From Jonathan Penrose, YLOA/YSPUC General Manager:
We are pleased to announce that we received notice this week that we successfully complied with the required uses for the PPP (Paycheck Protection Program) funds we received last April and that those funds have been completely forgiven!
This was expected, but as the forgiveness rules changed multiple times throughout the year, we could not be 100% certain until our application was processed by our bank and by the Small Business Administration.
This is a $650,000 benefit to our community (About $525,000 to YLOA and $125,000 to YSPUC) and dramatically improves our overall financial position.
When combined with the savings in labor costs that we achieved by participating in the workshare program (authorized under the Cares Act), our overall cash position for YLOA is approximately $1,000,000 better than it was a year ago.
Simultaneously, our employees received direct government assistance during the pandemic that increased their overall compensation from pre-pandemic levels.
This is a true WIN-WIN-WIN for our homeowners, our employees, and the association. I am extremely proud of what we have accomplished despite all the challenges of the last 18 months
I am not personally aware of any other organizations that were able to leverage the various COVID support systems as successfully as we were!
This did not happen by accident, but with a tremendous amount of research, planning, and quite a bit of extra work by our staff.
Complying with the various program requirements, and additional paperwork, was not simple or easy – but the results have been worth it.
You may recall that 3 years ago when I was hired as the General Manager, that our financial position was dire: operating capital was at critical levels, reserves were severely underfunded, and we were facing millions of dollars of costs to address decades of deferred maintenance.
In cooperation with the YLOA Board of Directors, I developed a multi-year plan to address the challenges we faced: we revamped our budgeting process, implemented a monthly forecast to more tightly manage our financial position, and adopted smart spending to prioritize projects that generated improved cash flow, high return on investment, and reduced long term costs.
We made the hard choice to increase dues 20% to jump start our plan and projected an annual assessment increase of 5%-8% for a minimum of 5 years to reach a stable financial position that would allow us to address our needs and obligations. In my opinion, without such a plan, we would not have remained financially solvent (especially with an annual increase in minimum wage of 7-9% for the first 3 years of the plan!).
• We executed on that plan, even better than expected. Dues increases last year (the second year I prepared the budget) were approximately 4.8%, and this year, only 3.7%.
• We fixed up the clubhouse and the cafe, and begin a road maintenance plan four years earlier than originally contemplated.
• We avoided a $600,000 special assessment recommended by our reserve study specialist last year.
• And this year, with PPP and labor savings through workshare, we improved our cash position approximately $1,000,000.
Inflation will be substantially higher this year than the last several, which will likely require us to use some of those funds to offset increased costs this year (especially for labor to attract and retain sufficient qualified staff), and our reserve balances are still well below recommended levels, BUT our overall financial position is “acceptable” and no longer “dire.”
We still have challenges ahead, however, we have made tremendous progress in a very short time – despite the extra challenges presented by the COVID crisis the last 18 months!
We are in a much, much, better position than we were and we’ve reached it sooner than I projected.
So despite our current and temporary labor shortage, we have much to celebrate and be proud of.
Hopefully, we can all pause for just a moment to reflect on the positive, take a deep breath, and continue moving forward together — with a little patience and grace for each other to offset the COVID stress and anxiety that is affecting us all.