CRE Single Lot/Homeowners Owners, It's Time To Speak Up!

[dgates80]

Oh and I almost forgot

THE M&O BUDGET IS NOW ONLINE

www.poacre.org - home page link

Demo Site
http://70.86.16.226/~poacre/index.php?
Go to documents, Budgets! Don't forget, you have to register...

June

Pick one!

Thanks, June.-- good work on getting this onto the web site quickly after the BOD voted to do this.

Wow. Just a quick look and I allready have about 20 questions. Gonna have to sit down and go over this line by line.

I suspect that many of my questions will be common ones. I see a "CRE Budget FAQ" is probably going to be needed to avoid repetitive questions and answers.

Some questions will fall into a "budget interpretation tutorial" catagory for the non-accountants among the membership. Others may question items and request justification, which may be obvious once a simple rational is presented. Other items may be contentious.

This is where a "top 10 (or 25) questions" document may help... to avoid spending a lot of time on the common and readily answered questions by having a "canned" answer.

This sort of FAQ would probably make a great handout sheet for the October membership meeting..... possibly quell the uprising and the use of torches and tar and feathers too.

 

[ladyhawk]

Also, where is the roads budget,

I don't have the roads budget. I didn't think much about that one simply because that wasn't the controversy. I will see what I can do to get it and put it online as well.

As for your other questions. I will see what I can do to get the answers. I quit looking at the budget after seeing the first two that we were expected to approve. At least this one is more realistic than the others...

And if you saw the other ones we had, I think you would have to agree. LOL

June

 

[ladyhawk]

Thanks, June.-- good work on getting this onto the web site quickly after the BOD voted to do this.

Wow. Just a quick look and I allready have about 20 questions. Gonna have to sit down and go over this line by line.

I suspect that many of my questions will be common ones. I see a "CRE Budget FAQ" is probably going to be needed to avoid repetitive questions and answers.

Some questions will fall into a "budget interpretation tutorial" catagory for the non-accountants among the membership. Others may question items and request justification, which may be obvious once a simple rational is presented. Other items may be contentious.

This is where a "top 10 (or 25) questions" document may help... to avoid spending a lot of time on the common and readily answered questions by having a "canned" answer.

This sort of FAQ would probably make a great handout sheet for the October membership meeting..... possibly quell the uprising and the use of torches and tar and feathers too.

Hey! I love the idea of the list of questions. If we can get those put together and out to the members before the meeting, it will make things go a lot smoother to.. So I will take the questions, get the answers, provide them back and keep track of the list! What a great idea.

Thanks! And you guys don't have time to volunteer? Here's a good example of volunteering!

 

[dgates80]

Official site

You might also explain which page shows the real budget info, and which one is demo only.

Its kinda confusing.

I would assume that the Adobe PDF presented on the www.poacres.org site is the "official" one. I sugggest you go there to download your 'for sure official' version of the budget.

The web site that has an IP address as opposed to a domain name (http://70.xx.xx.xx.xx/somethingorother) I think is not yet in a "production" status, and info there may not be nessessarily correct. When I build web sites I often use "placeholder" documents while building the overall structure of the site. the printing industry uses the concept of "greeked text" -- nonsense text that is simply a placeholder. Similar concept here.

 

[residentofcre]

I have a question on the financials. Actually this is probably best directed toward residentofcre or any other board member that was on the board last year.

On the very first line: M&0 fees show an increase in fees budgeted between '07 and '08. It is an increase of $76,382. If there are only X number of lots in CRE paying M&O, there is no resolution to Covenant #21 interpretation yet, and there is no per lot increase in M&O fees, how is it that the budget can increase at all? Is there a magical mystery ATM machine somewhere?

And, remind me please; what is one M&O fee worth?

The middle column should have been removed after the vote determined it wasn't going to happen.

Also, where is the roads budget, and why is there roads admin expense being shown as an adjustment to M&O Admin. That would be an improper transfer between funds in my estimation. Maybe a violation of GAAP or GASB? Thats really a comment more than a question.

When I get an answer to my question about the first line, we can go on to the second line, and then the third, and so on. I don't have much else to do. Obviously.

Question on the M&O income..... This line includes M&O fees [and late fees]due from previous years.

I would live to say that if you divide this number by $213.00 you will come up with the correct number of members in CRE but this is not the case. This number also includes discounted employee dues [1/2 an M&O benefit] and there are also members who pay no fee... lifetime members... and since it includes those along with the previous accounts receivable [accounted for by cash accounting rather than accrual accounting] the division won't work.

The Board recently sent the re-write of P&P#5 to legal which would move the accounting practices from cash to accrual and make this line item much easier to explain in the future....

The Roads Admin Expense is totally appropriate... we checked into this with legal and the accountants years ago. Since the Roads Budget is seperate from the M&O Budget, this is the best way to show the utilization costs of office space. This is the cost of the main offices of the Roads Dept. There should also be some cost associated with the utilization costs of the lower compound in the Roads Budget. This would be shown seperately on the Roads Budget only. Most companies that have overlapping usage of buildings, utilities, and supplies either bill or budget a similar situation. It's sort of like the tax write off you would use on your personal income taxes for use of one room in your house as an office.

Oh and by the way.. I think we should call this the 2008 Member Budget rather than the 2008 Decreased Budget...

 

[Toxick]

and there are also members who pay no fee... lifetime members...

How does one get in on this action?

 

[residentofcre]

How does one get in on this action?

Too late [thank goodness]... these are people who bought a Lifetime Membership in the old Ranch Club... if they change their deed in anyway... then they loose their no pay status as well... so they can't give the lifetime membership to family or new spouses....

 

[exnodak]

Question on the M&O income..... This line includes M&O fees [and late fees]due from previous years.

I would live to say that if you divide this number by $213.00 you will come up with the correct number of members in CRE but this is not the case. This number also includes discounted employee dues [1/2 an M&O benefit] and there are also members who pay no fee... lifetime members... and since it includes those along with the previous accounts receivable [accounted for by cash accounting rather than accrual accounting] the division won't work.
QUOTE]

I still don't see where you get an additional $76K. Even if you anticipated a prior year's harvest, you would also have a current year's adjustment for uncollected accounts that would offset it. Because you don't have a line item adjusting for uncollectibles (current year) this carry forward process will always create a large discrepency at year's end. One of the numbers must be wrong.

Because this is a budget of projected cash flow you should be plugging in the actual anticipated collections in terms of real cash expectation. In the accrual system you must provide a separate line to account adjusting for uncollectable accounts recievable (which in this case is a misnomer). They all get collected, but not necessarily in the cycle they are posted.

Budgets are originated as cash flow and their performance is reported by either cash or accrual basis depending on the type of business. You are right that cash is easier to report and it is the more proper method for POACRE because of the several different fund accounts that require monitoring. In other words, its easier to hide real money in an accrual system.

If prior year's budgets have always been reported on an accrual basis and measured for performance on a cash basis that would go a long way to explain the confusion in the finance committee.

 

[residentofcre]

I still don't see where you get an additional $76K. Even if you anticipated a prior year's harvest, you would also have a current year's adjustment for uncollected accounts that would offset it. Because you don't have a line item adjusting for uncollectibles (current year) this carry forward process will always create a large discrepency at year's end. One of the numbers must be wrong.

You would have to see the Budget Comparison Report for 06/30/07 to find the additional $76K. It took me a while to find it and since I don't have it with me at work... and have a meeting tonight that I cannot get out of ... it'll be late late tonight before I get the numbers posted.

The A/R they are showing in the Budget Comparison for the fiscal year that just past is about $50K. That doesn't include late fees or collection costs.

Because this is a budget of projected cash flow you should be plugging in the actual anticipated collections in terms of real cash expectation. In the accrual system you must provide a separate line to account adjusting for uncollectable accounts recievable (which in this case is a misnomer). They all get collected, but not necessarily in the cycle they are posted.

They might not even all get collected!! The property may have been sold before liens filed under the old P&P, meaning that the new owner is not responsible for the old owner's debt unless notified of the debt before settlement and agreeing to pay it off. The only way to collect the money in that case is through Civil Action [like small claims court] and apparently the information is sketchy in some cases as to contact the past owner.

The new P&P#5 shortens the time between declaring dues deliquent and filing a lien on the property.

Budgets are originated as cash flow and their performance is reported by either cash or accrual basis depending on the type of business. You are right that cash is easier to report and it is the more proper method for POACRE because of the several different fund accounts that require monitoring. In other words, its easier to hide real money in an accrual system.

That's a matter of debate... I happen to think the accrual method is much better for actively tracking Receivables. Right now they are subtracting the income from the expenses when posting them and that just doesn't do a thing for showing the actually A/R shrinking because an A/R doesn't exist... if you deal in cash you don't have anyone that owes you money.... If you deal in accrual you have an aged receivable to watch....

If prior year's budgets have always been reported on an accrual basis and measured for performance on a cash basis that would go a long way to explain the confusion in the finance committee.

CRE has never to my knowledge report on an accrual basis. It has always been cash... but like I said... that's going to change...

 

[exnodak]

... if you deal in cash you don't have anyone that owes you money.... If you deal in accrual you have an aged receivable to watch....

HUH? That's only true in retail. In POACRE all M&O invoices are generated as immediately payable on the same day and same time. That's what starts the delinquency clock ticking. There is absolute recognition of the available cash as it comes across the desk and credits are applied against the invoices. And, what has gotten POACRE in soooo much trouble is that they always seem to fail to acknowledge AVAILABLE cash.

How many people responded to the request for paying the '08 or '09 fees early? Are any of those accounted for? You need to check for credit balances against the receivables before you finalize this budget. It wouldn't take very many early payers to throw a monkey wrench into the process.

The budget is a theory. The performance of cash flow against the budget is reality. They both need to be posted or there is no real transparency. It would be good to see the last several years budget performances posted.

What about the Roads budget and the STD budget. M&O is sniveling in comparison to those two combined. And, the STD is the only fund that is REQUIRED by law to be made available to the general public.

 

[residentofcre]

HUH? That's only true in retail. In POACRE all M&O invoices are generated as immediately payable on the same day and same time. That's what starts the delinquency clock ticking. There is absolute recognition of the available cash as it comes across the desk and credits are applied against the invoices. And, what has gotten POACRE in soooo much trouble is that they always seem to fail to acknowledge AVAILABLE cash.

How many people responded to the request for paying the '08 or '09 fees early? Are any of those accounted for? You need to check for credit balances against the receivables before you finalize this budget. It wouldn't take very many early payers to throw a monkey wrench into the process.

The budget is a theory. The performance of cash flow against the budget is reality. They both need to be posted or there is no real transparency. It would be good to see the last several years budget performances posted.

What about the Roads budget and the STD budget. M&O is sniveling in comparison to those two combined. And, the STD is the only fund that is REQUIRED by law to be made available to the general public.

You keep talking about Receivables..... there is no receivable report when you are keeping your books in CASH. That's why we are moving them over to ACCRUAL....

I will find out about posting a cash flow..

We are working on M&O... Roads and STD are already approved by all.... That's why M&O is posted.

Has anyone else tried the new forum at www.poacre.org ?

 

[exnodak]

..... there is no receivable report when you are keeping your books in CASH. That's why we are moving them over to ACCRUAL....

Based on you statement, it would have been impossible to manage collections of past due accounts because they wouldn't have been booked anywhere.

It doesn't matter if you are in cash or accrual. The sum of the cumulative outstanding invoices is receivable and easily reportable. In either system it is easy to generate a report of the accounts receivable.

The difference between the two is when you post the actual money received/expended as income/expense. Cash system posts transactions at the time of invoice payment/expense payment. Accrual posts at the time of invoice generation/receipt of bill.

I don't have a problem with either one.

 

[residentofcre]

Based on you statement, it would have been impossible to manage collections of past due accounts because they wouldn't have been booked anywhere.

It doesn't matter if you are in cash or accrual. The sum of the cumulative outstanding invoices is receivable and easily reportable. In either system it is easy to generate a report of the accounts receivable.

The difference between the two is when you post the actual money received/expended as income/expense. Cash system posts transactions at the time of invoice payment/expense payment. Accrual posts at the time of invoice generation/receipt of bill.

I don't have a problem with either one.

And that is why changes are on the way.

 

[exnodak]

We are working on M&O... Roads and STD are already approved by all.... That's why M&O is posted.

Please clarify.

1 Am I to understand that the M&O budget that has been posted is NOT an approved budget?

AND

2. That the Roads and STD budgets which HAVE been approved are not available for posting on the websites?



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[ladyhawk]

Please clarify.

1 Am I to understand that the M&O budget that has been posted is NOT an approved budget? The M&O Budget was approved by the board to post on the POACRE website, it has not been approved by the membership and will be presented at the October membership meeting.

AND

2. That the Roads and STD budgets which HAVE been approved are not available for posting on the websites?The roads budget is available, I just don't have an electronic copy to post. When I get it, I willl post it. As for the STD Budget, I'm not even sure about that one because I've never had anyone ask. So, It's something I can look into...



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My reply is in Blue!

 

[exnodak]

Thank you

 

[ladyhawk]

Question on the M&O income..... This line includes M&O fees [and late fees]due from previous years.

I would live to say that if you divide this number by $213.00 you will come up with the correct number of members in CRE but this is not the case. This number also includes discounted employee dues [1/2 an M&O benefit] and there are also members who pay no fee... lifetime members... and since it includes those along with the previous accounts receivable [accounted for by cash accounting rather than accrual accounting] the division won't work.

We have more houses that have been built. Should we find out how many have gone in? Then in 07 there is no adjustment for money that may not be collected prior to the end of the fiscal year whereas the 08 does consider it. 07 is the budget done by the finance committee. The 08 budget done by the treasurer of the Board because of all the frustration in trying to get a realistic view of our finances!

The Board recently sent the re-write of P&P#5 to legal which would move the accounting practices from cash to accrual and make this line item much easier to explain in the future....

The Roads Admin Expense is totally appropriate... we checked into this with legal and the accountants years ago. Since the Roads Budget is seperate from the M&O Budget, this is the best way to show the utilization costs of office space. This is the cost of the main offices of the Roads Dept. There should also be some cost associated with the utilization costs of the lower compound in the Roads Budget. This would be shown seperately on the Roads Budget only. Most companies that have overlapping usage of buildings, utilities, and supplies either bill or budget a similar situation. It's sort of like the tax write off you would use on your personal income taxes for use of one room in your house as an office.

There are roads employees who utilize administrative areas and services such as utilities, copy machine, postage, ect.. in addition to that the roads assistant also does administrative for M&O so the roads budget should reflect ½ of her salary and should also reflect the reimbursement to admin for utilizing administrative areas and services, ect… I will try to get a copy of that posted in the next few days.

Oh and by the way.. I think we should call this the 2008 Member Budget rather than the 2008 Decreased Budget...

responses in Blue.

June

 

[ladyhawk]

And I am keeping a list of questions and answers to provide to members at our Membership meeting in October. I'm hoping this will help with the chaos!

June

 

[exnodak]

On page 1, it would help if the columns had headers. Which is budget and which is actual? Not clear. A column showing the difference would help interpret too.

 

[dgates80]

On page 1, it would help if the columns had headers. Which is budget and which is actual? Not clear. A column showing the difference would help interpret too.

I agree. Also remove the budget column with the projected amounts and leave only the current operating amount (the reduced budget) since that is the current reality.

It's a .pdf, which is great, but it would be usefull to be able to get it as an Excel file, this would facilitate analysis.

Thanks.

While this is a great step in the right direction, we also really need to see the roads budget and the STD budget as well. The idea is to open up to the membership the big picture of the whole CRE financials-- it's not supposed ot be a mystery where our money goes.

In general after looking at the budget it seems like that CRE is trying to do a good job of spending the member's money. The allocation of funds to administration seems pretty healthy though.... seems high in a relitive way to spend what, 40% + of the budget on administration?

275K in salaries plus benefits etc. on top. I did see a note that this is for 4 full time employees. So, 275K divided by 4 = a gross average of $68,750 per year. Of course, some make more and some less, but that is the average.