June Finance Committee Recap

WATCHDOG © 2011

The Finance Committee met last evening for their monthly meeting. They worked at about 2/3rds capacity for committee members. Interestingly, there is a consistent absence of one of the Directors from each of the committees she wanted to serve on and since 'money' was one of her platform issues, or at least how and upon what it is being spent, attendance for this one should be high priority.

The Finance Committee was first appointed as an ad hoc committee by the Board in 2008. Initially, it was tasked with considering the monthly financials, recommending approval of the quarterly financials to the board and ultimately oversight of ways to save and ways to develop capital. It has been instrumental in the initial budget proposals for the past few years as well as recommendations regarding both the water user fees and the annual assessments. It has been one of the highest functioning and best attended committees of the past 3 years.

The Chair this year has served on the committee and attended most of the Finance Comm meetings for the past 3 years. He has been an active voice lending sage and opinion regularly. Last night, he had arranged for one of the owners of the Hawaiian Beaches Water Company to speak to the Finance Committee about the costs associated with their recent water system upgrades. He spoke about the tank primarily. Their tank is a 330,000 gallon tank made of steel with glass lining and an epoxy coating. It was shipped to Hawaii Island from Europe and it took 3 containers for all the parts to arrive. The interesting feature about this tank is that you can add to the tank vertically for future capacity, up to a point. He said he would put the price tag for the tank related upgrades at about the $400,000.00 mark.

Absent from this meeting was the Chair of the Infrastructure Committee, who also serves on the Board and who has for the past few years been quite vocal on the tank 'not needing to be replaced' and the 'water system' not needing upgrading, 'looking out for the little guy' financially. In fact, also absent from this meeting are many in the community who have for years criticized any attempt to upgrade the water system, spend any money on the system or raise rates for the operational side of the water system. In fact, the Chair of the Finance Committee opined to the visiting speaker -- who is also an owner/Member of our community -- that he considered our water system 'a liability and not an asset'. This is an alarming statement considering water is an essential to life and has been part of this community's life for 3 decades. It is understandable however as it once again speaks to the 'decay' of yet another asset over the years while under the area of responsibility of both a former Field Manager and General Manager and under the authority of several Boards of Directors for 30 plus years! But more on this in a separate post. 

Rate discussions included the rate charged to water customers from Hawaiian Beaches Community. It seemed no big surprise to the Directors who serve on the Finance Committee the water costs will likely -- at minimum -- remain close to their current levels but may actually rise from here. This will not set well with their constituency who voted for them believing they would 'cut costs'. Actually, the facts thus far? This Board is spending MORE than the former Boards for the past 3 years. 

All in all, the meeting was upbeat, candid and served the purpose to help establish a 'dollar ball park' where the water costs may wind up as the upgrade process moves forward. It alarms the Watchdog that more members from the community do not take advantage of attending the various committee meetings, but especially the one where the 'pocket book' is going to be hit so solidly. Considering $$$$$'s being 'wasted' and 'mismanaged' was the 'campaign' message from the candidates this past election season, you'd think the ones who voted for that message expecting a clean sweep of the status quo would be making sure it was coming to pass. They are not! They are not at the Committee meeting where this topic would be discussed; they are not at the meetings of the Board where the costs will be approved, except of course those who serve on the Board and who have been among those calling for costs to be reduced; and they are absent from any community discussion where intelligent and respectful discourse could assuage any concerns or inaccurate notions! Understandably, the noble notion one can come in a cut 'fat' from the expenditures always appeals to the uninformed masses. It is somewhat satisfying to know the representative who came and shared her professional opinion that our costs were without much fat has proven to be true. The current Board added an annual expense of at least $2000.00 just to have someone sit and take Minutes; a function the 2008-2010 Board managed to accomplish at NO CHARGE TO THE MEMBERS by the Secretary of the Association. But, that additional cost was not discussed at a 'Finance Committee' level. 

The Chair asked for anyone who had anything to add to the agenda for next month's meeting to please let him know. If you have a suggestion please email it. Be sure to put 'finance committee' in the subject line so it can be forwarded to the Chair. A reminder, July is the month the 'draft' budget begins being discussed with August and September reserved for the Finance Committee to really do a fine tooth comb of the proposed budgets before making recommendations to the Board. I don't know if this Board will see the wisdom in having this done at a Committee level working closely with our Director of Operations and Management, but it surely cuts down on the hours spent doing this at a Board level when it is presented from the Committee. Just saying....