POA talks budget
When POA general manager Tom Judson presented the 2019 budget, his audience at Riordan Hall contained more POA employees than members.
Eleven department heads sat in a row behind nine board members. Since the department heads write their own budgets, Judson asked them to attend the meeting and be prepared to answer questions. About 20 people, including some POA employees, made up the audience.
The board is expected to vote on the budget at this week’s regular meeting on Thursday night in the Country Club boardroom. It’s is posted on the POA website, along with the PowerPoint presentation about the budget that was used at the public meeting.
The 2019 budget for the POA (without the water utility) shows a total income of $18,896,484. That includes more than $8 million in monthly assessment fees and $4 million in golf fees. Expenses for the same period are $18,051,522.
“It’s a tight budget,” Judson said.
He pointed out that the budget includes more than $1 million for the sale of the long-term cell tower leases to a third party. It’s a one-time-only payment, although the leases for the property under the towers will continue as monthly payments.
It also includes a contingency for the stump dumps of $100,000. The POA is working with an engineering firm to locate a site that would be appropriate for a mulching operation in the future, Judson said. The Arkansas Department of Environmental Quality probably will not permit a new stump dump, he said. There might also be costs associated with the old stump dumps, but there’s no way to know what they will be.
There are some capital projects budgeted, including $196,400 for golf maintenance to purchase some equipment and repair parking lots at Metfield and Scotsdale maintenance areas. Also, there is $80,000 budgeted as a “placeholder” for possible flood mediation work at the Country Club. It might be spent on the permitting fees associated with renovating the Country Club Golf Course in an attempt to make it more resistant to
flood damage.
Capital projects for lakes and parks include a new truck, a small ranger boat and a motor for one of the pontoon boats. But there are also cuts for lakes and parks, including a new rental pontoon boat and some fish stocking and fertilizer.
Judson listed cuts for several of the departments including golf. Under the pro shop’s budget, a manager position was eliminated when Darryl Muldoon was promoted to director. Also, several part-time player-assistant positions were eliminated.
In golf maintenance, labor hours and overtime were cut and purchases, including green fans, were deferred.
Recreation lost funding for additional pickleball courts, a proposed archery range, the renovation of two tennis courts and some additional cabins at Blowing Springs.
The food and beverage division has no capital projects and no startup costs. Cuts were made in personnel, with five positions eliminated. Lake Point will be closed for six weeks in January and early February, Judson said, and the staff will be temporarily moved to the BV Bar and Grill at the Country Club. Those weeks are slow for Lakepoint, so that is also a cost-cutting measure.
Both restaurants are still on target to turn a profit after three years, Judson said.
There were no cutbacks
for either the legal department or marketing. Since the legal department does collections on unpaid assessments, it’s too important to cut. Marketing is tasked with increasing revenue, so it wouldn’t make sense to cut it, he said.
It’s a rule of thumb that capital expenses should be more or less equal to depreciation, Judson said, and that is not forecast for the POA. About $515,000 is budgeted for all the capital expenses outside the water department, and depreciation is estimated at close to $2 million. That means that some maintenance will wait until there are more funds and, over time, that could become a problem.
Judson also went over a separate budget for the water utility. Water is budgeted for almost $9 million in total income and a net income of $691, 550. An increase in water fees will become effective when the new meter project is completed early next year. The increase is $.81 per month, which is the exact amount the water department is charged.
The water department has several capital projects scheduled, including a water tower rehabilitation, a new truck, a pump station upgrade and $300,000 for annual water main replacements.
When the floor was open for questions, one member asked about a loan of $600,000 from the water department to the POA last
month. Judson said that it will probably be repaid in December when the POA has more cash. In an email after the meeting, he said there could be similar loans in 2019.