SPCRIMD Finance FAQ

 

1. Q:  Who handles the money?

A:  The individual designated by the Board as the Financial Administrator manages the money in accordance with the Arizona  Revised Statutes (ARS) that are summarized in the County Special District Handbooks and in accordance with any additional Board guidelines. 

 

2. Q:  How many fund accounts are there?

A:  The Sheriff’s Posse Community Road Improvement and Maintenance District (SPC RIMD) has three county treasurer accounts, which  are where the RIMD funds are held --- a Maintenance & Operations (M&O) Account, a Chip-Seal/Fog Coat  Account, and a Bond Trust Account. 

3. Q:  What categories are included in the current budget and financial reports?

A: There are four “income” categories— levy income, interest income, gift income, and bond trust income.  There are six expense categories —snow removal, road maintenance expense, administrative expense, legal expense, insurance expense and contingency reserve.  Additionally there is a chip-seal/fog coat reserve category and a bond payment liability category.  Categories can be changed each year with Board action through a new approved budget.

4. Q:  How are disbursements made?

A:  The Financial Administrator writes checks from the county M&O Account, through Chase Bank.  When approved by the Board at a Public Meeting, the Financial Administrator may transfer money between the Chip-Seal/Fog Coat Account and the M&O Account.  The Financial Administrator shall transfer money from the Bond Trust Account to the M&O Account to cover the debt service bond payment, and this transfer shall be accomplished by email request to the Yavapai Treasurer, with copies to the Board, indicating amount and purpose of the requested transfer.

 

5. Q:  Is there a budget?

A:  Yes, in accordance with the laws and procedures in the Arizona Revised Statutes, the Board prepares a proposed annual budget for each income and expense category, which is presented in accordance with statute at a Public Hearing and newspaper publishment, then approved at a Board public meeting, and submitted to the County by July 10.  There are strict requirements in the ARS law that are summarized in the County Special District Handbooks for preparation and adoption of the annual budget.

6. Q:  Can expenses budgeted for one expense category be spent for benefit of another category or can money be spent on an item that was not budgeted?  

A:  In accordance with ARS 42-17106, Boards may transfer monies between budget items provided they follow these three criteria:

•The monies are available.

•The transfer is in the public interest and based on a demonstrated need.

•A majority of the members of the governing body votes affirmatively on the transfer at a public meeting.


7. Q:  What happens if expenses exceed budget?

A:  The Financial Administrator notifies the Board in any case where expenditures for a particular expense category exceed the budget, and requests an agenda item at a Board meeting for the Board to decide how to handle the issue.  Further, the Financial Administrator by statute cannot issue checks for expenditures in excess of approved budget amounts.

 

8. Q:  What happens if unanticipated expenses consume all our funds?

A:  The Board may authorize transfers between budget categories, but there is no mechanism to raise additional money during the year.  This is why the budget includes a contingency item. 

9. Q:  Where is the money kept?

A:  The money for the three bank accounts is kept in three active, interest-bearing accounts with the County Treasurer.

 

10. Q:  How are property tax levies set?

A.:  After the budget is approved, the Board submits a request to the County Treasurer for a Property Tax Levy equal to the amount of the budgeted expenditures for M&O and Chip Seal/Fog Coat reserve, less carry-over from the previous year.  For purposes of the property tax levies, income and expenditures related to the Bond Fund account are not included.

11. Q:  What is  carry-over?

A:  The carry-over is an estimate of the excess of actual income over actual expenses at the end of the budget year.

 

12. Q:  Does the RIMD have any debt?

A:  Yes, the RIMD has a debt payable to the Veranth Trust.  Those RIMD property owners who elected to take a loan to pay for the road construction are required to make loan payments every 6 months to the RIMD.   The RIMD uses these funds to make its twice a year payments to the Veranth Trust.

13. Q:  Does the RIMD have any income other than taxes?

A:  The RIMD earns interest on money in its accounts and usually receives a gift in lieu of taxes from the Yavapai County Mounted Sheriff’s Posse Association.  While the RIMD also collects Bond Trust money from the owners who elected to pay their share of the road construction costs through the loan process, this money is totally paid out as a debt payment to the Veranth Trust .

14. Q:  What are the financial reporting requirements?

A:  The Financial Administrator will provide quarterly reports to the Board that include the income-expense balances and the balances of the three county treasurer accounts.  This report will keep the Board members apprised of the overall financial condition of the SPC RIMD.  Also by May 15th of each year, the Financial Administrator will provide the Board a comparison of anticipated income and expenses to budgeted income and expenses for that year to assist them in developing a proposed budget for the following year.

 


15. Q:  Are the books audited?  

A:  The books are reviewed annually by a designated Board member or community auditor, prior to submission of the annual financial report. 

16. Q:  Does the Financial Administrator have any other responsibilities?
A:  The Financial Administrator is also responsible for semi-annual collection of Bond Trust payments from appropriate members of the SPC  RIMD.  If properties are sold by RIMD members having a loan liability to the Bond Trust, the Financial Administrator is responsible for providing the settlement company information for closing escrow and collecting funds, if appropriate, from close of escrow.  In accordance with ARS 35-501 and 35-502, the Financial Administrator files a spreadsheet report titled REPORT OF DEBT, LEASES AND CONTRACTS with the Arizona State Treasurer’s Office  that provides information relative to the RIMD indebtedness to the Veranth Trust.

 

17. Q: What occurs if a RIMD member does not submit their semi-annual Bond Trust payment by the specified due date?

A. The Financial Administrator shall follow the steps identified in Arizona statutes to pursue collection of the required bond payment.  This will require computation of late fees and accrued interest costs, and may entail incurring reimbursable legal fees resulting from consultation with the RIMD legal counsel.  

 

18. Q:  Are the books kept on an accrual basis or cash basis?

A:  The books are kept on a cash basis.

 

19. Q: Does the Board approve every expenditure? 

A:  The Financial Administrator may write checks without specific Board approval for the following expenditures:

•For budget approved categories involving only one-time expenditures per year, i.e.,

the insurance policies,

•For RIMD administrative expenses incurred by the Financial Administrator, and

•For bond payments to the Veranth Trust.

For all other expenditures, the Financial Administrator shall obtain approval from the Board Chairman, or the Board’s designated member for approving expenditures in a specific expense category, prior to writing a check.


20. Q:  What safeguards do we have against over-spending?

A.  As noted in the answer to FAQ number 7, the Financial Administrator notifies the Board in any case where expenditures for a particular expense category exceed the budget and shall not issue checks for expenditures in excess of approved budget amounts.  This is in conformance with AZ Revised Statutes that state expenditures shall not exceed the Board budgeted amounts.

21. Q:  What safeguards do we have against embezzlement by the Board?

A:  The Board does not have direct access to the RIMD money, and all authorized expenditures are per publicly approved budgets.

22. Q: What safeguards do we have against embezzlement by the Financial Administrator?

A. The Financial Administrator provides quarterly reports to the Board, and to RIMD members who ask to receive them.  Also, as noted in FAQ 19, except for very specific exceptions, the Financial Administrator obtains approval from a Board member for each expenditure.   In addition, financial records are reviewed once a year by a designated auditor, and in case of discovered malfeasance the community is protected by the fact that the Financial Administrator is a community homeowner with a major attachable asset (his/her lot/home) exceeding the value of any RIMD accounts.