Rust Pond Association
Treasurer Report for the 2015 Annual Meeting
by Clay Clatur
August 8, 2015
As in the past several years, the Rust Pond Association is in excellent financial condition. We have been operating at a net income averaging about $3,350 per year since 2008. Along with the sale of some of the dam property to Weston Auto Body and donations to two memorial funds many years ago, we have built up reserves of just over $47,700 (See note 1). These reserves are in place to help fund projects in order to halt and remove the sediment loading and runoff at the North end and the boat launching area on Route 28, and any dam repairs and/or tree removal that may be required in the future. In particular, $35,000 has been reserved for the two DES restoration projects grants. We also estimate $5,000 for tree removal at the dam property (dam!).
Our accounting year (fiscal year) is from August 1 of the current year to July 31 of next year. The year just ended on July 31 was 2014/2015. On August 1st we entered 2015/2016. We are on a cash accounting2 basis (vs. accrual).
My research shows there are 89 lakefront properties on the pond and 78 property owners. 9 owners own 2 or more parcels. Of these 78 owners 64 (82%) paid dues or made a contribution last fiscal year (2014/2015). To those of you who did your support is greatly appreciated.
Not so much 13 owners (17%) who have chosen NOT to pay dues for 4 years or more - some have never. There is also one non-owner, the Parkers, who are long standing paid up members, and occasionally some owners contribute. We have had 2 new owners since last year's meeting and an invitation letter has been sent to one to join the RPA. There has been no reply yet.
Last year I invoiced the Town of Wolfeboro for membership as my belief is they own the boat launch ramp property off Route 28. It is listed as "owner unknown" in the town assessing database. Town Manager David Owen said membership would be considered by the Selectmen on August 20, 2014. However, despite two recent reminders, I have not had a reply from him.
Profit Statement Summary for the 2014/2015 fiscal year ended July 31, 2015.
The official computerized 2014/2015 P&L Statement is included as an attachment.
Income from dues $ 6,800.00 ($4,300 for 2015-2016 dues)
Income from contributions 100.00
Interest from bank account (see note 3) $7.09 (Is this pathetic or what!)7
Total gross income $ 6907.09
Expenses (see note 4) $3,187.45
Net Income $ 3,719.64
Balance Sheet Summary - July 31, 2014
Current Assets
Citizens Bank Checking Account $ 25,300.25
Citizens Bank Money Market $ 22,480.57 see note 5
Total Current Assets $ 47,780.82
Current Liabilities $ 750.00 (D&O liability insurance)
NOTES
1 $20,000 of this has been reserved for our portion of the first DES grant received, and $15,000 for the second DES grant. As of this date we have not been invoiced for either of these amounts or any portion thereof.
2 Cash accounting means that income is recorded when received and expenses are recorded when paid. For example, if the DES sends us an invoice for July 2015 water testing they did ("last year") and I pay it in August 2015 ("this year"), it will show up as an expense on this fiscal years (2015/2016) P&L statement because that was when it was paid. In accrual accounting it would show up as an expense and an account payable for "last year". I am not in favor of cash vs. accrual accounting, but that is how it was set up when the association was founded. I feel this way because it is possible for some organizations some year-to-year differences in revenue, expenses and/or net profit may be due to timing and not actual material changes in their finances. In our case, though, these are not very material.
3 During fiscal year 2014/2015 (last year), we again had two accounts at Citizen's Bank. They are a checking account (pays no interest), and a money market (pays less than trivial interest)7. Once again we did not choose to put any funds in a CD or capital investments because a) CD interest rates are terribly low now, b) I probably don't have risk authorization (or expertise) to invest in stocks/bonds, and c) we could not determine when we would need to pay substantial funds to cover any North End project expenses related to the two DES grants.
4 The three major recurring expenses, as they are every year, were:
Dam Liability Insurance $ 744.00
BOD/Officer Liability Insurance $ 750.00
NH Dam Registration Fee $ 750.00 (see note 6)
Total $ 2,244.00 (about 70% of our expenses)
5 A large portion of the original seed money in this account, just over $17,300, came from three sources many years ago, (none of it has been spent to date), and has had minor interest growth since:
"Boundary Line Adjustment" of some of the dam property conveyed to Weston Auto Body in 1994/95 for a deposit to our account of $10,086.
Two donations to the "Ralph Ackley Memorial Fund" totaling $6,543.
A $780 donation to the "Ralph Nelson Fund".
6 This fee is based on the State's reported costs to perform the regular inspections of the dam, which is needed to ensure its continued safe operation. The fee amount is set by the state based on the dam classification. Our dam hazard is classified as "significant" (other classifications are non-menace, low and high). Each inspection requires a detailed review of all pertinent design, repair and inspection information that exist in our files, as well as in-depth visual inspection of the structure and the potential areas that may be affected by a breach of the dam. Also included are an examination of the hydrology of the contributing watershed, an assessment of the hydraulic capabilities of the structure, the preparation of the technical report and the issuance of follow-up documents for action by the dam owner. Further, DES has adopted an inspection interval in line with the Model State Dam Safety Program established by the Federal Emergency Management Agency. Under the inspection schedule, DES is to inspect our dam every three years.
7 A year ago I looked for an alternate banking situation where we could get better interest on our funds while still keeping them in a suitable liquid state. It was not successful.