2. Conversation with Kent on Budget Matters
Tuesday, January 16, 2018
Santa Rita Springs
Anza Room

3. State of the Corporation – Before 2014
No formal, Board Approved, Budget Development process
GVR’s Annual Audit had qualifications because no Reserve study methodology
GVR had no plan for establishing and funding Reserves
GVR approach to long-term facilities planning is unwritten, disjointed and underfunded

4. State of the Corporation – Before 2014
Investment decisions made without:
Investment policy
Consistent professional advice
Volunteer involvement
Outcome:
Minimal returns
Limited confidence
No accountability

5. State of the Corporation –
2014 onward
State of the Corporation –
Board of Directors undertakes to:
Develop and adopt a Budget Development Policy per By-Laws requirements
Engage a professional firm to conduct a Reserve Study and begin funding
Appoint a volunteer-led Investment Ad Hoc Committee
Engage professional Investment Advisors
Commission a long-term strategic facilities plan

6. State of the Corporation – After 2014
Board of Directors undertakes to:
Direct staff via CPM to develop budget and dues proposals that:
Maintain a dues levels to keep pace with inflation consistent with CPI and Social Security changes
Include the newly established annual Reserve provisions
Provide for Center Assessment priorities
Assure the provision of quality programs

7. Budget Development Policy (Per By-Laws)
Board of Directors establishes:
Dues
Operating Budget
Capital Budget
Guided by:
Actual operating expenses
Reasonable Reserve
Objective – self sustaining operating basis

8. Budget Development Policy (CPM) (Next FY)
Jan/Feb – Staff solicits GVR Clubs and Facilities Center Assessments (capital and operating)
Mar – P&E prioritizes Club Requests
Apr/May – Staff prepares prioritized project lists (maintenance & replacement)
June/July – Staff prepares operating and capital budget proposals

9. Budget Development Policy (CPM) (Next FY)
Aug/Sep –
Staff prioritizes facility center and reserve evaluations
P&E identifies priorities from Long-Range Strategic Plan
Fiscal Affair considers
Proposed operating budget
Schedule of dues & fees
Recommendations from P&E
FAC sends dues & budget to Board

10. Budget Development Policy (CPM) (Next FY)
Oct/Nov –
Board of Directors approves:
Final Operating Budget
Capital Budget
Dues

11. Budget Development Policy (Per By-Laws)
Remember that the
Board of Directors establishes:
Dues
Operating Budget
Capital Budget

12. Dues Setting Process CPM Outlines starting point as sum of:
50% of CPI-W
50% of Social Security change for current year
Factors considered that may impact final dues:
Operating costs
Maintenance projects
Appropriate reserves
Fiscal Affairs may deviate from starting point.

14. Impact of Reserve Study Decision
Annual Provision Amounts substantial
Current Year Corporate Net Income BEFORE provision must be equal to or greater than provision amount.
In every “for-profit” entity this is called a “profit”. For GVR a positive net is mandatory to fund the reserves.
Reserve Study amounts:
2016 $900,000
,400
,000

15. Budget Approach and Reporting
Revenue determinations derived from:
Prior year averages
Prior experience
Current projections of:
Existing Revenue producing activities
Potential new sources when identified

16. Budget Approach and Reporting
Expenses
Finance Staff provides guidelines and materials to:
Managers and supervisors with budget responsibility
Managers prepare budgets based on experience, required and devised plans
Budgets submitted to CFO for compilation and review
Staff compile data, projections, calculations, estimates, etc.

17. Budget Approach and Reporting
Budget finalizing
CEO, CFO & Mgrs. meet to arrive at final budget
CFO finalizes budget materials for presentation to:
Fiscal Affairs Committee which sends to
Board of Directors
Final step is action by Board of Directors.

18. Revenue and Expense Categories

20. Thank You for your Time and Interest in GVR
Submitted Questions
Thank You for your Time and Interest in GVR