answer. A question will be prepared for Mason & Mason asking why it is so important to have the Ending Reserve Fund Balances on Table 3 and Table 4 agree in 2026, but not important for the intervening years.
Status of Community Center Account: John Frisch noted that the memory device he uses for backing up the Activity Director’s data for the Community Center account is not connecting reliably with the AD’s computer. It may be a bad USB port. This is being worked on.