Post by Admin on Apr 5, 2016 10:34:30 GMT -7
GLA Unspent Savings Account Cash exceeds $133,000.00
At the March 2016 GLA Board meeting Director Ed Dobrowski asked the Board to explain the $125,000.00 sitting in the GLA savings account. He specifically wanted to know if that money could be spent on roads. Our answer to Ed is "yes, the GLA has a pile of cash sitting in a savings account and much of it could be used for roads".
By December 31st, 2013 the GLA Board had accumulated $92,784.29 in their savings account. One year later on December 31st, 2014 the savings account cash had mushroomed by almost $30,000.00 to $120,997.83.
In late 2014 the Board wished to hire an administrative assistant at a cost of approximately $10,000.00 per year. They stated that they did not have enough projected income for the 2015 budget and thus needed to raise annual dues. Despite having $120,997.83 in their savings account, the GLA Board voted to raise assessments by the maximum amount allowed under the Covenants, 10%. That brought in approximately an extra $10,000.00 from those members who were still paying dues and was enough to fund the new administrative assistant position.
By December 31st, 2015 the savings account cash was an eye popping $133,794.07. In late 2015 the GLA Board again stated that projected dues income was not enough to balance the 2016 budget and that an assessment increase may be needed. This time they wanted to give the administrative assistant a raise plus hire a bookkeeper and accountant to assist the Treasurer. In January of 2016 they decided to borrow $10,000.00 from their savings account instead of raising assessments.
At the end of 2015 the savings account stood at at $133,794.07. Based on past GLA Board experience, all but $11,897.00 held in the Construction Bond Fund could be spent on behalf of the landowners anytime the GLA wished to. The 2016 budget was already 100% funded from expected 2016 landowner assessments and $10,000.00 taken from savings.
Below is an image of the end of the year 2015 Balance Sheet. Please bear with me so you may understand how the GLA has come to amass a small fortune in their savings account.
By December 31st, 2013 the GLA Board had accumulated $92,784.29 in their savings account. One year later on December 31st, 2014 the savings account cash had mushroomed by almost $30,000.00 to $120,997.83.
In late 2014 the Board wished to hire an administrative assistant at a cost of approximately $10,000.00 per year. They stated that they did not have enough projected income for the 2015 budget and thus needed to raise annual dues. Despite having $120,997.83 in their savings account, the GLA Board voted to raise assessments by the maximum amount allowed under the Covenants, 10%. That brought in approximately an extra $10,000.00 from those members who were still paying dues and was enough to fund the new administrative assistant position.
By December 31st, 2015 the savings account cash was an eye popping $133,794.07. In late 2015 the GLA Board again stated that projected dues income was not enough to balance the 2016 budget and that an assessment increase may be needed. This time they wanted to give the administrative assistant a raise plus hire a bookkeeper and accountant to assist the Treasurer. In January of 2016 they decided to borrow $10,000.00 from their savings account instead of raising assessments.
At the end of 2015 the savings account stood at at $133,794.07. Based on past GLA Board experience, all but $11,897.00 held in the Construction Bond Fund could be spent on behalf of the landowners anytime the GLA wished to. The 2016 budget was already 100% funded from expected 2016 landowner assessments and $10,000.00 taken from savings.
Below is an image of the end of the year 2015 Balance Sheet. Please bear with me so you may understand how the GLA has come to amass a small fortune in their savings account.
The GLA Board maintains two real bank accounts, a checking and savings account, plus several that only exist on paper. 002 is the real checking account and 003 is the real savings account. Both are maintained as real accounts in banks. All of the accounts listed under 003, the bank savings account, exist on paper only. The money associated with them is all deposited into 003; the real bank savings account.
The total amount of cash, stashed in the savings account, is $133,749.07. Of that, all but $11,897.00 is available for spending by the GLA. Put another way. If the GLA went to the bank and withdrew all of the spendable money from their savings account on January 1st, 2016 they would have $133,749.07 minus $11,879.00 or $121,870.07 in their hands.
It is not clear to me if the GLA already removed the $10,000.00 needed to balance the 2016 budget or not. If they did remove these funds then the maximum amount they could withdraw on January 1st, 2016 would be $111,870.07. The balance of the 2016 budget is fully funded by landowner assessments. Thus the stash of cash in the savings account would not need to be depleted to pay for any budgeted items in 2016.
Note the line item titled "Accounts Receivable" that totals $280,197.56. That is the total amount of past due assessments, penalties and interest owed by landowners. If the GLA collected that amount they would have $280,197.56 plus their savings account balance of at least $111,870.07 for a total "Stash of Cash" of $392,067.63.
The GLA "Stash of Cash" is completely separate from the approved 2016 budget. The budget is fully financed from expected landowner assessments and $10,000.00 which was taken from the savings account.
Although the various paper accounts are earmarked for specific purposes like Digitizing, Lawsuits and Roads, in the past the GLA Board has easily shifted legal funds to roads, and spent them on crack sealing. In effect all savings account money, except for the Construction Bond Fund, can be spent on anything the Board desires.
The 2016 budget is based on collecting $131,625.00 via landowner dues. The administrative and legal litigation portion of the budget is expected to consume $44,829.00 of 2016 landowner dues. Put another way, for every $1.00 collected in 2016 assessments 34 cents will go directly to litigation and administration expenses.
To make matters worse, the March Financial statements show that the landowner assessment collection rate has plummeted from 85% at the end of 2015 to just 71% at the end of February 2016.
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The total amount of cash, stashed in the savings account, is $133,749.07. Of that, all but $11,897.00 is available for spending by the GLA. Put another way. If the GLA went to the bank and withdrew all of the spendable money from their savings account on January 1st, 2016 they would have $133,749.07 minus $11,879.00 or $121,870.07 in their hands.
It is not clear to me if the GLA already removed the $10,000.00 needed to balance the 2016 budget or not. If they did remove these funds then the maximum amount they could withdraw on January 1st, 2016 would be $111,870.07. The balance of the 2016 budget is fully funded by landowner assessments. Thus the stash of cash in the savings account would not need to be depleted to pay for any budgeted items in 2016.
Note the line item titled "Accounts Receivable" that totals $280,197.56. That is the total amount of past due assessments, penalties and interest owed by landowners. If the GLA collected that amount they would have $280,197.56 plus their savings account balance of at least $111,870.07 for a total "Stash of Cash" of $392,067.63.
The GLA "Stash of Cash" is completely separate from the approved 2016 budget. The budget is fully financed from expected landowner assessments and $10,000.00 which was taken from the savings account.
Although the various paper accounts are earmarked for specific purposes like Digitizing, Lawsuits and Roads, in the past the GLA Board has easily shifted legal funds to roads, and spent them on crack sealing. In effect all savings account money, except for the Construction Bond Fund, can be spent on anything the Board desires.
The 2016 budget is based on collecting $131,625.00 via landowner dues. The administrative and legal litigation portion of the budget is expected to consume $44,829.00 of 2016 landowner dues. Put another way, for every $1.00 collected in 2016 assessments 34 cents will go directly to litigation and administration expenses.
To make matters worse, the March Financial statements show that the landowner assessment collection rate has plummeted from 85% at the end of 2015 to just 71% at the end of February 2016.
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