Hawthorne Resident’s Cooperative Association

Budget Committee

WELCOME

2020 Operating and Capital/Reserve Budget Overview & Discussion

10-23-19

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Let’s Begin

• Handouts For Today

• On The Wall

• Review of Capital/Reserve

• Any Questions Before We Start?

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On The Wall

• On the wall you will see various sheets with major categories assigned to a page

– Proprietary Lease – Governs Services Provided

– Level Of Service- What is Community Expectation-(Are we meeting expectation and at what cost?)

– 2021

– Need More Information

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LEVELS OF SERVICE NOW & EXPECTATION

• Unacceptable – This is bad service at any level. Call it poor, terrible, less than stellar –bottom line is it is unacceptable for any reason.

• Basic – commodity and minimum standards

• Good – your customers identify your service as “satisfactory”

• World Class – This is a big jump from good. It is beyond satisfactory. Customers think of your company as great. You create value. Customers compare you with others in your industry

• Trademark – Others are compared to you. You are the industry benchmark for great service

• Once defined we need to plan to achieve our goals

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Let’s Proceed

• Revenues

– Cost of Goods Revenues

– Fees

– Assessments

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Lost Revenues- Over Estimated Revenues

• Reliance on New Home Sales/Proprietary Leases

• Miscellaneous Revenue for 2019 Overstated

• Can’t budget for revenue you will not have to accommodate expenses

• Revenue Estimates TAB #4

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Lost Revenues- Over Estimated Revenues

• Reliance on New Home Sales/Proprietary Leases

• Miscellaneous Revenue for 2019 Overstated

• Can’t budget for revenue you will not have to accommodate expenses

• Revenue Estimates TAB #4

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REVENUES Units Monthly Fee Price Monthly Revenue Annual Revenue

Maintenance Fees 1195 254.00$ 303,530.00$ 3,642,360.00$

Proprietary Lease Sales 0 -$

Verification Fee (Estoppel) 100 250.00$ 25,000.00$

Marina Rent Uncovered 46 27.50$ 1,265.00$ 15,180.00$

Marina Rent Covered 80 50.00$ 4,000.00$ 48,000.00$

Marina Gas 8,400.00$

Transfer Fee 100 50.00$ 5,000.00$

Enforcement Fines 2 1,000.00$ 2,000.00$

Misc. Operating Income

Emergency Remote Buttons (Necklace) 80 10.00$ 800.00$ 9,600.00$

REM Connections 25 20.00$ 500.00$

Water Hollendel Road 6 345.00$

Laundry 300.00$ 3,600.00$

Copier Fax 150.00$ 1,800.00$

Misc. Income 5,000.00$

Interest Income 7,416.00$

Capital Gains-Operating (1,449.00)$

Dividend Income-Unrestricted 9,450.00$

Gain (Loss) on Sale of Asset (6,151.00)$

TOTAL OPERATING REVENUES 133,691.00$

Commission on Resale -Paid to Sales Department 60 3.25% 60,000.00$ 117,000.00$

Commission on Resale-Hawthorne Retains 60 3.75% 60,000.00$ 135,000.00$

Home Sales-New 0 -$

TOTAL REAL ESTATE SALES REVENUE 252,000.00$

Internet Sales 492 34.00$ 16,728.00$ 200,736.00$

Internet Equipment Rentals 460 6.00$ 2,760.00$ 33,120.00$

Cable TV 456 45.00$ 20,520.00$ 246,240.00$

TOTAL CABLE & INTERNET 480,096.00$

Estimate Jobs

Home Services - Repairs 1 Hour Job 1700 40.00$ 68,000.00$

Home Services - Repairs Minimum 1/2 Hour 850 28.00$ 23,800.00$

TOTAL HOME SERVICES 91,800.00$

Landscape 1,500.00$

SUBTOTAL COST OF GOODS REVENUE 825,396.00$

GRAND TOTAL REVENUE 4,601,447.00$

GRAND TOTAL LESS REAL ESTATE SALES REVENUE 4,349,447.00$

Let’s Proceed

• Revenues

– Cost Assessed Per Use (User Fee)

– Cost Assessed to All Members (Assessment)

– Cost Subsidized By All Members (Not Profit)

– Levels of Service

– Comparison of Local Market Costs

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Revenues - Miscellaneous

• Laundry

• Marina Rental of Boat Slips

• Interest

• Investment Interest

• Transfers and Fees

• Other Miscellaneous revenue such as money for scrap, donations, faxes and copying fees.

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Revenues – Cost of Goods Sold

• Sales – Commissions received on sale of properties• Internet & Equipment $40.00 per household• Cable basic channels provided to all as part of

proprietary lease. • Enhanced channels $45.00 per month.• Alarm button in home is included in maintenance fee• Necklaces for home use: $25.00 installation/$10.00 for

1/$11.00 for 2• Home Services – Charges for Services requested to be

performed by staff on residents homes – Minor repair and maintenance only.

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Revenues – Fee Schedule

• Ensure we capture & document all fees being charged

• Discuss current fees being charged

• Review fees that should have been being charged

• Review areas that are user driven that are not being charged

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Revenues – Fee Schedule

• Discuss levels of subsidization for cost of goods & services

Discuss levels of service and resident expectations for services

Tipping Point if Raising Fees to Cover Cost

-Diminish Need for Service

-Increases Cost of Service

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Fee Schedule- Tab 7

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DEPARTMENT SERVICE

COST Does Include

Sales Tax INCREMENT

Administration Fax- Local Pages 1-8 pages 1.00 up to 8 pages

Administration Fax - Local Page 9 and up 0.15 per page after page 8

Administration Fax- Long Distance Pages 1-8 pages 2.00 up to 8 pages

Administration Fax - Long Distance Page 9 and up 0.15 per page after page 8

Administration Copier - Black and White 0.05 per page

Administration Copier- Color 0.10 per page

Administration Copier Large Jobs - If paper is supplied 0.04 per page

Administration Bar Codes - 2 initial per household No Charge

Administration Bar Codes - Replacement or New 5.00 each

Administration Records Review No Charge Helpful if you Call In advance

Administration Records Copied Black & White 0.05 per page//// Check Statute

Administration Trasfer Fee 50.00 per transfer

Administration Estoppel 250.00 per request

NEW Administration Prospectus - Email Copy 10.00

NEW Administration Prospectus - Hard Copy 15.00 plus postage

Marina Boat Slip Deposit - Non Interest bearing 330.00

Marina Covered Slip 50.00 Per month

Marina Uncovered Slip 27.50 Per month

Clarify Home Services Service Estimate Request No Charge

Home Services Labor 10.00

Home Services Minimum Service Charge up to 30 minutes 28.00 Up to 30 minutes

Home Services Minor Electrical/Plumbing 30.00 45 minutes

Home Services Minor Electrical/Plumbing 40.00 Hour

Home Services Minor Electrical/Plumbing 50.00 Hour and 15 minutes

Home Services Minor Electrical/Plumbing 60.00 Hour and 30 minutes

Home Services Minor Electrical/Plumbing 70.00 Hour and 45 Minutes

Home Services Power washing Residents Responsibility

Home Services Clean Gutters Residents Responsibility

Landscaping Minor Irrigation ?

Landscaping Lawn Replacement ?

Landscaping Flower Beds ?

Home Services Minor Electrical 40.00 Per hour

Home Services Minor Plumbing 40.00 Per hour

Home Services Minor Irrigation 40.00 Per hour

Laundry Washer 2.00 Per Load

Laundry Large Washer 4.00 Per Load

Laundry Dryer 0.25 Per 8 Minutes

NEW #device limit Electronics- Cable/TV Resale Verify - Active 2 jacks - Connect up to 4 devices No Charge

NEW Electronics- Cable/TV Labor 10.00 Up to 15 Minutes

Electronics- Cable/TV Labor 20.00 Per Half Hour

Electronics- Cable/TV Materials Actual Cost

Electronics- Cable/TV New Cable Jack 0.20 Per Foot

Electronics- Cable/TV 2 way Splitter 2.50 each

Electronics- Cable/TV 3 way Splitter 3.50 each

Electronics- Cable/TV 4 way Splitter 4.50 each

Electronics- Cable/TV Connector Ends 0.40 each

Electronics- Cable/TV Wall Plates with F81 Connector 2.00 each

Electronics- Cable/TV Retrofit Services to Current Standards 20.00 Per Half Hour

Electronics- Cable/TV Connect New TV TBD

Electronics- Cable/TV Connect VCR TBD

Electronics- Cable/TV Connect DVR TBD

Electronics- Cable/TV Connect Streaming Devices TBD

Electronics- Cable/TV Connect Headphones TBD

Suggesting #

Devices on Initial

Setup Electronics- Cable/TV Internet Services- Includes Initial Setup of 4 Devices 40.00 Per Month All Residents

Electronics- Cable/TV Connect Tablets TBD

Electronics- Cable/TV Connect Laptops TBD

Electronics- Cable/TV Connect Printers TBD

Electronics- Cable/TV Connect Wireless Wi-Fi Extenders TBD

Electronics- Cable/TV Connect Routers TBD

Electronics- Cable/TV Trouble Shoot Surround Sound TBD

Electronics- Cable/TV Hang TV Homeowners Responsibility

Electronics- Cable/TV Install Surround Sound Homeowners Responsibility

Electronics- Cable/TV Staff will not work on Non-Hawthorne cable or dish services

Electronics- Emergency Alarm Alarm System - Inside Hawthorne Property No Charge

Electronics- Emergency Alarm Alarm System - Inside Hawthorne Property - 1 Annual Test No Charge

Electronics- Emergency Alarm

Alarm System - Inside Hawthorne Property -Troubleshoot Issues Provided

No Damage or Relocation No Charge

Electronics- Emergency Alarm Alarm System - Remote Button - Installation/Relocation 25.00 Flat Fee

Electronics- Emergency Alarm Alarm System - Remote Button Necklace - Monthly Charge 10.00 Monthly to those Residents Using Service

Electronics- Emergency Alarm Alarm System - Remote Button Necklace - Monthly Charge 2nd Necklace 1.00 Monthly to those Residents Using Service

FEE SCHEDULE

Review Per Item

or Hourly

Increment

Review Per Item

or Hourly

Increment

What We Accomplished Today

• Recap

• Any Questions

• Next Steps

• Meeting #4

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