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| WATCHDOG © 2011 |
On August 18, 2011, the Finance Committee tentatively scheduled a follow up meeting to discuss the 'Operations' budget for September 1 at 6P. Confirmation of that time to the membership via the 'official' website calendar was made available exactly 24 hours before the meeting. A meeting where the annual assessment and water consumer fees are set. As a reminder, the former Board always made sure this particular Finance Committee meeting was NOTICED on the marquee, calendar and at the previous meetings so there would be maximum possible broadcast to encourage the members to attend. We always had a nice turnout. Not so this year.
Your bank account withdrawal for next year's assessment was determined for recommendation to the Board by 5 committee members and in the presence of 3 observers. 3!
This Board campaigned on cutting costs. How many of you in the community believed that meant a reduction in your annual assessment? Perhaps the 17% that was argued for last year by one of the directors? How many of you expected the 'water consumer fee' to be reduced CONSIDERABLY, like down to $12-$25 per month? Yeah! NOT HAPPENING...at least not as recommended by the Finance Committee.
Here is some interesting news:
Salaries & Wages cut from $220k to $190k, down from this year's ~ $232k. That is a savings of $42k.
Prepaid Healthcare cut from ~$34k to $$15k. That is a savings of $19k
Pension Contributions cut from proposed $4800 to $3600. A savings from last year of $300
Just in the three top line items on the disbursement schedule a savings this year of: $61,300.00!
Watchdog assumes this pleases all those who voted for the current Board members who campaigned on promises to bring the cost of employees down. With the ~18% reduction in staff costs and a mere increase over all in any other line item of ~$7500 one would think the assessment would be at most $246 which is ~18% from $300, this year's assessment.
Last night the Finance Committee agreed to recommend the following annual Assessment amount to the Board for their approval: $300.00! NOT $246.
The Water Consumer monthly amount? ::::::::::::::drum roll:::::::::::::: $50! HOLD YOUR HORSES! Here is a caveat: That is the monthly fee until January'ish when all 450 meters will likely be installed and then folks will get a bill based on 'standard' rate setting criterion. Alleged last night by one committee member, the average Hawaii household consists of 2.6 persons. She anticipated the basic rate for the 'average' household' would fall close to $50 while those with less than 2.6 persons would pay less/more than average would pay more!
When the topic of setting the 'water' fee was broached the folks in attendance, committee and observers, were told that the 'budget' maker [a committee member] has 'budgeted $235,320.00' for the year but at the time the question was asked how that number would come to be funded there was no definitive answer only that she takes the full amount necessary to fund and works backwards. As a Member YOU should be very concerned that someone pulls a number out of the air and then makes the bills for you and I to pay based on that number, you know, working backwards. Makes you wonder if the $190,000.00 for salaries and wages is a number she pulled together and is working backwards to make fit! That 18% cut is very similar to the same thing proposed last year during budget discussions.
The other natural queries to the engaged and active member's mind would be how many positions are being cut, who, and when the dust settles will you feel comfortable and confident with the people walking in the back of your house allegedly checking the water or handing your payment to the stranger in the office. Be sure to get a RECEIPT! It is true, changes happen and for a good reasons are always good in the long run. These changes? Time will tell how these go down. Remember the old saying, 'you get what you pay for!'
On another note, the former Boards [2008-2009-2010] worked diligently to build up the infrastructure and reserve funds through a time when the operations and reserve funds had been frozen by the banks. As of last evening the following funds were available in the 'infrastructure' and 'reserve' funds. After the proposed 'capital improvement' schedule for 2012 please note the balance remaining.
Infrastructure Fund [water and roads] had $309,701.66.
Proposed expenditures: $140,000.00 [leaving $169,701.66]
Reserve Fund had $194,548.02
Proposed expenditures:
- Painting of Honu Street Park: $12,500.00
- Maikoiko St. Park General Improvements: $15,000.00
- Swimming pool solar pump system $100,000.00
- Stables $50,000.00
- Pool Repair $12,500.00
- Total costs: $190,000.00
The anticipated contribution for the 2012 Reserve Fund is budgeted at $43,271 which at the end of 2012 should bring the Reserve Fund back up to about $47819.02! That takes us right back to about the same amount frozen in or 2 Reserve fund accounts in 2008!
The discussion was briefly entertained to 'seek a loan' for the solar pump system. The expected financial gain on that investment is approximately $1000 per month in Helco's fees not spent. It will take about 7 years to re-coop the costs of the solar pump system in Helco fees saved. While the panels are allegedly guaranteed for 25 years the pumps are not! They have a guarantee at about 1/5 of that time which is less than the 7 years to pay it off. A loan may be the smartest way to go if managed correctly if the goal is not to deplete the Reserve account to such a paltry amount.
ONE LAST NOTE: Looking ahead to 2013 there may be an additional 'assessment' amount for those with 'unmaintained easements'. The amount kicked around last night was $50. Immediately the idea was grasped that many members would want to pay $50 to have the staff come and clear their water easement. That is not how those funds are earmarked. An interesting 'tax' on approximately 800 property owners or 2/3 of the owners the other 1/3 is not required to pay! Members should really become active, especially if they live here and make sure the 'Membership' as a whole is being served. Watchdog is not opposed to a 'fee' being levied against chronic abuse of the CCR's; but not on a pick and choose basis.
Watchdog will keep a vigilant eye on the progress and report back here monthly on the Finance Committee decisions though most of the 2012 year has been set to propose for approval by the Board.
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