Committee News

Treasurer’s Report

By Mike Breslin SRCA Board Treasurer

The SRCA Finance Committee is comprised of members of our community association, which enables residents to have a say in how their money is spent. How does this committee work and who serves on it?

The Treasurer’s and Accountant’s Roles

It makes sense for the board treasurer to chair the finance committee. As chair, it’s the treasurer’s job to keep everyone on track as the budget is prepared. The treasurer also presents the budget for approval to the board. If the association works with an accountant, he or she may offer consulting, but the accountant really has no significant role in the process of devising the budget.

The CPA conducts an annual financial audit of the association books and prepares association tax returns. Throughout the year, the CPA is available to assist in developing and monitoring accounting policies and procedures and recommends internal controls to the committee and board. The accountant is a valuable partner who works closely with the manager and the board to ensure your financials reflect accurately the financial position of the association.

Butler-Hansen, PC recently completed our annual audit as required by the governing documents of SRCA. They conducted the annual audit to obtain reasonable assurance that the financial statements were free of material misstatements and to assess the accounting principles used. They evaluated the overall financial statements and line items presented in our reports and established that SRCA’s books and financial records are in good order and no issues were found. Their conclusion stated that in their opinion, the financial statements present fairly, in all material respects, the financial position of the Scottsdale Ranch Community Association as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in accordance with generally accepted accounting principles

As Treasurer and Chairman of the Finance Committee, I am most happy to report that SRCA ended 2022 in a strong and healthy financial position and your association has adequate reserves, proper financial record keeping and effective systems in place to maintain the highest level of service to the community in the years ahead.

Who Should Be on the Committee?

The homeowners who serve on the finance committee should represent a cross-section of the community. Of course, if there are members willing to serve who have expertise in areas such as insurance and finance, that’s even better. When it comes to size, a good general guideline is that the committee shouldn’t be so large that it becomes unwieldy. SRCA currently has 6 members on this committee.

What the Committee Does

The treasurer will make sure that all committee members understand the three basic components of the budget:

1. Funds needed for daily operation of the community, such as common electricity and water, grounds maintenance, management, insurance, and general maintenance. These expenses are either contractual or can be reasonably estimated based on experience. An important consideration when looking at items in the operating budget is the expectations of the community—for example, do members want a landscaper who is a “blow, mow, and go” type, or do they want a landscaper who provides a higher level of service?

2. Funds needed to maintain our reserves at sufficient levels. Reserve funds provide money for the repair and replacement of the community’s assets—such as the buildings, roofs, pavement, etc.

3. Funds for additions or enhancements to the existing common areas.

Armed with this knowledge, management and the committee estimate total expenses for the coming year and compare that sum to the association’s potential revenue

Year-End Audited Financial Statement Comparison

(assessments, interest on investments, rental income, and so on). If expenses are greater than revenue, the committee will first look for ways to lower expenses without compromising service. If that doesn’t balance the budget, the committee may have to make a tough decision—whether to increase assessments. This is what SRCA was faced with for 2023. A 10% increase in assessments bringing the annual assessment to $435 per unit.