Treasurer’s Report: 2020

Chairman’s Report: January 2020
January 1, 2020
Annual Assessments
December 31, 2019

Treasurer’s Report: 2020

by Gayle Cleaveland, Treasurer
Published January 1, 2020

2019 was another successful and busy year at Palmetto Dunes POA. The PDPOA is responsible for the operating, security, and maintenance of the common property within the development.

The Finance Committee, along with management, not only monitored the financials, but also engaged an outside CPA firm to perform the annual audit.

Key accomplishments of the Finance Committee during 2019 are:

Reviewed and recommended the 2020 operating budget to the Board of Directors. The total assessment for 2020 remained flat at $1,800.

Reviewed and recommended the 2020 capital budget to the Board of Directors. This budget includes the repair and enhancement of the roadway, sidewalks, and drainage along Sea Lane.

Received an unqualified opinion on the 2018 financials. This means the financial statements were fairly and appropriately presented and in compliance with accounting standards. Each year, the PDPOA has an outside CPA firm perform a financial statement audit. An audit helps to identify weaknesses in the accounting system, reduce the risk of fraud or poor accounting, and assure the members that PDPOA is running in accordance with the financial information they are receiving.

Created a Key Risk document. This document identifies various items that create risk to PDPOA. Some areas of identified risk at PDPOA are funds in excess of FDIC limits, concentration of investments, and litigation against PDPOA. The Finance Committee will review this document annually and make sure the organization has mitigating factors to offset the risk.

Reviewed and updated the 10-year plan. Within the 10-year plan, is the Repair and Replacement Fund. The Repair and Replacement Fund collects monies to be used for the repair and replacement of specific common area components identified in the reserve study. A reserve study evaluates the condition of major assets and amenities, estimates when they will need to be repaired or replaced, and how much that will cost. Ideally, a homeowners’ association wants to have a 100% funded Repair and Replacement Fund. This means the homeowners’ association has enough money to cover all anticipated costs. However, industry experts state that having at least 60% to 70% funded is sufficient. Since PDPOA cannot special access the members, management and the Finance Committee strive to keep the 30-year percent funded between 60% and 70%. Based off this percent funded, management recommends an annual transfer from the operating fund to the Repair and Replacement Fund. The Finance Committee and management set reserve funds at 70% funded, to be reached within 15 years.

Through October 2019, PDPOA is forecasting a positive operating variance of $431,000. Revenue is forecasted to exceed budget by $233,000 (which includes dividend income, permit fees, pass office revenue, and private citation income.) Expenses are forecasted to be under budget by approximately $198,000.

Our overall financial position remains strong, with a management team that has established a strong balance between revenue and expenses and accounting for our finances, allowing our Finance Committee to focus on the future of PDPOA. We are in good hands. If you have any questions about these finances, please contact Matt Nemes at mnemes@pdpoa.org.

— Gayle Cleaveland, Treasurer

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