Financial Review and Budget Committee June 6.26 Meeting Minutes

Date: June 6, 2026
Next Meeting: July 10, 2026, at 5:00 PM (Clubhouse)

Attendees

• Harris Mathis (Chair)
• Lisa Fearon (Co-Chair)
• Pamela Murray
• Nick Hotalski

Regrets: Cheryl Fitzgerald, Joe Schwartz

Key Discussion Items

1. Developer Deficit Funding
   • Financial statements show Lennar deficit funding recorded as both a liability and income.
   • Balance Sheet: “Due to Developer” liability = $594,166.14 (April).
   • Budget Report: “Developer Contribution” income = $103,749.
   • Committee will seek clarification on the separate treatment.
2. Assessment Income
   • Some homeowners appear to pay less than the budgeted assessment of $58.15/month.
   • Believed to be developer incentives during initial sales.
   • Need confirmation that all homeowners will pay the full assessment after turnover.
3. Financial Reporting Enhancements
   • Recommended adding statistical data to reports, including:
     • Assessment billing counts
     • Landscaping cost per lot/homeowner
   • Would improve financial analysis and trend tracking.
4. Cash Flow Reporting
   • Requested a monthly Cash Flow Statement in addition to current reports.
   • Also recommended Balance Sheets show month-to-month account changes.
5. Financial Transparency
   • Committee will request General Ledger reports.
   • Future requests may include:
     • Journal Entry reports
     • Accounts Receivable and Payable aging reports
     • Bank statements and reconciliations
     • Vendor invoices
6. Chart of Accounts (COA) Review
   • Discussed restructuring utility expense categories.
   • Recommended separating electricity, water/sewer, gas, and communication services (telephone, internet, cable) for better reporting clarity.
7. Reserve Funding
   • Reinforced that reserve funds should be used only for major repairs and replacements.
   • Recommended a reserve study at community turnover.
8. Landscaping Expense
   • April included a one-time Landscaping Replacement Enhancement expense of $186,526.30.
   • Expense was attributed to freeze damage repairs.
   • Noted that the annual budget for this account is only $10,000.
9. 2027 Budget Planning
   • Committee members will review the proposed 2027 budget over the summer.
   • Members will recommend items to include, exclude, or modify.
   • HOA Board approval of the annual budget is expected in November.

Action Items

• Clarify Lennar deficit funding accounting treatment.
• Confirm assessment structure following turnover.
• Request Cash Flow Statement and enhanced Balance Sheet reporting.
• Obtain General Ledger and supporting financial reports.
• Evaluate Chart of Accounts revisions.
• Recommend reserve study at turnover.
• Review and provide recommendations for the 2027 budget.