With its financial house in order dating back to late last fiscal year, the Community Housing & Resources board of directors is turning its attention to the future.
Specifically, the executive committee came to the conclusion that the below market value housing non-profit organization needs to prepare for the inevitable replacement of major items of its assets such as roofs, siding, staircases and air conditioning units. The committee recommended the establishment of a "building reserve" account to cover replacement costs associated with these more costly maintenance items.
The board's goal is to establish a reserve account for the fiscal year starting Oct. 1, 2014, in the amount of $60,000. That figure was reached through research done by the board's buildings and grounds committee and treasurer Melissa Rice. Just in the nick of time, too, since the board will be finalizing its FY 2014 budget over the next few months.
"It's inevitable that we will need to replace these items at some point," board president Richard Johnson reported to the panel at Monday's monthly meeting. "We can stretch out the life of roofs and stairs with routine maintenance, but at some point it will become necessary to replace a roof, or stairs."
Rice earlier had informed the board that CHR's accounts have operated "in the black" for the past nine months.
"We spent more last month, $34,000, but we knew it was coming," said Rice. "It went to two air conditioning units and insurance premiums."
Rice added that accounts payable and loan payables are both current and in line with expectations. She expected a slight decrease in rental income for the next month because of tenants moving out, but applications are being processed to fill the vacancies.
The executive committee also recommended the establishment of an "LEO reserve" account in the amount of $30,000 to cover appreciation of existing LEO (limited equity ownership) units at the rate of 3 percent per year for 10 years. The funds would come from one or more sources, including the pending sale of the LEO unit at 1491 Centre Street, ground leases, net proceeds from the sale of the Sanibel Highlands unit and the general operating budget.
In addition, the committee would explore the possibility of securing a line of credit from a local bank to be used only at the time an LEO resident wishes to sell their unit, fulfilling the other reserve obligation.
The board passed both reserve fund proposals unanimously. They also approved up to $6,000 for purchasing a used service truck for use by CHR's maintenance supervisor, who currently is providing his own transportation on a mileage rate reimbursement.
"It is not a cost saving move," said executive director Kelly Collini. "It's really a wash, and the employee is happier saving wear and tear on his own vehicle."
Board LEO committee member Ray Pavelka reported the Centre Street property sale should close within the next 45 to 60 days.
"We have one applicant who appears to be able to purchase, pending approval from the bank," said Pavelka. "We also have a second qualified prospect who has the means to step up in case the first applicant's contract falls apart. We spent all those months, most of a year, trying to get one contract and now we have two very good and deserving prospects."
Johnson adjourned the meeting after setting the date for the board retreat for Saturday, Sept. 21, and the next board regular meeting for Monday, Aug. 19.