At the January 2008 board of directors meeting John List reported that the operating profit for the month of November was $31,266.00 or $27,985.00 worse than budget. For the first eleven months of the year, the operating profit was $179,592.00 before depreciation. That is $200,000.00 worse than budgeted. After depreciation and the $400,000.00 insurance recovery, the net profit was $77,676.00.
Since when is insurance recovery a profit? Its not income, how can it be a profit, is what you are saying, we had an operational loss of $333K( approximate)? Recovered 400K of a casualty property loss that is supposed to be replaced with the insurance money? However we put the insurance money in a general fund to cover operational losses? Is that legal? What’s the insurance money from? Will the replacement of whatever was lost be a cost attributed to that function. Will this replacement cost be construed as an operational loss even if it was replaced by insurance.
If this concept is incorrect please provide an alternative correct explanation. It all appears to be mixing apples and oranges of money to make our operational losses less severe appearing. Maybe we need to insure our amenities against operational losses, seems to be the best way to turn a profit, heaven forbid raising user fees again, the last increase started an ice shortage in the area for cold rags for soreheads.
Premiums could be collected at the time of use, like a sales tax and would be proportionate to the amount of anticipated loss for that activity, we seem to be good at that. This cost wouldn’t be a fee, just a insurance premium to cover cost shortfalls and underutilization.
Please excuse me for being caddish with this but it never seems to end.