Business Office, Administration and Water
The Annual Budget is one of the most important functions of an association. This is an area where the guidance of the General Manager is critical. Volunteers can not or should they be expected, to prepare a budget as complex as ours. Their efforts are appreciated, but fall short of what is needed. The Board also failed to set limits or goals for the Budget Committee. Here again, the General Manager should have prompted the Board in action. The GM has also fell short.
A closer look at areas where there was a substantial increase in the budget for 2020 as compared to the current year of 2019, and other spending of interest.
Bussiness Office: Total Budget:
2019 255,759.00
2020 305,712.42
Wages and benefits:
2019 198,959
2020 246,962
Discussion:
While there was a slight increase in most areas of the operation, the wages and benefits show a significant change. Other than a General Manager, for the entire year, nothing has changed. This needs explanation and justification.
Administration: Total Budget:
2019 206,540.00
2020 216,079.00
The wages for this department are included in the Business office budget.
Insurance:
2019 56,000.00
2020 64,000.00 (with a notation: reduced premium for higher deductible)
Legal Fees:
2019 75,000.00
2020 75,000.00
Discussion:
There continues to be a high insurance cost that would apparently increased even more, if not for a change in the deductibles. There should be an explanation for this and what amounts of deductible.
There is no increase in the high legal fees.
Water department Total Budget:
2019 640,892.77
2020 668,616.26
Wages and benefits:
2019 305,493.00
2020 349,766.00
North Beach Contract:
2019 65,400.00
2020 00
Repair and Maintenance:
2019 55,000.00
2020 70,000.00
Water line replacement:
Will continue a "mile of pipe" with appropriation of 148,334.00
Additional wage and benefits of 72,334.00. are supplied to this project. This is in addition to the regular budgeted water payroll expenses. The 72,000 is a part of the total 148,000.00
Discussion:
The replacement of the carbon filter material is reflected in the 70,000 repair and maintenance. In reality, it should have it's own line item as carbon replacement material. According to discussions, the carbon should be replace more often than it is now. And, if done more often, the 70,000 is about half of what is needed. .
We would expect a decrease in the water budget with the ending of the contract with North Beach.
Bill Neal was heard saying that they keep replacing pipe to keep employees working. I believe it, but can't conform it as a true statement.
Other:
Other departments spending is in line with nothing significant relating to the budget.
The South end loop continues to be deceptive.
Note:
I can not guarantee that every figure I have stated is 100% correct. I have done my best to list them correctly. My eyesight has degraded rapidly and is difficult to see. Several upcoming eye operations should help.
I think most reasonable people can see that we could reduce our spending by up to as much as hundreds of thousands of dollars.
7 comments:
Thanks for the new page George.
Is it common practice to include payroll expenses in an item such as Common Property Department?
Do you know if we designate certain employees to that department only? Or does that just reflect the hours necessary from our pool of emoloyees?
Good questions, and I feel confident in my answers. It is common practice to include the payroll expenses in common property,as well as any special projects such as the water line replacement. It reflects most but not all the expenses. For example there is depreciation of equipment and related office expenses. Business Office and Administration costs are not reflected in many cases.
The common property that we have are all the physical properties and some buildings that the association owns. Parks, cabanas, bridges, trails, etc. Toby, the part time employee, is assigned to the maintenance of common property. He does the mowing, watering and minor repairs, but can be assigned other duties as needed. Other water department employees can also be involved in work on common property. Example would be excavation work or as simple as moving the chips around at the chipping site. Common property can also require work done by contractors.
Surfside members are the owners of all Surfside common property. They are valuable assets and have been neglected from the beginning. Long answer to a short question.
Thanks for your answer George
When you were on the board, did Surfside hire or have an accountant on contract to manage our books?
I have been concerned that a board member is trying to do this work ever since I bought property in this hoa.
Not sure of your term "Manage our books". For as long as I can remember, we have never hired an accountant other than the audit firms to review and do the required, by law, annual audit, which in part is published for the Annual Meeting in July.
An interesting note about the audit is that they also provide a confidential report for the Board members only. In this report they point out areas where there needs to be improvement and also make other recommendations. For the most part the suggested corrections are minor.
One item they repeatedly stress is the need for an Audit Committee or Reserve Committee, that meets three or four times a year to track spending. This suggestion has never been done. It is important and urgently needs to be done now. In my opinion our reserve accounts are under assault.
Volunteers just do not have the experience or knowledge to review the financial day to day operations, the budget process or reserve accounts. This in no way makes them bad people, but we can not expect them to make the professional financial decisions. I was hopeful that the hire of a General Manager would help in the needed corrections. I have been disappointed in that.
The bottom line is that with over a million and a half budget and much more complex financial issues, professional financial management is urgently needed. Contracting with an outside firm should be considered. Another possible solution is to hire an outside qualified person to be the association Treasurer. Our governing documents allow for this paid position.
I am no expert on anything, but this is how I see It.
Unfortunately when it comes to the GM it looks like there is disappointment in many areas.
Love how you ask George to use his wealth of experience on the board to explain things to us common folks. I would like to ask him what specific projects he championed and brought to fruition. I'll give him the Veteran's Park and thank him for that one.
George started the neighborhood watch program in Surfside. He spent countless hours knocking on doors and organizing 6 neighborhood watches. Every watch sign you see, is the results of his efforts. He left the program when he first became a board member. Without his continued leadership, no one else stood up to continue the program.
Another project he initiated was the restoration and improvement of the Twin Lakes cabana. He worked with the County to obtain the soil for the planted berm at that cabana. He designed the landscaping, and with others, contributed hands on labor in painting, planting and hand mowing the newly planted grass there. He could often be seen there by himself, watering, raking and grooming that site. The sign you see there and at the other cabana's was designed and built by him at his garage. Not only that, but he dug the holes by hand and installed the signs. He did design drawings for the present landscaping at Seabreeze and Skating Lake cabana's.
He re-established the Lands and Buildings Committee, after it was inactive for years. He was appointed by the Board to be chairman of that committee, which he did for several years. There is a file cabinet full of the information he gathered about Surfside property. He initiated the yearly maintenance program we have today. He served several years on the Water/Field Committee where he served as Secretary.
He served for a number of years on the Community Relations Committee, where he is best remembered for his pictures of community events, that were published in the Weekender.
He served on the board as Secretary for a total of 3 years. He was often the word on the content of our governing documents. He knew them well and was frustrated by the board for their lack of following the rules, and their personal insults against others and him.
He is now providing a service for the members with his blog, which takes a lot of his time. He provides you, 9:39 with a place that you can challenge him and show your disrespect. What have you done 9:39?
It would not be an exaggeration to say, George has probably done more for the members of Surfside than most others combined. His works will be here long after he is gone. Knowing him, I expect he will keep being a voice for a better Surfside as long as he can. I have noticed over the years, he never wants credit or attention on himself. He would rather praise and encourage others.
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