LAKE FOREST CONDOMINIUM ASSOCIATION 2015 BUDGET REPORT

Transcription

1 LAKE FOREST CONDOMINIUM ASSOCIATION 2015 BUDGET REPORT Enclosed are the payment coupons for the 2015 dues. They reflect an increase of 1.5%. A 4% discount is available for an annual prepayment. Attached is the 2015 Budget for the Lake Forest Condominium Association. The budget was adopted by the Board of Directors at their November 22, 2014 meeting. A budget ratification ballot is included with the mailing. Lake Forest owners are requested to review this information and return the ballot via mail, fax or indicating either your approval or disapproval of the budget. Colorado condominium association regulations reflect a non-response as approval of the budget adopted by the Board of Directors. The following is information that may be helpful in your understanding of the 2015 Budget and projected 2014 financial summary of the Association. The budget process attempts to anticipate expenses with the desire that savings can be realized in operations allowing increased funding of reserves. Overview. The Association is projected to end 2014 with operating expenses approximately $10,000 more than budgeted. The higher snow fall resulted in the snow removal costs significately exceeding budget by $16,000. Savings in other categories helped offset a portion of the snow removal cost. Reserve expenditures were $17,000 lower than originally budgeted. The total net income was $8,000 more than anticipated. The line-of-credit utilized by the Association to reduce annual assessment fluctuations was reduced by $35,000 to $50,000 at the end of Assessments. The 2015 assessments are increased 1.5% from The increase is $6 per month. The increase is to keep assessments at an adequate level to fund operating expenses. The monthly assessments are $381 ($311 for operations and $70 for reserves) for two bedroom units and $411 ($335 for operations and $76 for reserves) for two bedroom units with a loft. The Board of Directors continues to monitor all expenses to minimize any assessment increases to only those that are absolutely necessary. The assessments at Lake Forest remain comparable with similar properties in the area. Discount. The Board has approved a 4% discount for prepayment of your annual dues. At the 2014 annual meeting the ownership approved adding internet at a cost of $25. The internet cost, a direct pass-through to Comcast, is not eligible for the discount. For two bedroom units the annual payment amount factoring in the discount is $4, (12 x $381 = $4,572 less 4% discount of $ plus $300 for the internet). For the two bedroom with loft units the annual payment is $5, (12 x $411 = $4,932 less 4% discount of $ plus $300 for the internet). To receive the discount the annual payment must be made no later than the end of January 2015 and all prior balances must be current. Property management expenses. E More Property Maintenance is responsible for 24 hour site coverage of the property. The coverage is through their employees in the area and E More does not have a representative living on site. The unit owned by the Association is currently rented providing additional reserve funding and it remains available in the future should the management method be altered. Overall property management costs budgeted in 2015 including building maintenance, hot tubs and snow removal accounted for 39% of the total operating expense. Financial and legal. The Association has a financial review prepared annually by a CPA firm. The 2015 budget allows for the continuation of an annual financial review. All financial reports are available on the web site The administration cost is to Mountain Systems that includes maintenance of all Association bank accounts, assessment receipts, payment of bills, preparation of accrual accounting records, financial summaries, budgets, newsletters, web site development and maintenance, reporting to title companies and lenders, and the overall supervision of the operations of the Association. Office supplies and expenses include postage and owner communication copies. 1 of 2

2 Utility costs. The Association budgets 43% of the operating funding for utilities including the common electricity, water and sewer, cable TV, internet, the fire alarm telephone lines and monitoring, and trash removal. While a large expense category for the Association, we are limited in what we can do to regulate or control these expenses. Dues would be lower if the individual unit cost of water, sewer, internet, and cable TV were removed, but owners would pay a higher cost due to the removal of the bulk discounts. Common electricity is for the outside lights, spa area, utility closet heating and roof heat tape. Cable TV and internet is provided to all units under a long-term contract with Comcast. The contract allows for an annual increase using the same percentage as individual rates are increased. The contract provides basic digital cable service at approximately half the cost to each unit than if it was arranged for individually. Individual owners may arrange for additional cable services from Comcast including digital TV and high speed internet service. Additional services from Comcast are billed directly to the owner. The fire sprinkler system expense includes regular inspections required by the Fire District and our insurance provider. Insurance. The insurance of the Association is with Great Lakes Insurance provided through the Peliton Agency. The master policy covers the buildings, Association liability and the operations of the Board of Directors. Information regarding the master policy is available on the web site The deductible on the Association master policy is $10,000. Per the Declaration, individual owners are responsible for the deductible portion of any claim involving their unit. Individual owners should have an HO6 policy for the contents and liability inside of their units that includes building coverage of at least $10,000. Individual H06 policies are available through most insurance companies. Owners who rent their property may need a commercial policy to be adequately protected. A simple way to understand the insurance coverage is the master policy of the Association would pay to restore a unit totally destroyed to the condition it was when the first purchaser walked in the door (subject to the deductible). The Association s insurance provides no coverage for your contents or loss of use even if the origination of the damage (fire, water) is from outside the unit. Other expenses. This category includes the discount provided owners who prepay the dues annually, the cost of the annual meeting, payroll taxes, and other expenses that are not otherwise categorized. Interest expense and taxes. The Association is a non-profit corporation. However, nonassessment income, such as interest and rental income is subject to normal taxes. Some of the taxes can be offset by an allocation of some administration and management costs towards the income. Reserve fund. Funding for reserves is from an allocation of 21% from the monthly dues, a contribution from unit sales and rental income from the manager s unit. The unit owned by the Association is considered a component of the reserve fund as the equity is used for a line of credit available to the Association from a local bank. The Association currently has $50,000 outstanding from $200,000 available on the line of credit. The 2015 budget projects a reduction of $10,000 on the line with full payoff projected for The reserve fund is for long-term replacement and improvement projects. Reserve spending budgeted in 2015 includes building painting, a seal coat of the parking lot, improving the drainage between Building B and Building C, and replacement mulch on the lakeside of Buildings A through D. Two spas were replaced in 2014 completing the two year upgrade of the spa facility. 2 of 2

3 Lake Forest Condominum Association Financial Summary Reserve fund assessments 17% 2015 Funding Budget Other income 5% Line of credit use 0% Interest expense and taxes 0% 2015 Expenditures Budget Reserve expenditures 20% Line of credit repayment 3% Property management 30% Other expenses 2% Operating assessments 78% Insurance 7% Utilities, trash, water/sewer & cable TV 33% Accounting, legal and administration 5% Actual Budget Projected Budget Operating assessments 257, , , ,768 Reserve fund assessments 71,472 71,472 71,472 62,496 Other income 20,319 16,712 19,313 17,024 Line of credit use Total funding 349, , , ,288 Property management 112, , , ,200 Accounting, legal and administration 18,528 19,738 18,956 19,800 Utilities, trash, water/sewer & cable TV 103, , , ,254 Insurance 21,967 23,000 23,673 25,000 Other expenses 7,329 7,708 8,002 7,926 Interest expense and taxes 2,470 2,750 1,311 1,200 Reserve expenditures 57,550 53,000 36,291 76,500 Line of credit repayment 35,000 35,000 35,000 10,000 Total expenditures 358, , , ,880 Reserve fund assessments 20% 2014 Funding Other income 6% Line of credit use 0% Operating assessments 74% Interest expense and taxes 0% Other expenses 2% Insurance 6% 2014 Expenditures Reserve expenditures 10% Line of credit repayment 10% Utilities, trash, water/sewer & cable TV 33% Property management 34% Accounting, legal and administration 5%

4 Lake Forest Condominum Association 2015 Budget Actual Budget Projected Budget Assessments 257, , , ,768 Internet 7,200 21,600 21,600 21,600 Interest TOTAL INCOME 264, , , ,380 OPERATING EXPENSES Snow removal - parking 16,279 13,750 22,348 18,000 Snow removal - walkways 18,613 13,750 20,861 18,000 Common Area / Landscaping 9,871 7,500 5,557 7,000 Hot tub/spa 8,303 6,000 6,437 6,000 Buildings 5,632 12,000 12,332 12,000 Management contract 54,000 56,000 55,200 55,200 Other labor SUB-TOTAL Property management 112, , , ,200 Financial review / tax return 3,550 4,000 3,550 3,750 Administration 14,400 14,688 14,688 15,000 Office supplies & expenses Bank charges Legal & collection SUB-TOTAL Financial & legal 18,528 19,738 18,956 19,800 Common electricity 17,531 17,500 19,670 21,000 Cable TV & Internet 38,832 54,520 54,278 56,150 Trash Removal 8,748 9,400 8,968 10,200 Fire alarm system 5,516 5,000 2,536 5,300 Sanitation 21,456 23,604 23,602 23,604 Water 11,058 12,000 10,510 12,000 Telephone/Pager SUB-TOTAL Utilities 103, , , ,254 Insurance - buildings 21,967 23,000 23,673 25,000 Workmans compensation insurance SUB-TOTAL Insurance 21,967 23,000 23,673 25,000 Payroll taxes Mileage reimbursement Miscellaneous Discount on assessments 6,754 7,000 7,639 7,600 SUB-TOTAL Other 7,329 7,708 8,002 7,926 Interest 2,470 2,750 1,311 1,200 Income taxes SUB-TOTAL Interest and taxes 2,470 2,750 1,311 1,200 TOTAL ALL EXPENSES 266, , , ,380 INCOME (LOSS) (1,498) 0 (10,020) 0 RESERVE FUND Beginning balance 1,586 (683) (683) 8,779 Assessments - reserves 71,472 71,472 71,472 62,496 Loan change - per detail* (35,000) (35,000) (35,000) (10,000) Transfer from operations (income or loss) (1,498) 0 (10,020) 0 Other direct reserve income 20,308 16,700 19,300 17,012 Painting 0 11, ,000 Electrical Building improvements Landscaping 10, ,500 Grounds & Drainage ,000 Parking area 1,750 2, ,000 Roofs Manager unit cost 13, Spas 31,945 40,000 36,291 0 TOTAL RESERVE FUND EXPENSES 57,550 53,000 36,291 76,500 NET CHANGE TO RESERVE FUND (2,269) 172 9,461 (6,992) Ending reserve balance (683) (511) 8,779 1,787

5 Lake Forest Condominium Association Ten months ending October Month Month Month Month Actual Actual Actual Actual Budget Budget Actual Variance Estimate Projected % Budget % Assessments - operations 226, , , , , , , , , % 276, % Internet ,200 21,600 18,000 18, ,600 21, % 21, % Interest % % TOTAL INCOME 227, , , , , , , , , % 298, % OPERATION EXPENSES Snow removal - parking 10,950 13,068 11,563 16,279 13,750 9,750 18,348 (8,598) 4,000 22, % 18, % Snow removal - walkways 9,207 12,372 9,827 18,613 13,750 9,750 16,861 (7,111) 4,000 20, % 18, % Common Area / Landscaping 19,129 8,193 9,161 9,871 7,500 6,400 4,457 1,943 1,100 5, % 7, % Hot tub/spa 6,529 5,348 7,954 8,303 6,000 5,000 5,437 (437) 1,000 6, % 6, % Buildings 6,233 15,822 6,523 5,632 12,000 10,000 10,332 (332) 2,000 12, % 12, % Management contract 49,200 51,955 53,955 54,000 56,000 46,667 46, ,200 55, % 55, % Other labor % 0 0.0% SUB-TOTAL Property 101, ,758 98, , ,000 87, ,435 (13,868) 21, , % 116, % management Financial review / tax return 850 3,650 3,550 3,550 4,000 4,000 3, , % 3, % Administration 12,000 12,000 13,200 14,400 14,688 12,240 12, ,448 14, % 15, % Office supplies & expenses 522 1, % % Bank charges % % Legal & collection % % SUB-TOTAL Financial & legal 13,492 17,078 17,618 18,528 19,738 17,115 16, ,623 18, % 19, % Common electricity 16,740 20,760 15,771 17,531 17,500 14,000 16,170 (2,170) 3,500 19, % 21, % Cable TV & Internet 27,628 28,789 30,113 38,832 54,520 45,374 45, ,924 54, % 56, % Trash Removal 8,568 8,733 8,883 8,748 9,400 7,832 7, ,568 8, % 10, % Fire alarm system 3,647 5,619 4,676 5,516 5,000 4,160 1,696 2, , % 5, % Sanitation 21,456 21,456 21,456 21,456 23,604 19,670 19, ,934 23, % 23, % Water 9,961 10,978 11,585 11,058 12,000 10,000 8,510 1,490 2,000 10, % 12, % Telephone/Pager % 0 0.0% SUB-TOTAL Utilities 88,000 96,335 92, , , ,036 98,799 2,237 20, , % 128, % Insurance - buildings 18,879 18,853 18,685 21,967 23,000 19,200 19,857 (657) 3,816 23, % 25, % Workmans compensation % 0 0.0% insurance SUB-TOTAL Insurance 18,879 18,853 18,685 21,967 23,000 19,200 19,857 (657) 3,816 23, % 25, % Payroll taxes % 0 0.0% Mileage reimbursement % 0 0.0% Miscellaneous % % Discount on assessments 6,962 7,930 6,888 6,754 7,000 7,000 7,639 (639) 0 7, % 7, % SUB-TOTAL Other 7,229 8,091 7,784 7,329 7,708 7,590 7,884 (294) 118 8, % 7, % Interest ,273 2,470 2,750 1, , % 1, % Income taxes % 0 0.0% SUB-TOTAL Interest and taxes ,273 2,470 2,750 1, , % 1, % TOTAL ALL EXPENSES 229, , , , , , ,269 (10,811) 48, , % 298, % INCOME (LOSS) (2,188) (14,439) 12,429 (1,498) 0 2,392 (8,417) (10,809) (1,603) (10,020) -3.5% 0 0.0%

6 Lake Forest Condominium Association Ten months ending October Month Month Month Month Actual Actual Actual Actual Budget Budget Actual Variance Estimate Projected % Budget % RESERVE FUND Beginning balance 48,860 61,187 (36,483) 1,586 (683) (683) (683) (683) 8,779 Assessments - reserves 65,088 65,088 71,472 71,472 71,472 59,560 59, ,912 71, % 62, % Loan change - per detail* (60,000) 60,000 60,000 (35,000) (35,000) (85,000) (45,000) 40,000 10,000 (35,000) (10,000) -3.4% Transfer from operations (2,188) (14,439) 12,429 (1,498) 0 2,392 (8,417) (10,809) (1,603) (10,020) 0 0.0% (income Transfer or fees loss) (unit sales) ,512 4, ,400 1, , Rental income 8,773 8,700 15,600 15,650 16,200 13,500 13, ,600 16,100 16,200 Painting 0 157, ,000 11, , ,000 Electrical 0 4,940 5, Building improvements 0 23, Landscaping 0 7,135 4,931 10, ,500 Grounds & Drainage 0 11,530 32, ,000 Parking area 0 8,832 11,150 1,750 2,000 2, , ,000 Roofs , Manager unit cost 0 4,273 2,358 13, Spas 0 0 8,977 31,945 40,000 40,000 36,291 3, ,291 0 TOTAL RESERVE FUND 0 217, ,945 57,550 53,000 53,000 36,291 16, ,291 76,500 EXPENSES NET CHANGE TO 12,327 (97,669) 38,069 (2,269) 172 (62,048) (14,248) 47,800 23,709 9,461 (6,992) RESERVE Ending reserve FUNDbalance 61,187 (36,483) 1,586 (683) (511) (62,731) (14,930) 8,779 1,787 Cash Position Current Operating fund 28, ,833 23,147 6,784 Money Market Reserves 54,519 2,194 2,194 1,194 1,694 Loan account 2,379 1, Certificate of deposit TOTAL CASH 85,638 3,948 9,704 24,341 8,478 Reserve fund line of credit Credit line available 60, , , , , , , , ,000 Loan draws taken 60, ,000 85, ,000 10,000 50,000 40,000 Repayments made 0 60, ,000 35,000 85,000 85, ,000 50,000 Change* 60,000 60,000 (35,000) (35,000) (85,000) (45,000) 10,000 (35,000) (10,000) Outstanding loan balance 60, ,000 85,000 50, ,000 50,000 40,000 Reserve fund Unit value 325, , , , , , ,000 Cash reserves (36,483) 1,586 (683) (511) (14,930) 8,779 1,787 Less: credit line on unit (60,000) (120,000) (85,000) (50,000) (40,000) (50,000) (40,000) Net reserve 228, , , , , , ,787

7 Lake Forest Condominium Association Reserve Fund Schedule 2.00% Inflation Nov % Interest Cost Date Roof Replacement Roof replacement 467, Garage/spa gable roofs 50, ,000 Garage roof spa 55, Painting Partial painting 12, ,000 21,600 58,200 15,250 Decks 11, ,980 14,300 Repainting 150, ,000 Parking area / driveways Seal Coat 12, ,000 13,200 13,920 14,640 Asphalt patching 1, Crack fill 4, ,000 4,400 4,640 4,880 Asphalt replacement 60, ,000 Driveway pan replacement 25, Buildings & Grounds Manager unit costs Buildings - electrical Buildings - siding / structure 200, Fire sprinkler system Grounds - general 25, ,000 Building - general Spa Area Per tub replacement & equip 20, ,291 Equipment 5, Gas upgrade 20, Grounds Landscaping 5, ,500 6,900 7,200 7,500 Sprinkler system 20, Annual Requirement 36,291 76,500 81, ,200 24, ,980 41, ,000 27, ,300 Income or loss (10,020) Contribution from dues 71,472 62,496 62,496 62,496 62,496 62,496 62,496 65,000 65,000 65,000 65,000 65,000 65,000 Loans / special assessments (35,000) (10,000) (40,000) Transfer fee 3, ,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Rental Income 16,100 16,200 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Interest ,079 1,465 2,265 1,182 1,709 2,511 Accumulated Reserves (683) 8,778 1,786 (44,468) (83,322) (31,676) 44, , , , , , , ,812 Unit Equity 400, , , , , , , , , , , , , ,000 Unit Equity + Reserves 399, , , , , , , , , , , , , ,812

8 BALLOT Lake Forest Condominium Association Unit Number Should the Lake Forest Condominium Association adopt the proposed 2015 budget? YES NO Comments RETURN BALLOTS TO: Lake Forest Condominium Association P.O. Box 3428 Dillon, CO OR FAX TO (877) OR TO (Include your unit number, whether you approve or disapprove of the 2015 budget.) Please return your ballot by January 23, 2015.