Board Approves $4.3 Million 2019 Budget

Last Updated: 10-10-18

Updated Oct. 19
Jackie Ryan and Marty Thompson

Oakmont board of directors approved a 2019 budget of $4.3 million that is based on an $8 increase in member dues to $75 per month and covers a projected 12 percent increase in net operating expenses and fund transfers for the coming year.

The board of directors reviewed a line item budget proposal Oct. 9 with net operating expenses of $2.8 million and $1.5 million in transfers to fund two reserves: the asset replacement fund (ARF) and the capital improvement fund. The hike in dues, at just under 12 percent, is a lower rate of increase than the previous year’s of almost 16 percent.  The ARF is tied to the annual reserve study, which was also approved at the Oct. 16 meeting and based on current assets of approximately $10 million with an average economic life of 10 years.  In any given year, the ARF typically funds $1 million.

A contingency fund previously at $40,000 was beefed up to $100,000 for potential golf expenditures. Personnel, the largest chunk of the operating budget, increased almost 12 percent to pay for salary raises and to add a new compliance position on the OVA architectural staff.

The budget also calls for a fourfold increase in directors and officers liability insurance (D&O) since 2016 to $25,000, up from $6,041 (actual 2016 expenditure). D&O insurance helps cover defense costs, settlements and judgments arising out of lawsuits and wrongful act allegations brought against a nonprofit organizations.

The 2019 budget strikes a new note in how Oakmont’s coffers are filled. While new homes were being built, developers paid OVA a fee that went into a fund earmarked specifically for capital projects. The now complete Meadows project used the last available Oakmont building sites, eliminating developer fees as a source of revenue.

“Developer fees ended in 2017,”said director Tom Kendrick. “From now on dues will fill out all categories of the budget.”

The budget totally funds the organization’s formal capital improvement fund (CIF) for the first time” and puts Oakmont on a “pay as you go” status, according to Elke Strunka, OVA treasurer.

Strunka said the CIF, which provides for newly constructed or acquired assets and for major renovations, sits at $700,000, and will be shored up by a $465,000 transfer in 2019. “At the end of 2019, after paying for budgeted expenditures of approximately $459,000, we will see what our capital expenses are for the following year and replenish the fund as needed,” she said.

The budget calls for transferring $1.034 million to the Asset Replacement Fund for work at the Central Activities Center, including replastering the pool and spa, converting the pool to saltwater, and updating the cabana. The CAC landscaping also will be upgraded.

A $1.6 million loan earmarked as part of the East Rec renovation project will be used in the “short run to smooth out the dues on an annual basis,” Strunka said.

The budget is based on 4,785 paying members, up from 4,730 in 2018.