Budget Comparison Financials
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Questions to the WRA Treasurer
Q: Please have the treasurer, Donna Greathouse, explain the two line items “Board of Trustees $150″(Assessment) and “Repairs – WRA Buildings $12,000”?
A: The $12000 is projected for roof repairs on the Chalet and office. If this proves to not be enough we will at least set aside this much to combine with funds from the next year. Our goal is to not have to ask the members for a special assessment for what should be paid out of operating revenue. The primary purpose of the assessment revenue is to care for the assets of the association.
The Board of Trustees line was added to account for expenses specific to Board administration, such as the recurring need to replace or re-key to office door lock. Now that we have that key-less entry that cost should be minimal but we did make that expense in the current fiscal year. Another item that most likely should go in there is the cost of trustee manuals. It isn’t significant in itself but we are trying to have detail where it can be useful in determining ways to control costs and be accountable for expenditures.
Lost and Found
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.
A Brief Description of WRA
Wilderness Rim was started in 1967.
We have:
- an Administrative Assistant in the WRA Office located in the Rim
- an independent bookkeeper
- a Certified Public Accountant
- an attorney
- an insurance agent
- a private security patrol staffed by off-duty King County officers
- an amazing Water System to bring us some of the best water in the country
- a Certified Water System Operator
- a current and effective water and assessment billing software
- a Greenbelt
- a nice, well-maintained park with a lake
- contractors and/or employees to maintain our properties
- a bank account with more than a half million dollars saved
Our Homeowners’ Annual Dues remain at only $80 per lot.
We pay our taxes and help our neighbors. We have social functions for our members and their children. Santa visits us. Sometimes the Easter Bunny, too. We have accomplished all of this due to the significant and generous contributions of volunteers who have helped this association for the last 47 years.
We have managed all of this without an Oversight Committee because the WRA Bylaws clearly define how to manage this business, including supervision of WRA employees:
Bylaw 3.3.1 President. The president shall:
- preside at all meetings of the trustees and membership;
- sign as president all contracts or other written instruments authorized by the Board of Trustees;
- call special meetings of the trustees or of the membership whenever deemed necessary;
- supervise the employees of WRA, under the direction of the Board of Trustees;
- appoint chairpersons as required; and
- conduct the business affairs of WRA, under the direction of the Board of Trustees.
It is the duty of the four Officers (President, Vice President, Secretary, and Treasurer) to oversee the day to day operations of the association.
This business structure has served us well for decades.
The volunteers who you have elected to serve as your Board of Trustees are proud to be a part of this great legacy.
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.
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
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
Financial Statements Audit 2012-2013
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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
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
February – March 2014 Newsletter
View the February — March, 2014 Newsletter (PDF)
Budget Q&A Session
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!