Will you publish a description of the two Board Designated Funds, what is being paid into each, and what will be the balance at year’s end?

Board Designated - Master Plan Fund

Sources of MP Cash:

• $40/portion of monthly dues ~$1.5mil annually
• Capital Contribution Fund (CCF) $3,000 per each new homeowner purchase  ~$600k annually

Uses of MP Cash (potential examples):

• Chimneys renovation
• Postal Facility expansion
• Clubhouse renovation

Board Designated - Capital Replacement Fund

Sources of Capital Replacement Fund:

• Monthly transfer of cash from Operating Cash Fund equal to monthly depreciation amount  ~$3.2mil annually

Uses of Capital Replacement Fund (potential examples):

• Lake Petit Dam
• Road paving, guardrails, road striping
• Movers, snow removal equipment, other vehicles
• HVAC heating/cooling equipment
• Roof replacements

After the annual audit is completed the Finance Committee can recommend the Board to approve transfer of surplus dollars from Operating Cash to either fund.

Year-end balances depend on timing and actual costs on every item. Supply chain and contractor workforce delays in an environment of increasing prices can change the cost by the time the project is ready. Although Replacement Capital project costs are vetted during the previous year prior to the approved Capital Plan, we won’t know the actual cost until the project is bid. The spread between budget and actual is typically not large due to the limited scope of most projects. However, we recently experienced a change close to $800k in our favor due to competitive bidding on 2 projects. Approved items costing more than $300k in Replacement Capital that come in higher than budget must come back to the Finance Committee and Board for approval.

Projects on the Master Plan list are also estimated based in information available during the budget cycle, but are not approved in advance, and not included in the Capital Plan. However, those projects are included in cash flow analysis when the budget is constructed and assessments are set for the following year. Management, Finance Committee and the Board review cash flow analysis and capital expenditures on a regular basis.

(Q&A - asked by Michelle Toups #8106 during February 2022 Board Meeting)