Finance Advisory Committee – December 2021

By Robert “Bob” O. Jester, Committee Member

As published in The View, December 2021:

Who Is on the Finance Advisory Committee, and What Does the Committee Do and Not Do?

In recent candidate interviews, it became apparent that there are numerous misconceptions about what the Finance Advisory Committee is and what it does. So I want to describe for our residents how this committee is composed and what we do and do not do each month in our meetings.

Who are the members of this Committee?

By charter, this committee is composed of residents who have expressed an interest in serving the community and have verifiable professional backgrounds in finance, accounting, law, or relevant business management in fields related to the committee’s responsibilities. These include insurance, investments, banking, corporate management, and best industry practices in financial reporting systems and systems of internal controls.

What does this Committee not do?

This committee has NO authority to spend Association funds or to direct Association staff to expend Association funds. Those powers rest with the elected Board of Directors of the Sun City Shadow Hills Association.

What does this Committee do monthly?

  1. We analyze ALL Association and Troon financial statements in monthly meetings that last from three to five hours, and we commit approximately 12 to 18 hours in total each month to accomplishing the Committee’s obligations. In a typical monthly meeting, we review, analyze, and discuss approximately 125 pages of financial records. Our obligation is to look for errors in the reports, track trends, and compare the actual figures in all categories to the approved budget.
  2. We assist with the annual budgeting process and advise the Board on budget issues.
  3. We review all vendor contracts and insurance contracts and advise the Board about them.
  4. We advise the Board on best industry practices, and the Committee is vigilant about the Board’s compliance with California law applicable to Homeowners Associations.

I count 20 areas of charter obligations that the Committee is to accomplish or consider each month.

What is the Reserve Study Sub-Committee?

The Finance Advisory Committee has a Sub-Committee with four Finance Committee members and two residents with specialized expertise. They review the Reserve Study Report, which is a key element of the Replacement Fund. The Sub-Committee also reviews proposed Replacement Fund expenditures in excess of $5,000 submitted by staff and advises the Board about whether the requested expenditure is justified.

Hopefully this gives you a better taste for what we do to serve the community and the Board. Future articles will discuss specific topics in detail.

FAC Members: Larry Anderson and Larry Helseth, Co-Chairs; Zerryl Becker, Bob Jester, Jerry Cavoretto, Mike Whelan, Mike Nilsson, and Todd Murphy. FAC Sub-Committee Members for the Replacement Fund and Reserve Study: Chris Stevens and Don Salvatore.

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