Treasurer’s Report April 25, 2016

Treasurer’s Report    By Randy Dence Monday, April 25, 2016 

At the November 18, 2015 Yorkshire Hills Homeowners Association (YHHA) meeting Randy Dence was elected to replace Clarke Macy as Treasurer. The role of the Treasurer is to be the custodian of the funds and the financial records for YHHA. The Treasurer will be responsible for coordinating the development of the proposed annual budget and for preparing and giving the annual financial report on the financial status of the association. The treasurer will ultimately be responsible for insuring that the financial records of the association have been maintained properly in accordance with sound accounting practices.

YHHA is a tax-exempt organization as described in Internal Revenue Code (IRC) section 501(c)(4). To be so described by the IRC, a homeowners association must primarily serve the community rather than the private interest of its members. 

The members of the YHHA board of directors and each officer of the Association have a fiduciary relationship with the members of the Association. This fiduciary relationship requires the members of the board to act in good faith and in the best interests of the members of the Association. It means that board members must exercise due care and diligence when acting for the community, and it requires them to act within the scope of their authority.

Financial Review

1. YHHA Insurance Policy 

The current policy is with Kemner-Iott agency in Adrian, MI. The insurance carrier is Auto-Owners Insurance. The Association has used them for our insurance for at least 10 years. In 2006, the cost of the policy was $868 and it has since risen to $1,129. I have been informed by the agency to expect another increase in July when the policy is to renew.  

The policy is twice the price of competing insurance carriers and includes unnecessary coverage (equipment breakdown coverage) and premium adjustment (upcharges with no coverage).

The Treasurer has procured two suitable bids from Nationwide and State Farm Insurance at less than $650 per year. The Nationwide insurance proposal provides twice the liability and Directors and Officers coverage ($2 Million). The Nationwide proposal will also cover our entire bank balance for employee fidelity…employee theft is not covered currently with Auto Owners. 

Recommendation:

Move our insurance to Nationwide (on renewal) – opt for $1Million coverage plus the employee dishonesty at a total yearly cost of $550. This would save the Association over $600/year. 

• The Insurance Policy Quote will be submitted for the minutes when available.    

2. General Accounting Review 

My review found several areas to improve the fiscal policies and record keeping of the Association. Additionally, we have forfeited our non-profit corporate status for neglecting to file the required annual Reports and Fees with the State of Michigan. 

> The Letter from the State of Michigan has been included for the minutes. 

 Treasurer’s Recommendations: 

> Develop a workable budget, keeping in mind the needs, requirements and expectations of the community. 

> Consolidate accounts for simplified reporting and record keeping. 

> Completed. Savings Account was Closed and all Funds transferred to the Associations’ Checking Account. 

> Increase efforts to collect delinquent assessments. Publicize and enforce rules and penalties.

> Authorize legal action (Lien) against owners who do not comply with the rules. 

> Determine proper assessment – in line with covenants and budgeted projects. 

> Appoint (Social /Gardening/Welcoming) committees and delegate authority to them for non-board related activities.      

> Select an attorney to the Association Board if possible. 

> Inform Association members of board decisions and transactions. Provide more transparency and accuracy in communications.  

3. Financial Status 

TCF Savings  ***7461                     Amount                               Balance

12/31/15                                               $.14                                       $ 3,091.61  

3/28/16                                                ($ 3091.61)                          $       0.00 

3/31/16                                                $.07                                        $       0.07

4/21/16                                  Acct. Closed --------------  

TCF Checking   ***9156                 Amount                               Balance

12/17/15                                                                                              $ 21,634.56  

12/18/16                                              ($ 2.00)                                 $ 21,632.56 

12/31/16                                              Deposit        $ 240.00        $ 21.872.56

1/18/16                                                ($ 2.00)                                 $ 21.870.56

3/9/16                                                   Deposit  $80.00                 $ 21,950.56

3/16/16                                                ($ 2.00)                                 $ 21,948.56

3/28/16                                                Transfer  $ 3,091.61         $ 25,040.17

A copy of the most recent TCF checking account has been submitted.  

Randy Dence, Treasurer YHHA