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8 June 2025 Charbonneau Villager

By JOHN MCLAIN

The Financial Oversight Committee includes: � Linda Owen CCC treasurer, CCC Board of Directors � Lee Harker, CCC chair of Asset Management Committee, � John Cronkrite, resident � John McLain, resident � Jim Meierotto, CCC general manager( non-voting member) Together they meet on a regular basis and contemplate the major areas that board members most often ask about the HOAs financial stability. Their focus is on the big picture rather than the details, mining the spreadsheets of columns and rows to find a dashboard view that every board member and resident can read to feel informed about where we are now and where we are headed in the future. An important outcome for the work of this committee is to advise the CCC board on decisions and policies adopted in the current year budget process that will lead to a financially stable and low-risk future. The many questions most asked by board members and residents fall into three major areas.

Dues questions: How are the dues spent, what is risk of special assessments in the future and is there a limit to dues increases in the future?

Debt questions: How much debt do we have, how much is too much, are we at risk of higher interest rates in the future causing us dues increase?

Reserves questions: How much do we have in reserves, is it enough to meet future needs without a special assessment and do we have enough for emergencies and other contingencies?

Rather than many columns and rows of financial information, this committee strives to develop and implement a“ dashboard” that focus on just a few key metrics, charts, and guiding policy recommendations. Below are some examples of a Dashboard report for CCC Board Members and Residents, using a green( all is OK), yellow( concerned), and red( immediate action required) indicators – similar examples will be completed for CCE).

CCC dues

Figure 1 – $ 119 is the current CCC Monthly dues which is in the GREEN zone of not being too close to the Max Limit( red) and not being too low( yellow).

Note: Current CCC dues are 8 % below the $ 129 monthly dues limit based on historical CPI inflation adjusted monthly dues beginning in 1975. The Limit is the maximum dues that can be assessed without a vote of the residents.

If dues get too low( e. g. below 85 % of Max Limit) it likely leads to a“ catch up” period in the future( i. e. sometimes described as kicking the can down the road).

CCC debt

Figure 2 – Total Assets are funded by primarily with a bank loan for

$ 8,356,000 at 3.125 % fixed rate for 10 years, then market rate for remaining 10 years.

Note: The use of debt is at a high point due to major capital projects over the past five years( e. g. new Activity Center building, new Sports Center building). The future years plan is to reduce the level of debt to below 50 %. It is neither recommended nor planned to incur additional long-term debt if the debt is above 50 % of total assets.

Figure 3 – Loan Payments are less than 33 % of monthly dues

Note: The amount of debt repayment does not currently hinder the ability of the HOA to fully fund its reserve requirements( i. e. Reserve Study) or its normal operations requirements

CCC Reserves

Figure 4— $ 750,000 Current Reserve Balance

Reserves for Maintenance and Replacements are adequate to fund projects through the next 10 years. The Board established a minimum threshold of $ 500,000 as a contingency for unanticipated costs or projects. Current 2025 ending balance of about $ 700,000 will grow each of the next 10 years to over $ 2,000,000 in anticipation for many projects totaling about $ 1,300,000 in year 2037. The allocation of dues requires an annual increase of 7 % over the next 10 years to maintain adequate reserves for maintenance and replacements.

Charter

The Board approved charter for Financial Oversight states“ This Committee oversees the long-term planning, formulating and monitoring of the budget & financial forecasts and policies to assure that adequate resources are available to meet the long- term goals set by the Board in its fiduciary responsibility for CCC and CCE”. This group of residents serves both an important financial perspective to advise the Board of Directors and serves as a communications channel to keep residents informed about the future of their HOA’ s financial health.

Each month in the Villager, this committee will focus on a specific area of financial significance to provide transparency to residents regarding the financial management of CCC and CCE financial resources. If you would like to sit in on any future committee meetings or be considered to join as a voting committee member, please contact Linda Owen at l. owen @ charbonneaucountryclub. com.