Post by Poor Richard on Apr 23, 2022 15:45:43 GMT -7
GLA 2021 Financial Analysis Made Simple - How Your Money Was Spent
The Glastonbury Landowner's Association (GLA) have released their 2021 Year-End Financial reports. The 19-page document can be confusing and possibly overwhelming for many landowners. In this article, we will try to simplify the reports to let you know how your money was spent. A word of caution before we begin. For many years the GLA has refused to provide directors or landowners with primary financial documents. Requests for canceled checks, invoices, time cards, and bank statements have been routinely ignored or denied. Thus none of the entries on the financial reports can be independently verified. A complete description of expense codes was never provided either so many expenses remain murky. The Forum, this writer and all landowners must simply assume that the figures presented are correct. We rounded figures to the nearest dollar to keep the calculations simple. We also ignored murky expense codes so our figures are conservative.
The total amount of dollars budgeted for 2021, $155,110.00, takes into consideration that 15% of parcels will not pay their assessments. If everyone paid their 2021 assessments the amount budgeted for roads, elections, etc would be 15% higher.
Tens of Thousands of Dollars Were Saved in 2021
In 2021 the GLA saved tens of thousands of dollars by not hiring an Administrator, discontinuing monthly board meetings, ending long term debt collection, and by canceling the Annual Election.
$23,900.00 was saved when the GLA did not hire a new administrator in 2021. The previous administrator quit in 2020.
$23,900.00 was saved when the GLA did not hire a new administrator in 2021. The previous administrator quit in 2020.
For reference see expense line items 2010b, 2016a, 2023, and 2024 on the Profit and Loss Budget Performance Cash BOD report.
Substantial rent money was saved by doing away with monthly board meetings traditionally held at Emigrant Hall and open to the public. Over $2,327.00 was saved by not renting Emigrant Hall and not providing landowners with printed information like ballots, nomination forms, and newsletters. The GLA also saved $200.00 by not having to provide Annual Election refreshments.
Substantial rent money was saved by doing away with monthly board meetings traditionally held at Emigrant Hall and open to the public. Over $2,327.00 was saved by not renting Emigrant Hall and not providing landowners with printed information like ballots, nomination forms, and newsletters. The GLA also saved $200.00 by not having to provide Annual Election refreshments.
See expense codes 2052, 2055, 2060, and 2096 on the Profit and Loss Budget Performance Cash BOD report for verification.
Long Term debtors saw relief in 2021 when the GLA stopped long term debt collections. The GLA saved $3,000.00 in potential collection attorney expense.
See expense code 1310b on the Profit and Loss Budget Performance Cash BOD report for verification.
The total amount saved from reduced services and no Administrator was $29,227.00. So where did that saved money go? Does it mean that assessments should go down in 2022? The Administrator's position is still vacant, regular board meetings are not held, long term debt collections have not resumed and an Annual Election is still not scheduled.
How Your Money Was Spent
In 2021 it cost the GLA $7,824.00 to count the assessments collected and produce the mind numbing financial reports. All assessment checks were collected and deposited by Claudette Dirkers who provides her services for free. The Treasurer used to provide a completed Quick Books company file to the accounting firm for simple verification. That process ceased several years ago and accounting costs have since ballooned. Many of the reports are redundant. Some are confusing and imply that the GLA cannot decide between a cash or accrual system of accounting. Financial reports are not posted on the GLA website and are no longer mailed to landowners. The net effect is that landowners and many directors do not understand the reports and rarely ask questions. Almost everyone is left completely in the dark. Why?
The Forum posts GLA Financial reports along with official GLA minutes. Our extensive collection dates back to 1997.
Roads are required by the Covenants to receive at least 51% of the assessments collected in a given year. Snow Plowing, expense code 1000, and Road Maintenance expenses, code 1030, totaled $124,152.00 in 2021. But just $102,600.00 was in the budget for plowing and roads. No competitive bids were sought for plowing or maintenance and spring grading was skipped. Standish Excavation was given complete control over both jobs. Competitive bidding, timely spring grading and closer scrutiny could have kept road expenditures within the budgeted amount. The 2017 Road Committee included verbiage in their written contracts that road work could not exceed budgeted amounts. In 2018 competitive bidding and enforced, budgeted road contracts were discontinued under the leadership of GLA President and Road Committee Chair Dennis Riley. Then the GLA snowplow was listed for sale at $6,000.00. A month later Standish purchased the well-maintained truck, sander and plow from the GLA for $1,500.00. That was the same price the GLA paid for replacing all six truck tires in 2017. Standish often used that economical plow and sander for Glastonbury roads.
Legal Fees, expense code 1300, skyrocketed in 2021 to $49,363.00. That was over three and one half times the amount that was budgeted; $14,000.00. In 2021 the budget was overspent by $32,846.00 despite having saved $29,900.00 in Administrative, information, collection, rent, and election costs. Savings, past due assessments, and the recovery of some legal fees paid for the $63,746.00 spending binge.
Legal Fees, expense code 1300, skyrocketed in 2021 to $49,363.00. That was over three and one half times the amount that was budgeted; $14,000.00. In 2021 the budget was overspent by $32,846.00 despite having saved $29,900.00 in Administrative, information, collection, rent, and election costs. Savings, past due assessments, and the recovery of some legal fees paid for the $63,746.00 spending binge.
In 2021 Legal Collections, expense code 1310b, for long term past due assessments ceased. As noted above that saved the GLA $3,000.00. The collections attorney has since resigned and a new attorney is not being sought. The GLA can only collect past due assessments for 8 years back. Thus every year of delay for some debtors requires that the GLA "write off" their 9th year of past due assessments and penalties. In 2021 the GLA wrote off $18,205.00 in bad debt.
For reference see expense code 191 on the GLA Profit and Loss Accrual report.
The GLA has a peculiar, decades-long, and unwritten policy of not spending assessments collected in a given year until at least, the next calendar year. So assessments collected in 2021 will not be spent until 2022. Sometimes landowner assessments will sit in the bank for up to two years before being spent. Non Profit corporations normally have some funds set aside for emergencies but hoarding an entire year or more of assessments is generally considered poor fiscal management. On December 31, 2021, the GLA claimed to have $295,367.00 in total current assets, Balance Sheet TOTAL ASSETS. And $180,187.00 in cash, Balance Sheet TOTAL CHECKING/SAVINGS, sitting in the Bank of The Rockies. The 2021 budget was just $155,110.00.
Although required by Montana State Law, the 2022 budget has not been approved or released to landowners. But the GLA will not spend 2022 assessments until at least 2023 so maybe they will release a new budget by then.
Was your money spent wisely? Is the GLA managing your money well?
Was your money spent wisely? Is the GLA managing your money well?
The Forum reports so you can decide.
The March 31, 2022 GLA Financial reports show that 126 parcels are withholding their assessment payments. On December 31, 2021 just 65 parcels were not paid in full.
Feel free to post financial questions below. We will do our best to provide honest and accurate answers.