The replacement of aging shrubs surrounding our buildings.

Transcription

1 1. INCOME STATEMENT a. March Operating Loss was ($13,067) vs. a budgeted Operating Income of $1,973 resulting in a negative variance from plan of ($15,040). i. Income was on plan with actual income of $61,403 vs. a budget of $61,506. ii. iii. iv. Admin expenses were $9,294 vs. a budget of $11,554 resulting in a positive variance from plan of $2,259. The biggest contributor was insurance which will run under budget for the year. Maintenance expenses were $40,443 vs. a budget of $22,976 or a negative variance from plan of ($17,467). Landscape Maintenance expenses came in at $5,082 vs. a budget of $9,998 or a positive variance from plan of $4,916. Main contributors to the positive variance were Landscape Improvement, where we spent $0 during March and Irrigation Repairs which reflected a $1,064 reimbursement received from Hotwire. v. Facilities Maintenance expenses were $35,362 vs. a budget of $12,978 or ($22,384) over budget. The biggest single contributor to this variance was Fire Alarm Repairs which unexpectedly came in at $23,067, which in and of itself exceeds our $15,000 annual budget for this item. Also contributing to this month s negative variance was Termite Protection and Pest Control totaling almost $6,000, which were budgeted for February and April respectively, but occurred in March. vi. Utility Expenses were $8,852 vs. a budget of $9,123 or $271 under budget. b. Year-to-date ( YTD ) thru March our Operating Loss was ($15,052) vs. a budgeted Operating Loss of ($9,419) resulting in a negative variance from plan of ($5,633). i. YTD Income remains on plan with actual income of $184,428 vs. budgeted Income of $184,597. ii. iii. iv. YTD Admin expense totaled $31,426 vs. budget of $35,633 or $4,208 under budget. The majority of the favorable variance is due to our Property Insurance Premiums coming in under budget, which will continue throughout the year. YTD Maintenance expenses totaled $95,787 vs. a YTD budget of $81,453 or a negative variance from plan of ($14,334). YTD our Landscape Maintenance expenses are $40,262 vs. a YTD budget of $29,994 or a negative variance from plan of ($10,268). The primary contributor to the overage is Landscape Improvement which is $14,336 over budget. Some of this is due to work which was completed at the end of 2016, but not invoiced until January. While I expect our Landscape Improvement spending to be nominal over the course of the summer, I expect Landscape Improvement to end the year over budget due to unbudgeted expenses for items including: The replacement of aging shrubs surrounding our buildings.

2 Unanticipated removal of diseased palms and related replacements. Additional tree trimming because of the roof replacement project as well as mandated trimming by our insurance provider. Replacement in the fall of sod, shrubs and trees damaged or killed by this seasons drought. v. YTD our Facilities Maintenance are $55,525 vs. a budget of $51,459 or a negative variance of ($4,066). The biggest contributor to this negative variance is Fire Alarm Repairs which are $23,971 YTD. This is vs. a YTD budget of $3,750 and a 2017 budget of $15,000. In other words we are already $8,971 over our annual budget for this item. On a positive note, our Roof Repairs YTD expenses are $780 vs. a YTD budget of $11,000. We have a 2017 budget of $20,000 for Roof Repairs and I m hopeful that most of this can be used to offset the Fire Alarm Repair overage. vi. 2. BALANCE SHEET All other Maintenance items are within normal variance ranges. YTD Utility Expenses are $24,627 vs. a YTD budget of $29,290 or $4,663 under budget. a. Cash of $235,000 in our Operating Account plus $1,020,313 in Pooled Reserves results in a March Cash Balance of $1,255,313 vs. $1,040,390 at the end of February, an increase of $214,923 for the month. Extraordinary items impacting this month s cash balances were the drawdown of the $375,000 loan from Capital Bank, offset by the remainder of the downpayment owed to BP Roofing in the amount of $202,540. b. Maturing CD s. With the Board s decision to replace our roofs in 2017 (See Section 4.a.), any maturing CDs will be reinvested in Money Market funds as we will need to utilize a significant portion of our Reserves for the Roof Replacement Project. The following CD will mature in April. CD #xxxx07901 Bank: FCB Projected Amount: $135, Maturity Date: Previous Term: 9 months c. Quarterly Assessments We have no owner s in arrears. d. Accounts Receivable ( A/R ). Due from Owners A/R was $453, down from $618 at the end of February. e. Balance Sheet under Other Assets Bonita Springs Utilities $11,200. Has been on the Balance Sheet since before Alliant became our association manager. We contacted them and they said the money will not be refunded until the buildings are sold. f. Current Liabilities now reflects our $375,000 Loan from Capital Bank.

3 g. Retained Earnings (also referred to as Owner s Equity). Retained earnings at the end of March were $120,074 vs. $134,808 at the end of February, or a reduction of $14,734 for the month.

4 3. RESERVES The following Table shows the forecasted use of our Reserves during Pooled Reserves 12/31/16 $ 789,287 Unallocated Interest 12/31/16 $ 7,667 Jan-Mar $15,880/Month $ 47,640 YTD Disbursements $ (203,515) Mar Unallocated Interest $ 4,234 P&I Loan Payments $ March Reserve Balance $ 645,313 Projection March Reserve Balance $ 645,313 April-Dec $15,880/Month $ 142,920 Remaining Roof Replacement Project Expense 1 $ (661,280) 2017 Estimated P&I Payments 2 $ (75,827) Seal Coating $ (5,940) Estimated Unallocated Interest 12/31/17 $ 1,500 Projected December 2017 Year End Reserve Balance 3 $ 46,686 1 Projected project expense of $1,438,820 less payments to BP Roofing of $200,000 in December 2016, and $202,540 in March 2017, less $375,000 loan from Capital Bank. 2 Projected debt service for 2017 for the $375,000 loan from Capital Bank. 3 Note that the projected project expense of $1,438,820 includes a contingency of $68,325. Any amount of the contingency that is not used, will increase our year end reserve balance by the unused amount.

5 4. ROOF REPLACEMENT PROJECT (Repeated from last month s Report) a. Roof Replacement Project After careful consideration, your Board has decided to replace our roofs in Our original plan was that replacing the roofs for Canary Island and Ivory Cane would occur in 2021 and 2022 respectively. However, based on the fact that we spent over $50K on roof repairs in 2016 and that we had initially budgeted another $50K in roof repairs in 2017, it became clear that borrowing money to supplement our Reserves to pay for replacing our roofs in 2017 made more sense than spending $250K or more to continue to repair them between now and Subsequent to this decision we met with Iberia Bank, BB&T Bank, Florida Community Bank and Capital Bank. Based on those meetings we received Term Sheets from all 4 banks offering us the funding we needed at rates ranging from 3.75% to 4.75%. After evaluating our options we have completed the necessary loan documents and have closed on this financing. We will be supplementing our existing Reserves, by borrowing $375,000 at 3.75% for a 48 month term, from Capital Bank. The debt service for this Loan will be paid through our current Reserve Funding, meaning no increase in quarterly assessments and no special assessment will be required to fund this Project. While your Board has the authority to take out a Loan, we did require homeowner approval to conditionally pledge our assessments as collateral for this Loan. This approval was provided at a Special Homeowner s Meeting which occurred just prior to the December Board Meeting. b. Project Costs and Assumptions Roof Replacement Project Project Assumptions (Rev ) Canary Island in 2017 Ivory Cane in 2017 Borrow $375,000 for 48 months Interest $ 29,412 Loan Paid off in March 2021 Loan Amount $ 375,000 Interest Rate 3.75% Term 48 Months Monthly Reserve Funding $ 15,880 Monthly Debt Service $ (8,425) Per Month Balance to Reserves $ 7,455 Per Month

6 PROJECT COSTS Canary Island Court $ 584,546 Ivory Cane $ 713,454 Additional Plywood Expense Cap $ 13,800 FORGE Recommendations $ 2,000 Fascia & Sub-Fascia Estimare $ 15,000 Gutters $ 37,695 $ 68,325 $ 1,434,820 $ 1,313 Bank Closing Costs $ 950 Total Closing Costs $ 2,263 Further details on this Project can be found on the Palm Colony Web Site in the Owner s Section under Roof Replacement Project. 5. INSURANCE (Repeated from last month s Report) Our 2017 Insurance Premiums were budgeted to be $101,239 an increase of $4,583 or 4.74% over our 2016 Premiums. The actual Premiums (which were invoiced after our Budget was completed) came in at $82,375 a decrease of $14,281 or 15% less than our 2016 Premiums. As a result our Insurance Premiums will be $18,864 less than we have budgeted for Insurance Policy Terms Premiums Increase Budget Actual Premium Variance Umbrella 1/12/ , , , D & O 1/12/ , , , Crime 1/12/ , , , GL 1/12/ , , , (297.74) Property 1/12/ , , , , (18,566.37) Group Accident 1/12/ WC 5/1/16-5/1/ $0.00 Total $ 96, $ 4, $ 101, $ 82, ($18,864.11)

7 We are maintaining the same coverage that we had in A summary of our coverage is shown in the Table below: Summary of Insurance COVERAGE AGENT DATES PAID PREMIUM COMPANY VALUES Property with Wind X $71, Empire Indemnity Ins. ECL $22, TIV $5,000 Deductible 5% Wind CY Deductible General Liability X $5, Nautilus Insurance NN $2,000,000 Aggregate $1,000,000 Occurrence Business Auto Included Crime X $1, Liberty Insurance CAC $1M Limit $2,500 Deductible Directors & Officers X $1, Liberty Insurance CAP $1,000,000 Limit $1,000 Deductible Umbrella X $1, Federal Ins. AARE $15,000,000 Liability Limit Workers Comp 05/01/ /01/2017 X $ Zenith Insurance Z If Any $500,000 per accident $500/500/500 limit Group Accident X $ The Hartford Life 21SR $10,000 Accidential limit We did make one change for 2017 and that was with regard to the payment of the Premiums. Last year we paid the entire Premium of $96,656 in January. The year, we were offered the option of paying 20% up front and paying the remainder over 10 months, at a 3% interest rate. Given the amount of cash we used due to the unexpected expenses during 2016, we opted for this financing option to help our cash flow. The interest expense for utilizing this option is approximately $ Should you be in need of proof of the Association s Insurance Coverage please contact Insurance at