Finance Advisory Committee – October 2021

By Larry Anderson and Larry Helseth
Finance Advisory Committee Co-Chairs

As published in The View, October 2021:

Instead of our normal report we’d like to use this month’s article to pay special tribute to our retiring Finance Advisory Committee (FAC) Chairman, Bill Wethe.

Bill,

On behalf of the entire SCSH Community, the FAC wants to express our appreciation for your leadership and transformational efforts as FAC Chairman over the last five years. We are in a much sounder financial position because of your tireless and seemingly endless efforts as a leader, mentor, and caretaker of all our financial matters.

With your guidance, the FAC and the Board Treasurers have developed strong policies and procedures that will continue to enhance financial management, while providing confidence and stability for years to come. We all marvel at the number of hours you have devoted to the tasks at hand, your knowledge of our governing documents, how they need to be applied to new issues, and your extensive experience in the HOA management industry. You never lost sight of the big picture, yet no detail escaped your scrutiny.

You have provided Board members with invaluable analyses on a myriad of topics. Your expertise in construction, maintenance, and enhancements to hospitality venues has been a tremendous asset that is going to be difficult to replace.

Enjoy your “newly available time” to visit more often with your family members in Orange County and Arizona, play some golf, and participate in volunteer opportunities in the Coachella Valley and Orange County.

Thank you again for your service and dedication.

FAC Members: Larry Anderson and Larry Helseth Co-Chairs, Bob Jester, Jerry Cavoretto, Mike Whelan, Mike Nilsson, Todd Murphy, and FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, and Don Salvatore.

Contact the author at finance@scshca.com.

Finance Advisory Committee – September 2021

By Larry Anderson and Larry Helseth
Finance Advisory Committee Co-Chairs

As published in The View, September 2021:

FAC Members

Larry Helseth returns to the FAC with the resignations of Bruce Marley in July and Bill Wethe in August. Larry previously served on FAC in 2016 through 2018. We now have seven members and Board approval for a total of nine members. As of this writing, we are interviewing one candidate. We are always looking for owners who have a financial background including accounting and financial reporting and an interest in serving on the FAC or on its Subcommittee on the Reserve Study. Please contact either of the Co-Chairs if you would like to discuss completing an Advisory Committee Interest Form.

Work Completed

During the month of August 2021, the FAC and its Subcommittee continued their work including:

  • Review and recommend Board approval, subject to audit, of the unaudited July 2021 financial statements including the:
    • Combining and combined financial statements and supplemental financial information schedules.
    • Condensed financial information for The View magazine.
  • Review of the year-to-date variance analysis on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (7+5) as compared to the 2021 Budget and the 2021 Forecast (6+6).
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (7+5) as compared to the 2021 Budget and the 2021 Forecast (6+6) provided to the Board.
  • Review and written recommendations to the Board on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the July 2021 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting held on August 20, 2021.
  • Preparation of the monthly written report to the Board for its meeting on August 30, 2021.
  • Review of Q2 2021 HOA insurance market renewal update from the insurance agent with written recommendations for the 2022 Budget.
  • Preparation of articles for Finance News on two new members and Replacement Fund investment in equity index funds.

Work in Process

  • Review and written recommendations to the General Manager and the Board on the drafting of the 2022 Reserve Study.
  • Review and written recommendations to Troon, the General Manager, and the Board on the drafting of the 2022 Budget.
  • Mike Nilsson has volunteered to join the new Ad Hoc Advisory Committee studying the possible expansion and renovation of Shadows Restaurant.

Further Information

Additional FAC Members: Bob Jester, Jerry Cavoretto, Mike Whelan, Mike Nilsson, and Todd Murphy. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bob Jester, Mike Whelan, and Larry Helseth, Chair.

Contact the author at finance@scshca.com.

Change of Investment Policy for Replacement Fund (aka “Reserves”)

By Mike Nilsson, Member
and Bill Wethe, Chair
Finance Advisory Committee

Through December 2020 our Replacement Fund, per the existing Policy, was invested in cash based and fixed income assets. As we all know these investments are earning very low rates, far below construction cost inflation. In December 2020 the Board approved a change in the Investment Policy whereby up to 35% of the Replacement Fund could be invested in a professionally managed basket of low-cost equity investments. In April 2021 the Board approved moving $3 million (about 25% of the Fund) into equities. Almost $1 million was invested prior to July and the balance is to be invested over the remainder of this year. The “basket” is being managed by Comerica Securities and closely monitored by the FAC. The investments are in index funds, mutual funds and exchange traded funds.

To view a copy of the current Investment Policy use the following link on the HOA website:

https://www.scshca.com/wp-content/uploads/2021/04/Signed-Investment-Policy-Approved-12-21-20.pdf

Finance Advisory Committee – August 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, August 2021:

FAC members

On June 28, 2021, the Board approved the addition of two new FAC members: Mike Nilsson and Todd Murphy. Welcome, Mike and Todd! We appreciate your interest in serving our community. FAC has eight members, and we have Board approval for a total of nine members. We are looking for owners who have a background including accounting and financial reporting, and an interest in serving on the FAC or on its Subcommittee on the Reserve Study. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Work Completed

During the month of July 2021, the FAC and its Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval, subject to audit, of the unaudited June 2021 financial statements of the Association including the:
    • financial statements and supplementary schedules.
    • combining and combined financial statements and supplemental financial information schedules included in the Treasurer’s report.
    • condensed financial information of the Association to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the General Manager on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (6+6) of the Operating Fund and Replacement Fund as compared to the 2021 Budget and the 2021 Forecast (5+7).
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (6+6) as compared to the 2021 Budget and the 2021 Forecast (5+7) provided to the Board.
  • Review and written recommendations to the Board on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the June 2021 bank statements, bank reconciliations, and investment account statements.
  • Conference call with Comerica Securities, the Replacement Fund investment manager, on July 23, 2021 to review investment performance and investment recommendations.
  • Regular meeting of FAC held on July 23, 2021, using audio and video conference call.
  • Preparation of the FAC monthly written report to the Board for its meeting on July 26, 2021.

Upcoming Work

  • Review and written recommendations to the General Manager and the Board on the drafting of the 2022 Reserve Study.
  • Review and written recommendations to Troon, the General Manager, and the Board on the drafting of the 2022 Budget.

Further information

Additional FAC Members: Larry Anderson, Bob Jester, Jerry Cavoretto, Mike Whelan, Bruce Marley, Mike Nilsson, and Todd Murphy. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, Bob Jester, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

FAC Introduction to Nilsson and Murphy

By Bill Wethe
Finance Advisory Committee Chair

The Board recently approved the recommendations from the members of the Finance Advisory Committee (FAC or the Committee) to have Mike Nilsson (Mike) and Todd Murphy (Todd) become members of the Committee.

Mike and Todd prepared the following brief summaries introducing themselves to the community residents for those of you who have not yet met them.

Mike Nilsson

Those of you who have been here a bit longer may remember Mike as President of the SCSH Computer Club from about 2008 to 2011. He and his wife, Sue, moved to Sun City Shadow Hills from Beverly Hills in November 2004, when there were only about two hundred homes completed.

Mike is a retired sailor, ski instructor, pilot, off-road racer and swimmer. To fund all those endeavors, he was Executive VP of Sinclair Paint Company. Prior to Sinclair he was Corporate Director of Lear Siegler’s Internal Consulting Group and Manager of Financial Control at Mattel Toy Company.

In the nonprofit area, he has over 20 years on other HOA Boards, has been a director of Caltech’s Entrepreneurs’ Forum for 30 years and was Exec VP of the Bob Hope Hollywood USO for 3 years, among others. He has both BS and MS degrees in Engineering/Operations Research from Northwestern and USC respectively.

Todd Murphy

Todd and his wife, Kathy, purchased their first home in Sun City Shadow Hills in 2007 as a second home while living in Fawnskin on the north shore of Big Bear Lake. After living in the mountains and skiing for 20 years (ended by bad knees), they wondered why they were shoveling snow all winter. So they sold their first home here and bought a second as their full time residence. Both were very involved in their mountain community with Kathy serving as Fawnskin Mayor and President of the North Shore Improvement Association and Todd as President/Director of the Big Bear Municipal Water District and President/Director of the Mountain Area Transit Agency, while also volunteering for the Big Bear Discovery Center, the Chamber of Commerce and various other community organizations.

They originally moved to the mountains from Orange County to purchase a Bed and Breakfast – the Inn at Fawnskin – which Kathy operated while Todd continued to manage the Orange County transit system – OCTA. Both were active in Yorba Linda with Kathy volunteering at the Nixon Library and Todd serving as Mayor/Councilman for the city. They were also very involved in youth sports where they met.

After moving from the mountains, they were ready to take a break from intense civic involvement and decided to spend more time with family and friends. That didn’t last long. Both are volunteers at the Living Desert serving as Conservation Ambassadors and are also active physically with many hours of working out in the pool’s year round, playing bocce ball and other sports. Todd also enjoys the North Golf Course as he chases the white ball around. He has always been actively involved in his community and is looking forward to being as helpful as possible serving on the FAC and to bring his varied professional experiences to help the Committee make the right recommendations to our board.

Please join me and the other six members serving on the FAC in welcoming Mike and Todd and thanking them for their participation with FAC in service to our community. FAC now has eight of nine positions filled. We are continuously looking for owners who have a background including accounting and financial reporting and an interest in serving on the FAC or on its Subcommittee on the Reserve Study. Please contact the FAC Chair if you would like to discuss completing an Advisory Committee Interest Form.

Finance Advisory Committee – July 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, July 2021:

FAC Members

FAC is in the process of interviewing three candidates. FAC has six members, and we have Board approval for a total of nine members. We are looking for owners who have a background including accounting and financial reporting and an interest in serving on the FAC or on its Subcommittee on the Reserve Study. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Work Completed

During the month of June 2021, the FAC and its Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval, subject to audit, of the unaudited May 2021 financial statements of the Association including the:
    • financial statements and supplementary schedules.
    • combining and combined financial statements and supplemental financial information schedules included in the Treasurer’s report.
    • summary financial information on financial position and results of operations included in the General Manager’s report.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the General Manager on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (5+7) of the Operating Fund and Replacement Fund as compared to the 2021 Budget and the 2021 Forecast (4+8).
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (5+7) as compared to the 2021 Budget and the 2021 Forecast (4+8) provided to the Board.
  • Review and written recommendations to the Board on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the May 2021 bank statements, bank reconciliations, and investment account statements.
  • Review and written recommendations to the Board on engagement of a Reserve Study consultant and parameters for the 2022 Reserve Study.
  • Regular meeting of FAC held on June 18, 2021, using audio and video conference call.
  • Special meeting of FAC held on June 8, 2021, using audio and video conference call.
  • For the Board meeting on June 26, 2021:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the General Manager monthly written report to the Board.

Upcoming Work

  • Review and written recommendations to the General Manager and the Board on the drafting of the 2022 Budget.

Further Information

Additional FAC Members: Larry Anderson, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – June 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, June 2021:

Work Completed

During the month of May 2021, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval, subject to audit, of the unaudited Association April 2021 financial statements including the:
    • financial statements and supplementary schedules.
    • combining and combined financial statements plus supplemental financial information schedules included in the Treasurer’s report.
    • summary financial information on financial position and results of operations included in the General Manager’s report.
    • condensed Association financial information to be published in The View.
  • Review of the year-to-date variance analysis prepared by the General Manager on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (4+8) of the Operating Fund and Replacement Fund as compared to the 2021 Budget and the 2021 Forecast (3+9).
  • Review and written recommendations to the Board on a proposed contract for security services.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (4+8) as compared to the 2021 Budget and the 2021 Forecast (3+9) provided to the Board.
  • Review and written recommendations to the Board on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the April 2021 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on May 21, 2021, using audio and video conference call.
  • Review of 2021 estimate of taxable income and estimated income tax payments.
  • For the Board meeting on May 24, 2021:
    • Preparation of the FAC monthly written report.
    • Review of the General Manager monthly written report.

Upcoming Work

  • Interview candidate for the Committee.
  • Review and written recommendations to the Board on parameters for the preparation of the 2022 Reserve Study.

FAC Members

FAC has six members, and we have Board approval for a total of nine. So we have three openings, and we would love to meet with you. We are looking for owners who have a background including accounting and financial reporting and an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further Information

Additional FAC Members: Larry Anderson, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – May 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, May 2021:

Work Completed

During the month of April 2021, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval, subject to audit, of the unaudited March 2021 financial statements of the Association including the:
    • financial statements and supplementary schedules.
    • combining and combined financial statements and supplemental financial information schedules included in the Treasurer’s report.
    • summary financial information on financial position and results of operations included in the General Manager’s report.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the General Manager on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (3+9) of the Operating Fund and Replacement Fund as compared to the 2021 Budget and the 2021 Forecast (2+10).
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (3+9) as compared to the 2021 Budget and the 2021 Forecast (2+10) provided to the Board.
  • Review and written recommendations to the Board on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the March 2021 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on April 23, 2021, using audio and video conference call.
  • Conference call with Comerica Securities, the Replacement Fund investment manager, on April 23, 2021.
  • Review and written recommendations to the Board on insurance renewal as of April 22, 2021.
  • For the Board meeting on April 26, 2021:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the General Manager’s monthly written report to the Board.

Upcoming Work

  • Review of 2021 estimate of taxable income and estimated income tax payments.
  • Review and written recommendations to the Board on parameters for the preparation of the 2022 Reserve Study.

FAC Members

FAC has six members, and we have Board approval for a total of nine members. So we have three openings, and we would love to meet with you. We are looking for owners who have a background that includes accounting and financial reporting and an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further information

Additional FAC Members: Larry Anderson, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – April 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, April 2021:

Work Completed

During the months of February and March 2021, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the 2020 audited financial statements. Audited financial statements were approved by the Board on February 22, 2021, and issued by the Auditor on February 24, 2021.
  • Review and recommend Board approval of the 2020 income tax returns.
  • Review and recommend Board approval of the Association’s unaudited January and February 2021 financial statements including the:
    • financial statements and supplementary schedules.
    • combining and combined financial statements included in the Treasurer’s report.
    • summary financial information on financial position and results of operations included in the General Manager’s report.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the General Manager on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2021 Forecast (2+10) of the Operating Fund and Replacement Fund as compared to the 2021 Budget.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2021 Forecast (2+10) provided to the Board.
  • Review and written recommendations on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the January and February 2021 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on March 19, 2021, via audio and video conference call.
  • For the Board meeting on March 29, 2021:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the General Manager’s monthly written report to the Board.

Work in Process

  • Insurance renewal as of April 22, 2021.

FAC Members

Thank you, Bob Giovannettone, for serving on the Committee from June 2019 through February 2021. We appreciate the contributions and recommendations you made. Now, FAC has six members; and we have Board approval for a total of nine. So we have three openings, and we would love to hear from you. We are looking for owners who have a background including accounting and financial reporting and an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further Information

Additional FAC Members: Larry Anderson, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Treasurer’s Message: A Treasurer’s Report

Carey Thompson
Treasurer

Hello residents,

I’m Carey Thompson, a fellow homeowner and since June 2020, your Treasurer of our HOA Board. I assumed that responsibility when Bruce Marley resigned for personal reasons. It was an easy transition for me since I was the previous Treasurer and a member of the Finance Advisory Committee. Since I rejoined the Board, we have not been able to have meetings with homeowners in attendance. I’ve been very brief in my reports at the open Board meetings held via streaming, so I thought it might be a good time to provide you an update.

By now you should have received a packet in the mail that contains a cover letter from me and includes the 2020 annual audit results as well as our current insurance coverage. The law requires us to mail this information to you every year. In addition, our resident’s only website has an abundance of detailed financial reports for those of you interested in drilling down into the details.

So, in the spirit of a “State of the Union” address, I want to bring you all up to date on how our community is doing financially. Although this topic makes some people’s eyes glaze over, I think you’ll want to hear how we’re doing. I’ll keep it simple and brief, and I promise you there won’t be a quiz at the end.

Overall, how are we doing financially? In a word – great.

When the pandemic crisis hit in March 2020, the Board took proactive measures to slash expenses to make up for lost revenue. At the height of the pandemic, both Shadows and our golf courses were closed. With no end-of-season group and club parties, there was no revenue from catering, which is usually quite profitable for us. Our investment income was decreased due to falling investment rates.

The Board took steps early on in the crisis to decrease our operating budget expenses including golf, landscape, property protection, fitness, facilities/maintenance, mostly in personnel costs. Closed facilities do not need as many people to maintain them in good working condition. As a result, our 2020 actual performance was just over $600,000 above our budget plan. Here are the numbers:

When the 2020 operating budget was approved, the Board planned just over $14 million in revenue and $14.4 million in expenses, which was a $331,000 budget deficit of revenue over expenses. Our existing working capital would cover that deficit. It allowed the Board to approve an $8 per month credit on the 2020 monthly assessment.

However, due to the cost saving measures the Board took, the actual financial performance for the year was $12.8 million in revenue and $12.5 million in expenses. Although we had reduced revenue in fitness, golf, food and beverage, as well as investment income, we reduced the expenses even more. That’s how we were able to finish the year more than $600,000 above our planned budget. In addition, the favorable variance in actual results, as well as the accumulated net working capital in the

Operating Fund, allowed the Board to authorize a one-time annual credit of $144 per home or $496,800 in total effective January 1, 2021. This $144 credit per home was reflected in your HOA account and your monthly assessment for January 2021 was reduced by the one-time credit.

Since rejoining the board, in addition to the standard monthly responsibilities, I have been quite busy with several major projects: I coordinated the development of the 2021 budget, renegotiated the Troon contract, updated our investment policy, oversaw the 2021 Reserve Study, and the 2020 annual audit and filing of our income taxes. Of course, I had lots of help from FAC and Bill Wethe, as well as significant support from our DRM General Manager, Tyler Ingle and Troon General Manager, Rolland Vaughn.

Here’s what’s on tap for the coming year. The Board is now working on ways to increase our investment income. Return on standard Certificates of Deposit is extremely low, less than 1% of the value of the CD on maturity. We have received some recommendations from our Comerica investment advisors and the FAC for the Board’s consideration. The more revenue we can generate from investment income means less we need to assess homeowners in monthly dues. I will share more information on this in the near future.

We are also planning to replace our golf cart fleet this year. The fleet we purchased almost 5 years ago has been fully depreciated and it is time to purchase new carts. We have been saving money in our Replacement Fund for this purchase. Fortunately, unlike when we previously leased golf carts, we have a trade-in value of more than $200,000 as opposed to no value on the leased carts. We are receiving bids and expect to have new carts delivered by the start of the season this coming November.

When this term of office expires in April 2022, I plan to apply to rejoin the FAC as a regular member. Currently, our FAC has three vacant positions. Yes, you do need a financial or related background to serve on this committee, but we have not had any applications for membership in many months despite our many efforts at recruiting. It’s easy to apply, just go to our resident’s only section of the HOA website and search for the volunteer application form.

As I mentioned, you recently received a packet from me including the 2020 audit of financial statements highlighting our results along with an abundance of additional detail. Take a moment to review the audit. I think you will be happy with our financial standing.

I welcome your comments and questions. You can email me anytime. The address is on the inside front cover of The View every month. I look forward to seeing you at an open board meeting in the future.

Carey Thompson
Treasurer

Finance Advisory Committee – March 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, March 2021:

Work Completed

During the month of February 2021, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited January 2021 Association financial statements including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report prepared by the Controller.
    • summary financial information on financial position and results of operations included in the General Manager’s report to the Board.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2021 Operating Fund revenues and expenses.
    • 2021 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and recommend Board approval of the January 2021 bank statements, bank reconciliations, and investment account statements.
  • Review and recommend Board approval of a written agreement to engage a firm to provide non-judicial foreclosure services approved by Board on January 25, 2021.
  • Board approved proposed revisions to the following items on January 25, 2021:
    • FAC Charter and Mission – FAC BAF 2021 # 1.
    • FAC Subcommittee Charter and Mission – FAC BAF 2021 #2.
    • Association Procurement Policy – FAC BAF 2021 #3.
  • Special meeting of FAC held on February 3, 2021, via audio and video conference call.
  • Regular meeting of FAC held on February 19, 2021, via audio and video conference call.
  • For the Board meeting on February 22, 2021:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the General Manager’s monthly written report to the Board.

Work in Process

Review and recommendation to the Board on the:

  • 2020 audited financial statements.
  • 2020 Federal and California tax returns.

Upcoming Work

Insurance renewal in April 2021.

FAC Members

FAC has seven members, and we have Board approval for a total of nine members. So, we have two openings, and we would love to hear from you. We are looking for owners who have a background including accounting and financial reporting and an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – February 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, February 2021:

Work Completed

During the month of January 2021, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited December 2020 financial statements of the Association including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report of the Association prepared by the Controller.
    • summary financial information on financial position and results of operations included in the Controller’s report to the Board.
    • condensed financial information of the Association to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 annual results as compared to the 2020 Budget and the 11+1 Forecast provided to the Board.
  • Review and written recommendations on proposed BAFs for the expenditure of funds from the Replacement Fund for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the December 2020 bank statements, bank reconciliations, and investment account statements.
  • Review of firms providing non-judicial foreclosure services, preparation of Request for Proposal (RFP), review of responses to RFP, evaluation and reference check of service firms, and written recommendation to the Board (FAC BAF 2020 # 16).
  • Written recommendation to the Board of proposed revisions to Replacement Fund Investment Policy (FAC BAF 2020 # 15).
  • Regular meeting of FAC held on January 22, 2021, via audio and video conference call.
  • For the Board meeting on January 25, 2021:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller’s monthly written report to the Board.

Work in Process

Annual review and submission of proposed revisions to the Board for review and adoption including:

  • FAC Charter and Mission – FAC BAF 2021 # 1.
  • FAC Subcommittee Charter and Mission – FAC BAF 2021 #2.
  • Association Procurement Policy – FAC BAF 2021 #3.

Upcoming Work

2020 Audit.

FAC Members

FAC now has two openings. We would love to hear from you if you have a background including accounting and financial reporting and an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

2021 Monthly Assessment (Dues)

Beginning January 1, 2021, the monthly assessment will increase to $306 per month. As a reminder, the Board approved a one-time credit in the amount of $144 per homeowner; the net amount due for January is $162. The coupon books have been mailed but there is no coupon for the month of January. If you pay by check, please be sure to include your account number on your check. If you prefer a coupon, please contact the HOA office.

If you are paying by check, the mailing address is as follows:

Sun City Shadow Hills
c/o Desert Resort Management
PO Box 601205
Los Angeles, CA 90060-1205

Finance Advisory Committee – January 2021

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, January 2021:

Work Completed

During the month of December 2020, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited November 2020 financial statements of the Association including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report for the Association prepared by the Controller.
    • summary financial information on financial position and results of operations included in the Controller’s report to the Board.
    • condensed Association financial information to be published in The View.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2020 Forecast (11+1) of the Operating Fund and Replacement Fund as compared to the 2020 Budget and the 2020 Forecast (10+2) Forecast prepared by the Controller.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 Forecast (11+1) with comparison to the prior forecast and the 2020 Budget provided to the Board.
  • Review and written recommendations on proposed BAFs for the expenditure of funds from the Replacement Fund for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the November 2020 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on December 18, 2020, using an audio and video conference call.
  • For the Board meeting on December 21, 2020:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller’s monthly written report to the Board.

Work in Process

  • Review of firms providing non-judicial foreclosure services, preparation of Request for Proposal (RFP), review of responses to RFP, evaluation of service firms, and written recommendation to the Board.
  • Potential revisions to Replacement Fund Investment Policy and written recommendation to the Board.

Upcoming Work

Annual review and potential revisions to the:

  • FAC Charter and Mission.
  • FAC Subcommittee Charter and Mission.
  • Association Procurement Policy.
  • 2020 Audit

FAC Members

FAC now has two openings on the Committee. We would love to hear from you if you have a background including accounting and financial reporting along with an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

What is the California HOA Fidelity Bond?

The California HOA Bond is a new type of fidelity bond requirement, which protects the homeowners in a community from various acts of fraud, or theft. California legislation, effective January 1, 2019, is now requiring that every HOA in California be required to obtain a HOA fidelity bond. The HOA is considered a private government within a community of homes that can regulate, assess, and create specific rules for the community and homeowners based on decisions of an elected board.

The California HOA fidelity bond requirements are listed below and require cooperation of management companies entrusted with the day-to-day operations of the HOA and the elected board members to ensure that the fidelity bond can be obtained. This bond will protect the HOA and homeowners from any dishonest activity that may occur with the assets in the Operating Fund and Replacement Fund of the HOA. The HOA fidelity bond will protect the HOA and its homeowners from the management companies or the directors should funds in either the Operating Fund or Replacement Fund not be disbursed in accordance with applicable law and with policies and procedures adopted by the Board of SCSHCA.

California Civil Code Section 6, 5806, states the following:

“Unless the governing documents require greater coverage amounts, the association shall maintain fidelity bond coverage for its directors, officers, and employees in an amount that is equal to or more than the combined amount of the reserves of the association and total assessments for three months. The  association’s fidelity bond shall also include computer fraud and funds transfer fraud. If the association uses a managing agent or management company, the association’s fidelity bond coverage shall additionally include dishonest acts by that person or entity and its employees.”

In the prior paragraph, the Civil Code refers to the word “reserves”. This word is synonymous with the word Replacement Fund that is utilized by SCSHCA to describe the accumulated financial resources for the major repair and replacement of common area real and personal property components as identified in the most recent Reserve Study. The most recent reserve study approved by the Board of Directors of SCSHCA is dated October 29, 2020 and is referred to as the 2021 Reserve Study.

The California HOA fidelity bond requirements rely largely on three things including: 1) managerial companies/persons, 2) separation of financial duties, and 3) annual CPA audit.

Requirement #1: Is there an independent management group running the community?

The purpose of the HOA fidelity bond is to ensure limited access to the funds in the Operating Fund and the Replacement Fund of the HOA, i.e.: a property manager should not be allowed full access to HOA funds. Underwriters will need to know exactly who all has access to the HOA funds and will require that rules be established for certain parties to protect the members of that specific community. Honesty is crucial when requesting a California HOA Bond.

Requirement #2: Separation of all Financial Responsibilities

Whoever applies for the HOA Bond must be aware of the requirement where specific financial responsibilities must be performed by different people. This is yet another way to protect the homeowners from fraudulent activities. There must be at least two different people on the HOA board to approve invoices for payment. The person who makes the bank deposits, writes checks, or completes bank withdrawals cannot be the person who keeps the books and checks the bank statements at the end of each month to ensure that all funds received and disbursed are accounted for properly in accordance with generally accepted accounting principles.

Requirement #3: Books submitted annually to CPA or Accountant

When requesting the HOA Bond, the Surety will look to ensure that the HOA applying for the fidelity bond has an independent Auditor who issues their report on the annual audited financial statements of the HOA.

The SCSHCA is served by a five-member elected Board of Directors. Day to day management of the operations of the HOA are the responsibility of Desert Resort Management, Inc. (DRM) for all operations other than golf and food and beverage (F&B) operations pursuant to a written management agreement. Day to day management of the golf and F&B operations are the responsibility of Troon Golf, L.L.C. (Troon) pursuant to a written management agreement. DRM and Troon are each responsible for employment of management and staff positions for their respective operations. DRM and Troon are each responsible for the preparation of the accounting and financial reporting for each of their operations. The Controller of SCSHCA is an employee of DRM and is responsible for the preparation of the combining and combined financial statements of SCSHCA. Monthly financial statements and other monthly financial reports are reviewed by the Finance Advisory Committee (FAC) composed of residents appointed by the Board of Directors of SCSHCA to review the financial statements and reports prepared by Troon, DRM, and the Controller and to make a recommendation to the Board of Directors of SCSHCA to accept or not accept the financial statements and financial reports. The Controller, and the Treasurer of the Board and at least one other Board member must approve invoices and payment requests for the disbursement of funds from either the Operating Fund or the Replacement Fund. The financial statements prepared by the Controller, DRM, and Troon are audited annually. The amount of the fidelity bond is computed annually by the FAC and furnished to the Board of Directors for approval.

Finance Advisory Committee – December 2020

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, December 2020:

Work Completed

During the month of November, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited October 2020 financial statements of the Association including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Association Treasurer’s report prepared by the Controller.
    • summary financial information on financial position and results of operations included in the Controller’s report to the Board.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Conference call with Comerica Securities, Inc., the Investment Manager for the Replacement Fund, on October 23 including review of:
    • current investment yield.
    • forecasted investment yield for the next 12 months.
  • Review and written recommendations on the 2020 Forecast (10+2) of the Operating Fund and Replacement Fund as compared to the 2020 Budget and the 2020 Forecast (9+3) Forecast prepared by the Controller.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 Forecast (10+2) provided to the Board.
  • Review and written recommendations on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the October bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on November 20 using audio and video conference call.
  • For the Board meeting on November 23:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller monthly written report to the Board.

Work in Process

  • Review of firms providing non-judicial foreclosure services, preparation of Request for Proposal (RFP), review of responses to RFP, evaluation of service firms.
  • Potential revisions to Replacement Fund Investment Policy.

FAC members

FAC now has two openings on the Committee. We would love to hear from you if you have an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form. I would be pleased to discuss any questions you may have and provide you important information to aid you in your decision making.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – November 2020

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, November 2020:

FAC Members

FAC now has two openings on the Committee. We would love to hear from you if you have an interest in serving on the FAC or on the FAC Subcommittee. Please contact me if you would like to discuss completing an Advisory Committee Interest Form. I would be pleased to go over any questions you may have and provide you with important information to aid in your decision‑making.

Work Completed

During the month of October, the FAC and FAC Subcommittee continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • On the 2021 Reserve Study:
    • Review and recommend Board approval.
    • Preparation of comparative financial analysis of the Reserve Studies for the years 2013 through 2021.
  • On the 2021 Budget:
    • Written recommendations and attendance at the Board budget review meeting on October 20, 2020.
    • Preparation of comparative financial analysis of the Budget for the years 2013 through 2021.
    • Review and recommend Board approval.
  • Review and recommend Board approval of the Association’s unaudited September 2020 financial statements including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report prepared by the Controller.
    • summary financial information on the financial position and results of operations included in the Controller’s report to the Board.
    • condensed Association financial information to be published in The View.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review and written recommendations on the 2020 Forecast (9+3) of the Operating Fund and Replacement Fund as compared to the 2020 Budget and the 2020 Forecast (8+4) Forecast prepared by the Controller.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 Forecast (9+3) provided to the Board.
  • Review and written recommendations on proposed BAFs for the expenditure of funds for the replacement or major repair of real and personal property common area components identified in the Reserve Study.
  • Review and recommend Board approval of the September 2020 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on October 23, 2020, via audio and video conference call.
  • For the Board meeting on October 26, 2020:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller monthly written report to the Board.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

SCSH Board Message – 10/24/2020

Good afternoon residents,

Your HOA Board wants to provide answers to the most frequently asked questions about the proposed budget.

Our budgeted dues for 2020 were actually $281, not $273.

It was only because of a surplus from 2019 that we were able to reduce the dues for 2020 by $8 per household. Making the amount we paid $273.

With the COVID shutdown we lost significant income: Shadows restaurant closed, no fitness classes, and no golf revenue. Given the COVID issues it is possible for at least the remainder of this year, there will be very few Canadians here to play golf further compounding the problem.

What did we do to reduce our expenses?

  1. We furloughed as many employees as possible.
  2. We reduced maintenance as much as possible.
  3. We reduced maintenance of the golf courses. (The result was many complaints about the condition of both courses when they were re-opened.)

But the golf courses, sport courts, pools, and facilities do need to be maintained. You can’t just let the golf course die, pools need to be kept clean, landscaping still needs work, and all this still takes staffing. So, we are not able to cut all staff if we want to maintain the facilities, and the cost of staffing even at a minimal level increases costs more than the income shortfall.

Consequently, there is an increase in costs during a shutdown, not a savings in costs.

Initially we thought there might be a loss of $300K - $400K. Our actual loss for 2020 has been contained to $48,000. This is amazing considering the loss of income.

Inflation is about 1%. There is a mandatory increase in minimum wage of 8% for 2021.

Our contracts with our landscaping, golf and security companies have increased because they are faced with those minimum wage increases as well.

There was an increase in expenses for all the additional signage and for the purchase of sanitizing products due to COVID.

Carey Thompson did a great job of working with Troon to reduce their management fees.

We sincerely believe that our financials are the best around. We have an amazing team of Carey Thompson, Treasurer; Tyler Ingle, Controller; Bill Wethe and the Financial Advisory Committee; and DRM, our management company, who brings extensive financial experience and significant software to track every expense.

The bottom line is this:

  • 2020 Actual Dues are $281
  • 2021 Proposed Dues are $294
  • This is a $13 or 4.6% increase if the Board were to pass the proposed budget.

Again, this sounds worse than it is because people forget that dues in 2020 were reduced by $8 due to the 2019 surplus and we add the $12 for Frontier on top of the 2021 dues to make it $306. Residents will be saving money on the cable bills which will offset the cost of Frontier internet.

70% of residents voted in favor of the Frontier contract to save money, and so far, reports from those installed have said the savings is about $40-$60 per month. Given these facts, for 70% of the residents, the estimated net monthly dues cost because of the HOA Frontier contract savings means $306 minus $40 (cable savings) or a net monthly cost of $266. To be fair, you need to subtract the savings of the Frontier installation from your monthly dues rate to get to your effective net cost on monthly HOA dues. For 70% of the residents your effective monthly dues rate might go down next year.

Monday the Board will vote on the proposed budget. If you have comments, suggestions, or changes on the proposed budget please let us know.

Let us know if you have further comments or suggestions before Monday’s Board meeting. You can review the draft budget online at:

www.scshca.com/budget-worksheets

We hope this helps. Please let us know if you have any questions.

Sincerely,
Your HOA Board

Budget Meeting Video Now Available

To see more videos, visit our Videos page by clicking here.

Finance Advisory Committee – October 2020

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, October 2020:

Work Completed

During the month of September, the FAC continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited August 2020 financial statements of the Association including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report prepared by the Controller.
    • summary financial information on the financial position and results of operations included in the Controller’s report to the Board.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review of the 2020 Forecast (8+4) of the Operating Fund and Replacement Fund as compared to the 2020 Budget and the 2020 Forecast (7+5) Forecast prepared by the Controller.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 Forecast provided to the Board.
  • Review and recommend Board approval of the August 2020 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on September 25, 2020, using audio and video conference call.
  • For the Board meeting on September 28, 2020:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller monthly written report to the Board.

Work in Process

FAC and the FAC Subcommittee have several items we are working on including:

  • 2021 Reserve Study including preparation of financial analysis and written recommendations.
  • 2021 Budget including written recommendations and attendance at the Board budget review meetings on August 19 and September 23, 2020.
  • Review and written comments and recommendations to the Board on other potential contracts that the Association is considering.

FAC Members

FAC now has two openings on the Committee. We would love to hear from you if you have an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form. I would be pleased to discuss any questions you may have and provide you important information to aid you in your decision making.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley.

FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.

Finance Advisory Committee – September 2020

By Bill Wethe
Finance Advisory Committee Chair

As published in The View, September 2020:

FAC Members

Thank you, Steve Proia, for your service to the community, FAC, and the FAC Subcommittee since December 2017. I will miss your commitment, expertise, and responsiveness. With Steve’s resignation effective August 22, 2020, FAC now has two openings on the Committee. We would love to hear from you if you have an interest in serving on the FAC or on the FAC Subcommittee. Please contact the author if you would like to discuss completing an Advisory Committee Interest Form. I would be pleased to talk about any questions you may have and provide you important information to aid you in your decision-making.

Work Completed

During August, the FAC continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:

  • Review and recommend Board approval of the unaudited July 2020 Association financial statements including the:
    • financial statements and supplementary schedules prepared by DRM/Associa, Troon, and the Controller.
    • combining and combined financial statements included in the Treasurer’s report prepared by the Controller.
    • summary financial information on the financial position and results of operations included in the Controller’s report to the Board.
    • condensed Association financial information to be published in The View magazine.
  • Review of the year-to-date variance analysis prepared by the Controller on the:
    • 2020 Operating Fund revenues and expenses.
    • 2020 Replacement Fund expenses for the purchase and replacement of common area real property components and inter-fund transfers to the Operating Fund for the purchase and replacement of common area personal property and equipment components.
  • Review of the 2020 Forecast (7+5) of the Operating Fund and Replacement Fund as compared to the 2020 Budget and the 2020 Forecast (6+6) prepared by the Controller.
  • Preparation of the Management Discussion and Analysis (MD&A) of the 2020 Forecast provided to the Board.
  • Review and recommend Board approval of the July 2020 bank statements, bank reconciliations, and investment account statements.
  • Regular meeting of FAC held on August 21, 2020, using audio and video conference call.
  • For the Board meeting on August 31, 2020:
    • Preparation of the FAC monthly written report to the Board.
    • Review of the Controller’s monthly written report to the Board.

Work in Process

FAC and the FAC Subcommittee have several items we are working on including:

  • 2021 Reserve Study.
  • 2021 Budget.
  • Review and written comments and recommendations to the Board on the potential contract for bulk internet service with Frontier Communications of America, Inc.
  • Review and written comments and recommendations to the Board on other potential contracts that the Association is considering.

Further Information

Additional FAC Members: Larry Anderson, Bob Giovannettone, Bob Jester, Jerry Cavoretto, Mike Whelan, and Bruce Marley. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Bruce Marley, and Bill Wethe, Chair.

Contact the author at finance@scshca.com.