By Greg Ellison
(Oct. 10, 2019) With the fiscal year hitting the halfway mark this month, OPA Treasurer Larry Perrone said the focus remains monitoring replacement reserve funds until the year ends next spring.
Speaking at the
‘ meeting on Oct. 2, Perrone said through the end of August, the overall laddered investment rate of return is roughly 2.5 percent.
“As of Aug. 31, the association has approximately $15.9 million in reserve,” he said.
Of that sum, about $4.8 million is in CDARs (Certificate of Deposit Account Registry Service), with approximately $11.1 million placed in money markets earning a 2 percent return.
Highlighting specific account balances, Perrone said through August replacement reserves sat at about $6.3 million, with $2.7 million in bulkheads and $1.3 million inroads.
Looking ahead to reserve levels forecast the year’s end on Apr. 30, 2020, Perrone said the projection is positive, even though the association is in the midst of four major capital projects.
“From a liquidity standpoint, we’re in good shape,” he said. “Our expenditures we’re projecting at $4.286 million this year to cover all our projects.”
Based on these calculations, Perrone estimated the current fiscal year ending reserve balance would be roughly $2.9 million.
“With the money we’re spending this year, we wanted to make sure … that we had the liquidity to cover the expenses and … that we didn’t drain our replacement reserves to a point where if something unforeseen happened, we didn’t have money to cover it,” he said.
In addition to injecting about $1.9 million into replacement reserves this April to start fiscal 2019/2020, which closed last fiscal year at roughly $5.2 million, Perrone said around $720,000 was added to the bulkhead and waterways reserve fund.
“On Apr. 30, we had almost $2.5 million [in bulkheads],” he said. “The expenditures planned for this year is $1.95 million [so] we’re projecting an ending balance of $1.2 million.”
Perrone also said $350,000 was added to bolster the $1.1 million balance in road reserves to begin fiscal 2019/2020.
“We have an anticipated spend of $836,000, which will leave us with $615,000,” he said.
As the remaining fiscal year ticks away, Perrone said the careful monitoring of balance ledgers would continue.
“We want to make sure the Association from a financial standpoint remains healthy,” he said. “If the plans go accordingly … we should still be in good shape at the end of this fiscal year.”