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Budget Detail Questions and Answers

Q:  What does the Annual Meeting budget line item include?

A:  The Annual meeting line item for the current budget includes all costs for the annual meeting, printing, mailing, food, sound system, ballots etc.  The only thing not included would be an allocation of Suzanne’s wages for the time she will spend on preparing for the meeting.

 

Q:  Why do we have Bank Charges Expense?

A:  The bank charges us every time someone bounces a check or for extra services.  We recover the cost of bounced fees by charging a typical NSF fee to members.

 

Q:  Depreciation Expense… what is this?

A:  Capital purchases (water system, equipment, buildings etc.) are generally listed as an asset on the Balance Sheet rather than expensed in full when purchased. Businesses use the concept of allocating that cost over the useful life of the asset as an expense—which is recorded as Depreciation. This useful life can be as short as three years and as long as forty years or more depending on the kind of asset. It is not a cash expense in the current year.

 

Q:  Legal Fees – Is this from changing the water billing contract?

A:  No, there has been no legal expense in regard to removing the water billing from the contract with Sallal. We have an attorney whose job is to help our volunteer Board be sure to make good contracts, guide us in business decisions and to review our Bylaw amendments each year among the other things attorneys do. We have been sued or have had to sue others over the years.  Last year we had a mostly new Board and we had a number of things come up. An example is that PSE registered the easement they have on our greenbelt (from 2010 I think) on a member’s lot instead of ours.  The attorney was involved in helping us determine how to address that.  We had a question about whether trustees can take a leave of absence.  So we budget for legal expenses and some years we don’t use it much and other years it is a bigger item.  It is a hard one to plan for but we do the best we can.

 

Q:  Communications/Newsletter- is this part of office supplies or is it  staff?

A:  We are required by the Bylaws to provide the membership with a printed newsletter six times a year.  This is the printing cost.  I hope we will be able to reduce that by getting a good laser printer in the office soon or going to an electronic newsletter.

 

Q:  Park Maintenance Services—what is this?

A:  Our contract for grounds maintenance was set at $1600 (plus $500 a month for extra services) a month in 2011 and 2012 until we changed to a different provider last winter.  That entity went out of business this past summer and since then and currently we are not in a contract for grounds maintenance.

 

Q:  As a suggestion, when the Chalet is used for non-board related meetings, why don’t you charge a rental fee that covers cost of cleaning, plus additional money that goes into a reserve to help pay for maintenance of the Chalet.

A:   We charge a nominal fee for reserving the chalet.  The members own the chalet.  The reservation fee covers the administrative costs.  We each pay assessment fees to cover the cost/maintenance of the assets.  Yes, the reservation fee could be higher and in fact the board did just raise it from $10 a day to $25. If you feel strongly it should be changed come to the park committee meeting and we will listen to what you think or send a member concern form.

 

Q:  Please send all future communications via email rather than USPS. I can see that a lot of money can be saved if everyone switches to this method. 

A:   You are correct, money can be saved, as well as time (which equates to money) and natural resources (trees, water etc.).  With the upgrades to the website we are aware there are many ways we can use it to save on the cost of all of our communications.  We need members to provide email addresses and be willing to agree to use electronic methods.  Last spring we included a flyer with the newsletter asking members how they wanted to receive information.  Over half of those who responded wanted paper.  Our members have to support this kind of change by participating.

 

Should you have other questions, please email treasurer@wildrim.org.

 

 

Special Meeting Results


Result

The budget is ratified.



Votes

Total number of members:

 

638

"No" votes required to reject the budget:
(See "Washington State Law", below.)

 

320

Total number of ballots received:

 

77

Number of votes in favor of ratification:

 

49

Number of votes against ratification:

 

27

Number of ballots without a "Yes" or "No" vote:

 

1

 

Washington State Law


From:  Revised Code of Washington (RCW) 64.38.025(3):

Within thirty days after adoption by the board of directors of any proposed regular or special budget of the association, the board shall set a date for a meeting of the owners to consider ratification of the budget not less than fourteen nor more than sixty days after mailing of the summary. Unless at that meeting the owners of a majority of the votes in the association are allocated or any larger percentage specified in the governing documents reject the budget, in person or by proxy, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the owners shall be continued until such time as the owners ratify a subsequent budget proposed by the board of directors.

 

What the Law Means


From:  WA State Community Associations Institute (http://blog.wscai.org/2013/08/27/budget-ratification-best-practices/)

At the budget ratification meeting, unless the budget adopted by the board is rejected by a vote of a majority of the total voting power of the association (or any larger percentage specified in the governing documents), the budget “is ratified.” In other words, the owners do not approve the budget—the budget is automatically approved unless it is rejected by a majority of the total voting power. Thus, if less than a majority of the total voting power is present in person or by proxy at the budget ratification meeting, it is legally impossible for the budget to be rejected and ratification is automatic.

 

Ballot Counting Procedure


  1.  Ballots are received:
    1. By personally being deposited into the WRA Ballot Box,
    2. By USPS mail at the WRA PO Box 315, picked up by the Administrative Assistant and delivered to the WRA Office,
    3. By personal Drop Off into the WRA Office Mail Drop Box outside the Office door,
    4. All Ballots are deposited into the WRA Ballot Box prior to the close of voting at the Membership Meeting.
  2. The Ballot Box is kept in a secure location and the keys to the Ballot Box are entrusted to the secretary and/or locked in the Key Lock Box in the WRA Office.
  3. After the close of voting:
    1. All actions involving the Ballots will involve a minimum of two persons who have signed Confidentiality Forms,
    2. The Ballot Box is unlocked,
    3. The Ballots are removed from the Ballot Box,
    4. The Ballots are separated into two groups,
      1. Ballots with names, addresses, and/or lot numbers for identification, and
      2. Ballots without identification.
    5. The Ballots that can be identified are turned over to at least two persons who will verify the names on the outside of the Ballots with the Master Registration List.
      1. The WRA listing will be available by Lot Number / Account Number, and
      2. By Alpha listing – the alpha listing will serve as the master Registration List.
    6. Ballots that cannot be identified without opening will be turned over to at least two persons who will open each Ballot to determine what WRA member submitted the Ballot, if possible.
      1. These Ballot will be identified by member name and number, and
      2. Will be added to the Master Registration List.
    7. In the event that a clear and valid identification cannot be made the Ballot will be set aside as invalid.
  4. After all Ballots that are identified as valid Membership votes,
    1. The Ballots will be opened and the identification portion will be removed and saved separately.
    2. The Voting portion of the Ballot will be separated into groups of 10 or 20 depending on the number of Ballots received and the complexity of the voting involved on the Ballot.
  5. A separate sheet (page) will be available for each group of Ballots for tallying the votes.
      1. Three persons will count each group of Ballots by individual item on that Ballot.
        1. Either by one person reading the results and another noting the responses,
        2. Or by one person reading the results and two others noting the responses,
        3. The roles of the persons counting the Ballots will then reverse and the count will be done again,
        4. If the counts are not in agreement in any one group of Ballots, the count will be repeated until an agreement on the votes is achieved,
        5. When the counts are in agreement, the total of each item’s votes will be logged onto a Master Ballot Count Sheet.

      2. The Master Ballot Count Sheet will be verified by another group of counters.
  6. After verification that all ballots have been counted and the results posted to the Master Ballot Count Sheet, the results will be given to the president of the Board of Trustees for publication to the Membership.

Lost and Found


mitten

If you have lost an item in the park, it may have been turned in at the Chalet.

Office hours and contact information are in the website sidebar.

Water Quality Concerns Q&A

 

Wilderness Rim Association oversees the Wilderness Rim water system, Cascade Park, the greenbelt, and the office.  The volunteers who serve on your Board of Trustees give generously of their time, endeavoring to act in your best interests and to serve with honesty and integrity.

We would greatly appreciate your support.

 

water

 

 

Questions and answers regarding water concerns:

 

Was there something that happened with Sallal? Is it just to save money, and if so why are we doing this now and not waiting to do it at the regular meeting?

We are changing now (and not in July) because the contract with Sallal is renewed each January.
We are going back to handling our own billing to reduce costs, to have accurate accounting as requested by our CPA, and to provide office services here in the community.

 

How much money is being saved, and how?

We anticipate saving at least $10,000 per year by performing these tasks ourselves.
For example, our new budget for meter reading is less than $3,500 a year.  With Sallal it would cost $7800.

 

How will we be hiring the new employees to make this happen?

We have hired a very capable office person, Suzanne Glazier, to do the billing and to handle member concerns and payments.

 

And how/who will ensure that they are trained appropriately?

Denny Scott, our water system operator, has been working with Wil Chromey, our new meter reader.  The meters have already been read and the process went smoothly.  Our existing billing software license includes support for Suzanne.

 

Is Sallal continuing to do maintenance?

We are only resuming accounting-related functions.  Sallal will continue to be our water system operator.  They will continue to monitor water quality and to maintain the system.   Our water quality will not be affected.

 

Water Quality Concern

Water

A Response from the Department of Health

From: Ernie Henrie

Sent: Friday, February 7, 2014 2:32 PM
To: Wilderness Rim Association Office; trustees@wildrim.org
Subject: Re: Heads Up About Calls To WA Dept of Health

Hello Trustees,

I just spoke with Brian Boyce of the Department of Health (in Kent) in regards to the water complaint. He indicated that the call he received was from an unidentified person with concerns about our service contract with Sallal. This person indicated that the contract was “no good” because of changes made to it by the WRA Board of Trustees.  I advised Mr. Boyce that two changes were made to the contract, and the were as follows:

  • Do the billing in-house, as advised by our auditor.
  • Reading our own meters.

The remainder of the contract was left in tact, and that Sallal was still the Water System Operator and responsible for water quality.

Mr. Boyce indicated that WRA has done nothing wrong in making these changes and they would only get involved if water quality or system operations had problems. Mr. Boyce did speak highly of Sallal, and as far as they are concerned this matter is closed.

Ernie

Budget Q & A

Jessica Besso is a Certified Public Accountant and Fraud Examiner who has worked with WRA's Budget and Finance Committee to create a new budget.

The new budget has been approved by the Board of Trustees and a Special Meeting of the Membership has been called on February 15, 2014 for the purpose of ratifying it.

The following PowerPoint slides are part of Jessica Besso's Budget Q & A session on Saturday, February 2nd, 2014.

See the WRA Calendar for a second, identical, Budget Q & A session is scheduled for February 11th, 2014 at 7:30 pm at the Chalet.


IMPORTANT NOTE:

Jessica's PowerPoint presentation contains a slide showing a Side-by-Side Analysis of Meter Reading and Billing Cost Savings.  This slide contains financial information that is available to WRA members only.

To access the slide, you must be a registered website user.  For details about how to register, please see How to Access Members-Only Posts


Slide1

Slide2

Slide3


Q:  What is the purpose of the budget?

A:  The annual budget is a tool for the members and volunteer Board to use as a guideline to direct the Association's income and expenses.   It is a way to communicate variances due to reality compared to expectations and hold the volunteer-run committees and membership accountable.  It helps everyone plan for the future and prioritize funds as a planning tool and roadmap.  The budget provides a control element in financial statements. The budget is used as a guide or “target” to help the homeowner association determine if it has under or over-estimated the amount of the expenditures. If significant deviations from the budget (the expectations of what the expenditures should be) occur, the Board of Trustees should try to determine the causes.


Q:  What is a budget not meant to be?

A:  A budget is NOT a mandate from the membership.  Budgets help minimize the unexpected, but they cannot predict the future.  No budget will perfectly align with actual activity, but the intent is to estimate as closely as possible.


Q:  Why does a budget have to be balanced?

A:  The money coming in and money going out must be equal.  The Association cannot plan to spend more money than comes in (a deficit) nor plan to receive more than it spends (a surplus).  As a not-for-profit corporation, the bottom line must equal zero.


Q:  What happens if the actual money coming in or going out does not match the budget?

A:  The Board should determine why there is a large variance and seek corrective measures if necessary.  Many factors can cause a budget line item to be greater than or less than the actual amount.  Again, a budget is just a working estimate or goal.


Q:  What happens to money that is not spent?

A:  The Board evaluates the financials on a quarterly basis and can allocate funds for reserves, capital improvements, repairs, or other future needs.

Slide4


Q:  Why did the WRA Board of Trustees call for a Special Meeting of the Membership to approve a new budget?  Doesn't WRA already have a member-approved budget?

A:  The members rejected the budget proposed at the July 2013 annual meeting.

RCW 64.38.025 requires that the corporation use the last budget approved which was the 2012-13 budget.  The membership should have clear communication from the Board on financial matters, and the only way to do that is through a special meeting.  Washington State law requires that any budget the Board adopts must be ratified by the membership.  The Board wants the membership to be aware of the financial commitments it is making.  The new budget reflects a better estimate of income and expenses and includes costs that have already been incurred that were not part of the budgets in prior years such as the reserve study and financial statement audit.



Q:  How does this budget resolve the issues that led the membership to reject the previously proposed budget?

A:  The budget is balanced, aligns more accurately with actual expenses, allocates funds to the reserve accounts from surcharge, and does not raise assessments.


Slide5

Slide6


Q: Why is WRA performing the billing and meter reading instead of Sallal?  Was there something that happened with Sallal?

A: The renewal of our contract comes up every January.  In the process of preparing for that renewal, it was decided that preparing the billing and meter reading is more cost-effective for the membership when performed by our own staff.  Also the Board had been advised by the outside independent auditors and CPA who prepares the tax returns that the billing records should be in the control of WRA.  Other benefits of moving the work in house include adherence to the WRA Water Regulations, better service to the membership with integration of assessment and water billing, and cost savings of $10,000-$15,000/year.  Detailed analysis of the cost savings is available in the office or in the members-only area of the website.


Q: Are my water rates going to be impacted by this change with Sallal?  How will my water bill be affected by the new budget?

A: The intent is to keep costs reasonable and reduce where possible.  The water rate increase last fall is the basis of the revenue projections in the budget.  Actual water consumption will determine actual revenue and whether or not expenses are covered.  In dry years, more water is used and is a large variable affecting billing, and bottom line surplus or shortage.   We currently do not anticipate any rate changes for the remainder of this calendar year at this time.


Q: Is Sallal continuing to do maintenance on the water system?

A: Yes, we are renewing the contract with Sallal Water Association for the Water System Operator, Denny Scott, for 2014.


Q: Will the billing be accurate?  What about the meter readings?

A: The Association has employed an administrative assistant to handle all day-to-day office operations for some time, and now water billing will again be among the list of duties.  The training for billing is included in the software license fee for the software that we own and used in the past.  Meter reading is not a professional skill.  The Association has retained the services of a competent meter reader who is supported by our Water System Operator through our contract with Sallal Water Association.


Q: What if the meter reader is ill?  Is there a backup plan?

A: The readings do not have to be performed on particular days of the month.  The Water Committee and Board of Trustees fully support this effort that saves the membership over $5,000 and will ensure that the meters are read in a timely and appropriate manner.


Slide8


Q. What are the reserve funds?

A: The reserves were established decades ago for the purpose of repairing or making capital improvements to the water system or replacing it entirely in the event of a catastrophe.


Q. What are the reserve study requirements?

A: Per RCW 64.38.065, an association is encouraged to establish a reserve account with a financial institution to fund major maintenance, repair, and replacement of common elements. The Board of Trustees is responsible for administering the reserve account.  The Association is currently funding replacement reserve accounts for the future major repair and replacement of Association assets of the water system. Accumulated funds are held in separate accounts and are generally not available for operating purposes.  There is a reserve study being prepared by FCS Group using the calendar year 2013 water operations data.


Q: What happened to the reserves in prior years?

A: The 2012-2013 fiscal year budget approved by the membership does not include the allocation of the Water Surcharge income to the Water Reserve. Therefore, the membership approved the decision of the 2011-2012 Board of Trustees to opt out of the regulation and to use the funds for necessary operational costs.  Controls are being put in place to educate the Board and future volunteers on how the reserves need to be funded, currently per the Water Regulations via the surcharge.  This proposed budget meets this requirement.


Slide9


Slide10

Budget Q&A Session

budget2

Jessica Besso, CPA, CFE, and a Budget & Finance Committee member, is hosting a Budget Question and Answer Session at the Chalet on:

  • Saturday, February 8th at 11:00 am

and again on

  • Tuesday, February 11th at 7:30 pm

    Please note: if you cannot make it to either of these sessions, please email the Secretary@wildrim.org with your questions and they will be answered promptly.

Please come and learn about how the Board’s approved budget was created and get answers to all of your budget-related questions.  Topics can include the history of the WRA business, the purpose of budgets, reserves, current activity, and future plans.  The sessions will be recorded for future reference.  Bring your neighbors!

Special Meeting of the WRA Membership

Materials for this Special Meeting will be mailed to each member.  
Members who have created an account on the website can view .pdf versions of the materials here.

Questions and Answers (Budget Q&A Session Materials) here: https://wildernessrim.org/budget-q-a/

budget

Wilderness Rim Association’s Board of Trustees has adopted a new budget for the current year (2013-2014) to better serve the needs of the Association.  Washington State law requires the Board to present any budget it adopts to the membership for approval at a meeting called for that purpose.

This is a balanced budget proposal that recognizes WRA’s requirement to set aside the Water Surcharge (that is not spent for current Capital Improvements) into the Restricted Water Reserve. This new budget also reflects the Board’s recent decision to reduce costs by having our billing work done by our own staff.  An increase in office hours is budgeted to improve customer support for members at our own office.  Additional obligations for the financial audit and the Water Reserve and water rate studies approved by the Board for better management of our water system are also included.  The cost for these studies will be paid for by a $1.34 surcharge each billing, for the next twelve billings, to distribute the cost fairly among members:  $16.08 per member over two years.

 

The volunteers who are your Board of Trustees are working hard to make good decisions for our Association.  We ask your support and participation in the upcoming Membership Meeting and your vote of approval for this budget.

Thank you.

 

The following announcement will mailed to all WRA Members:

WILDERNESS RIM ASSOCIATION
SPECIAL MEETING OF THE MEMBERSHIP
SATURDAY, FEBRUARY 15, 2014

Acknowledging the membership’s rejection of the budget presented at the Annual Meeting in July, 2013 the Board is announcing a new proposed budget for the period of July 1, 2013 through June 30, 2014 for your consideration. Washington State law requires the Board to present any budget it adopts to the membership for approval at a meeting called for that purpose.

Please plan to attend this Special Membership Meeting at the Chalet in Cascade Park on Saturday, February 15, 2014 at 10:00 a.m. Registration will begin at 9:00 a.m. Come early to meet your neighbors and your WRA volunteers over coffee and refreshments. This is a private business meeting for WRA homeowners and lot owners only. Your children are welcome to attend with you. Please bring this sheet with your questions, comments and your ballot which is included in this mailing.

 You may vote by mail or by dropping off your ballot at the office any time before noon on the day of the meeting.
 Mailed ballots must be received by February 14, 2014 to ensure they are counted.
 We require 10% membership participation to reach a quorum. Please take the time to vote.