For the month ended April 30, 2013
Budget Summary
Year-To-date income of $191,957 is slightly better than budget. Year- To-date expenses of $162,029 are $15,235 less than budget. Primary reasons for the favorable expense position are: 1.) payroll reduction first 3 months ($9,900), 2.) un-accrued audit fee ($3,200), 3.) Credit received for medical benefits ($1,800) and lower vehicle expenses ($1,467).
Balance Sheet Summary
Total cash balances on hand at the end of April to meet operating costs amounted to $53,663. The social checking account balance remains at $986.19.
Reserve balances on hand at the end of April (money market accounts), increased to $489,556, up from $481,676 at the end of March. Reserves have increased by a total of $26,750 since year end. To date, capital expenditures have amounted to $4,211. In addition to funds currently available in money market accounts, the replacement fund balance also includes $97,300 in loan principal outstanding owed to the Association.
Comments
In sum, Meadow Hill, Inc. continues to enjoy a strong balance sheet leading into the recently approved paving project (Phase I). We will pay for the initial phase entirely from reserves and rely on no outside funding. Better still- no special assessment is required to complete the initial phase. Healthy reserves preclude special assessments, which no one likes. Over the next few months, The Association’s reserve balance will be reduced considerably as we pay the contractor and engineer. We expect to have enough remaining, however, to stay within the $186,000 contingency amount established by the board to meet any future emergencies.
This is good, but reserves are also intended for more than meeting emergencies. They are a vital component of overall financial health. The most recent issue of Common Ground, a magazine for homeowner associations, had this to say about them: “Setting aside funds for routine repairs isn’t enough. Associations must have plans and funding streams for the big-ticket items too.” And, “When tasked with funding major projects, associations have two options: Pay it forward or take a chance securing money later.” Fortunately, these points have been recognized by previous boards as well as the present. They are an important part of making Meadow Hill an enviable place to reside and for ensuring that property values are maintained.
– David Faxon