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The Buzz: Covenant residents: What you need to know now

Ann Boon
Ann Boon

By Ann Boon, RSF Association board president

This Thursday, Feb. 6, there will be a very important open meeting of the Rancho Santa Fe Association Board of Directors. It will be held at the Garden Club at 9 a.m.

Item 1: The purchase of the RSF Garden Club building by the RSF Association.

After months of negotiations, the RSF Association board and the RSF Garden Club board have reached an agreement. All the documents have been finalized. At our Thursday meeting the Association board will review all the transaction deal points for the public.

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The Association board will then vote to approve the formal resolution to purchase the Garden Club building. Once this resolution has been approved, in accordance with our Covenant bylaws, all the members of the Covenant will receive written notification from the Association explaining the details of the final agreements.

If Association members wish to challenge the purchase, they will have 30 days to deliver to the Association office a petition signed by 100 voting members of the Association.  Such a petition would cause the Garden Club purchase issue to be submitted to a vote by all Association members.

Item 2: Budget Goals

Over the past five years, Association expenses have continued to grow while revenues remained basically flat.  The Association is looking for ways to balance the needs of the community with revenues to avoid having to increase your assessment.

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For the past two years, your board has moved nearly $200,000 from the Community Enhancement Fees to the General Services Fees in order to balance the General Services budget. With guidance from the Finance Committee, the board has reviewed all expense categories to attempt to identify where reductions could be made without impacting the level of services you receive.

An area that was identified was compensation, which takes about 70 percent of General Services revenues. The Association provides a very generous benefit package to virtually every employee from the Association Manager to the Parks & Recreation workers. This package comprises fully paid healthcare benefits, including dental and vision insurance, sick leave, paid vacation, and 401k contributions.

In fact, if an employee does not use vacation during the year, vacation pay is accrued.  There is currently no cap on the amount of vacation that can be carried over from year to year.

Excluding the Golf Club, Tennis Club, and Osuna, for the fiscal years ending 2009 through 2013, salaries and wages increased $70,000 to $2,554,000.  This is about a 3 percent increase.  And on top of that, employee benefits, excluding accrued vacation pay, increased $75,000 to $596,000, about 14 percent. Accrued vacation expense now totals approximately $1,000,000.

This brings us to Item 3.

Item 3: Compensation Committee

Our current bylaws do not prohibit the entire board or the executive committee from performing the duties of a compensation committee but neither do they specifically call for the establishment of a Compensation Committee. This year our executive committee has acted as a compensation committee, studying all the components of compensation, including salaries and all employee benefits.

The intention of the entire board is to bring costs under control so that salaries and benefits are fair to our employees while also remaining sustainable to our members. Our board recognizes that this important goal is an ongoing job.  That said, we are proposing that our bylaws specifically authorize every board to create a Compensation Committee from its members.

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The Compensation Committee would be directly responsible for reviewing and evaluating salaries and employee benefits.  The Compensation Committee would report its findings and recommendations to the entire board.

Item 4: Member access to employee compensation information.

We will be discussing in open session the kinds of information regarding Association employees’ salaries and benefits that are by law required to be available to Association members. This issue should be clearly understood by all employees and all members. This topic is appropriate and required to be discussed in open session because we will not be discussing specific employee information by individual employee name.

In general, according to the Davis-Sterling Act, the California law governing HOAs, with respect to employee compensation: Association members have the right to information concerning the compensation paid to employees, including the general manager, as long as the employees’ job classifications or titles, not the employees’ names, are used.

I hope to see you all on Thursday.


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