HISID looks at 2014 budget

Friday, November 1, 2013

HOLIDAY ISLAND -- "I would challenge anybody here in the room, or around the table, formally or informally, I would challenge you -- what contingency, what emergency would occur that would warrant having to operate the district four months at a time without anything else coming in?" asked Holiday Island District Manager Dennis Kelly at the Board of Commissioners meeting Monday. "Even the ice storms you've had have lasted just days."

He was referring, during the 2014 budget discussion (See the district's PowerPoint presentation here), to the amount the district is required, by its own Code of Regulations, to keep in reserves: 35 percent of budgeted expenses each year.

He said the 35 percent is "predicated on a four-month count," or a third of the year.

Kelly said he had tried to find out the background of how the 35 percent reserve was established, "and there was no real answer ... it was just kind of pulled out of the air."

He suggested reducing the reserves to 25 percent, or three months, which would free up $318,000 per year to be used for operating expenses, he said.

The discussion was tied to unexpected expenses this year in legal fees associated with two lawsuits against the district (roughly $225,000 to $250,000), expenses for repairs to Well #7, which could run up to $80,000, and returning to spending $200,000 on road paving each year as the district had in the past.

He said the legal fees can be paid out of the reserve account "because it fits the category of what you would use that account for -- it's not an operating expense."

Even without reducing the reserve percentage, Kelly said the district is "in good shape, with a reserve account that continues to grow."

Figures supplied as part of the discussion show $895,000 in undesignated reserves, which cannot be used for operating expenses but can be used on such things as capital assets, the district's portion of any split-cost improvement grants or other one-time costs and unanticipated expenses.

In addition to undesignated reserves, there is $210,000 in unrestricted funds tied up in certificates-of-deposit.

This is all separate from the funds set aside for debt service on the wastewater treatment plant, the rolling stock equipment reserve, road funds from the county, fire department reserves and the district's operating money market account, which has $1.2 million in it.

Kelly said it costs the district $300,000 to operate each month, but in a later interview reduced that figure to $263,000.

Projected total income in the 2014 budget from all sources is $3.165 million, with $1.985 million being billed for assessments. Office Manager Marilyn Clave said at the meeting she had accounted for expected unpaid assessments on 827 lots. As of Oct. 16, $1.528 million in assessments had been paid. The largest bulk of unpaid billed lots was 769, owned by Holiday Island Development Corporation, representing $312,199 in lost income.

In this draft of the budget, operating expenses are projected at $2.881 million, leaving a surplus of $284,000.

Figures show an actual total surplus from the 2013 budget, as of the meeting, at $701,918.

Kelly is also proposing salary increases for employees and offered two scenarios for achieving those: a one-time bonus or a percentage of anywhere from 2 to 4 percent.

The problem with a straight cost-of-living increase, he said, is that higher-paid employees get a lot of money and lower-paid get a little money, which results in an "accordion effect."

"The district is not going bankrupt," Kelly said later. "In fact, we're doing quite well. We have a $283,000 surplus going into the new year, $3.4 million in reserves and $1.1 million in cash."

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  • Let's get Tom Dees involved here! Where is the deception in all this. We have no money to spend on infrastructure, yet we have a surplus, (if you read the right statement.)The madness of the phantom surplus is leading them to buy that inexperienced water expert a new toy at the tune of $60,000.00 w/trailer. (Get on line Folks, that set up can be purchased for half that.)(Not to mention the thing is simply not needed.)

    I'm just sick..!

    J. Paul Brown


    -- Posted by smokhous on Sat, Nov 2, 2013, at 3:02 PM
  • Common "FK"! Show us a Balance Sheet on a cash basis. Show us these surpluses!

    J. Paul Brown


    -- Posted by smokhous on Sat, Nov 2, 2013, at 3:04 PM
  • Now I'm really going to show my stupid. "FK" is showing a "Budgeted Income" of $3.1 million plus for 2014. If the assessments just brings in $1.9 million, where the heck (and I don't mean heck) is the other $1.2 million come in at? The Golf Courses...?!!

    J. Paul Brown


    -- Posted by smokhous on Sat, Nov 2, 2013, at 5:12 PM
  • NRHI

    Point being, the pressure at my meter is below 20psi. That's all we can get because that's all it will handle! When the line into our meter exploded last year, they had to completely close a loop below our meter. Many of the regulators are set for pressures which do not exist above them. If the pressure in the entire system is increased, the lines below the regulator would be devastated before anyone could react. Even a chance failure of a regulator would be destructive to the line below that regulator.

    That is, I am told, what happened on the Island Friday.

    On another side of this equation, I was told by our esteemed Fire Chief, he only needs a pressure of 5psi to fight a house fire. His truck can "suck" the water thru the pipe. In investigating this with other sources, I'm told this negative pressure on the unstable water lines, could cause them to collapse inwardly and completely close the lines permanently. ( Not to mention burning the house down.)

    J. Paul Brown


    -- Posted by smokhous on Sun, Nov 3, 2013, at 9:11 AM
  • NRHI

    That method of firefighting was not described to me. Not arguing with your premise, but these guys don't have that kind of equipment. Besides, if it were my house, the street will not accommodate that traffic. The tankers would have to back in the street, (1/4 mile) to feed the pumper. Only one of them could make the trip at a time. No room to make the turnaround.

    But then, why have the fire hydrants if they are not for use?

    As for replacing the feeder lines, give it to a private company or do it ourselves, gonna cost a ton of cash...!

    Just say'n!

    J. Paul Brown


    -- Posted by smokhous on Sun, Nov 3, 2013, at 1:07 PM
  • Who is leading in the polls for the BOC election ???????? A week from tonight is the great debate, don't miss it.............

    -- Posted by LITTLE DOZER on Mon, Nov 4, 2013, at 8:53 PM
  • A pumper that pumps 1K GPM has an internal suction of 22 PSI, anything below that will collaspe the piping. Soft hosing will also collapse. In order to pump water out of a hydrant at 5 PSI they require 'hard' suction.

    As to the tankers, they will back up, dump water into portable pool and take off to refill. Can dump 1K Gal. in less than 2 minutes. It's called a 'relay'.

    -- Posted by CommonSense22 on Thu, Nov 7, 2013, at 3:39 PM
  • Having 35% in reserves is keeping HISID fiscally sound. Most Condo Developments would not have less than that. And they generally do not need to furnish sewer/water services. It would not be prudent to purchase in a community that had less.

    -- Posted by CommonSense22 on Thu, Nov 7, 2013, at 4:04 PM
  • As I see this, between Kelly and the BOC, Holiday Island will not only go broke, but if they continue to dig in residents pockets for more money, they are going to see an increase in turned back lots. But then maybe it will burn from no water pressure first. Maybe that's the plan. Anyone play a violin? And the BOC isn't through, two of them are seeking re-election, and why? I betting it's not in the spirit of community service. Resident's better be aware of who they are voting for, and the reasons the candidate/s is seeking to be elected!

    -- Posted by Concerned Person on Fri, Nov 8, 2013, at 2:13 AM
  • Nice piece "Common Sense"! Just would make a couple of points. The line may have 22psi until the moment the pumper starts the suction. The immediate effect is a 0(zero)psi. It will go from that to a negative in seconds. In a sound system, that's fine. In this already collapsing environment, disaster..!

    I do believe you are granting our local FD instant access to equipment they do, in fact, not have. If they must wait until a tanker can get to the tower, fill the tank, drive to the site, unload the tank, the house is lost..!

    Just say'n..!

    J. Paul Brown


    -- Posted by smokhous on Sat, Nov 9, 2013, at 7:39 AM
  • 23 comments, over half from NRPI, from Smokehous, a few more from the other few rabblerousers (commonsense22 and concerned citizen). It seems that NRPI is so out of touch with reality that he thinks people who don't drink from the same koolade glass have to resort to threats of rape and slaps, Worse yet, does he believe that the residents of HI would allow this to happen, that we are so weak?

    -- Posted by HI truth seeker on Sun, Nov 24, 2013, at 7:57 PM
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