Together, we are facing a truly unprecedented situation. The global coronavirus pandemic is affecting all of our families, our businesses, our communities, and our way of life. During this time of uncertainty, I wanted to update you on how we’re approaching the situation from a financial perspective at Palmetto Dunes.
First and foremost, our hearts go out to anyone who’s been impacted by the virus, either directly or indirectly. Our thoughts are especially with those who are sick, to whom we extend our heartfelt wishes for a full recovery. And we’re truly inspired by the selfless healthcare workers around the world who are on the front lines working tirelessly to care for people in need.
Second, at Palmetto Dunes, we’re focused on the health and safety of our employees, families and community. All of our employees remain committed to the organization while some work from home and others are operating on a slightly different schedule adjusting to the new norm. This shift has been relatively smooth, and we continue to deliver quality customer service, availability, and security.
Third, as we deal with this pandemic, management and the Finance Committee are mindful the financial impact this will have on the organization. We are proactively monitoring our revenue and expenses during this unprecedented time and updating the 2020 forecast monthly. Due to the restrictions on travel and the economic uncertainty resulting from Covid-19, pass office revenue and CEF revenue are forecasted to come in significantly under budget.
To help offset the expected shortfall in revenue and operating cash flow, the organization submitted an application for the Payroll Protection Program Loan. This program is part of the Cares Act and is offering $349 billion in forgivable loans that small businesses impacted by the coronavirus pandemic can use to cover costs including payroll and rent. If approved, these funds will help offset the loss in revenue.
The Finance Committee created an ad-hoc group to meet with our financial advisor on a weekly basis. The purpose of this ad-hoc group is to make sure PDPOA’s portfolio is well-positioned to rebound from Covid-19 when the economy recovers PDPOA’s portfolio is split between fixed income and equities. The portfolio is very conservative, and the equities are invested in Dividend Aristocrats. Our portfolio has declined over the past few months, but still has outperformed benchmarks.
Several years ago, the Finance Committee established a General Fund which can be used to support operating shortfalls as the result of an unforeseen or unplanned event. At the end of March, the fund’s balance was approximately $2,745,000. If needed, this money is available to support operations due to the anticipated shortfall in revenue in the 2020 operating budget.
Management is also proactively reviewing expenses and as a result, enacted a hiring freeze. Open positions will not be filled until our revenue stabilizes at more normal levels. The organization will continue to proactively evaluate all options to reduce or push costs out to be prepared in the event the pandemic has a much more significant impact to our financial resources.
These are challenging times; your Association is taking a proactive role in managing your resources given the uncertainty on the pandemic and how long it may take to recover. As we go forward, we’ll be sure to keep you updated, and know that we always value your questions, ideas, and feedback. Stay well and I look forward to seeing many of you again.