Yosemite Lakes Owners’ Association is committed to providing members with accurate information about financial and other matters.
Following are some inaccurate statements made recently on social media. CLICK on the plus sign (+) for the TRUTH.
Incorrect: We (YLOA) received an employee retention credit, PPP funds and Workshare benefits totaling to $3,065,672.34
TRUTH: YLOA Received $1,900,909.23 in PPP funds ($650,490) and Employee Retention Credits ($1,250,419.23)
YLOA received ZERO direct workshare benefits. Workshare benefits were paid directly to employees by the state and federal government and never received by YLOA.
Workshare was an essential component of the strategy to keep employees working. Without workshare, many employees would have made more money staying home during Covid and not coming to work.
If they did not come to work, YLOA would have had to return the $650,490 in PPP funds to the federal government and would NOT have qualified for the employee retention credits.
100% of the amount received is available in YLOA Bank Accounts, and it has been recommended that the funds be allocated in the following manner:
1) ½ of the funds received ($950,000) be transferred to YSPUC to fund critical infrastructure needs.
2) $650,000 be added as an additional contribution to YLOA Reserves; bringing the reserve balance to just under $2 Million
3) $300,000 be retained by YLOA for Operating Liquidity and potential tax liability associated with Employee Retention Credit
Incorrect: Our member’s dues as of 2023 have been increased to provide over one and half million dollars per year to provide funding for our infrastructure, facilities and roads.
TRUTH: The assumption that ALL of the increase in assessments was available to fund infrastructure, facilities, and roads IS NOT CORRECT.
Most of the increases had to be used to pay increased labor expense, due to the 55% increase in California Minimum Wage over the last 6 years!
And, next year’s budget adds extra labor resources to PRP, Roads, and Meter/Septic to facilitate more dedicated labor hours to the PRP project (with labor shortages last year it was necessary to use PRP staff to assist with water leaks, emergency road repairs, and meter reads)
The approximate 5 year break down looks like this:
• 5 year change in Assessment Income: $1,446,346
• 5 year change in Annual Labor Cost due to Minimum Wage: ($658,181)
• 5 year change in Labor Cost due to Increased Labor hours: ($254,248)
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Available for investment in infrastructure: facilities, roads, and ALL other increased costs for parts, materials, and supplies due to inflation |
$533,917 |
That means, that for next budget year, approximately:
• 46% of our increased assessments (almost ½) are being used just to cover the impact of California increasing minimum wage so significantly.
• 17% is being used to hire additional labor to get more done.
• 37% is available for reserves, repairs, fixed assets, and other increased costs (primarily due to inflation)
This is how YLOA used the funds from additional assessments collected from 7/1/19 through 6/30/23:
• Total Additional Assessments: $3,417,164
• Total Increased Labor Costs (22%): ($757,792)
• Invested in Repairs, Maint, etc (38%): ($1,300,000)
• Additional Cash to Reserves (24%): ($815,517)
• Additional Cash to PRP (7%): ($234,632)
• Other (9%): ($309,093)
Overall, 91% of additional assessments were used for labor and reserves/investment.
ONLY 9% (approximately $75,000/year) used to offset other increased costs, including inflation. (Yes, we look for and implement other cost savings measures to keep expenses down).
100% of money received in Covid Assistance is still available AND WAS NOT USED FOR OPERATIONS.
Incorrect: The GM does not provide financial information to the board.
TRUTH: The board has more financial information, with more detail and greater analysis than ever before. For example, detailed analysis of all reserve investment and expenditures since 2014 was provided to the board at the budget meeting in April, as well as a detailed funding history for PRP since inception.
Yes, during the software conversion, not all reports have been available; However, the board was aware of this, and that this was a temporary situation due to vacancy in controller position and conversion process. Bank balances have been provided monthly, and Balance Sheet reports will be available again shortly, now that prior year financial reviews have been completed by our CPAs.
Monthly financial forecasts resumed in December 22, and in February of this year, the entire board began receiving copies of all bank account statements and checks that had previously only been reviewed by the finance committee.
Once the financial reviews for 6/30/23 are completed (expected within 120 days), a formal monthly closing process will be implemented, and all financial reports will be available monthly.
Incorrect: The association states that our current reserves balances will not be sufficient at the end of each year to meet the association's obligation for repairs of our major components during the next 30 years.
TRUTH: This is based on the reserve study from 3 years ago. The current situation is different, as discussed at the budget meeting in April, at the board meeting in June and updated in YLP life 6/16/23. Also see the annual packet mailed to all homeowners in May.
Incorrect: Each year the GM continues to lower the PRP budget. The 2020-2021 year he only budgeted $388,243
TRUTH: The PRP Budget for FY 20/21 was $650,000. The PRP Budget for 21/22 was $627,500. The PRP Budget for 22/23 was $552,500. PRP Funding for 23/24 is $781,473.
The current board approved the GMs request at the April budget meeting, for additional funding to PRP to make up for the $337,513 under funded amounts from FY 2015-2017. Which means the PRP project is currently 100% funded, compared to budget, since inception.
The GM recommends a budget to the board to balance multiple community priorities. It is the Board of Directors that sets the budget, not the GM.
| PRP Budget 2021: $627,500 |
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Note: PRP has remaining funding from prior years of approx $575,198. $239,257 of these funds will be combined with $388,243 funding in this year, to support a total PRP budget of $627,500 for FY 2021-22 |
Incorrect: The GM has not provided the true cost of what it is costing us per linear foot. (to install pipeline).
TRUTH: This is included in YSPUC Financial statements provided by our CPA. As of 12/31/21 the most recent cost per foot placed in service is $159/ft. This will be updated shortly based on YSPUC year-end financials for the most recent fiscal year.
Incorrect: We were already behind (Fix Our Stuff) schedule before Covid
TRUTH: Covid started 8 months into the first year of Fix Our Stuff. In reality, we were ahead of schedule at that time. The major updates at the Clubhouse and Café were completed in the first 2 years, as scheduled – even with Covid. The YLOA Board voted to reschedule year 3 plans for the pool, to provide funding for accessibility issues. They then elected to move the planning and approval of the pool project to committee, instead of being managed by the GM and Maintenance Manager who successfully facilitated the Clubhouse and Café projects.
Incorrect: (Outsourcing PRP) definitely would cost us less when you put into consideration all of the large equipment we are buying, the continuation of employee training, replacement of machinery, the liabilities, workman's comp, and the rework of the installation of the new pipes.
TRUTH: This is by no means certain – in fact, it is highly unlikely. This has been examined in the past and costs to outsource run about 40% more per foot than internal costs. It is good to evaluate such things, however, and YLOA has already contacted an outside firm to get comparison numbers to internal costs. It is not final yet, but based on initial feedback, the current cost to outsource appears to be $80-$100 MORE per foot.
Incorrect: The Board of Directors did not receive justification or proof of the allocations from the GM. How can the water company owe YLOA over $700,000 in such a short period of a time?
TRUTH: This did NOT come about in a short period of time. We paused the regular reimbursement between YLOA and YSPUC after the departure of our prior controller and while we worked with our CPAs to reconcile the Equity transactions between the two companies, and to complete prior year reviews. These are primarily regular expense reimbursements to YLOA for monthly admin fees, health insurance, workers comp insurance, payroll expenses, etc. Money transferred IN to YLOA (as opposed to out), does not require YLOA Board Approval. That would be like saying we need board approval to receive a payment from a homeowner. Nonetheless, the YLOA Board has received a copy of the entire detail history of such reimbursements, going back to 2014.
Incorrect: YSPUC spent $1 million on a hard rock drilling rig and is now not going to use it.
TRUTH: YSPUC does not and has not EVER even owned a hard rock drilling rig, or ever proposed purchasing one. This is an absolute rumor and fabrication.
Incorrect: If we didn’t receive the federal grants what would our reserves be?
TRUTH: As of 6/30/23 Reserve Balance would be just under $1,300,000 and 100% funded to budget for the last 5 years. Please see the annual packet which provides additional detail about YLOA’s comparative financial performance WITHOUT the benefit of PPP Funds or Employee Retention Credits.
