RANCHO SANTA FE — The Rancho Santa Fe Association board set aside time in their Sept. 1 meeting agenda to address financial questions raised by the Past Presidents Council (PPC).
The Past Presidents Council consists of 10 former Association presidents as well as four previous members of the Covenant Design Review Committee (CDRC).
Janet Danola, the RSF Association board treasurer, told her fellow board of directors and members present that she had been ticking off the financial issues raised, as her scheduled permitted, regarding a letter sent by the PPC in Aug 2016.
“A few weeks ago, the board received a letter from a group of members that call themselves the Past Presidents Counsel,” Danola said. “Today, we’re going to talk about the administrative department’s operating costs, expenditures from the Covenant Enhancement Fund, and authorized signers on bank accounts.”
Danola believed that following her report the accounting department portion would be fulfilled in terms of replying to the PPC letter.
“I’ve got to say that I could not have done this without the help of everyone in the accounting department, so this is not just my show,” she said.
Danola spent a significant amount of time discussing why the operating expenses increased from the year-end of June 2016 at $2.1 million, and $1.8 million in June 2015, respectively.
According to Danola, the increases were in payroll, legal and litigation, and a rise in public relations. On the flipside, there were decreases in the Association’s CHP contract and consulting services.
Danola was specific as to why there was an increase in administrative payroll of $327,000.
“The increase in expense of 2016 over 2015 was due to three things: the hire of two new administrative managers which were included in the budget; number two, severance pay for two former employees not included in the budget; and, number three, higher healthcare costs,” she said.
Danola shared that lower staffing levels also offset those increases.
In reference to legal and litigation, expenses were $290,000 for year ending in June 30, 2016 and $162,000 for June 2015.
Danola said that the total expenses incurred during 2016 were equally divided between administrative and land use with litigation, potential litigation, and settlement.
“So what I’m saying is half the cost was due to administrative and land use and half was due to litigation, potential litigation, and settlements. The Board intends to make efforts to control costs of administrative and land use components of the legal expense,” she said. “The litigation, potential litigation, and settlements component of legal expense is difficult to control and difficult to estimate accurately for budgeting purposes. The Board will make every effort to manage the business of the Association in such a way that overall the cost is controlled.”
The 2017 budget for legal and litigation expense was at $275,000, she said.
In the public relations category, $69,000 was spent in 2016 whereas $41,000 was calculated for the year ending in June of 2015.
“While the increase of $28,000 was not questioned by the PPC, it can be explained as follows. During the year ending 2016, the Association engaged in the Village Vibe and other community activities,” she said. Danola continued, “The invoices for subcontractors that take care of things like traffic control, game rentals, games, crafts, advertising, were included in this category and that’s grouped in the $28,000.”
When Danola finished her presentation on all the items, the board thanked her for all her hard work. In addition to the board, PPC member, Marie Addario was in attendance and said a few words.
“As a representative of the Past Presidents Council, I want to thank you and the board for dealing with our questions,” Addario said.
Addario went on to say how they appreciated the time that was spent along with the cooperation.