Financial Statements For the year ended December 31, 2014 Sharma & Associates, Inc. Vishnu Sharma, Certified Public Accountant 4901 NW 17 th Way, Suite 305 Fort Lauderdale, FL 33309 T: (954)284-3080 F: (954)284-3081
TABLE OF CONTENTS Independent Auditor s Report 1-2 Financial Statements Balance Sheet.. 3 Statement of Revenues, Expenses and Changes in Fund Balances.. 4 Statement of Cash Flows... 5 Notes to Financial Statements 6-12 Supplementary Information Supplementary Information on Expenses Actual versus Budget.. 13 Supplementary Information on Shared Components Hotel Unit: Statement of Revenues, Expenses and Changes in Fund Balances. 14 Supplementary Information on Expenses Actual versus Budget.. 15-16
SHARMA & ASSOCIATES, INC. Vishnu Sharma, Certified Public Accountant 4901 NW 17 Way, Suite 305 Ft. Lauderdale, FL 33309 Office (954) 284-3080 Fax (954) 284-3081 Auditing ~ Accounting ~ Taxes ~ Condominium Accounting ~ Financial Management ~ Consulting To The Board of Directors Sixty Sixty Condominium Association, Inc. Miami Beach, FL 33180 INDEPENDENT AUDITOR S REPORT Report on the Financial Statements I have audited the accompanying balance sheet of Sixty Sixty Condominium Association, Inc. as of December 31, 2014, and the related statements of revenues, expenses and changes in fund balances, and cash flows for the year then ended. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making the risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sixty Sixty Condominium Association, Inc. as of December 31, 2014 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Supplementary Information My audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Supplementary Information on Expenses Actual versus Budget on page 13, Statement of Revenues, Expenses and Changes in Fund Balances Hotel Unit on page 14 and Supplementary Information on Expenses Actual versus Budget Hotel Unit on pages 15-16, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information, is the responsibility of management and, except for that portion marked unaudited, was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The information marked unaudited has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, I do not express an opinion or provide any assurance on it. Management has omitted supplementary information about future major repairs and replacements of common property that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Financial Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. The results of my audit of the basic financial statements are not affected by that missing information. Vishnu Sharma, CPA Sharma & Associates, Inc. Ft. Lauderdale, FL January 21, 2016 Members: American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants Association of Certified Fraud Examiners Community Associations Institute
BALANCE SHEET AS OF DECEMBER 31, 2014 ASSETS Operating Fund Replacement Fund Total Cash & Cash Equivalents $ 11,036 $ - $ 11,036 Unit Owners Receivables 198,484-198,484 Total Assets $ 209,520 $ - $ 209,520 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ 184,849 $ - $ 184,849 Prepaid Unit Owners Assessments 36,448-36,448 Total Liabilities 221,297-221,297 FUND BALANCES Operating Fund (Deficit) (11,777) - (11,777) Replacement Fund - - - Total Fund Balances (Deficit) (11,777) - (11,777) Total Liabilities and Fund Balances $ 209,520 $ - $ 209,520 The accompanying notes are an integral part of these financial statements. Page 3 of 16
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES Operating Fund Replacement Fund Total REVENUES Maintenance Assessment Income $ 150,882 $ - $ 150,882 Interest Income 12-12 Late Fee Income 325-325 Administrative Fees Income 575-575 Other Income 1,640-1,640 Total Revenues 153,434-153,434 EXPENSES Commercial Unit Common Expenses 164,957-164,957 Bank Charges 693-693 Bad Debt Expenses 757-757 Total Expenses 166,407-166,407 Excess (Deficiency) of Revenues Over Expenses (12,973) - (12,973) Fund Balances -Beginning 1,196-1,196 Fund Balances (Deficit)-Ending $ (11,777) $ - $ (11,777) The accompanying notes are an integral part of these financial statements. Page 4 of 16
STATEMENT OF CASH FLOWS Operating Fund Replacement Fund Total Cash Flows From Operating Activities: Cash Collected from Monthly Activities $ 31,140 $ - $ 31,140 Cash Paid to Suppliers and Professionals (40,914) - (40,914) Net Cash Used for Operating Activities (9,774) - (9,774) Net Decrease in Cash (9,774) - (9,774) Cash Beginning of Period 20,810-20,810 Cash End of Period $ 11,036 $ - $ 11,036 Reconciliation of Excess (Deficiency) of Revenues Over Expenses to Net Cash Provided by Operating Activities: Excess (Deficiency) of Revenues Over Expenses $ (12,973) $ - $ (12,973) Reconciliation Adjustments: (Increase) Decrease in Unit Owners Receivables (122,294) - (122,294) Increase (Decrease) in Accounts Payable 93,653-93,653 Increase (Decrease) in Prepaid Unit Owners Assessments 31,840-31,840 Net Cash Used for Operating Activities $ (9,774) $ - $ (9,774) The accompanying notes are an integral part of these financial statements. Page 5 of 16
NOTES TO THE FINANCIAL STATEMENTS NOTE 1: ORGANIZATION Sixty Sixty Condominium Association, Inc. is a not-for-profit corporation, Non-Stock Corporation incorporated on December 2, 2005, pursuant to Chapter 718 of the Florida Statutes. The Association is organized for the purpose of maintaining and preserving the common areas owned by the individual unit owners in common, and consists of 87 units including 82 residential units, 4 commercial units, and 1 hotel unit. Condominium Hotel The Association is structured to operate as a condominium hotel and to that extent it is classified as a resort condominium under Section 509.242 Florida Statutes because the owners of the Residential units shall be permitted to lease their Units more than three (3) times in a calendar year for periods of less than thirty (30) days or one (1) calendar month, whichever is less. In addition, the Association is zoned by the City of Miami Beach as a suite hotel, meaning that no unit owner may establish permanent residence at the unit. Residential unit owners, through the Association, do not exercise the control over the operation of the Condominium normally found in residential condominium. Common Elements The Condominium has been established in such a manner to minimize the Common Elements. Most components which are typical common elements of a condominium have instead been designated here in as part of the Shared Components of the Hotel Unit. Hotel Unit / Shared Components The Hotel Unit shall consist of all of the Condominium Property, including, without limitation, any and all improvements now and hereafter constructed thereon, less and except only the following: (i) the Residential Units and the Commercial Units and (ii) portion of the Condominium Property below elevation minus fifty feet, which shall be deemed Common Elements. As such, the owner of the Hotel Unit controls all Shared Components which include but are not limited to the main hotel lobby, pools and pool deck, fitness center, all parking areas and garages, all exterior block walls and balconies and terraces, the roof, all utility, mechanical, electrical, telephonic, telecommunications, plumbing, life safety and heating and ventilation systems and elevators. Obligations for Expenses Relating to the Hotel Unit The Hotel Unit Owner has granted easements with respect to certain portions of the Hotel Unit and agreed to repair, replace, improve, maintain, manage, operate and insure the Hotel Unit. In consideration of the foregoing each Residential Unit Owner and Commercial Unit Owner by purchase of their unit has agreed to reimburse the Hotel Unit Owner for all such Shared Component costs and that the Hotel Unit Owner shall be excused from paying any part of such costs. These costs and payments are above and beyond what is paid by each Residential Unit Owner and Commercial Unit Owner to the Association as part of their monthly Assessment. Page 6 of 16
NOTES TO THE FINANCIAL STATEMENTS NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Association uses the accrual method of accounting. Revenues are recognized as of the date of billing and expenses are deducted in the period in which they are incurred. The Association s financial statements use the fund method for presentation purposes. This method distinguishes assets, liabilities, revenues and expenses between operating funds, reserve funds and special assessments. Disbursements from the operating fund are generally at the discretion of the Board of Directors, whereas, reserve funds must be used for any of the designated reserve fund purposes, and special assessments must be used for the designated purposes. Fund Accounting The Association maintains its accounting records using a fund accounting system. Accounts are classified for accounting and reporting purposes in accordance with the nature of their purpose. The Association generally maintains two funds based upon their nature and purpose: OPERATING: REPLACEMENT: This fund is used to account for financial resources available for the general operations of the Associations; This fund is used to accumulate financial resources designated for future major repairs and replacements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from the estimates that were used. Cash and Cash Equivalents For presentation purposes, the Association consolidates checking, money market, mutual funds, and treasury bills. These assets are reflected at amortized cost, with any premium or discount (the difference between cost and face value) being amortized over the period to maturity as an adjustment to interest income. Generally accepted accounting principles differentiate investments (maturities of ninety (90) days or more) from cash and cash equivalents. Capitalization and Depreciation Policy Real property not directly associated with units is recognized as assets by the Association when the Association has title to the property and either the asset can be disposed of by the Board of Directors or generates significant cash flows from members on the basis of usage or from nonmembers. Common personal property purchased with Association funds, with a useful life of more than one year, is capitalized on the Association's financial statements. Capitalized assets are depreciated over their estimated useful lives using the straight-line method of depreciation. Page 7 of 16
Concentration of Credit Risk SIXTY SIXTY CONDOMINIUM ASSOCIATION, INC. NOTES TO THE FINANCIAL STATEMENTS Financial instruments which potentially subject the Association to concentrations of credit risk are primarily cash and assessments receivable. Cash balances maintained at the financial institutions where the Association maintains its accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. As of December 31, 2014, the Association s total cash balance was not in excess of FDIC insurance coverage limits. The Association has not experienced losses related to these investments. The Association believes it is not exposed to any significant risk on cash and assessments receivable. Comprehensive Income ASC220 (formerly SFAS No. 130) requires a full set of general-purpose financials statements to be expanded to include the reporting of comprehensive income. Comprehensive income is comprised of two components, net income and other comprehensive income. For the year ended December 31, 2014, there were no items that qualify as comprehensive income. Unit Owner Receivables Monthly assessments to unit owners are based upon a share of the budgeted operating expenses and future major repairs and replacements, if elected. The Association retains excess operating funds at the end of the year for use in future operating periods. Unit owner receivables represent outstanding amounts owed to the Association by various homeowners net of an allowance for uncollectible maintenance fees. The Association provides an allowance for losses on receivables based on a review of the current status of existing receivables, where applicable. The Board of Directors and Management believe past due assessments may be collected by the Association and, therefore, have not estimated an allowance for doubtful accounts as of December 31, 2014. As of December 31, 2014, the unit owners receivables balance was $198,484. Accounts Payable Accounts Payable reflects 2013 and 2014 Shared Component fees due to the Hotel Unit Owner for the four commercial units owned by the Association. These expenses are recorded as accounts payable reflecting the expenses charged to the year in which they were incurred even though not paid until a subsequent period. As of December 31, 2014, the accounts payable balance was $184,849 [see NOTE 6: Commitments]. Prepaid Unit Owner Assessments The amount of prepaid unit owner assessments represents monthly assessments received in advance of the due date. Prepaid assessment is reduced when the assessment becomes due and revenue is recognized by the Association. As of December 31, 2014, the prepaid unit owner assessments balance was $36,448. NOTE 3: MAINTENANCE ASSESSMENTS The Association s declaration document provides that each owner is chargeable for their share of common expenses based upon the budget adopted. The Association has lien rights in the event of delinquent assessments, which can be exercised through foreclosure proceedings. The Association provides for an allowance for losses on receivables based on a review of the current status of existing receivables. In addition to the assessments payable to the Association, each Unit Owner is obligated for payment of sums Page 8 of 16
NOTES TO THE FINANCIAL STATEMENTS to the Hotel Unit Owner for use and enjoyment of the Shared Components. The Hotel Owner has a lien right against each unit to secure the payment of the shared costs or other exactions coming due for the maintenance, operation, upkeep and repair of the Shared Components. NOTE 4: INCOME TAXES The Association is subject to federal taxation and has essentially two methods to determine the amount of tax, if any, it must pay. One method, the excess of revenues from members over related expenditures is subject to taxation unless such excess is returned to the unit owners or applied to the following year's assessments. The other method enables the Association to elect to exclude from taxation "exempt function income," which generally consists of revenue from unit owner assessments. Under either method, the Association may be subject to tax on investment income and other non-exempt income, but at different rates. The Association has adopted FASB ASC 740 which clarifies the accounting for uncertainty in income taxes by defining the attributes a tax position must meet for any part of the benefit of tax position to be recognized in financial statements prepared in conformity with generally accepted accounting principles. In accordance with the disclosure requirements, the Association s policy on income statement classification of interest and penalties related to income tax obligations is to include such items as part of income tax expense. As of December 31, 2014, the association did not have any uncertain tax positions. The Association has not as yet filed its 2014 federal income tax return on Form 1120H under section 528 of the Internal Revenue Code. The Association has arranged to have this prepared and filed upon completion of this audit. The Association does not anticipate any income tax expense due, however, the Association may face a failure to file penalty. The Association has no income tax returns under examination by the Internal Revenue Services. However, the Association s Federal income tax returns for the last three years (2012, 2013, and 2014) are subject to examination, generally for three years after they are filed. NOTE 5: UNCERTAINTY IN INCOME TAXES The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity s financial statements or tax returns. The Association evaluates its uncertain tax positions using provisions of ASC 450, Accounting for Contingencies. Accordingly, a loss contingency is recognized when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonable estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position, or for all uncertain tax positions in the aggregate, could differ from the amount recognized. For the year ended December 31, 2014, there were no transactions that would cause an uncertainty in the accounting for an income tax liability or refund. NOTE 6: COMMITMENTS The Association holds title to all four commercial units and is thus obligated for any and all financial obligations pertaining to these units including payments to the Hotel Unit Owner. Pursuant the section 13.7 of the Association s Declaration document, the Hotel Unit Owner is irrevocably appointed as agent and attorney in fact for the Association and each unit owner and for each unit owner of a Page 9 of 16
NOTES TO THE FINANCIAL STATEMENTS mortgage or other lien upon unit and each owner of any other interest in the Association property to adjust all claim arising under insurance policies purchased by the hotel unit owner and to execute and deliver releases upon the payment of claims. NOTE 7: REPLACEMENT FUNDS The Association s governing documents and Florida Statues require funds be accumulated for future major repairs and replacements of the common elements. The Association has no such accumulated funds as of December 31, 2014. The Hotel Unit Owner through its control of the Shared Components is responsible for repairs and maintenance for all major components of the building including roof, elevators, heating and ventilation system, pool, and parking elements among others. When additional funds are needed for capital improvements and deferred maintenance, the Association has the right to increase regular assessments, or pass special assessments to address the shortfall, or delay major repairs until such time that adequate funds have been accumulated. An independent study to determine the funding requirements for future capital improvements and deferred maintenance has not been conducted. At the 2014 annual budget meeting, held on November 21, 2013, the unit owners voted to waive funding reserves. NOTE 8: SHARED COMPONENTS Hotel Unit / Shared Components The Hotel Unit shall consist of all of the Condominium Property, including, without limitation, any and all improvements now and hereafter constructed thereon, less and except only the following: (i) the Residential Units and the Commercial Units and (ii) portion of the Condominium Property below elevation minus fifty feet, which shall be deemed Common Elements. As such, the owner of the Hotel Unit controls all Shared Components which include but are not limited to the main hotel lobby, pools and pool deck, fitness center, all parking areas and garages, all exterior block walls and balconies and terraces, the roof, all utility, mechanical, electrical, telephonic, telecommunications, plumbing, life safety and heating and ventilation systems and elevators. Obligations for Expenses Relating to the Hotel Unit The Hotel Unit Owner has granted easements with respect to certain portions of the Hotel Unit and agreed to repair, replace, improve, maintain, manage, operate and insure the Hotel Unit. In consideration of the foregoing each Residential Unit Owner and Commercial Unit Owner by purchase of their unit has agreed to reimburse the Hotel Unit Owner for all such Shared Component costs and that the Hotel Unit Owner shall be excused from paying any part of such costs. These costs and payments are above and beyond what is paid by each Residential Unit Owner and Commercial Unit Owner to the Association as part of their monthly Assessment. Special Assessment 2013 On November 21, 2013, a special assessment in the amount of $1,955,699 ( special Assessment 2013 Building Repairs ) was passed by the Hotel Unit Owner to pay for Shared Component repairs to mechanical, structural, electrical, fire alarm and life safety equipment, and elevator modernization related to water damage. Payment Page 10 of 16
NOTES TO THE FINANCIAL STATEMENTS is due from each Residential Unit Owner and Commercial Unit Owner in 96 equal monthly payments beginning January 1, 2014. Unit owners will pay directly to Hotel Unit, proportionally to their ownership percentage in the shared components elements. This has no direct impact on the Association, but is included for disclosure purpose as it relates to the Shared Components. Special Assessment 2013 - Repairs to Building $ 1,955,699 Special Assessment 2013- Expenditures as of 12/31/2013 (118,113) Special Assessment 2013- Expenditures as of 12/31/2014 (238,038) Deferred Revenue - Special Assessment as of 12/31/2014 $ 1,599,548 Insurance The Association s property insurance policy is included as part of the Shared Components and is billed by the Hotel Unit Owner directly to Association unit owners as part of the Shared Components monthly fees due. This insurance policy contains a deductible [5.0%] for windstorm damage. The Association s Residential and Commercial unit owner through their obligation of the Shared Components would be responsible to pay any losses equal to the deductible on any insurance claim they file against this policy, and the Hotel Unit Owner has the right to increase regular assessments, levy a special assessment, or delay repairs until adequate funds are available. Settlement Trapani In 2013, the Association signed a settlement with their former legal counsel, Christopher Trapani, for a total amount of $37,826, related to attorney s fees dues by the Hotel unit. The Association agreed to pay the settlement as follows: $5,000 before January 15, 2014, and the remaining balance of $32,826 in equal monthly installments of $750 beginning February 1, 2014, with the final payment of any remaining balance of principal and interest no later than July 1, 2016. As of December 31, 2014, the balance due was $23,826, and was included in Shared Components legal/professional fees recorded in 2013. NOTE 9: FORECLOSURED UNITS The Association has taken possession of multiple units through its own foreclosure action against units that were significantly past due. The Association holds title to these units subject to the first mortgage and anticipates at some point the first mortgagor will foreclose to take possession of the unit. NOTE 10: RELATED PARTY The Association submits payments to the Hotel Unit Owner monthly for shared component expenses due by the Association s Commercial Units. The Association receives payments from the Hotel Unit Owner monthly for Association common expense based on the Association s annual budget. As December 31, 2014, the Association had both a receivable due from the Hotel Unit Owner and an accounts payable due to the Hotel Unit Owner. NOTE 11: SUBSEQUENT EVENTS The Association has evaluated events and transactions for potential recognition or disclosure in the financial statements through January 21, 2016, which is the date the financial statements were available to be issued. Page 11 of 16
NOTES TO THE FINANCIAL STATEMENTS As that date, there are subsequent events to be reported other that those listed below: Water Damage Claim On June 26, 2014, a unit located at the 9 th floor, caused a significant water leak resulting in extensive water damage to the 9 th floor and four additional floors below. The Hotel Unit Owner on behalf of the Association filed a claim for a damage amount of $756,085. On November 5, 2014, a payment of $112,078.46 [$137,078 payment minus the deductible of $25,000] was received. On August 5, 2015, the Hotel Unit Owner on behalf of the Association agreed with the settlement amount of $590,966 proposed by the Insurance Company for the water claim. On September 17, 2015, the Insurance Company paid two others amounts: an amount of $297,728 to the Hotel Unit Owner and $156,160 directly to the Remediation Group supplier. The remaining amount of $165,119 related the original claim amount of $756,085 is still pending as of January 21, 2016. Special Assessment 2015 -Building Emergency In 2015, the Hotel Unit owner passed an emergency special assessment for $375,000, to cover the reconstruction of the hallways, a new smoke control panel, and miscellaneous repairs to the building needed to bring the building into compliance with City of Miami Beach to be reopened for rentals. The special assessment was due in a single payment due June 1, 2015, payable to the Hotel Unit Owner. Settlement Bhojwani On January 1, 2015, the Association entered into a settlement agreement with their former legal counsel, Komal Bhojwani, for a total amount of $46,810, related to legal services provided to the Hotel unit through October 30, 2013. These expenses were recorded as expense as part of Shared Components in 2012. The Association agreed to pay $750 per month commencing January 10, 2015 and to pay the full balance due within three years of the date of this agreement but may pay off the balance due in full in any time. These payments are being made by the Hotel Unit Owner through Shared Components. Sixty Sixty Condominium Lawsuit On September 22, 2015, the Association filed a motion in the 11 th Judicial Circuit for Miami-Dade County, Florida, to appoint a receiver to take control of the management of the Association, including the shared components, and for a temporary injunction prohibiting the Hotel Unit Owner from attempting to collect the emergency special assessment from the unit owners, from instituting foreclosure proceedings against the unit owners, including threatening same and recording liens on the units, and from acting on behalf of or in the name of the Association; and requested that the Court order the Hotel Unit Owner to provide the Receiver with the legal and financial records from 2013 to September 22, 2015. On January 8, 2016, the Court of the 11 th Judicial Circuit for Miami-Dade, Florida, ordered the Hotel Unit Owner to produce previously requested financial audits. Page 12 of 16
SUPPLEMENTARY INFORMATION ON EXPENSES - ACTUAL VERSUS BUDGET Annual Budget [unaudited] Variance Under/(Over) Account Actual Bank Charges $ 693 $ 180 $ (513) Offices supplies - 34 34 Postage - 31 31 License, Fees & Permits - 476 476 Total Administrative Expenses 693 721 28 D&O Insurance - 885 885 Taxes - 5,000 5,000 Total Insurance and Taxes Expenses - 5,885 5,885 Commercial Unit Common Expenses 164,957 164,957 - Total Contract Services Expenses 164,957 164,957 - Bad Debt Expenses 757 - (757) Total Operating Expenses 166,407 171,563 5,156 Total Expenses $ 166,407 $ 171,563 $ 5,156 Page 13 of 16
SHARED COMPONENT ELEMENTS - HOTEL UNIT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES Operating Fund Replacement Fund Special Assessment Total REVENUES Maintenance Assessment Income $ 1,056,563 $ - $ 238,038 $ 1,294,601 Interest Income 3 - - 3 Unit Repair and Cleaning Income 3,740 - - 3,740 Late Fee Income 350 - - 350 Legal Fees Income 25,661 - - 25,661 Administrative Income 950 - - 950 Rental Income 112,078 - - 112,078 Other Income 4,829 - - 4,829 Total Revenues 1,204,174-238,038 1,442,212 EXPENSES Management Fees 19,825 - - 19,825 Legal - Professional Fees 75,202 - - 75,202 Permits & Licenses, Taxes 14,475 - - 14,475 General Office Expenses 17,649 - - 17,649 Bank Charges 1,362 - - 1,362 Insurances Expenses 272,749 - - 272,749 Payroll Contract Expenses 271,453 - - 271,453 HU Share of Common Expenses 97,465 - - 97,465 Security Expenses 75,243 - - 75,243 Pest Control Expenses 2,354 - - 2,354 Pool Maintenance Expenses - - 238,038 238,038 Repairs & Maintenance 239,570 - - 239,570 Repairs & Maintenance Contracts 39,966 - - 39,966 Utilities Expenses 292,917 - - 292,917 Janitorial Expenses 1,662 - - 1,662 Landscape Expenses 7,350 - - 7,350 Depreciation on Fixed Assets 4,795 - - 4,795 Bad Debt Expenses 125,614 - - 125,614 Total Expenses 1,559,651-238,038 1,797,689 Excess (Deficiency) of Revenues Over Expenses (355,477) - - (355,477) Fund Balances (Deficit) -Beginning (288,481) - - (288,481) Fund Balances (Deficit)-Ending $ (643,958) $ - $ - $ (643,958) Page 14 of 16
SHARED COMPONENT ELEMENTS HOTEL UNIT SUPPLEMENTARY INFORMATION ON OPERATING EXPENSES - ACTUAL VERSUS BUDGET Account Actual Annual Budget [unaudited] Variance Under/(Over) Management Fees $ 19,825 $ 24,105 $ 4,280 Accounting Expenses - 4,500 4,500 Professional Fees 29,755 5,000 (24,755) Legal, Professional and Consulting Fees 44,999 5,000 (39,999) Total Management and Professional Fees 94,579 38,605 (55,974) Annual Corporation Renewal 448 120 (328) Office Supplies 5,044 838 (4,206) Food and Entertainment 180 800 620 Bank Charges 1,362 180 (1,182) Parking 9 - (9) Printing and Postage 795 800 5 License, Fees and Permits 8,657 11,500 2,843 Printing and Reproduction 534 500 (34) Total Administrative Expenses 17,029 14,738 (2,291) Insurance 272,264 291,393 19,129 Insurance Reimbursement to Owner 485 - (485) Taxes 5,818 13,576 7,758 Total Taxes and Insurance Expenses 278,567 304,969 26,402 Landscape Services 5,650 5,000 (650) Pest control 2,354 3,004 650 Window cleaning Services - 1,500 1,500 Pool and Spas Services Contract - 3,575 3,575 Office Copy Lease 3,458 2,500 (958) Equipment Contract Generator 2,200 1,043 (1,157) HU Share of Common Expenses (CE) 97,465 97,465 - Marina Deck Lease - 850 850 Fire Alarm Services 23,415 500 (22,915) Water Treatement Contract 2,099 2,100 1 Security Services Cameras - 10,200 10,200 Radio and Pager Contract 1,495 975 (520) Elevator Maintenance 34,172 18,070 (16,102) Cable Contract Services 42,403 39,360 (3,043) Fitness Room Water Services - 1,200 1,200 Gym Preventive Maintenance - 1,000 1,000 Total Contract Services Expenses 214,711 188,342 (26,369) Page 15 of 16
SHARED COMPONENT ELEMENTS HOTEL UNIT SUPPLEMENTARY INFORMATION ON OPERATING EXPENSES - ACTUAL VERSUS BUDGET [Continued] Account Actual Unaudited Annual Budget Variance Under/(Over) Payroll Accrued Expenses 747 - (747) Front Desk and Concierge Staff 90,272 90,272 - Administrative and Management Assistant 28,184 28,184 - Total Maintenance Staff 50,648 50,648 - Workers Compensation 22,386 22,378 (8) Employee Bonus 400 - (400) Medical Benefits 9,724 9,720 (4) Holiday Pay 4,809 4,677 (132) Overtime Expenses 3,226 3,384 158 Total Payroll Contract Expenses 210,396 209,263 (1,133) Security Services Cameras 2,016 - (2,016) Security 59,041 - (59,041) Repairs and Maintenance Marina Deck 100 500 400 Tree, Lawn Replacement and Trimming 1,700 1,500 (200) Repairs and Maintenance Interior 2,600 500 (2,100) Repairs and Maintenance Exterior - 500 500 Fire Equipment and Services 51,828 2,000 (49,828) Plumbing Repairs and Equipment 22,416 - (22,416) Gym Equipment Repair 159 500 341 Hardware Supplies 7,629 1,500 (6,129) Paint Supplies 394 1,000 606 Cleaning Supplies 1,662 1,800 138 Repairs and Maintenance Unit Expenses 2,800 - (2,800) Repairs and Maintenance Supplies 1,098 500 (598) Repairs and Maintenance Fire Safety 17,222 8,000 (9,222) Repairs and Maintenance Building 144,208 - (144,208) Repairs and Maintenance Equipment 298 3,000 2,702 Repairs and Maintenance Spa - 500 500 Repairs and Maintenance Locks and Keys 14,297 3,000 (11,297) Repairs and Maintenance Office 160 500 340 Repairs and Maintenance Contingency 15,037 8,000 (7,037) Cable TV and Internet 6,720 (6,720) Total Repairs and Maintenance Expenses 351,385 33,300 (318,085) Electric 111,882 102,218 (9,664) Water and Sewer 93,943 75,836 (18,107) Gas 10,664 15,419 4,755 Telephone 25,900 17,688 (8,212) Internet and Wifi 1,405 16,140 14,735 Trash Collection 18,781 18,652 (129) Total Utilities Expenses 262,575 245,953 (16,622) Bad Debt Expenses 125,614 21,393 (104,221) Depreciation Expenses 4,795 - (4,795) Total Operating Expenses $ 1,559,651 $ 1,056,563 $ (503,088) Page 16 of 16