Post by Admin on Feb 3, 2018 10:57:25 GMT -7
An Overview of GLA Finances - A Simple Guide
Glastonbury is a unique community in a myriad of ways and our system of government reflects that. Glastonbury was founded as a closed spiritual community and is slowly evolving into an open, secular landowners association. Our history has greatly impacted our finances and made them more difficult to understand. Decades of unpaid assessments totaling over a quarter million dollars are starting to be collected. The collected money is not part of the annual budget, yet in 2017 it totaled $37,014.80.
In a normal HOA money is collected via assessments and spent according to a written budget. If $100,000.00 is the amount the HOA expects to collect then the budget must explain to the home owners how that $100,000.00 will be spent. They must be informed how much will go towards road maintenance, administration, elections and other activities. By law the budget must be balanced; the amount expected to be collected via assessments must equal the amount proposed for spending and/or saving for long term projects.
The GLA creates a budget every year. The budget is always balanced even though that sometimes requires an assessment increase. The final budget is approved by the GLA Board and mailed to landowners in February. Unfortunately the final approved budget only reveals part of the picture of how landowner funds will eventually be spent. Why?
The GLA has a general operating fund that holds more than the total of what landowners pay in assessments each year. In 2017 landowners paid $131,620.00 in 2017 assessments. At the end of 2017 most of that money was spent via the 2017 budget. However on December 31st, 2017 the GLA held $189,331.24 in their Savings account. The exact figures are listed on page 3 of the 2017 Balance Sheet available here.
The savings account holds some money for long term projects, has $30,000.00 for legal expenses, emergency snow plowing money and cash that has yet to be allocated. It also contains a construction bond fund of $14,497.00 which belongs to landowners who have not yet bothered to request their construction bond money back. The Construction Bond Fund increases every year. Some landowners may have passed on or moved away and will never receive a refund from the fund.
Budget money that is not allocated or spent by the end of the year also goes to the savings account.
In 2017 savings account funds were spent to improve our roads and complete non-recurring projects like cleaning the culverts. Budget money is normally used for recurring expenses like gravel and grading. As long as collections of past due assessments continues the savings account should remain a robust source of income. At the end of 2017 our accounts receivable or approximate total of past due assessments totaled $215,731.60.
The GLA legal budget is an example of why the final 2018 budget will not accurately reflect money available. The 2018 budget allocates $7,000.00 for ALL legal expenses yet an extra $30,000.00 sits in the GLA savings account for Legal Expenses. The GLA could spend up to $37,000.00 for legal expenses in 2018 without asking landowners for more money.
Snow Plowing is another good example. $16,500.00 is in the 2018 budget for contracted snow removal costs.However another $26,077.99 is in the GLA savings account for emergency snow removal. If a blizzard raged for weeks on end the GLA could spend up to $42,577.99 for contracted snow removal. If that was fully spent and the snow was still falling the GLA Board could tap into the $30,000.00 legal fund and transfer money from it to the Emergency Snow Removal Fund. If the legal fund was emptied then any of the other funds could be tapped except for the Construction Bond Fund.
The bottom line of this article is that the GLA has an ample supply of money to perform the yearly duties required of it. Are the landowner funds being managed wisely and efficiently is another question and one that landowners should weigh in on. It is your money. What do you think?
In a normal HOA money is collected via assessments and spent according to a written budget. If $100,000.00 is the amount the HOA expects to collect then the budget must explain to the home owners how that $100,000.00 will be spent. They must be informed how much will go towards road maintenance, administration, elections and other activities. By law the budget must be balanced; the amount expected to be collected via assessments must equal the amount proposed for spending and/or saving for long term projects.
The GLA creates a budget every year. The budget is always balanced even though that sometimes requires an assessment increase. The final budget is approved by the GLA Board and mailed to landowners in February. Unfortunately the final approved budget only reveals part of the picture of how landowner funds will eventually be spent. Why?
The GLA has a general operating fund that holds more than the total of what landowners pay in assessments each year. In 2017 landowners paid $131,620.00 in 2017 assessments. At the end of 2017 most of that money was spent via the 2017 budget. However on December 31st, 2017 the GLA held $189,331.24 in their Savings account. The exact figures are listed on page 3 of the 2017 Balance Sheet available here.
The savings account holds some money for long term projects, has $30,000.00 for legal expenses, emergency snow plowing money and cash that has yet to be allocated. It also contains a construction bond fund of $14,497.00 which belongs to landowners who have not yet bothered to request their construction bond money back. The Construction Bond Fund increases every year. Some landowners may have passed on or moved away and will never receive a refund from the fund.
Budget money that is not allocated or spent by the end of the year also goes to the savings account.
In 2017 savings account funds were spent to improve our roads and complete non-recurring projects like cleaning the culverts. Budget money is normally used for recurring expenses like gravel and grading. As long as collections of past due assessments continues the savings account should remain a robust source of income. At the end of 2017 our accounts receivable or approximate total of past due assessments totaled $215,731.60.
The GLA legal budget is an example of why the final 2018 budget will not accurately reflect money available. The 2018 budget allocates $7,000.00 for ALL legal expenses yet an extra $30,000.00 sits in the GLA savings account for Legal Expenses. The GLA could spend up to $37,000.00 for legal expenses in 2018 without asking landowners for more money.
Snow Plowing is another good example. $16,500.00 is in the 2018 budget for contracted snow removal costs.However another $26,077.99 is in the GLA savings account for emergency snow removal. If a blizzard raged for weeks on end the GLA could spend up to $42,577.99 for contracted snow removal. If that was fully spent and the snow was still falling the GLA Board could tap into the $30,000.00 legal fund and transfer money from it to the Emergency Snow Removal Fund. If the legal fund was emptied then any of the other funds could be tapped except for the Construction Bond Fund.
The bottom line of this article is that the GLA has an ample supply of money to perform the yearly duties required of it. Are the landowner funds being managed wisely and efficiently is another question and one that landowners should weigh in on. It is your money. What do you think?
