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Finance staff reviews reserves, collection rates and hazardous-tree spending after storm response
Summary
Finance staff presented February financial statements, highlighting a 2024 operating surplus that allowed the association to cover November storm cleanup costs, current reserve balances (SURF, Roads, UDR), and concerns that 2025 hazardous-tree spending could exhaust the annual hazardous-tree budget and require UDR funding.
Finance staff Joel reviewed the February 2025 consolidated financial statements and a capital-project report, flagging several items the committee discussed in detail.
Joel said the association closed 2024 with a $305,870 operating surplus, which made it feasible to cover emergency storm-response expenses incurred in November 2024; the committee later recommended reclassifying those storm costs from capital to operations. He reviewed collection-rate trends: dues collections were about 94.6% year-to-date through February and were projected to rise above the 95% budget assumption by March. Joel explained how prepaid golf memberships are recognized in January and how payroll timing (a month with three payrolls) made some early-year comparisons with 2024 appear worse than they are on a year-to-date basis.
Joel walked the committee through reserve balances and obligated projects. SURF showed a beginning balance in the $3.0M range, with obligated capital projects (listed in the packet) reducing available cash; the committee reviewed an obligated-project total and the board’s preferred minimum carryover balance. Joel described the undesignated reserve fund (UDR) as the repository for collections on past-due operating assessments and interest; UDR stood near $350,000 and is typically used to cover extraordinary operating needs when necessary.
Committee members and staff discussed hazardous-tree spending driven by the November storm and the likelihood that additional 2025 hazardous-tree work (including a recently approved $40,000 estimate) would exhaust the $100,000 line in the 2025 operating budget; that could lead to UDR usage mid-year. Committee members recommended more proactive tree-management planning and noted salvage/timber income when trees are removed.
Joel offered to show committee members where in the online packet the detailed capital-project and departmental line-item statements appear. Committee members thanked Joel for the detail and said the financial data will be included alongside the committee’s motions to the board.
