Annual Rept 2015.publisher. full report

Frenchman’s Creek, Inc. and Subsidiary

Notes to Consolidated Financial Statements

Note 5.

Future Major Repairs and Replacements (Continued)

The activity in the Replacement Fund for the years ended April 30, 2014 and 2013 is summarized as follows:

Note 6.

Deferred Compensation Plan and Investments

The Association has a deferred compensation agreement with the Executive Director. The terms of the agreement provide for addi- tional compensation per year beginning June 30, 2002. The Association has contributed $901,420 and $801,420 into the plan as of April 30, 2014 and 2013, respectively, which is included in deferred compensation investments on the consolidated balance sheet. The contributions are placed in a separate investment account which is adjusted for any earnings or losses of the investments during the preceding year. The investment account consists of a diversified portfolio including cash, stocks, mutual funds and corporate fixed income securities. As of April 30, 2014 and 2013, investments at fair value, to fully fund the deferred compensation plan amounted to $1,143,972 and $978,500, respectively. On March 15, 2005, the Association entered into a revolving line of credit in the amount of $1,500,000. On March 15, 2011, the $1,500,000 line of credit was renewed at an interest rate equal to LIBOR plus 1.50% (1.65% as of April 30, 2014). In March 2013, the line of credit was renewed through October 1, 2014. There were no borrowings on this line of credit during the years ended April 30, 2014 and 2013. In conjunction with the renovations of the back of the house and the fitness center, the Association entered into a nonrevolving line of credit with the total borrowings not to exceed $3,300,000 at an interest rate based on the one-month LIBOR rate plus 2.0% (2.15% as of April 30, 2014). The Association is required to make monthly principal and interest payment through the maturity date of May 1, 2024. The line of credit is secured by the Associations’ personal property and its right to assess the members as described in the Security Agreements. The outstanding balance on the line of credit as of April 30, 2014 and 2013 was $2,295,303 and $2,457,531, respectively. Note 7. Long-Term Debt and Line of Credit

2014/2015 Annual Report Page 40