At the June meeting of the Property Owners Assocation Board of Directors, four capital project funding requests were approved.
The purchase of three medium-duty and one heavy-duty utility vehicle (all used) were approved for $25,455 for the Toqua golf maintenance department. These are replacements for utility vehicles that have reached the end of their useful lives. They are late model, used John Deere vehicles in excellent condition, turned in off-lease by high-end private clubs, at a significant savings versus new equipment.
Replacement of the Kahite Lift Station sewer control panel was approved for $7,704 as an upgrade for the existing obsolete system that has reached the end of its useful life.
Installation of 10 personal water craft lifts at the Kahite (1), Tanasi (7) and Yacht Club (2) docks were approved for $19,824. This project, originally approved at the May board meeting, was resubmitted at a 17 percent higher price, but based on a higher quality offering that is more suitable for today’s larger jet skis. Since original approval we now have 10 lease checks in hand, assuring full occupancy for the initial season. At the higher price, but full occupancy, the internal rate of return is 12.2 percent.
Water booster pump
Finally, a supplemental funding request was approved for a water booster pump to support additional lots added at Coyatee Hills. The project was approved in November for $45,085. The assumption at that time was the use of internal labor and equipment to do the installation, but this cost was not recognized in the funding request. Delays, design changes and wet weather pushed the project into the busy months of the year, necessitating the use of contract labor and the use of gravel to stabilize the foundation base. The total overrun was $60,261, partially offset by unrelated booster pump projects at the Wellness Center and medical office building. Overruns of this magnitude are never acceptable. A draft proposal for an addition to the Purchasing Policy and Procedures Manual has been submitted to the board for consideration and further development.
At this point in the year we have approved approximately 57 percent of the 2017 capital plan and are about 2 percent, or $15,000, over budget for those projects that have been approved. Year-to-date net income reflects a favorable variance to budget of about $821,000, though deferred maintenance projects will offset most of that in the coming months.
Management expectations are that we will perform somewhat better than budget on net income, capital spending and cash flow after including projects that are currently deferred.
