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Health & Fitness

Where did all the money go? Chapter 3 Paying the replacement reserve expenses, MVF Style

Where did all the money go? – Protecting the Funds – MVF Style

Chapter 3 Paying for Capital Repair & Replacement MVF Style

Scheduled 2013 Capital Expenditures The Board of Directors has authorized the expenditure of $3,324,601 (50.0% of reserve investments) capital projects.   In addition, $706,100 in three projects that start in 2013 will be completed or financed over the next five years (2014 to 2017), Solar Panels ($222,600), Pool renovations ($400,000) and Village wide trails ($150,000). A total of $4,029,701 (60.6% of reserve investments) capital expenditure projects have authorized, under contract and/or in progress.

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The Solar Panels The Board of Directors authorized the installation of Solar Panels by on the MVF administrative building roof by Green Spring Energy of Timonium, Maryland at a cost of $222,600 with a down payment of $66,500 in 2013 with the balance financed over 10 year. In The News feature in the August 9 2013 issue of the Montgomery Village News Mike Conroy reports that in Dave Humpton’s EVP Report reported “that staff has been working with vendors to bring solar collection panels to some MVF facilities, as approved last year. Despite unexpected manufacturing hurdles and changing energy rates, staff is committed to finding a solution that helps further the goal of being more energy efficient”.

The Pool renovations budget, other than Whetstone pool, is $525,000 $125,000 in 2013 and $400,000 over the next four years paid from capital reserve funds. The Lake Whetstone pool renovations will cost $1,780,000 scheduled for completion in 2014, Apple Ridge pool $1,989,000 in 2015, and Sedgwick pool $1,716,000 in 2017. The total budgeted, planned, scheduled and approved capital reserve pool renovations cost from 2013 to 2017 is $6,920,000 which is more than the 2012 year end audited board designated reserve fund of $6,689,330.

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In the first paragraph of the cover letter to the MVF 2014 Proposed Budget and updated 5-Year Plan signed by David B. Humpton Executive Vice President  & W. Gregory Snellings, CPA, Chief Financial Officer, outlines the MVF 2014 four

primary goals, 1. Minimize assessment increases, 2. Complete Whetstone pool renovation and South Valley restroom-concession facility, 3. Maintain sufficient reserve contribution for Repair & Replacement of existing assets and 4. Fairly compensate MVF employees.

The Village-Wide Trail restoration is estimated to cost $200,000 over four years with 2013 cost funded from Undesignated Operating Surpluses and the remaining $150,000 funded from Capital Contribution Fees (CCF) revenue ARS 2007 Reserve Study  (see attached schedule in pdf version) detailed $851,100 streets, parking lots, trails and pedestrian paths components scheduled for restoration from 2007 to 2019.

Most of the asphalt surfaces were in poor condition in 2007 and since that time any maintenance, safety, or storm damage concerns were met with minimal patching and temporary measures. Since 2010 as a feature of the Montgomery Village Vision 2030 and the Foundation 5-year plan Asphalt property elements are now under the jurisdiction of the Committee on the Environment (COE) and referred to as Nature Trails and allowed to revert to their original natural state.

Page 5 of Dave B. Humpton, EVP & W. Gregory Snellings, CPA, CFO cover letter to 2014 Proposed Budget and updated 5-Year Plan, section on Operating Capital MVF Trail system: “Funding for the pathway project has been postponed for the 2014 budget. Funds encumbered from 2012 ($25,000) and in the 2013 budget ($50,000) will be used to develop a Village Wide map and way finding system (?) to make the paths more useable, noting connections to regional trail systems. Capital funds for this project are projected to resume in the 5-year plan and will be funded by the Capital Contribution Fee”.

MVF Lake and Park Capital Expenditures Two of the most expensive and unnecessary MVF funded projects are, the Lake Whetstone Island shoreline restoration $162,345 and the South Valley Snack Bar and Public Toilet construction. Page 61 MVF Proposed 2014 Budget CCF Capital Budget Project Proposal “This item was approved as part of the 2012 budget, but funding is being moved to the CCF fee. Capital and construction will now come from a Maryland State Grant ($125,000) and the CCF ($125,000) and the ongoing maintenance will be funded from the MVF operating budget. Neither project is included as a line item on the Inventory of Reserve Components. The 2013 MVF Reserve expense narrative for Parks includes $162,345 “To stabilize the lake banks at Lake Whetstone”, $83,544 Park path, trail and park lot asphalt. The budget description “stabilize the lake bank of Lake Whetstone” is misleading, for the last 20 years the deteriorating condition and inadequate maintenance of Lake Whetstone Park, Lake and shoreline has been a major concern of residents of the South Village & Whetstone neighborhood bordering the lake and most assumed this was to address the long awaits shoreline restoration of south and north shoreline of Lake Whetstone.    

Lake Whetstone Island Shoreline Restoration October 5 2012 Sylvia Carignan, staff writer for the Gazette, reports environmental restoration company Ecotone, provided engineering plans for review and permitting for the stabilizing of Lake Whetstone Island shoreline. Foundation spokesperson Mike Conroy stated, “after the plans are reviewed the work will go out for bid”.  In October 2012 the MVF board of directors authorized Ecotone, an environmental restoration company to proceed with the bidding process.

Whetstone Lake and Park is considered wildlife habituate and the island’s shoreline erosion could be a threat to the Heron population. The 2012 expenditure for engineer, design and construction plans and specification was $35,586, increasing total estimated shoreline stabilization cost to $197,931. The South Valley Park Lawn theatre renovation cost $204,006 in 2009 and the Lake Whetstone Park Dock erection cost the Village $204,906 in 2010. Herons, Ducks and Eagles are not included in the annual count of Geese and Gosling in the Village. However, it is estimated there are approximately 30 Herons domiciled on Lake Whetstone Island during the spring matting season. This shoreline restoration capital project will cost the Village $6,600 per Heron.

Given the Foundation’s long history of preferring a natural and economical approach to decision making, the Restoration of Lake Whetstone Island Shoreline is somewhat surprising as it may well end up as the most expensive and ill advise use of reserve funds in the Village’s history.

MVF Park Lake Stream Shoreline maintenance and environmental conditions including erosion, shoreline stabilization, damage repair, sediment runoff, water quality and environmental concerns is not just limited to Lake Whetstone but includes all Village lakes, streams, ponds, and drainage systems. 

Hope for Lake Whetstone Page 1 of Dave B. Humpton, EVP & W. Gregory Snellings, CPA, CFO cover letter to 2014 Proposed Budget and updated 5-Year Plan, page1 “For the 2014 budget, the only new capital project proposed is the fountain for Lake Whetstone. Page 57 CCF Capital Budget Project Proposal Installation of an aeration fountain in Lake Whetstone similar to the one installed at the Theater Pond. $30,000 in 2014 funded from Capital Contribution Fees (CCF)”

That’s all for now. Please download the pdf file attached to this blog post and review the various back-up supporting schedules.

Coming soon Chapter 4 Where did all the Money go-MVF Reserve Plan 2014-fact or fiction?

 

 

 

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