Budget & Finance June 18th Meeting

Budget & Finance Committee

Budget and Finance Committee
June 18, 2014
Meeting Minutes

1. Meeting was called to order by the Chair at 7:00 pm.

2. Committee Attendees: Wes Elliott (Chair), Ty Kehrer (Vice-Chair), Nimish Sanghavi, Robin Kinkead, Dale Urbanek

3. Non-Committee Attendees: Wendy Taylor (SRP General Manager), Scott Fisher (SRP Treasurer), Jennifer Edwards and Christina Hjelmquist (SFMC), Sally McShea (resident), Ted Hart (Morgan Stanley Investments).

4. Public Comment / Issues: None

5. No one electronically recorded the meeting.

6. The Committee reviewed the draft minutes from the May 21, 2014 meeting:

a. Ty Kehrer made the motion that, “The Budget and Finance Committee accept the May 21, 2014 minutes as presented.”  The motion was seconded by Nimish Sanghavi.
b. The motion passed with Robin Kinkead abstaining. 

7. The Committee reviewed the financial statements for May 2014:
a. Robin Kinkead made the motion “The Budget and Finance Committee accept the May 2014 Financial Statements as presented”.  The motion was seconded by Ty Kehrer.
b. The motion passed “Unanimously.”

8. The committee reviewed and discussed investments:
a. Ted Hart made a presentation to the committee regarding our investments and ways to better meet our needs:
i. Ted Hart recommended that the committee refocus on laddering our replacement reserve funds out to 5 years, that it was impossible to forecast when interest rates would move.
ii. Ted Hart recommended that a portion of our funds be placed into variable rate (equity) CDs.  After Ted’s presentation the committee confirmed that they had already invested $480,000 in these kinds of CDs through BB&T investments.
iii. Ted Hart recommended that US Treasuries were becoming much more appealing, and that we can select whatever maturity date we want with these.  Ted Hart recommended that these would be good to fill in holes in our replacement reserve ladder after the reserve study is complete and we know what our expected needs are.
iv. Ted Hart agreed to act based off of general guidelines from the committee, instead of only buying specific offerings as directed.  The committee agreed to review the offerings which Ted Hart provides, and provide example offerings, amounts, and maturity dates for Ted Hart to invest the funds.  The committee will also be able to provide this for CDs in advance of maturity so Ted Hart will be able to invest the funds more quickly.
v. SFMC will provide to Ted Hart a complete list of CDs held by the proprietary to ensure insurance limits are maintained.
b. In regards to current investment needs, the committee requested that Ted Hart invest:
i. $140,000 from the Replacement Reserve SBMM account is used to purchase a Discover Bank 5 year CD with a rate of 2% (or similar offering as necessary).
ii. $240,000 from the Replacement Reserve SBMM account is used to purchase a Synchrony Bank 5 year CD with a rate of 2.05% (or similar offering as necessary).
iii. $240,000 from the Capital SBMM (proceeds from GE Cap Fin’l CD) account is used to purchase from Citizens Bank 6 month CD with a rate of 0.30% (or similar offering as necessary).
iv. $245,000 from the Operating SBMM account is used to purchase from Northbrook Bank 3 year CD with a rate of 1% (or similar offering as necessary).
c. For funds not yet available, but maturing before the July meeting, the committee requested:
i. Upon receipt of funds  please invest a total of $744,000 from our Capital fund in certificates or treasuries with interest rates equal to or greater than .3% that mature in a ladder as specified below:    
1. QTR 4 2014  $106,000
2. QTR 1 2015  $248,000
3. QTR 2 2015  $390,000
ii. As funds become available please invest a total of $140,000 from our reserve fund in certificates or treasuries with an interest rate equal to or greater that 2% and a 5 year term.
iii. Please make sure all investment are fully insured and under the FDIC threshold.

9. Wendy Taylor provided an update on the IRS Audit:
a. The auditor had requested additional information, which our lawyer has responded too.  Additional update expected as information is received. 

10. There was a discussion regarding the need for a concrete apron along Tall Cedars to access our maintenance lot / truck storage area.

a. Via email on May 28th, Ty Kehrer made the motion that “The Budget & Finance committee recommends that the Association contract with Epic Concrete to install a new concrete apron along Tall Cedars to access our maintenance lot / truck storage area, with Capital Improvement funds, at a cost not to exceed $12,000.”  The motion was seconded by Dale Urbanek.
b. Via email the motion passed “Unanimously”.
c. The committee ratified this approval at the meeting.

11. There was a discussion regarding the maintenance building project off of Gum Springs road.

a. Wendy Taylor informed the committee that she was still looking for a Project Manager to manage the job, and to provide alternate budgets for the use of the Gum Spring property, or the Tall Cedars maintenance lot for this building.   She was hopeful regarding an upcoming meeting with a former Toll Brothers Land Use manager.

12. There was a discussion regarding the reserve study:

a. Wendy Taylor informed the committee that representatives had already spent 4 days on site, and that the Reserve Study should be available in July.  Wendy intends to get a Draft of the Reserve Study to email out to the committee by July 16th, and the representatives should be here to present and discuss their findings at the Committee’s next meeting on July 22nd.

13. Wendy Taylor informed the committee that the budget presentation would be made at the Committee’s meeting on August 20th, and that the meeting would begin at 6pm.

14. Due to scheduling conflicts, the July Budget & Finance committee meeting was rescheduled to Tuesday July 22nd.

15. The meeting adjourned at 9:00 pm.