M I N U T E S
WOODLAKE COMMUNITY ASSOCIATION, INC. Board of Directors’ Special Meeting 6:30 p.m., March 30, 2015, located at Spring Run Presbyterian Church
MINUTES I
The meeting was called to Order at 6:35 PM.
II
All members of the Board except for Ray Turcan were in attendance.
III
Motion made and passed unanimously to approve the Junior Spring Break Clinic.
IV
Motion made by Steve, seconded by Del Rio to approve the WSRC Programs Update to include the Crafters Retreat. Motion carried.
V
Motion to add Jenine Phelps to the post elections/ballot counting made by Jerry, seconded by Sharon. Motion carried.
VI
REVIEW OF 2015 FINANCIALS: Review of the 2015 Financials for January and February
Jerry stated the purpose of this segment of the meeting and noted that March was not included because it was not rolled out yet. Jerry told Salina that he had organized her reports to show each department separately with income and expense laid out together for easy reference. Salina noted that there were handouts available for anyone who wanted one. The first page presented was the WCA/WSRC Balance Sheet which notes the financial position of the WCA and WSRC, the changes in payables, additions to fixed assets, cash and outstanding receivables. Salina felt that this was a useful document for showing the overall cash position of the club and going forward she will provide a month by month comparison for the year. Total operating cash is at $191,000. Total reserve was at $389,723. Next the WSRC P/L was examined. Salina reminded the board that for January and February 2015, the board had instructed all managers to use the budgets from January and February 2014. This may cause the numbers to be off from the 2015 budget, but managers were still following the directions that they were given. Additionally, managers were then asked to cut 30,000 from the February 2014 budgets they were given. Membership income showed a decline, but exact figures were difficult to compare to 2014, due to a promotion that gave WSRC members who were also residents a free month of dues in January 2014. There is then a jump in dues from January to February in 2014. Salina stated that membership was working on getting correct figures for January 2014 to be able to compare to what we took in in January 2015. Salina also noted that March is projected to have much higher membership numbers due to people coming in for summer swim memberships. For expenses, Administrative salaries descreased from 2014 and were in line with the 2015 budget. Utilities were high due to 2014 bills being paid in January and Professional Services were also high due to Salina being hired from Farenheight and Cassie taking on extra responsibilities. Studio W showed a loss in January, but recovered in February to be in the black. Expenses for Studio W are stable so there is little risk of not making budgeted numbers for the year. Salina also noted that Studio W also provides a service for the community by housing the cycles for the WSRC and freeing up the SRC Clubhouse for residents to rent. For the WSRC fitness, Personal Training income decreased. Salina explained that this was probably because there is a lack of trainers in the club. Noel has hired one new trainer and is looking for more to help increase sales in
the future. Fitness expenses are over budget due to instructor salaries. Salina has met with Noel to go over figures and be sure that her class schedules in the future will meet budget. Salina reminded the board that we may need to increase the fitness salary budget, as stated when the budget was approved. Salina stated that Noel is also working with membership to track class usage and see if the same members are the only ones attending classes and if more can be cut. DelRio cautioned that proper research is done before classes are cut to make sure we will not lose members because of it. Jerry explained the importance of managers coming to the board with budget concerns before money is spent, so that changes in the budget can be approved if necessary. Managers should not be going over budget without board approval. Program income exceeded budget and expenses were under budget. Salina commended Jennifer Brefeld for revamping birthday party packages and marketing to residents, because this increased income a lot. Aquatics income has increased from 2014 and Karen is making sure there are adequate people signed up for classes and clinics, so that money will not be lost. Expenses reflected a credit from Swim Metro for overpayement in 2014. This money cannot be applied to 2014, because the financials are closed, so it will be reflected in 2015. Salina also pointed out some large expenses that were paid with reserve funds. These included diving board repairs and pool furniture repair. Salina stated that in the future she plans on adding reserve expenditures to the P/L statement, then debiting the expense. In Tennis, salaries were over budget. Salina explained that this was most likely because they did not budget for a tennis manager in January and February, since we have not hired one yet. However, other staff members had to work extra to cover those responsibilities. Salaries have still decreased in comparison with 2014 numbers. The board then moved on to the WCA P/L statement. Salina reported that operating income was lower than budgeted. DelRio noted that this could be because of people paying their assessments late or late payments not being charged yet. Jerry advised checking to see if 10% increase had been added for January and February, even though it would not be applied until April. Salina reported that she would look into this and report back. Salina also noted variances in “other” income and capital income which come from house closing fees, trash income, late fees, mail boxes, etc. Jerry suggested that Salina particularly look at any income area that is showing a decrease from projected, because it is critical that they identify areas where expenses need to be significantly cut if the income is truly decreasing from 2014. Salina reported that there were also variances in administrative salaries, due to a significant amount of personnel changes. While January expenses were lower than budgeted, this was mainly due to unfilled positions within the company. February was closer to expected, but still reflects benefits for employees no longer employed. She stated that salaries could be inconsistent for a few months, but she does keep detailed reports by individual employee each pay period that she can supply for the board’s review. Maintenance salaries were also examined and were shown to be higher than usual due to overtime because there are not enough employees to meet the demands, mostly due to snow removal in the community. John Greis will be hiring seasonal employees to help solve this problem in the future months. A WCA capital expenditure was explained by George to be for an analyzation and report by the Timmons Group to look at shoreline stabilization in Woodlake. This report was approved so that it could be submitted to the County Environmental Division to seek a partnership to help stabilize our shorelines. George also noted that they needed to locate this report so that it could be followed up on. He stated that he would ask Cassie to locate it. Salina brought attention to a transfer of $50,000 from the WCA to the WSRC to ensure that there was enough cash to cover expenses. This will be paid back as soon as possible. Salina then explained that she would like her financial statements ready one week before the board meeting so that the board and residents could view and submit questions and she would have time to get the answers in time for the meeting. She made a request to the Board that they consider moving their monthly meetings to the 4th Wednesday of the month so that this would be possible. Her reasons to support this were to allow time for careful preparation of financial statements, time to meet with managers about their figures, to be able to get extra reports such a membership reports ready, and so that Salina could be prepared to present and answer questions without being overly rushed. She stated that having the meetings on the 3rd Wednesdays make these things very difficult to do well. Salina brought attention to a 10,000 bill for the repair of the indoor pool’s Pool Pak. This repair was approved by the board and already completed. Salina was concerned that there is not enough extra cash to pay this bill and
asked the board for permission to pay for it by reserves or a transfer from the WCA. George felt that the money should stay on the WSRC side of the finances and that she should use reserves if she needs to. Jerry also said she could use the reserves as long as it is clearly documented and the transfer of funds is shown on the P/L. That way it is kept track of and can be paid back when possible. Salina was asked whether she could find the money in the operating budget, but she said that until the loans are refinanced there is no extra cash for this. George then stated that it is logical to use reserves for these kind of expenses, because they are easier to track and justify. Salina also noted the use of reserves for pipe damage from freezing temperatures, truck repair, fixing lights at the amphitheater, and fixing beds at the front entrance. George requested that John Greis called some outside companies and price what their hourly rate would be for labor. This would show how much money we are saving by doing these repairs ourselves. Salina brought a refinancing option to the board that she had obtained from our bank. By refinancing both mortgages to a 20 year loan with a 5 yr maturity, we would save 25,000 per month that would help with paying expenses for the WSRC and alleviate the cash stress. There would be about 3,000 in closing costs for doing this. Jerry asked if the bank would offer a loan without a balloon payment, but Salina said they would only offer a 5 yr on the small loan or a 5 yr or 7yr on the bog loan. DelRio aksed if there would be a prepayment penalty if we refinanced with another bank. Jerry answered that yes, additional fees would apply, but we still need to have quotes from other institutions to compare to our bank. Salina agreed to get more options for the board to review. The meeting then moved to the Member Voice session.
VII
MEMBER VOICE The following topics were brought before the Board: Brandermill’s Club charges $100 for Residents, $300 for Non-Residents Are we in survival maintenance or growth maintenance? What is the worse-case scenario for 2015? Demographics vs. debt
VIII
EXECTIVE SESSION Motion made to move to recess the regular meeting and enter into executive session for the purpose of discussion related to personnel and contract negotiations. Motion carried. Motion made to reconvene the regular meeting, approve action taken during executive session and affirm that no other discussion was held than the stated purpose.
VIII
The meeting was adjourned at 12:00 Midnight.
MINUTES I
The meeting was called to Order at 6:35 PM.
II
All members of the Board except for Ray Turcan were in attendance.
III
Motion made and passed unanimously to approve the Junior Spring Break Clinic.
IV
Motion made by Steve, seconded by Del Rio to approve the WSRC Programs Update to include the Crafters Retreat. Motion carried.
V
Motion to add Jenine Phelps to the post elections/ballot counting made by Jerry, seconded by Sharon. Motion carried.
VI
REVIEW OF 2015 FINANCIALS: Review of the 2015 Financials for January and February
Jerry stated the purpose of this segment of the meeting and noted that March was not included because it was not rolled out yet. Jerry told Salina that he had organized her reports to show each department separately with income and expense laid out together for easy reference. Salina noted that there were handouts available for anyone who wanted one. The first page presented was the WCA/WSRC Balance Sheet which notes the financial position of the WCA and WSRC, the changes in payables, additions to fixed assets, cash and outstanding receivables. Salina felt that this was a useful document for showing the overall cash position of the club and going forward she will provide a month by month comparison for the year. Total operating cash is at $191,000. Total reserve was at $389,723. Next the WSRC P/L was examined. Salina reminded the board that for January and February 2015, the board had instructed all managers to use the budgets from January and February 2014. This may cause the numbers to be off from the 2015 budget, but managers were still following the directions that they were given. Additionally, managers were then asked to cut 30,000 from the February 2014 budgets they were given. Membership income showed a decline, but exact figures were difficult to compare to 2014, due to a promotion that gave WSRC members who were also residents a free month of dues in January 2014. There is then a jump in dues from January to February in 2014. Salina stated that membership was working on getting correct figures for January 2014 to be able to compare to what we took in in January 2015. Salina also noted that March is projected to have much higher membership numbers due to people coming in for summer swim memberships. For expenses, Administrative salaries descreased from 2014 and were in line with the 2015 budget. Utilities were high due to 2014 bills being paid in January and Professional Services were also high due to Salina being hired from Farenheight and Cassie taking on extra responsibilities. Studio W showed a loss in January, but recovered in February to be in the black. Expenses for Studio W are stable so there is little risk of not making budgeted numbers for the year. Salina also noted that Studio W also provides a service for the community by housing the cycles for the WSRC and freeing up the SRC Clubhouse for residents to rent. For the WSRC fitness, Personal Training income decreased. Salina explained that this was probably because there is a lack of trainers in the club. Noel has hired one new trainer and is looking for more to help increase sales in
the future. Fitness expenses are over budget due to instructor salaries. Salina has met with Noel to go over figures and be sure that her class schedules in the future will meet budget. Salina reminded the board that we may need to increase the fitness salary budget, as stated when the budget was approved. Salina stated that Noel is also working with membership to track class usage and see if the same members are the only ones attending classes and if more can be cut. DelRio cautioned that proper research is done before classes are cut to make sure we will not lose members because of it. Jerry explained the importance of managers coming to the board with budget concerns before money is spent, so that changes in the budget can be approved if necessary. Managers should not be going over budget without board approval. Program income exceeded budget and expenses were under budget. Salina commended Jennifer Brefeld for revamping birthday party packages and marketing to residents, because this increased income a lot. Aquatics income has increased from 2014 and Karen is making sure there are adequate people signed up for classes and clinics, so that money will not be lost. Expenses reflected a credit from Swim Metro for overpayement in 2014. This money cannot be applied to 2014, because the financials are closed, so it will be reflected in 2015. Salina also pointed out some large expenses that were paid with reserve funds. These included diving board repairs and pool furniture repair. Salina stated that in the future she plans on adding reserve expenditures to the P/L statement, then debiting the expense. In Tennis, salaries were over budget. Salina explained that this was most likely because they did not budget for a tennis manager in January and February, since we have not hired one yet. However, other staff members had to work extra to cover those responsibilities. Salaries have still decreased in comparison with 2014 numbers. The board then moved on to the WCA P/L statement. Salina reported that operating income was lower than budgeted. DelRio noted that this could be because of people paying their assessments late or late payments not being charged yet. Jerry advised checking to see if 10% increase had been added for January and February, even though it would not be applied until April. Salina reported that she would look into this and report back. Salina also noted variances in “other” income and capital income which come from house closing fees, trash income, late fees, mail boxes, etc. Jerry suggested that Salina particularly look at any income area that is showing a decrease from projected, because it is critical that they identify areas where expenses need to be significantly cut if the income is truly decreasing from 2014. Salina reported that there were also variances in administrative salaries, due to a significant amount of personnel changes. While January expenses were lower than budgeted, this was mainly due to unfilled positions within the company. February was closer to expected, but still reflects benefits for employees no longer employed. She stated that salaries could be inconsistent for a few months, but she does keep detailed reports by individual employee each pay period that she can supply for the board’s review. Maintenance salaries were also examined and were shown to be higher than usual due to overtime because there are not enough employees to meet the demands, mostly due to snow removal in the community. John Greis will be hiring seasonal employees to help solve this problem in the future months. A WCA capital expenditure was explained by George to be for an analyzation and report by the Timmons Group to look at shoreline stabilization in Woodlake. This report was approved so that it could be submitted to the County Environmental Division to seek a partnership to help stabilize our shorelines. George also noted that they needed to locate this report so that it could be followed up on. He stated that he would ask Cassie to locate it. Salina brought attention to a transfer of $50,000 from the WCA to the WSRC to ensure that there was enough cash to cover expenses. This will be paid back as soon as possible. Salina then explained that she would like her financial statements ready one week before the board meeting so that the board and residents could view and submit questions and she would have time to get the answers in time for the meeting. She made a request to the Board that they consider moving their monthly meetings to the 4th Wednesday of the month so that this would be possible. Her reasons to support this were to allow time for careful preparation of financial statements, time to meet with managers about their figures, to be able to get extra reports such a membership reports ready, and so that Salina could be prepared to present and answer questions without being overly rushed. She stated that having the meetings on the 3rd Wednesdays make these things very difficult to do well. Salina brought attention to a 10,000 bill for the repair of the indoor pool’s Pool Pak. This repair was approved by the board and already completed. Salina was concerned that there is not enough extra cash to pay this bill and
asked the board for permission to pay for it by reserves or a transfer from the WCA. George felt that the money should stay on the WSRC side of the finances and that she should use reserves if she needs to. Jerry also said she could use the reserves as long as it is clearly documented and the transfer of funds is shown on the P/L. That way it is kept track of and can be paid back when possible. Salina was asked whether she could find the money in the operating budget, but she said that until the loans are refinanced there is no extra cash for this. George then stated that it is logical to use reserves for these kind of expenses, because they are easier to track and justify. Salina also noted the use of reserves for pipe damage from freezing temperatures, truck repair, fixing lights at the amphitheater, and fixing beds at the front entrance. George requested that John Greis called some outside companies and price what their hourly rate would be for labor. This would show how much money we are saving by doing these repairs ourselves. Salina brought a refinancing option to the board that she had obtained from our bank. By refinancing both mortgages to a 20 year loan with a 5 yr maturity, we would save 25,000 per month that would help with paying expenses for the WSRC and alleviate the cash stress. There would be about 3,000 in closing costs for doing this. Jerry asked if the bank would offer a loan without a balloon payment, but Salina said they would only offer a 5 yr on the small loan or a 5 yr or 7yr on the bog loan. DelRio aksed if there would be a prepayment penalty if we refinanced with another bank. Jerry answered that yes, additional fees would apply, but we still need to have quotes from other institutions to compare to our bank. Salina agreed to get more options for the board to review. The meeting then moved to the Member Voice session.
VII
MEMBER VOICE The following topics were brought before the Board: Brandermill’s Club charges $100 for Residents, $300 for Non-Residents Are we in survival maintenance or growth maintenance? What is the worse-case scenario for 2015? Demographics vs. debt
VIII
EXECTIVE SESSION Motion made to move to recess the regular meeting and enter into executive session for the purpose of discussion related to personnel and contract negotiations. Motion carried. Motion made to reconvene the regular meeting, approve action taken during executive session and affirm that no other discussion was held than the stated purpose.
VIII
The meeting was adjourned at 12:00 Midnight.
