achoa budget and finance committee 2019 draft budget ... · 10/9/2018 · this is a budget...
TRANSCRIPT
ACHOA Budget and Finance Committee 2019 Draft Budget Presentation
10/2/2018 1ACHO Budget and Finance
Committee
} This is a Draft Budget for 2019 and your input tonight will assist in finalizing the 2019 Budget for Board approval at the November 6, 2018 Board Meeting. PLEASE ASK QUESTIONS.
} Once the Board approves the Budget, the Budget will be forwarded to community members for ratification at the ACHOA Membership Annual Meeting December 11, 2018
10/2/2018ACHO Budget and Finance
Committee 2
} Key questions addressed by the ACHOA Budget & Finance Committee for 2019:
◦ Should the ACHOA maintain Status Quo monthly assessments which are below the inflation level?
◦ Should the ACHOA raise monthly assessments consistently, with the expected 2.7% inflation rate?
◦ Should the ACHOA raise monthly assessment to increase the underfunded Contingency Fund (“Rainy Day Fund) from $154,000 towards two months of cash on hand which would be $417,772?
◦ Should the ACHOA continue to fund Capital Projects at $5.00 per month to add new amenities and services over time?
10/2/2018ACHO Budget and Finance
Committee 3
} ARROWCREEK HOA - ASSESSMENT INCREASE HISTORY (AS OF 10/9/18)
◦ 1997 to 2006: $110.00 per month assessment ◦ 2007: $221.24 per month to fund Reserve and
filed lawsuit against developer. ◦ 2009: Reduced to $205.00 per month after
developer lawsuit settled. ◦ 2013: $218 per month – Reserve Fund increase. ◦ 2018: $238 per month - increase to fund both
Operating, Capital and Reserve
10/2/2018ACHO Budget and Finance
Committee 4
} ACHOA Follows Zero Base Budgeting as required by NRS 116: Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period.
} The process of zero-based budgeting starts from a "zero base," and every function within an organization is analyzed for its needs and costs.
} Budgets are then built around what is needed for the upcoming period, regardless of whether each budget is higher or lower than the previous one.
10/2/2018ACHO Budget and Finance
Committee 5
} This is a Budget Designed to support the Associations 2017 to 2020 Strategic Plan.
} The Seven Strategic Focus areas that follow and planned inflation rate of 2.7% were considered in developing the draft budget.
10/2/2018ACHO Budget and Finance
Committee 6
} Strengthen the Brand and Reputations of ArrowCreek
} Enhance the Residents’ Center
} Expand Amenities and Offerings
} Unify the ArrowCreek Community
10/2/2018ACHO Budget and Finance
Committee 7
} Create a Vibrant Trail System and Outdoor Fitness Circuit
} Improve the Curb Appeal of ArrowCreek through Landscaping
} Maintain Existing Roads
10/2/2018ACHO Budget and Finance
Committee 8
} The ACHOA is a mature community of twenty years that continuously requires updating, replacement, and repair through the Reserve Fund Budget.
} The ACHOA over time must develop new amenity offerings to maintain relevance through the Capital Fund.
} This Draft 2019 Budget includes an $8.00 per Month Assessment Operating Fund increase. ($96.00 annual cost per lot for the Operating Budget Only)
} There is no Special Assessment.
10/2/2018ACHO Budget and Finance
Committee 9
} Affirm the Capital Fund Expenditures for new community amenities.
} Affirm the Reserve Fund Funding and Expenses that are modified for inflation.
} Affirm the Operations Funding And Expenses that recognize fuel price increases, wage inflation, utility increases, insurance increases, material increases, and contracted vendor price increases.
10/2/2018ACHO Budget and Finance
Committee 10
Assessment Per Month 1,085 Members
2019 Budget Reserve Change Proposed
2018 Approved Budget
2018 ActualProjection 8-31-18
Operating Budget
$156.00 per month
$148.00 per month
$148.00 per month
Reserve Budget(Min is $)
$85.00 per month approved
$85.00 per month
$85.00 per month
Capital Projects Fund
$5.00 per month
$5.00 per month
$5.00 per month
Basic Assessment
$246.00 permonth
$238.00 per month
$238.00 per month
Sub-gate Assessment
$5.00 per month
$5.00 per month
$5.00 permonth
Sub GateMembers
$251.00 per month
$243.00 per month
$243.00 per month
10/2/2018ACHO Budget and Finance
Committee 11
Revenue 2019 BudgetVer 4S
2018 Approved Budget
2018 Projected Actual 8-31-18
Residential Assessments - $246 per month $ 3,202,920 $ 3,101,616 $ 3,100,664 Contribution to Reserves - $85 per month $ (1,106,700) $ (1,106,700) $ (1,107,720)Capital Projects - $5 per month $ (65,100) $ (65.100) $ (65,100)Gate Assessments $5 per month $ 16,500 $ 16,560 $ 16,560 Contribution to Reserves-Gates $ (5,376) $ (5,400) $ (5,400)Road Snippet Assessment-$37 per month $ 7,992 $ 7,992 $ 7,992 Contribution to Reserves-Road Snippets $ (6,912) $ (6,912) $ (6,912)AC Country Club Assessments $ 5,904 $ 5,712 $ 5,712 ADRC Submittal Fees $ 36,000 $ 29,600 $ 38,000 Gate Transponders & Clickers $ 25,080 $ 24,996 $ 19,711 Social/Recreation/Activity Fees $ 1,380 $ 1,200 $ 1,700 Room Rental Fees $ 1,200 $ 900 $ 1,300 Late Fees & Interest $ 8,100 $ 8,100 $ 8,865 Construction Penalties $ - $ - $ 500 Compliance Fines $ 3,000 $ 3,000 $ 1,625
Interest Earned - Operating Accounts $ 6,000 $ 6,291 $ 6,176 Grant Income $ 103,000 $ 25,000 $ -
Total Revenue $ 2,232,988 $ 2,045,835 $ 2,023,668
10/2/2018ACHO Budget and Finance
Committee 12
Expense Department(Details Provided Latter in Presentation)
2019 Draft Budget Vers. 4S
2018 Approved Budget
2018 ProjectedActual 8-31-18
Administration $ 75,670 $ 90,410 $ 84,801 Communications $ 36,000 $ 35,900 $ 42,924 Payroll & Benefits $ 1,318,086 $ 1,320,708 $ 1,086,767 Insurance $ 88,990 $ 86,512 $ 77,141
Utilities $ 196,150 $ 187,680 $ 175,989
Landscaping $ 38,000 $ 38,000 $ 41,175
Operations $ 36,400 $ 36,018 $ 30,557
Contracted Svcs. $ 142,800 $ 107,600 $ 90,931
Repair & Maint. $ 289,390 $ 279,680 $ 262,035
Professional Svcs. $ 283,900 $ 285,500 $ 257,745
Taxes $ 1,200 $ 1,200 $ 783
Total Expenses $ 2,506,636 $ 2,469,208 $ 2,156,848
10/2/2018ACHO Budget and Finance
Committee 13
Capital Projects Revenues and Expenses
2019 Draft Budget Ver 4S
2018 Approved Budget
2018 ProjectedActual 8-31-18
Revenues Budget Revenue $5.00 per month $ 68,100 $ 65,220 $ 69,891
Balance Sheet Surplus $ 354,130 $ 375,000 $ 350,000
Total Revenue and Cash $ 422,230 $ 440,220 $ 418,891
Expenses
Equipment Depreciation $ 43,200 $ 43,200 $ 33,262
Vehicle Depreciation $ 24,000 $ 24,000 $ 22,000Total Depreciation – Non Cash $ 67,200 $ 67,200 $ 55,262
10/2/2018ACHO Budget and Finance
Committee 14
Expense Department 2019 Draft Budget Ver 4S
2018 Approved Budget
2018 ProjectedActual 8-31-18
Capital Project - Other Projects # 2 $ 2,520 $ 15,000 $ 3,333Capital Project - Fire Access Gates at Harbottle Park parking area # 1 $ 20,000 $ 0 $ 0
Capital Project - Website Development # 3 $ 8,000 $ 10,000 $ 11,000
Capital Project - Marketing & Public Relations # 3 $ 6,000 $ 0 $ 2,250
Capital Project - Toro Workman MDX Gas 16HP # 2 $ 14,239 $ 0 $ 0Capital Project - Riding or Stand Up Lawn Mower $ 0 $ 0 $ 13,244Capital Project - Park Benches Bust Stops & Concrete Pads # 2 $ 4,500 $ 0 $ 0Capital Project - Playground Remodel & Upgrade Residents Cntr # 1 $ 20,000 $ 0 $ 0Capital Project - Wind Screens for Pickle and Tennis Courts # 2 $ 5,000 $ 0 $ 0Capital Project - Seating Areas Pickle Ball and Tennis # 3 $ 10,000 $ 0 $ 0
Capital Project - ADA Chair for Swimming Pool # 3 $ 7,500 $ 0 $ 0Capital Project - Master Hiking Trail # 1 $ 10,000 $ 0 $ 5,000Capital Project - Improvement Studies # 3 $ 3,000 $ 12,000 $ 5,000Capital Project - Res. Center Planning # 3 $ 6,000 $ 50,000 $ 8,003
Total Expenses without Depreciation $ 117,359 $ 87,000 $ 57,530
10/2/2018ACHO Budget and Finance
Committee 15
Operating and Capital Revenues and Expenses
2019 Draft Budget Ver 4S
2018 Approved Budget
2018 ProjectedActual 8-31-18
Total Revenue and Cash $ 422,230 $ 440,220 $ 418,891Total Expenses without
Depreciation$ 117,359 $ 87,000 $ 57,530
Surplus or (Loss) $304,871 $353,220 $361,361
Operating Revenue $ 2,232,988 $ 2,045,835 $2,023,668
Total Expenses $ 2,506,636 $ 2,469,208 $2,156,848
Surplus or (Loss) ($273,648) ($423,373) ($133,180)
Total Capital and Operating Surplus or (Loss)
$31,223 ($70,153) $228,181
10/2/2018ACHO Budget and Finance
Committee 16
} In the past the Board has maintained a Contingency Fund (“Rainy Day Fund”) of two months projected expenses as recommended by the Independent Accounting firm to avoid Special Assessments.
} Two months would equal $417,772.
} As of September 30, 2018 the sum is actually $154,000 which was depleted to handle the Emergency Drainage Projects this year.
} Surplus Funds from 2018 and projected 2019 can be used to build up the Rainy Day Fund.
10/2/2018ACHO Budget and Finance
Committee 17
} The Browning Update Reserve Fund Report for 2019 has not been published pending the updates and all the road work completed for 2018.
} The 2018 Road Work Projected funded by the Reserve Fund encountered higher material and labor costs than expected.
} An updated report will be reviewed and approved at the November Board Meeting.
10/2/2018ACHO Budget and Finance
Committee 18
} The Reserve Committee will evaluate planned work for the next five years to maintain a minimum of 50% Funding level in an attempt to not raise assessments in 2019. There are no guarantees until the full update has been analyzed.
} The report will be published shortly. Therefore the following reflects the information from the 2018 report.
10/2/2018ACHO Budget and Finance
Committee 19
Description 2017 2018 2019 2020 2021 2022
Beginning Balance 6,705,926 7,305,038 5,283,6645,645,800 4,633,604
New 5 Yr.
5,262,245
2.5% Inflated Expenditures * 552,922 3,162,296 765,820 2,265,394 645,956 1,756,304
Reserve Contributions 1,042,560 1,042,560 1,042,560 1,172,880 1,197,276 1,222,179
Lots/Month1,086 80.00 85.00 85.00 90.00 91.87 93.78
% Increase 0% 6.25% 0% 5.6% 2.1% 2.1%
Net Interest * 109,474 98,361 85,397 80,318 77,321 78,674
Ending Balance 7,305,038 5,283,664 5,645,800 4,633,604 5,262,245 4,806,794
Fully Funded Balance * 9,278,472 9,843,574 8,432,166 9,178,881 8,302,526 9,110,741
Funded % 78.7% 53.7% 67.0% 50.5% 63.3% 52.8%
10/2/2018ACHO Budget and Finance
Committee 20
} ACHOA Members are required to pay for the life of the assets that have been consumed by 12-31-2019 and future ACHOA Members need to pay the life of the assets consumed in the future.
} Present Cost to replace 100% of all ACHOA assets is $22,232,009 and Estimated Future Replacement Cost is $27,316,425.
10/2/2018ACHO Budget and Finance
Committee 21
} The Big Four Projects have increased the actual expenditures in 2018. [Roads, Drainage, Resident Center Refresh, Landscape]
} 2019 actual paid projection subject to further review is at $3,620,394 as reflected in August 2018 statements.[$3,925,955 - 2018 Budget]
} However, Reserve Monthly Assessment remains the same. $85.00 per month per lot at this time.
10/2/2018ACHO Budget and Finance
Committee 22
Categories 2019 Budget Ver 4S
2018 Approved Budget
2018Projected as of 8-31-2018
Description
Administrative $ 24,570 $ 45,210 $ 33,345
Communications $ 25,580 $ 26,400 $ 32,075
Insurance $ 60,000 $ 60,000 $ 55,122
Operations $ 6,000 $ 6,000 $ 5,483
Professional
Services$ 277,600 $ 273,800 $ 238,531
Property Taxes $ 1,200 $ 1,200 $ 0
Total Admin Exp. $ 395,170 $ 412,610 $ 361,556
10/2/2018ACHO Budget and Finance
Committee 23
Categories 2019 Budget Vers 4S
2018 Approved
Budget
2018Projected As of 8-31-2018
Description
Administrative $ 5,200 $ 5,200 $ 5,973
Payroll & Benefits $ 639,625 $ 622,525 $ 499,808 2 New FTE
Workers Comp $ 7,500 $ 7,500 $ 6,049
Auto Insurance $ 4,800 $ 2,724 $ 2,482 Insurance Increase
Utilities $ 112,700 $ 112,700 $ 110,562 Water rates increase
Landscaping $ 38,000 $ 38,000 $ 41,175
Operations $ 1,500 $ 1,500 $ 711
Contracted Services $ 142,800 $ 107,600 $ 96,931 Fuels Prevention
Repair & Maintenance $ 206,726 $ 201,216 $ 178,597 Vacuum Truck & Snow
Professional Services $ 6,000 $ 9,000 $ 6,000 Drainage
Total Facilities $ 1,164,851 $ 1,107,965 $ 948,288
10/2/2018ACHO Budget and Finance
Committee 24
Categories 2019 Budget Vers 4S
2018 Approved
Budget
2018Projected as
of 8-31-2018
Description
Administrative $ 38,000 $ 33,000 $ 40,461
Communications $ 3,600 $ 3,600 $ 3,077
Payroll & Benefits $ 95,998 $ 94,257 $ 85,770
Workers Comp. $ 1,419 $ 1,413 $ 966
Utilities $ 62,470 $ 58,200 $ 49,823 Water rates
Operations $ 2,100 $ 1,718 $ 1,644 Repair and
Maintenance$ 59,600 $ 56,000 $ 55,780
Taxes $ 25 $ 25 $ 19
Total Expenses $ 263,212 $ 248,213 $ 237,540
10/2/2018ACHO Budget and Finance
Committee 25
Categories 2019 Budget Vers 4S
2018 Approved
Budget
2018Projected as
of 8-31-2018
Description
Administrative $ 3,000 $ 2,400 $ 3,265
Payroll & Benefits $ 582,463 $ 603,926 $ 501,189 Turn over
Insurance $ 15,271 $ 14,875 $ 12,522
Utilities $ 14,200 $ 14,200 $ 9,644
Operations $ 26,800 $ 26,800 $ 22,719
Repair &
Maintenance$ 18,504 $ 17,904 $ 16,375
Total Expenses $ 660,238 $ 680,105 $ 565,714
10/2/2018ACHO Budget and Finance
Committee 26
Categories 2019 Budget Vers 4S
2018 Approved
Budget
2018Projected as
of 8-31-2018
Description
Administrative $ 4,900 $ 4,600 $ 4,757
Communications $ 4,800 $ 3,800 $ 5,500
Repair & Maint. $ 600 $ 900 $ 300Professional
Services$ 26,700 $ 26,700 $ 24,589
Total Expenses $ 37,000 $ 36,000 $ 35,146
10/2/2018ACHO Budget and Finance
Committee 27
Categories 2019 BudgetVers 4S
2018 Approved
Budget
2018Projected as
of 8-31-2018
Description
Utilities $ 6,780 $ 6,540 $ 6,532
Repair &Maintenance $ 4,560 $ 4,560 $ 11,283
Total Expenses $ 11,340 $ 11,100 $ 17,815
10/2/2018ACHO Budget and Finance
Committee 28
} This draft will be further amended based upon input from the Board, Budget & Finance Committee Members and ACHOA lot owners in attendance tonight.
} Version Five will be close to the Final Version that will be recommended to the Board at the November Board meeting.
} Thank you for your input and questions.
10/2/2018ACHO Budget and Finance
Committee 29