Crooked River Ranch Club & Maintenance Association FY Proposed Budget

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Quentin Osborne
5 years ago
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1 Crooked River Ranch Club & Maintenance Association FY Proposed Budget

2 Here s What We re Going to Talk About Tonight FY Operating Budget FY Capital Reserve Plan

3 Operating Budget The HOA s annual operating budget is like your family s budget it shows where you get your income and where you spend it. It doesn t show your bank balance, what loans you ve taken out, or what you own. It s not a photo taken at a moment in time. It is more like a video taken over the whole year.

4 FY Operating Budget Rentals RV Park Golf Course Administration Ranch Total HOA Dues $1,189,800 $1,189,800 Rents $41,000 $41,000 Camping $194,250 $194,250 Ext. Stay $90,000 $90,000 Other Sales $7,500 $68,200 $75,700 Greensfees $555,000 $555,000 Cart Rental $212,000 $212,000 Annual Pass $205,000 $205,000 Cart Storage $36,000 $36,000 Other Revenue $1,200 $10,250 $138,175 $149,625 Total Revenue $42,200 $291,750 $1,086,450 $1,327,975 $2,748,375 Total Expenses $32,939 $230,728 $1,088,236 $1,250,501 $2,602,404 Rev over Exp $9,261 $61,022 -$1,786 $77,474 $145,971

5 Contribution to Ranch Profits Rentals $9,261 Based on FY Proposed Operating Budget Administration $77,474 Administration RV Park Rentals RV Park $61,022 Golf Course -$1,786

6 FY Admin Budget Revenue Expenses Revenue over (under) Expenses Administration $1,307,000 $375,009 $931,991 Pool $325 $66,279 -$65,954 Snack Shack $15,550 $21,646 -$6,096 General Maintenance $5,100 $224,075 -$218,975 Roads $0 $563,492 -$563,492 Administration $1,327,975 $1,250,501 $77,474

7 How are your dues spent? Pool $66, %.5% Snack Shack $21,646 Gen. Maintenance $224, % 45.8% Roads $563,492 Admin Office 30.5% $375,009 Based on FY Proposed Operating Budget

8 What are Capital Assets and Depreciation? Your family has capital assets, like a house, a wood stove and a car. They are items that last more than one year. Your capital assets deteriorate (and lose value) every year through use. The HOA calls that depreciation. Your family needs to protect your investment by repairing and replacing your assets. So does our HOA. Your family spends less if you save the money first rather than borrowing it. So does our HOA.

9 What is depreciation? Suppose you buy a car in 2018 for $45,000, and suppose that car will last 10 years

10 Operating Expenses: Gas Oil Minor Repairs General Maintenance, etc. Depreciation Expense: Automobile cost / 10 years $45,000. / 10 years = $4500. per year

11 When you need to replace that car in 10 years.. Will you be ready?

12 HOA Capital Expenditures The HOA s annual capital expenditure budget is a list of capital assets that need to be repaired or replaced during the year. The HOA considers any major repair or replacement that exceeds $3,000 to be a capital expenditure. It is paid for with savings that have been set aside for that purpose within the Capital Reserve Fund. The HOA s 30 Year Capital Reserve Plan ensures that the Association is adequately funded to engage in capital expenditures and can effectively plan for them.

13 What do we need to plan for?

14 FY Capital Expenditure Budget Rentals RV Park Golf Course Administration Total Lg. Pool Resurfacing $43,000 $43, septic tanks $45,000 $45,000 C Loop Electrical $25,000 $25,000 Cart Barn Reroofing $3,500 $3,500 Tee Mower $33,000 $33,000 Lower Pasture Irrigation $18,000 $18,000 Parking Lot Chipseal $14,000 $14,000 Tennis Court Resurface $9,000 $9,000 Used Roller $100,000 $100,000 Total $0 $70,000 $36,500 $184,000 $290,500

Our CRP includes a list of all the assets of the HOA, the current replacement costs, and estimated

15 Capital Reserve Plan (CRP) The Board of Directors has a fiduciary responsibility to the HOA property owners to protect our shared investment in the common assets of the HOA. Our CRP includes a list of all the assets of the HOA, the current replacement costs, and estimated remaining lives over the next 30 years. Our CRP ensures that the HOA will have adequate funds to meet these obligations.

16 How much does our HOA need to save to protect our assets? The BAC estimates that our HOA needs to raise $6.2 million over the next 30 years to repair and replace these assets. Each year, the BAC calculates how much is needed to stay on target. By this year, we should have saved $2 million. We currently have about $900,000 in the CRP, or 45% of what we should have saved by today. We are short because we did not start funding the CRP until about 10 years ago because our HOA dues were too low.

17 500 HOA Dues in Five Year Intervals

18 What are the Risks if we fail to save enough? HOA standards for a Capital Reserve Plan recommend maintaining each year a minimum of 70% of the total amount needed in the future. Without a strong Capital Reserve Plan balance, the HOA may be restricted in obtaining bank financing for major repairs or replacements. The HOA might require an emergency assessment for each of our 2,644 property owners.

19 Capital Reserve Plan History $2,200, % $1,650,000 $1,100,000 $550,000 29% 23% 51% 45% 41% % $ Future

20 FY Year CRP FY 2018 Actual & Est FY 2019 Budgeted FY 2020 Project FY 2021 Project FY 2022 Project FY 2023 Project Beg. Balance $1,107,275 $933,767 $826,599 $802,891 $642,192 $661,309 Depreciation $113,800 $105,064 $111,094 $114,240 $119,984 $123,584 Transfer Commitments $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 Special Transfer Insurance Reimbursed Interest Earned $,2,138 $3,268 $2,893 $2,810 $2,248 $2,315 Capital Expenditures -$363,211 -$290,500 -$212,695 -$352,749 -$178,115 -$173,328 End. Balance $933,767 $826,599 $802,891 $642,192 $661,309 $688,879

21 Where do we go from here? Our Board of Directors should continue to fund the CRP to achieve and maintain a 70% funding level. To do that, our HOA dues will need to be raised on a regular basis in amounts similar to the last three years. In addition, our HOA needs to continue to improve the profitability of our revenue-producing businesses through capital investments and better marketing.

22 Questions? Thank You for taking the time to learn and understand how the Crooked River Ranch Budget is prepared and implemented!

Thank You for Taking the Time to Learn and. Understand How the. Crooked River Ranch Budget is. Prepared and Implemented!

Thank You for Taking the Time to Learn and Understand How the Crooked River Ranch Budget is Prepared and Implemented! FY 2017-2018 Budget Presentation Introductions Members of the Crooked River Ranch Board