Budget Committee Meeting
November 17, 2001

Attending: E. Hockett, M. Hughes, R. Johnson, B. Santoro, H. Vaugeois, B. Wenstrom, J. Withington, and B. Quigley.

Absent: P. Miner and M. Shelton

B. Wenstrom, Treasurer, convened the regular meeting of the committee at 8:00 A.M. He immediately recognized B. Quigley for the purpose of correcting an item in the 2001 Actual vs Budget - Cash Basis statement as was published on the web site and distributed at the meeting.

He pointed out that on the second page under the budget listing for Other Income - Federal/State Tax Refunds the number should be $6,819 instead of $9,416. The reason was that this amount for overpayment of taxes in previous years had already been partially refunded in the previous year.

Identification of Potential Budget Surpluses: The Directors next scanned the Actual vs Budget statement for potential surpluses that could be reallocated for effective use. The following items appear to be possible surpluses:

1. Snow Removal (listed under Common Area budgeted for $15,000. Currently $6,712.50 has been spent). Obviously this area is unpredictable, but B. Quigley noted that any snow removal in December would be paid out of the next budget. Normally a good snow storm costs about $3,000. The final amount ultimately is determined by an hourly rate structure that allows for type of equipment used, type of work done, and time spent. The guess was the POA could end up spending $10,000 in this area which could leave a $5,000 surplus for reallocation.
2. Weed Control (listed under Common Area budgeted for $4,500. Currently $1, 929.57 has been spent). B. Wenstrom stated that this project is complete for the year. When he pays the final bills around $2,000 will have been spent. This leaves a potential surplus of $2,500.
3. Fence Repair (listed under Common Area budgeted for $6,500. Currently none has been spent). No money has been spent because a final cost sharing agreement has not been reached with neighbor, Ray Whitmeir, due to his unavailability this year. The western boundary of the Ranch must be surveyed before it can be fenced. Mr. Whitmeir agreed to this in principle, but has been out of contact since then. The fencing project would be 30, 692 feet (51/2 miles). This is probably a $45,000 project. It is also questionable that the fence boundary project with Vermejo Ranch is complete. The report is that the fence from Will Potterıs property going West is in bad shape. It was decided to roll over this yearıs budgeted amount into next yearıs budget for the same project.
4. Legal Fees (listed under Administrative Expenses budgeted for $2,500. Currently $660.70 has been spent). Since there is no immediate expense expected, this could be reduced to $800 leaving a surplus of $1,700 for reallocation.
5. Supplies (listed under Administrative Expenses budgeted for $5,000. Currently $3,591.98 has been spent). There was discussion whether the current amount spent reflected the actual moment or the end of October. It was concluded, nevertheless, there would be a surplus. A compromise number of $750 was determined to be excess for reallocation.

The final conclusion was that the identified potential surpluses increased somewhat by smaller amounts from other categories would produce an overall surplus of around $10,000 for reallocation to important projects.

Reallocation of Budgeted Surpluses: The Directors only briefly meditated before affirming that any surpluses should be applied to road improvement. B. Quigley pointed out that despite being a non-profit organization, the POA is allowed to roll over excess funds into the next year's budget. The feeling is, however, the roads are a project to be addressed any time possible.

1. Road Improvement At this point, M. Hughes, Chair of the Common Area and Road Committees, was given the floor. He had held a meeting of the Road Committee the previous evening to determine how the remaining amount in the Road Committee budget would be spent, as well as identify possible projects in the event of a budget surplus.

   This committee had reduced a large list of possible candidates to five repair projects previously identified for 2001 on Squirrel Lane, Fisher Peak Pkwy, Rainbow Springs, Elk Ridge Trail, and Trail Ridge Road to exhaust the current budgetıs funds. They identified any additional surplus should be used to grade in order to remove wash boarding on all the Ranchıs main roads (indicated on a map) that had been covered in road base. Tall Oaks will receive some grading and necessarily some road base to preserve the road since it has already been scraped clean.

   Mr. Hughes proposed that in light of the identified budget surplus, $16, 949 be spent for the projects he had just outlined beginning on Monday. The group wondered, if the road contractor, Ciarloıs Excavation, would be available. Mr. Hughes recognized the difficulty of the impending holidays, but observed that the contractorıs business strategy is to take on large jobs and use our work to provide cash flow to his company. Therefore, he would be available. The group questioned the current conditions for road repair. Mr. Hughes allowed that the current dryness was a problem. This, however, was the best time to do road work before the snow and rain prevents any work until late spring/early summer when they dry again. The POA could rent a water truck to wet the roads, but this would be at a cost of $1,000 per day. Furthermore, the contractor has agreed to try the work, and stated a willingness to redo anything that the dryness impairs.

   After the preceding discussion and questions, Mr. Hughes and the Road Committee were instructed to carry out their plans.

   B. Quigley will make all the adjustments to the budget and bring it to the December Board Meeting.

2. Allocation of San Isabel Refund Checks B. Wenstrom brought to everyoneıs attention a $7,653.18 refund check received recently by the POA from San Isabel Electric under a program offered to customers who fronted materials costs for them. He added this amount to the Utilities account. Subsequently, however, he discovered the POA has received smaller refunds in previous years totaling $4,231.20, but they were misidentified and placed into the Ranchıs general account. He expressed his intention to move at the 12/15 Board of Directorsı meeting that the Board place any year end budget excess up to the $4,231.20 amount into the utilities account to replace the earlier refunds which should have been placed there.

   The program has been going on for almost ten years, so the group wondered why the refund was so much larger this year. The answer may be the result of delayed bookkeeping at San Isabel. B. Quigley offered to check with Mr. Baldwin about this program in 1992-96.

Old Business:

B. Wenstrom reminded the group of his task to place the Ranch's funds into the highest interest bearing account he could find. Unfortunately, rates continue to fall and he has not been able to fulfill this task as he had planned. A property owner did suggest we place our funds into the ING Bank which many have seen advertised. Mr. Wenstrom researched this possibility. While they do offer a favorable interest rate, they only accept accounts from private individuals and not organizations. He, therefore, will continue to monitor local banks. Mr. Wenstrom asked H. Vaugeois to thank the property Owner for their interest and suggestion.

New Business:

B. Wenstrom instructed everyone to be prepared to approve the 2002 budget at the December meeting. The budget and its approval still hinges most on: 1) The CPI index which he will ascertain close to the meeting, and 2) The list of improved/unimproved properties. Undoubtedly the CPI will be much lower than in the recent past. Thus, the adjusted increase in property ownersı dues will not be great. A change in status from unimproved to improved, though, will affect an ownerıs dues more substantially. For this reason, Mr. Wenstrom wants the list soon, so he can mail change of status notifications before December 15 and owners may file prompt appeals. The goal must be: to be fair to each individual property owner, yet be consistent across the Ranch with the application of terms.

Announcements:

1. In the future, only the financial statements reflecting spending at the end of he month will be placed on the web site. B. Quigley will then bring the end of the month statements and the statements reflecting actual spending to the meetings.
2. All future meetings will be at 9:00 A.M. B. Wenstrom will notify P. Roehl of the dates and times of future meetings to ensure correctness and consistency of all listings on the web site calendars.

The meeting was then adjourned.

Submitted by Ed Hockett, Secretary, November 18, 2001

Next Meeting: 9:00 A.M. Saturday May 18, 2002 at Bill Wenstrom's home.