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Association Draft Operating Budget Presentation - FY 09/10. Final Draft - April 25, 2009. The Process To Date. The Big Picture. Utilities Water (+12%) Trash (+3.5%) Electric (+3%) Landscape Extras (-5%) Day-to-Day Plantings Irrigation Tree Maintenance Fertilization and Pest Control
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Association Draft Operating Budget Presentation - FY 09/10 Final Draft - April 25, 2009
Utilities Water (+12%) Trash (+3.5%) Electric (+3%) Landscape Extras (-5%) Day-to-Day Plantings Irrigation Tree Maintenance Fertilization and Pest Control Landscape Contract (-14.3%) Revenue Laundry Contract Washer Rebate Labor Transfer G&A Increased Deductibles Increase Premiums – Workers’ Comp. Increase Premiums for Health Insurance Total Salaries Flat Operating Budget Drivers Behind Change
From a Consolidated View • Spending plan equals $6,051,800 • Year ending balance equals $6,099,440 • This year’s funding adjustment equals 7.7 percent • The ending balance and associated funding adjustment for the next five-year period are as follows:
Background and Factors • Staff met with all 12 DACs and worked through the reserve funding and work schedules line by line • There was a heightened awareness this year to bring the lowest (responsible) assessment to members due to the economic pressure and conditions • The expense and interest-income rate factors are 3% • Maintain as much a straight line funding level as can be reasonably maintained
DAC Comments • District Operating - DAC requested addition of the landscape maintenance to the North and West Fence line to be included in the Operating Landscape Budget to insure proper upkeep of these areas. • Action Taken: This landscape maintenance work is included in the new landscape contract specifications. • There were no additional requests regarding the proposed Operating Budget draft. • The DAC wishes to keep the percentage of increase of assessment to the residents at the rate stated in the budget, this would eliminate a spike in assessments at a later date. • Action Taken: Achieved total budget change at 2.8% better than originally expected at 4.7%. • District Reserve –After reviewing first draft of the Operating and Reserve Budgets, the DAC requested to put a hold the Second Phase of the Cribari Landscape Restoration Project until the year 2012. • Action Taken: Modified 2010 Reserve Plan by reducing Landscape Restoration $30,000 per year starting 2010 for the next three years – the final phase of the landscape restoration plan to be completed in 2013.
Cribari Reserve Fund Notables • Next year’s spending plan = $897,000 • Deck coating ($47,500), grounds restoration ($195,500) and building repairs prior to paint ($423,500) • Reserve minimum balance target = $720,600 • Actual fund balance falls below minimum target in 2011 • Funding levels are as follows: • 2009/2010 - $827,175 – 19.1% adjustment • 2010/2011 - $707,375 – 4.5% adjustment • 2011/2012 - $739,075 – 4.5% adjustment • 2012/2013 - $1,428,175 – 4.5% adjustment…(4.5 to 5% through 2028)
DAC Comments • District Operating - No DAC comments after reviewing the first draft of the proposed Operating Budget. • District Reserve – DAC requested to keep assessments from climbing any higher than necessary, proposed that the following items be eliminated or at least spread out over a couple years: • No Landscape Restoration projects at this time. • Action Taken: The Board has indicated a fairly strong position with regard to this district moving forward with their landscape restoration program. • General comments regarding flat roof and gutter and spout replacement. • Action Taken: Informed DAC that both items are a carryover from FY 09-10. • DAC concerned regarding “over estimated” Building Components. • Action Taken: After meeting with Ken Brady and Rick Casey, the Reserve Fund was adjusted, Montgomery Reserve assumes $1,000,000 of loan payback. DAC request was accomplished without modifying Facility Department personnel recommendations.
Montgomery Reserve Fund Notables • Next year’s spending plan = $1,162,200 • Roofs ($300,0000, driveways (TE) and parking ($159,000), landscape and water feature ($207,800), building components ($321,200) • Target minimum balance = $722,400 • Actual year ending balance and funding adjustments (%) for the next fours years as follows: • 2009/2010 - $723,420 – 2.9% adjustment • 2010/2011 - $1,118,590 – 3.5% adjustment • 2011/2012 - $1,548,560 – 3.5% adjustment • 2012/2013 - $1,900,030 – 3.5% adjustment…(3.5% through 2028)
DAC Comments • Operating Fund • After reviewing the draft of the FY 2010 Budget the DAC was pleased with the 3.1% proposed increase in the operating budget. • Action Taken: After updating the water rate to the actual cost the proposed 3.1% increase was reduced to a 2.2% change. • Reserve Fund • The 6.6% increase in the reserve fund presented to the Heights DAC was acceptable – the DAC acknowledges that there might be a chance that the ABOD will not approve a deficit in reserves this year. • DAC concerned regarding the funding for Building Components allocation, requested that the painting project scheduled for FY 2010 to be moved to FY 2011. • Action Taken: Building Components funding based on Facility Department personnel recommendation and future deck coat project and paint project in 2011 was spread between two years – also the fund balance was reduced to help achieve the objective.
Heights Reserve Fund Notables • Next year’s spending plan = $493,200 • Deck coating ($100,000), building components prior to painting ($317,800) • Target minimum balance = $197,700 • Actual fund balance falls below minimum for three years (including % adjustment) • Actual year ending balance and funding adjustments (%) for the next fours years as follows: • 2009/2010 - $1,665 – 5.4% adjustment • 2010/2011 - $14,065 – 5% adjustment • 2011/2012 - $66,365 – 5% adjustment • 2012/2013 - $197,965 – 5% adjustment…(5% through next 30 years)
DAC Comments • Operating Fund • No comments in regard to operating budget. • Reserve Fund • After reviewing reserve funding plan, the DAC expressed concern regarding the landscape restoration plan – requesting the plan be put on hold for one year. • Action Taken: No change; staff’s recommendation is to keep the funding as originally presented at 8.3% and to keep funding level as predicted last year at this time, even though the end result will produce a negative ending balance in the reserve fund at year’s end – playing catch up will only transfer the burden to future years.
