Summary of Finance Committee Meeting of 26 June 2007
Present:
Finance Committee: Phyllis Benaman, Dottie Fields, John Frisch, Nancy Garner, Sanya Ham, Don Horan, John Lynch, Paul Rankin, Jean Strub
Board of Directors (BoD): Mal Malo, Bill Nosal
FRCA Account: Questions concerning the 31 May financial reports were sent to Armstrong Management last week. Most of the questions have been answered. Armstrong Management will be reminded that a few questions still need answers. Additional questions concerning the payments to the contractor operating the outdoor pool and payroll preparation will be sent to Armstrong Management. The 2005 and 2006 audits are still pending. Recently discovered information made it necessary to modify the 2005 audit, which had been thought to be in final form.
Investments: It is recommended that the BoD direct Armstrong Management to prevent the 12-month CD at CAB from renewing when it matures on 25 July. Money from the CD should be deposited in the B B & T Replacement Reserve account. The Finance Committee recommends to the BoD that Armstrong Management be directed to purchase two additional 60-month CDs totaling $110,000 using funds from the B B & T Replacement Reserve account. The two CDs should be purchased from banks paying the highest rate of interest, provided that the FDIC coverage maximum not be exceeded during the terms of the CDs. Based on the 20 June CD rates, a 60-month CD for $75,000 at 5.08% would be purchased from Acacia Federal Bank, and a 60-month CD for $35,000 at 5.12% would be purchased from Main Street Bank where we already have a $40,000 CD. The Finance Committee also recommends that Armstrong Management be directed to open a money market account at Firsttrust as a short-term, interest-paying, easy-access repository for operating funds. Temporarily excess operating funds in the Firsttrust checking account should then be moved to the money market account to earn interest. Finally, the Finance Committee recommends that the BoD direct Armstrong Management to establish Treasury Direct at both the Replacement Reserve account at B B & T and the operating account at Firsttrust so that US Treasury bills can be easily purchased from either account.
Budget: It was agreed that, by contract, Armstrong Management should take the lead in preparing the draft 2008 budgets. Draft budgets are due from Armstrong Management to the BoD by 15 August. The Finance Committee will then review the draft budgets. A recommended budget must be sent to the BoD by 30 September. The BoD should announce as soon as possible that input to the 2008 budget is requested from the FRCA committees, the Activities Director, the BoD, etc. This input should be provided to both Armstrong Management and the FRCA Finance Committee.
Contracts: The Finance Committee needs electronic copies of many of FRCA’s active contracts. Don Horan will send a list of needed contract copies to Sylva. Contract copies are especially needed to support the review of the 2008 budgets. The Finance Committee reviewed a proposal from Shenandoah Landscape Services to install three rain sensors on the existing community irrigation controllers. The sensors will prevent the irrigation systems from turning on during or shortly after rain. The Finance Committee agreed that the proposal was acceptable.
2007 Mason & Mason Report: Mason & Mason sent a non-responsive response to our question 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. (See summary for 17 April Finance Committee meeting for more details.) Paul Rankin made extensive calculations relevant to the Mason and Mason Report, and these were briefly discussed. The Finance Committee recommends that the BoD ask for the final version of the 2007 Mason & Mason Report because it will be needed for preparing the 2008 budgets.
Status of Community Center Account: This account is continuously monitored by the Finance Committee. Its status was briefly discussed. It appears to be in good order.