Columbia Association Board of Directors
Work Session, April 9, 2020
NANCY’S NOTES (Click here for the agenda.)
There was no resident speak out because the meeting was held via Google Hangouts to keep people socially distant. The virtual work session was recorded so that the public can listen to the meeting at a later date if they desire.
Village Associations was added to the meeting agenda at my request.
Update on CA’s Finances
Status of Bank Financing
A loan from a bank is still being pursued. The bank had asked if CA would raise rates for sports and fitness to help pay for the loan. I suggested raising the annual charge to help repay the loan.
CA applied for a loan and was informed that the application was received. It is a loan for such circumstances as these. CA is currently borrowing on an unsecured line of credit as needed on an existing loan. The loan is at about $8 million. It is an unsecured loan and the bank does not want to continue in an unsecured position.
Review of Revised FY2020 Year-End Estimate (operating activity)
Revenue will be down $4.6 million in the 4th quarter and net assets will be down about $2.3 million. We will be $2.4 million below where we expected to be at this time of year. There will be fewer capital projects in 2020. The fiscal year will end with increase in nets assets of $1.7 million, i.e. revenue in excess of expenses.
Status of FY2020 and Prior Capital Projects
Capital spending has slowed. It has to be approved by Susan Krabbe. If a project has begun, it still must go through Susan. Category 3 allocation is more routine capital items needed. The current Cat 3 projects will have to be determined. Any not yet started will not be started this year.
Payroll taxes have been deferred which provides a bit of wiggle room. Currently CA is targeting a partial opening by July 1. The date is projected but not written in stone.
Review of Cash Flow Projection and Assumptions
The Board was taken through the upcoming months cash flow using the loans in order to meet necessary payments. CA has been using the credit and then repaying it after the annual charge payments are received. Because everything is up in the air and nothing is certain, all this information has been projection.
The Board will review the FY2021/2022 budget revisions in an upcoming meeting. Changes will be made but there is no way to know what those changes will be at this time. Everything is in play. The organization will be different initially and maybe for years until it can return to full capacity. Facilities must be looked at and what modifications can be made so CA can continue to function as well as possible.
The Board will receive new budgets giving options about what actions to take based on assumptions. Since it is unknown when operations and facilities will be up and running again, staff is reviewing what can be cut from the currently approved budget.
Status of FY2021 Operating and Capital Revisions
The numbers demonstrate losses due to loss of revenue in case camps and before and after school programs don’t happen. Open Space will reduce its costs and thus less mowing and trimming. Fewer workers will mean less projects and upkeep. There is projected to be a $57,000 loss in net assets. The staff continues to work on the numbers to find the best way with the least impact to protect the organization.
The capital budget needs to be reduced. The Board looked at projects that would take it from $15 million to $8.4 million. Neighborhood center renovations have to be postponed along with the continued renovations at Supreme Sports Cub. Many items will be pushed to another year.
I asked Susan Krabbe, Milton Matthews and Board members to lift the cap on reserves for the Villages so they do not have to repay money they get from loans, or from other sources. Alan Klein said the Board has the right to set as policy that CA will lift the cap on reserves for this year and next year. Susan said that staff will work with the villages on this issue. The Board will also discuss it at future meetings.
Stay safe everyone.
Remember to keep distant from others who do not live in your household.
This does help flatten the curve! This too shall pass.
Email me at Nancy.mccord@ca-Board.org