2017-2018 Budget Proposal Report

REPORT OF THE POALH BUDGET COMMITTEE-PROPOSED 2017-18 BUDGET

The Budget Committee submitted the attached fiscal 2017-18 Budget to the Board of Governors for their approval. The Board reviewed the operating budget proposed, made several changes with the concurrence of the Budget Committee and voted to bring the Budget to Association members at the Annual Meeting on August 21, 2016. The Budget Committee, in a series of meetings, met with the chairs and committee members, officers and other specific individuals responsible for line items in the budget. Finally, this year the Budget Committee and the Board provided Committee chairs and other individuals responsible for Budget line items with an opportunity to meet with the Board and the Budget Committee to react and discuss the final Budget approved by the Board. This meeting resulted in a few changes to the Budget that is being submitted to members for their approval. The end result is an 2017-18 Operating Budget that is reasonable, meets the needs of the Association and its members and maintains and improves the quality of Lake Hayward and the Association’s services and facilities.

Here are the highlights of the 2017-18 Operating Budget:

Mill Rate-The mill rate to fund the 2017-18 Budget cannot be determined at this time. However, if we use the October 15, 2015 Grand List as the basis for a calculation and the Grand List does not change the mill rate would be approximately 4.6 mills. The actual mill rate for 2017-18 will be set in the spring of 2017 after we receive the actual Association taxable Grand List from the Town of East Haddam and we determine the rate of tax delinquencies from this year’s tax levy.
Tax Revenues are projected to be $201,650 which represents a 100% collection rate of estimated current year billings and collection of prior year delinquent taxes. With the collection procedures we put in place, all delinquencies as of June 30, 2016 have been collected in full.
Town of East Haddam Reimbursements-Over the past number of years, the Association through the work of members of the LQIC, the Association has consistently received reimbursements through the Town’s budget for cost related to the Association’s work to treat the Lake and various other lake related education programs. So this year it was decided to include the estimated amount of reimbursement the Association will receive in 2017-18.
Transfers from Association Reserves- The $12, 189 is balance of delinquent taxes that were collected in prior years and in accordance with policies established and approved by the Association were to be used to reduce taxes in future years. There are no further reserves available to reduce taxes.
Capital Improvements-The Properties Committee received funding for several capital projects ($10,000) including expanding and repairing the 3^rd beach parking lot, a new walk way to the 3^rd beach parking lot and repairs to the 2^nd beach parking lot. The Committee has an existing $10,000 capital maintenance reserve to provide additional funding for these projects.
Communications-This budget consists of $9,356 for printing the Spring Packet and the weekly Newsletters, postage and supplies, hosting the Association’s e-mail system and software for the Association’s web site.
Events and Recreation-These expenses covers the net cost of all the activities the Association has for its members including band concerts, Lake Hayward Days activities, arts & crafts activities, fishing and golf tournaments and other children’s activities.
Insurance and Bonds-Reflects a modest increase based on the estimates from our insurance agent and a change in the workers’ compensation policy that will reduce workers’ compensation premiums substantially.
Professional Fees-Professional fees represents fees paid to our accountants to perform a financial review of Association financial statements and legal fees paid to our law firm to assist in Association legal matters
Properties Committee-This budget continues to fund an aggressive list of current and deferred maintenance projects including beach raking, new beach sand, mowing contract, providing sanitation facilities, tennis court maintenance, expansion of boat racks to meet the present and future demand for boat racks, removal of trees, Pavilion and basketball court maintenance, surveying Association properties to determine boundaries, hiring a part time maintenance person to handle the increasing maintenance duties that cannot be staffed with volunteers, replacing 10 street signs and the design and installation of a rain garden on Association property to stimulate member interest in replicating rain gardens on their properties.
Public Safety-The Association through its Public safety Committee works closely with the East Haddam Police Department and Ct State Police to provide a police presence at 10 Association events, providing police security at peak periods and upgrading the Pavilion security camera and adding a second camera.
Real Estate Taxes-Taxes are estimated to remain at the same level as estimated for 2016-17.
Stipends-Stipends will remain the same for all except for the Assistant Secretary, who, is entitled to a 5% increase voted on two years ago.
Tax Collector’s Expenses- These are fees paid to the vendor for the Association’s on-line property tax system and printing our tax bills, training, postage, envelopes and lien fees.
Utilities-These costs include electricity, water and cable system for our security system and are estimated to be about 8% above 2015-16 levels.
Waste Management Collection-These costs will remain the same as 2016-17. Collection involves once a week collection in the fall, winter and spring and twice a week collection in the summer while seasonal residents are at the Lake.
Lake Quality Improvement-These costs involve the weed treatment contract with our contractor, a septic incentive drawing, office supplies, hiring a limnologist consultant to assist the committee, water testing and a water-wise planting incentive program.
General Capital Reserve Charge-The Budget Committee and the Board spent a great deal of time discussing the issue of providing separate capital reserves for each project that is raised by Committees or groups rather than having one Capital reserve that covers all capital projects of the Association. Last year the LQIC Committee made an excellent presentation on the need to start reserving for lake related projects and the Association agreed to fund $25,000 in the 2016-17 budget and to transfer $65,000 existing reserves to a LQIC specific reserve. This year the Budget Committee and Board decided to recommend to the members that the Association hold one capital reserve that considers all of the capital needs of the Association. The LQIC proposal last year and updated this year for 2017-18 budget purposes estimates a total amount of Association capital outlays of $540,000 over a 17 year period. While the LQIC forecast is only an estimate, the Board believes that the entire organization needs to focus on a long term strategic plan. The Budget Committee recommended and the Board agreed to start this process in the fall and have at least a preliminary Capital Plan covering all of the Association’s needs ready for the Spring of 2017. This is the most important undertaking of the Association and will be the starting point for determining the priority of the projects and the level of annual funding to be included in the Annual Operating Budget so the Association can be in position to execute specific projects once they have been vetted by the Committees and Board before specific projects are brought to the membership for approval of the project’s funding. In 2017-18, the Board asks for a charge of $25,000 to add to the general Capital Reserve.
Operating Budget Contingency Fund-The Budget Committee and the Board request approval to allocate $15,000 for an Operating Budget Contingency that can be used if after the Board reviews each budget line item and reallocates the budget to achieve Association objectives and there are projects or tasks that need to be achieved before the end of the fiscal year, the Board can use the Operating Contingency reserve to fund those projects up to a limit of $15,000. This procedure has allowed Committees to complete important projects in a fiscal year and not have to wait until the next fiscal year. When the Association budgets 15-18 months in advance it is sometimes difficult to gauge how many of the projects will be accomplished and even with the reallocation of unspend budgets, there still may not be enough to fund those projects. In 2015-16, the Board authorized the utilization of $8,267.07 of the 2015-16 contingency reserve.

SPECIFIC DESIGNATED RESERVES

The Budget Committee and the Board requests the following specific reserves be carried forward or redesignated: $10,000 for Properties Capital Maintenance projects to be used in 2016-16 or 2017-18; a $25,000 charge to the 2017-18 Operating Budget for the redesignated General Capital Reserve account to fund capital projects that are determined to be necessary through the long term strategic planning process; redesignating the $25,000 charge in the 2016-17 Operating Budget for the LQIC Capital Reserve and the $65,000 reserve transfer from the LQIC Capital reserve to the redesignated General Capital Reserve account. No actual expenditure from the General Capital Reserve Account can be spent until the project is reviewed by the Board and has all the necessary support and is brought before the membership for a vote at the Annual or Special meeting of the Association.

The Budget Committee and Board also request approval to continue the Promotional Items Revolving Account of $5,00 and 2016-17 and 2017-18 Operating Contingency Reserves of $15,000 each to cover short falls.

The Budget Committee thanks all those who were involved in the budget process for their cooperation and efforts in making the 2017-18 budget process the most complete, transparent and inclusive budget process that the Association has embarked upon. We welcome your comments before and during the Annual Meeting.

Respectfully submitted,

Budget Committee,

Ed Bader, Chair

Roland DePratti

Dave Edgington

Kim Jonah

Lee Griffin

Gail Miers