Association Draft Operating Budget Presentation - FY 09/10 Final Draft - April 25, 2009.

Association Draft Operating Budget Presentation - FY 09/10

Final Draft - April 25, 2009

The Process To Date

ASSOCIATION BUDGET DEVELOPMENT TIMELINE

FISCAL YEAR 2009/2010

October 14, 2008 Submit Draft FY 09/ 10 Budget Calendar to Board of Directors for discussion and consideration

October 28,2008 Board of Directors formally approves FY 09/ 10 Budget Calendar

November 15, 2008 Solicit DAC input regarding service level changes/ special projects via e-mail and written form for retention purposes

J anuary 5-9, 2009 Solicit broker input for master insurance package renewal J anuary 7, 2009 DAC input due to staff J anuary 12-16, 2009 Board/ Staff workshop to develop budget objectives FIRST MILESTONE

J anuary 19-23, 2009 General Manager communicates budget objectives to department managers

February 10, 2009 Board/ Staff review master insurance package renew

February 13, 2009 Facilities Maintenance submits the Replacement Reserve updates by District to the GM and Controller

February 13, 2009 Landscape Department submits its operating budget recommendations by District to the GM and Controller

SECOND MILESTONE

February 16-20, 2009 Landscape Department reviews budget recommendations with GM and Controller

February 16-20, 2009 Facilities Maintenance reviews Replacement Reserves by district with the GM and Controller

February 23-27, 2009 “First Draft” Operating and Replacement Reserve budgets are reviewed with District Advisory Committees

March 5, 2009 Written comments from DAC Chairperson regarding draft budget due

THIRD MILESTONE

March 5, 2009 Landscape budget recommendations reviewed with Board of Directors

March 23, 2009 Total operating budget recommendations reviewed with Board of Directors – including any fee changes

April 6-10, 2009 Evaluate Montgomery Roof replacement project funding and loan program

April 6-10, 2009 Replacement Reserve plan by district reviewed with Board of Directors

April 14, 2009 Total Operating budget and Reserve Plan presented to Board of Directors

April 28, 2009 Board of Directors formally approves and accepts FY 09/ 10 budget

FOURTH MILESTONE May 1-15, 2009 Pro Forma budgets assembled and printed May 18, 2009 Budgets are distributed to members

The Big Picture

2010 2009 Change $ % Change

Operating Assessment 7,082,133 7,297,740 (215,607) -3.0%

Reserve Assessment 4,766,970 4,426,300 340,670 7.7%

11,849,103 11,724,040 125,063 1.1%Total Association

Operating Budget Drivers Behind Change

• Utilities – Water (+12%)– Trash (+3.5%) – Electric (+3%)

• Landscape Extras (-5%)– Day-to-Day Plantings– Irrigation– Tree Maintenance– Fertilization and Pest

Control

• Landscape Contract (-14.3%)

• Revenue • Laundry Contract• Washer Rebate

• Labor Transfer – G&A

• Increased Deductibles• Increase Premiums –

Workers’ Comp.• Increase Premiums for Health

Insurance • Total Salaries Flat

Description FY 10 FY 09 Change Per CentLandscape Contract 1,635,410 1,908,200 (272,790) (14.3)Landscape Extras 748,400 792,605 (44,205) (5.6)Labor Transfer 1,043,847 1,012,159 31,688 3.1Water 1,142,700 1,020,400 122,300 12.0Trash 571,900 552,500 19,400 3.5Insurance 1,391,000 1,377,600 13,400 1.0Gas/ Electric 122,980 119,400 3,580 3.0Repairs & Maint/ Pest Control 474,000 484,600 (10,600) (2.2)Legal/ Other 16,400 35,500 (19,100) (53.8)Total Expense 7,146,637 7,302,964 (156,327) (2.1)

Less Fee Income 71,500 45,600 25,900 56.8

Assessment Base 7,075,137 7,257,364 (182,227) (2.6)

Monthly Per 1000 AFA 157.32 161.37 -4.05 (2.60)

Prior (Surplus)/ Deficit 0.16 0.90 -0.73 81.60

Net Monthly Per 1000 AFA 157.48 162.27 (4.79) (3.10)

Prior (surplus)deficit (17,489) (27,315)

Association Overall

Villages Association Budget Analysis

Compare Year 2010-11 Estimates to Year 2004-09 Budgets(does not include revenue from fees and income)

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2002 Budget 76.326.4 3.6 29.2 14.636.513.3 0 200 -0.3 200 0 0 97.9 0 298

2003 Budget 79.525.3 3.4 29.2 14.650.2 14 0.25 217 -1.6 215 -6.3 209 0 0 107 2.39 326

2004 Budget 86.624.1 3.6430.7 15.761.913.9 0.29 237 -1.6 235 -6.3 229 0 0 102 -1.6 337

2005 Budget 80.527.1 3.3930.5 17.164.514.9 0 238 -1.6 236 -6.3 230 0 0 101 -3.6 335

2006 Budget 78.927.7 3.3732.8 17.761.915.5 0 238 -1.6 236 -6.3 230 0 0 113 -1.8 349

2007 Budget 87.430.9 3.9 33.1 17.569.816.2 0 259 0 0 0 0 0 0 0 0 0 0 0 0 0 125 -2.3 381

2008 Budget 98.530.9 4.3133.9 19.776.6 17 0 281 0 0 0 0 0 0 0 0 0 0 0 0 0 134 -4 411

2009 Budget 105 31.8 4.3136.8 19.949.715.7 0 264 0 0 0 0 0 0 0 0 0 0 0 0 0 160 1.46 425

2010 Budget 108 31.8 4.4441.2 20.650.216.7 0 273 0 0 0 0 0 0 0 0 0 0 0 0 0 162 0.25 435

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The Districts at a Glance

District FY09 FY10 $ Change % Change FY09 FY10 $ Change % Change FY09 FY10 $ Change % Change

Cribari 150.14 132.51 -17.63 -11.7 92.28 109.91 17.63 19.1 242.42 242.42 0.00 0.0

Montgomery 159.63 154.95 -4.68 -2.9 160.70 165.38 4.68 2.9 320.33 320.33 0.00 0.0

Heights 177.50 170.95 -6.55 -3.7 120.43 126.98 6.55 5.4 297.93 297.93 0.00 0.0

Hermosa 182.55 184.39 1.84 1.0 154.37 167.23 12.86 8.3 336.92 351.62 14.70 4.4

Verano 163.35 162.03 -1.32 -0.8 168.03 169.35 1.32 0.8 331.38 331.38 0.00 0.0

Del Lago 188.16 178.69 -9.47 -5.0 46.90 56.37 9.47 20.2 235.06 235.06 0.00 0.0

Highland 165.28 174.77 9.49 5.7 41.27 45.80 4.53 11.0 206.55 220.57 14.02 6.8

Glen Arden 125.58 123.91 -1.67 -1.3 80.76 82.43 1.67 2.1 206.34 206.34 0.00 0.0

Olivas 172.59 167.07 -5.52 -3.2 81.24 86.76 5.52 6.8 253.83 253.83 0.00 0.0

Fairways 194.75 207.09 12.34 6.3 30.50 34.36 3.86 12.7 225.25 241.45 16.20 7.2

Sonata 155.22 149.22 -6.00 -3.9 23.84 29.84 6.00 25.2 179.06 179.06 0.00 0.0

Valle Vista 141.91 144.84 2.93 2.1 24.10 21.17 -2.93 -12.2 166.01 166.01 0.00 0.0

District Operating District Reserve District Total

The Districts in Detail

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 206,820 326,500 (119,680) (36.7) 23.89Landscape Extras 138,800 161,330 (22,530) (14.0) 16.03Labor Transfer 215,339 216,268 (929) (0.4) 24.87Water 191,500 171,600 19,900 11.6 22.12Trash 84,500 80,100 4,400 5.5 9.76Insurance 267,800 265,200 2,600 1.0 30.93Gas/ Electric 24,200 23,000 1,200 5.2 2.80Repairs & Maint/ Pest Control 86,500 90,400 (3,900) (4.3) 9.99Legal/ Other 2,500 21,100 (18,600) (88.2) 0.29Total Expense 1,217,959 1,355,498 (137,539) (10.1) 140.68

Less Fee Income 53,200 28,300 24,900 (88.0) 6.14

Assessment Base 1,164,759 1,327,198 (162,439) (12.3) 134.54

Monthly Per 1000 AFA 134.53 153.29 (18.77) (12.2)

Prior (Surplus)/ Deficit (2.02) (3.15) 1.13 35.9


Cribari

Cribari Assessment HistoryYEAR Operating Reserve Total

2004 126.67 85.00 211.67

2005 134.39 75.00 209.39

2006 140.31 78.57 218.88

2007 151.39 81.75 233.14

2008 161.78 85.84 247.62

2009 150.14 92.28 242.42

2010 132.51 109.91 242.42

2011 139.14 114.85 253.99

2012 146.09 120.02 266.11

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 191,500 228,100 (36,600) (16.0) 30.65Landscape Extras 98,200 104,400 (6,200) (5.9) 15.72Labor Transfer 144,902 140,548 4,354 3.1 23.19Water 154,000 141,300 12,700 9.0 24.65Trash 87,700 84,300 3,400 4.0 14.04Insurance 193,300 191,400 1,900 1.0 30.94Gas/ Electric 15,330 14,400 930 6.5 2.45Repairs & Maint/ Pest Control 85,000 85,500 (500) (0.6) 13.60Legal/ Other 2,500 3,000 (500) (16.7) 0.40Total Expense 972,432 992,948 (20,516) (2.1) 155.6

Less Fee Income 7,100 5,100 2,000 (39.2) 1.14

Assessment Base 965,332 987,848 (22,516) (2.3) 154.50

Monthly Per 1000 AFA 154.49 158.10 (3.61) (2.3)

Prior (Surplus)/ Deficit 0.46 1.53 (1.08) (70.60)


Montgomery

Montgomery Assessment HistoryYEAR Operating Reserve Total

2004 147.65 96.03 243.68

2005 144.18 106.02 250.20

2006 146.21 127.22 273.43

2007 160.18 140.47 300.65

2008 169.01 146.09 315.10

2009 159.63 160.70 320.33

2010 154.95 165.38 320.33

2011 162.70 171.16 333.86

2012 170.83 177.15 347.98

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 57,450 69,700 (12,250) (17.6) 39.75Landscape Extras 35,800 33,100 2,700 8.2 24.78Labor Transfer 34,683 33,699 984 2.9 24.01Water 39,600 35,800 3,800 10.6 27.41Trash 16,300 16,800 (500) (3.0) 11.28Insurance 44,700 44,300 400 0.9 30.94Gas/ Electric 1,500 1,700 (200) (11.8) 1.04Repairs & Maint/ Pest Control 16,600 18,900 (2,300) (12.2) 11.49Legal/ Other 500 500 0 0.0 0.35Total Expense 247,133 254,499 (7,366) (2.9) 171.07

Less Fee Income 0 0 0 NA 0.00

Assessment Base 247,133 254,499 (7,366) (2.9) 171.07

Monthly Per 1000 AFA 171.05 176.15 (5.10) (2.9)

Prior (Surplus)/ Deficit (0.10) 1.35 (1.46) 108.1


Heights

Heights Assessment HistoryYEAR Operating Reserve Total

2004 165.99 99.01 265.00

2005 156.89 99.01 255.90

2006 150.60 100.98 251.58

2007 169.27 105.00 274.27

2008 179.99 105.00 284.99

2009 177.50 120.43 297.93

2010 170.95 126.98 297.93

2011 179.50 133.31 312.81

2012 188.47 139.95 328.42

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 168,520 172,800 (4,280) (2.5) 43.36Landscape Extras 89,600 84,100 5,500 6.5 23.05Labor Transfer 96,520 91,311 5,209 5.7 24.83Water 113,600 101,900 11,700 11.5 29.23Trash 64,000 61,500 2,500 4.1 16.47Insurance 120,200 119,100 1,100 0.9 30.93Gas/ Electric 10,500 10,000 500 5.0 2.70Repairs & Maint/ Pest Control 59,400 62,400 (3,000) (4.8) 15.28Legal/ Other 1,500 1,500 0 0.0 0.39Total Expense 723,840 704,611 19,229 2.7 186.24

Less Fee Income 3,200 3,200 0 0.0 0.82

Assessment Base 720,640 701,411 19,229 5.0 185.42

Monthly Per 1000 AFA 185.41 180.47 4.94 2.7


Net Monthly Per 1000 AFA 184.40 182.55 1.84 1.0

Hermosa

Hermosa Assessment HistoryYEAR Operating Reserve Total

2004 151.03 110.45 261.48

2005 157.91 95.00 252.91

2006 160.49 80.01 240.50

2007 174.60 100.01 274.61

2008 193.55 105.00 298.55

2009 182.55 154.37 336.92

2010 184.39 167.23 351.62

2011 193.61 167.23 360.84

2012 203.29 167.23 370.52

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 153,200 199,200 (46,000) (23.1) 33.51Landscape Extras 99,800 99,500 300 0.3 21.83Labor Transfer 102,386 98,971 3,415 3.5 22.40Water 120,000 96,400 23,600 24.5 26.25Trash 60,600 58,300 2,300 3.9 13.26Insurance 141,400 140,000 1,400 1.0 30.95Gas/ Electric 20,000 19,000 1,000 5.3 4.38Repairs & Maint/ Pest Control 42,600 42,600 0 0.0 9.32Legal/ Other 1,500 1,500 0 0.0 0.33Total Expense 741,486 755,471 (13,985) (1.9) 162.23

Less Fee Income 2,500 3,300 (800) 24.2 0.55

Assessment Base 738,986 752,171 (13,185) (1.8) 161.68

Monthly Per 1000 AFA 161.68 164.56 (2.88) (1.8)

Prior (Surplus)/ Deficit 0.35 (1.21) 1.56 129.2


Verano

Verano Assessment HistoryYEAR Operating Reserve Total

2004 155.06 83.99 239.05

2005 156.25 75.01 231.26

2006 143.41 90.01 233.42

2007 155.39 99.00 254.39

2008 167.34 108.90 276.24

2009 163.35 168.03 331.38

2010 162.03 169.35 331.38

2011 170.13 158.62 328.75

2012 178.64 130.66 309.30

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 174,265 184,900 (10,635) (5.8) 49.43Landscape Extras 60,300 68,975 (8,675) (12.6) 17.10Labor Transfer 86,992 84,523 2,469 2.9 24.67Water 78,100 83,400 (5,300) (6.4) 22.15Trash 45,700 43,900 1,800 4.1 12.96Insurance 109,000 108,000 1,000 0.9 30.92Gas/ Electric 26,000 26,000 0 0.0 7.37Repairs & Maint/ Pest Control 39,000 38,200 800 2.1 11.06Legal/ Other 1,500 1,500 0 0.0 0.43Total Expense 620,857 639,398 (18,541) (2.9) 176.11

Less Fee Income 2,500 2,000 500 (25.0) 0.71

Assessment Base 618,357 637,398 (19,041) (3.0) 175.40

Monthly Per 1000 AFA 175.39 180.79 (5.40) (3.0)

Prior (Surplus)/ Deficit 3.30 7.37 (4.06) (55.1)


Del Lago

Del Lago Assessment HistoryYEAR Operating Reserve Total

2004 160.54 3.01 163.55

2005 162.02 10.01 172.03

2006 165.08 20.00 185.08

2007 175.58 30.00 205.58

2008 191.75 37.53 229.28

2009 188.16 46.90 235.06

2010 178.69 56.37 235.06

2011 187.62 61.46 249.08

2012 197.01 66.99 264.00

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 199,160 197,400 1,760 0.9 46.27Landscape Extras 69,300 72,300 (3,000) (4.1) 16.10Labor Transfer 101,487 95,901 5,586 5.8 23.57Water 129,500 112,800 16,700 14.8 30.08Trash 52,400 50,400 2,000 4.0 12.17Insurance 133,200 131,900 1,300 1.0 30.93Gas/ Electric 2,500 1,900 600 31.6 0.58Repairs & Maint/ Pest Control 42,400 42,400 0 0.0 9.85Legal/ Other 2,500 2,500 0 0.0 0.58Total Expense 732,447 707,501 24,946 3.5 170.13

Less Fee Income 500 1,200 (700) 58.3 0.12

Assessment Base 731,947 706,301 25,646 3.6 170.01

Monthly Per 1000 AFA 170.00 164.04 5.96 3.6

Prior (Surplus)/ Deficit 4.77 1.24 3.53 (284.8)


Highland

Highland Assessment History YEAR Operating Reserve Total

2004 154.33 34.00 188.33

2005 148.66 35.02 183.68

2006 151.73 35.00 186.73

2007 157.63 36.39 194.02

2008 166.93 38.76 205.69

2009 165.28 41.27 206.55

2010 174.77 45.80 220.57

2011 183.51 50.84 234.35

2012 192.68 56.44 249.12

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 70,855 72,300 (1,445) (2.0) 26.45Landscape Extras 33,800 38,800 (5,000) (12.9) 12.62Labor Transfer 48,652 46,433 2,219 4.8 18.16Water 46,600 39,600 7,000 17.7 17.40Trash 39,000 37,500 1,500 4.0 14.56Insurance 82,800 82,000 800 1.0 30.91Gas/ Electric 400 400 0 0.0 0.15Repairs & Maint/ Pest Control 16,200 16,200 0 0.0 6.05Legal/ Other 1,000 1,000 0 0.0 0.37Total Expense 339,307 334,233 5,074 1.5 126.67

Less Fee Income 0 0 0 0.00

Assessment Base 339,307 334,233 5,074 1.5 126.67

Monthly Per 1000 AFA 126.68 124.79 1.89 1.5



Glen Arden

Glen Arden Assessment History YEAR Operating Reserve Total

2004 119.51 36.00 155.51

2005 110.53 40.40 150.93

2006 105.82 75.27 181.09

2007 120.39 75.27 195.66

2008 134.02 78.29 212.31

2009 125.58 80.76 206.34

2010 123.91 82.43 206.34

2011 130.11 87.37 217.48

2012 136.61 92.59 229.20

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 227,885 257,200 (29,315) (11.4) 45.42Landscape Extras 54,400 56,080 (1,680) (3.0) 10.85Labor Transfer 114,809 110,705 4,104 3.7 22.89Water 148,300 133,000 15,300 11.5 29.57Trash 69,700 69,500 200 0.3 13.90Insurance 155,100 153,600 1,500 1.0 30.91Gas/ Electric 16,800 16,800 0 0.0 3.35Repairs & Maint/ Pest Control 50,400 52,100 (1,700) (3.3) 10.05Legal/ Other 1,500 1,500 0 0.0 0.31Total Expense 838,894 850,485 (11,591) (1.4) 167.24

Less Fee Income 0 0 0 0.00

Assessment Base 838,894 850,485 (11,591) (1.4) 167.24

Monthly Per 1000 AFA 167.24 169.55 (2.31) (1.4)

Prior (Surplus)/ Deficit (0.17) 3.04 (3.21) (105.6)


Olivas

Olivas Assessment History YEAR Operating Reserve Total

2004 156.30 37.02 193.32

2005 149.93 42.01 191.94

2006 150.47 50.00 200.47

2007 166.89 52.00 218.89

2008 180.83 64.99 245.82

2009 172.59 81.24 253.83

2010 167.07 86.76 253.83

2011 175.42 91.11 266.53

2012 184.19 95.67 279.86

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 28,725 24,000 4,725 19.7 61.69Landscape Extras 10,500 13,380 (2,880) (21.5) 22.55Labor Transfer 12,255 11,438 817 7.1 26.32Water 15,400 12,700 2,700 21.3 33.08Trash 7,000 6,900 100 1.4 15.03Insurance 14,400 14,300 100 0.7 30.93Gas/ Electric 150 900 (750) (83.3) 0.32Repairs & Maint/ Pest Control 6,800 6,800 0 0.0 14.60Legal/ Other 200 200 0 0.0 0.43Total Expense 95,430 90,618 4,812 5.3 204.95

Less Fee Income 0 0 0 N/ A 0.00

Assessment Base 95,430 90,618 4,812 5.3 204.95

Monthly Per 1000 AFA 204.96 194.63 10.33 5.3

Prior (Surplus)/ Deficit 2.13 0.12 2.01 1,675.0


Fairways

Fairways Assessment HistoryYEAR Operating Reserve Total

2004 136.58 24.92 161.50

2005 144.23 27.00 171.23

2006 159.99 20.00 179.99

2007 184.43 24.00 208.43

2008 199.25 27.71 226.96

2009 194.75 30.50 225.25

2010 207.09 34.36 241.45

2011 217.44 38.66 256.10

2012 228.32 43.60 271.92

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 86,175 105,700 (19,525) (18.5) 41.07Landscape Extras 27,200 23,280 3,920 16.8 12.97Labor Transfer 47,923 46,511 1,412 3.0 22.85Water 47,000 41,600 5,400 13.0 22.41Trash 24,000 23,100 900 3.9 11.44Insurance 64,900 64,200 700 1.1 30.95Gas/ Electric 3,200 3,000 200 6.7 1.53Repairs & Maint/ Pest Control 17,400 17,400 0 0.0 8.30Legal/ Other 700 700 0 0.0 0.33Total Expense 318,498 325,491 (6,993) (2.1) 151.85

Less Fee Income 2,500 2,500 0 0.0 1.19

Assessment Base 315,998 322,991 (6,993) (2.2) 150.66

Monthly Per 1000 AFA 150.65 153.98 (3.33) (2.2)



Sonata

Sonata Assessment HistoryYEAR Operating Reserve Total

2004 135.26 35.99 171.25

2005 133.70 39.00 172.70

2006 137.86 40.00 177.86

2007 148.65 44.00 192.65

2008 162.01 46.20 208.21

2009 155.22 23.84 179.06

2010 149.22 29.84 179.06

2011 156.68 30.08 186.76

2012 164.52 30.32 194.84

Cost perMonth

Description FY 10 FY 09 Change Per Cent Per 1000Landscape Contract 70,855 70,400 455 0.6 34.16Landscape Extras 30,700 37,360 (6,660) (17.8) 14.80Labor Transfer 37,899 35,851 2,048 5.7 18.27Water 59,100 50,300 8,800 17.5 28.48Trash 21,000 20,200 800 4.0 10.12Insurance 64,200 63,600 600 0.9 30.93Gas/ Electric 2,400 2,300 100 4.3 1.16Repairs & Maint/ Pest Control 11,700 11,700 0 0.0 5.64Legal/ Other 500 500 0 0.0 0.24Total Expense 298,354 292,211 6,143 2.1 143.80

Less Fee Income 0 0 0 N/ A 0.00

Assessment Base 298,354 292,211 6,143 2.0 143.80

Monthly Per 1000 AFA 143.80 140.84 2.96 2.1

Prior (Surplus)/ Deficit 1.04 1.07 (0.04) 3.4


Valle Vista

Valle Vista Assessment HistoryYEAR Operating Reserve Total

2004 118.34 8.61 126.95

2005 116.99 9.01 126.00

2006 119.95 10.00 129.95

2007 133.59 22.34 155.93

2008 145.55 25.74 171.29

2009 141.91 24.10 166.01

2010 144.84 21.17 166.01

2011 152.08 21.78 173.86

2012 159.69 22.46 182.15

The Reserve Fund

From a Consolidated View

• Spending plan equals $6,051,800• Year ending balance equals

$6,099,440• This year’s funding adjustment

equals 7.7 percent• The ending balance and associated

funding adjustment for the next five-year period are as follows:

Five Years at a Glance

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

Spending Plan $6,051,80

0$4,474,500 $3,019,600 $2,378,900 $3,828,900

Ending Balance $6,099,44

0$6,187,177 $7,906,797 $10,539,36

7$11,855,03

7

Funding Adjustment

7.7% 2.5% 1.0% 4.2% 1.5%

Background and Factors

• Staff met with all 12 DACs and worked through the reserve funding and work schedules line by line

• There was a heightened awareness this year to bring the lowest (responsible) assessment to members due to the economic pressure and conditions

• The expense and interest-income rate factors are 3%

• Maintain as much a straight line funding level as can be reasonably maintained

The Districts

Cribari

DAC Comments • District Operating - DAC requested addition of the landscape

maintenance to the North and West Fence line to be included in the Operating Landscape Budget to insure proper upkeep of these areas.– Action Taken: This landscape maintenance work is included

in the new landscape contract specifications.• There were no additional requests regarding the proposed

Operating Budget draft. • The DAC wishes to keep the percentage of increase of assessment

to the residents at the rate stated in the budget, this would eliminate a spike in assessments at a later date.– Action Taken: Achieved total budget change at 2.8% better

than originally expected at 4.7%. • District Reserve – After reviewing first draft of the Operating and

Reserve Budgets, the DAC requested to put a hold the Second Phase of the Cribari Landscape Restoration Project until the year 2012.– Action Taken: Modified 2010 Reserve Plan by reducing

Landscape Restoration $30,000 per year starting 2010 for the next three years – the final phase of the landscape restoration plan to be completed in 2013.

Cribari Reserve Fund Notables

• Next year’s spending plan = $897,000– Deck coating ($47,500), grounds restoration

($195,500) and building repairs prior to paint ($423,500)

• Reserve minimum balance target = $720,600

• Actual fund balance falls below minimum target in 2011

• Funding levels are as follows:– 2009/2010 - $827,175 – 19.1% adjustment– 2010/2011 - $707,375 – 4.5% adjustment– 2011/2012 - $739,075 – 4.5% adjustment– 2012/2013 - $1,428,175 – 4.5% adjustment…

(4.5 to 5% through 2028)

Montgomery

DAC Comments• District Operating - No DAC comments after reviewing the first

draft of the proposed Operating Budget.• District Reserve – DAC requested to keep assessments from

climbing any higher than necessary, proposed that the following items be eliminated or at least spread out over a couple years:

• No Landscape Restoration projects at this time. – Action Taken: The Board has indicated a fairly strong position with

regard to this district moving forward with their landscape restoration program.

• General comments regarding flat roof and gutter and spout replacement.– Action Taken: Informed DAC that both items are a carryover from FY

09-10.• DAC concerned regarding “over estimated” Building Components.

– Action Taken: After meeting with Ken Brady and Rick Casey, the Reserve Fund was adjusted, Montgomery Reserve assumes $1,000,000 of loan payback. DAC request was accomplished without modifying Facility Department personnel recommendations.

Montgomery Reserve Fund Notables

• Next year’s spending plan = $1,162,200– Roofs ($300,0000, driveways (TE) and parking

($159,000), landscape and water feature ($207,800), building components ($321,200)

• Target minimum balance = $722,400• Actual year ending balance and funding

adjustments (%) for the next fours years as follows: – 2009/2010 - $723,420 – 2.9% adjustment– 2010/2011 - $1,118,590 – 3.5% adjustment– 2011/2012 - $1,548,560 – 3.5% adjustment– 2012/2013 - $1,900,030 – 3.5% adjustment…

(3.5% through 2028)

Heights

DAC Comments• Operating Fund• After reviewing the draft of the FY 2010 Budget the DAC was

pleased with the 3.1% proposed increase in the operating budget.– Action Taken: After updating the water rate to the actual cost

the proposed 3.1% increase was reduced to a 2.2% change. • Reserve Fund• The 6.6% increase in the reserve fund presented to the

Heights DAC was acceptable – the DAC acknowledges that there might be a chance that the ABOD will not approve a deficit in reserves this year.

• DAC concerned regarding the funding for Building Components allocation, requested that the painting project scheduled for FY 2010 to be moved to FY 2011.– Action Taken: Building Components funding based on Facility

Department personnel recommendation and future deck coat project and paint project in 2011 was spread between two years – also the fund balance was reduced to help achieve the objective.

Heights Reserve Fund Notables

• Next year’s spending plan = $493,200– Deck coating ($100,000), building components prior to

painting ($317,800)

• Target minimum balance = $197,700• Actual fund balance falls below minimum for three

years (including % adjustment)• Actual year ending balance and funding

adjustments (%) for the next fours years as follows: – 2009/2010 - $1,665 – 5.4% adjustment– 2010/2011 - $14,065 – 5% adjustment– 2011/2012 - $66,365 – 5% adjustment– 2012/2013 - $197,965 – 5% adjustment…(5% through

next 30 years)

Hermosa

DAC Comments

• Operating Fund• No comments in regard to operating budget. • Reserve Fund • After reviewing reserve funding plan, the DAC

expressed concern regarding the landscape restoration plan – requesting the plan be put on hold for one year.– Action Taken: No change; staff’s recommendation is to

keep the funding as originally presented at 8.3% and to keep funding level as predicted last year at this time, even though the end result will produce a negative ending balance in the reserve fund at year’s end – playing catch up will only transfer the burden to future years.

Hermosa Reserve Fund Notables

• Next year’s spending plan = $1,683,000– Building components prior to paint ($804,600), deck coating

($300,000), painting – at least half ($325,700), landscape ($75,400)

• Target minimum balance = $405,700• Actual fund balance falls below minimum for two

years • Actual year ending balance and funding adjustments

(%) for the next fours years as follows:– 2009/2010 – ($129,200) – 8.3% adjustment– 2010/2011 - $26,200 – 0% adjustment– 2011/2012 - $492,800 – 0% adjustment– 2012/2013 - $961,400 – 0% adjustment…(22.3% reduction

in 2013/2014 then 3% in future years)

Verano

DAC Comments• Operating Fund• No changes requested by DAC - final draft budget reduced

from 7.9% to 7.2% after updating water rate. Once landscape savings were factored in operating assessment was actually reduced to a level less than the prior year.

• Reserve Fund • DAC requested postponement to a number of structure

related components expenditures, such as area lighting, retaining walls, building components and other deferrals…expenditures for roofs and concrete - requested one-year loan for $100,000 from the Club to meet those expenses or the expenditures in those categories be deferred.– Action Taken: The originally proposed budget represented a

20% increase in reserve assessments – this was reduced to 11.6% assuming a $100,000 loan from the Club is secured. Further landscape savings were factored into the reserve plan, which reduced the funding to .8%

Verano Reserve Fund Notables

• Next year’s spending plan = $204,600– Driveway/TE/parking ($17,600), area lighting ($29,400),

building components ($69,100)

• Target minimum balance = $473,100• Actual fund balance stays below minimum for one

more year • Actual year ending balance and funding

adjustments (%) for the next fours years as follows;– 2009/2010 – $16,800 – 0.8% adjustment– 2010/2011 - $481,667 – 6.3% adjustment (reduction)– 2011/2012 - $793,717 – 17.2% adjustment (reduction)– 2012/2013 - $1,030,017 – 3.5% adjustment…(3.5% in

future years)

Del Lago

DAC Comments• Operating Fund• After presenting the first draft of the Operating Budget, the DAC

responded with some concerns, specifically the tree maintenance and pest control categories. – Action Taken: Staff scheduled a meeting with DAC Chairperson and

Juan Heredia - after a walkthrough of the area, concerns/questions where addressed and answered satisfactory.

• Reserve Fund • After presenting the first draft of the reserve budget, the DAC

presented questions and concerns in regard to the walkway replacement, retaining walls, and building components (particularly pot shelves and rear fences). – Action Taken: Staff scheduled a meeting with two of the area

supervisors from the maintenance department and DAC Chairperson on March 4 - after a walkthrough of the area all questions were addressed.

– Also, the landscape restoration funding schedule was revised to reflect the DACs accelerated schedule.

Note: Operating budget was reduced by 5% due to a water rate adjustment and landscape savings – the reserve fund was originally projected to increase 11% and has been increased to 20.2% as a partial result from landscape savings.

Del Lago Reserve Fund Notables• Next year’s spending plan = $225,200

– Landscape ($70,000), retaining walls ($36,000), building components ($44,300), walkway replacement ($15,000)

• Target minimum balance = $209,300• The fund balances exceed the minimum balance

amount until the 2027 when the fund balance dips below for a one-year period

• Actual year ending balance and funding adjustments (%) for the next fours years as follows;– 2009/2010 – $263,375 – 20.2% adjustment– 2010/2011 - $347,775 – 9% adjustment– 2011/2012 - $425,475 – 9% adjustment– 2012/2013 - $539,875 – 9% adjustment (9% in

2014/2015 then 6.5 to 7% for foreseeable future)

Highland

DAC Comments

• Operating Fund• After reviewing the draft of the proposed

Operating Budget no concerns were communicated - the DAC is in full support.

• Reserve Fund• The DAC requested its roof reserve funding

schedule be accelerated to repair all valleys over a three-year period and to accelerate landscape restoration program, completing it by 2010/2011.– Action Taken: The adjustments were made to

the spending plan to meet the DACs objective.

Highland Reserve Fund Notables

• Next year’s spending plan = $703,300– Roof repair ($400,000), landscape ($130,500), building

components prior to paint ($58,600)

• Target minimum balance = $281,100• Actual fund balance is strong next year, but dips

below minimum balance the next two years and then again in 2015/2016 (including % adjustment):– 2009/2010 – $982,400 – 11% adjustment– 2010/2011 - $255,300 – 11% adjustment– 2011/2012 - $113,300 – 11% adjustment– 2012/2013 - $310,600 – 11% adjustment…(11% percent

through the 2014/2105 year then lowers to 3.5 for future years)

Glen Arden

DAC Comments

• Operating and Reserve Fund• After reviewing the operating and

reserve budget drafts, the DAC approved management’s recommendations.

Glen Arden Reserve Fund Notables

• Next year’s spending plan = $178,200– Driveway/TE/parking ($28,000), landscape ($43,900)

building components prior to paint ($26,600), area lighting ($35,000)

• Target minimum balance = $252,700• Actual fund balance exceeds minimum target

throughout entire plan (including % adjustment):– 2009/2010 – $800,175 – 2.1% adjustment– 2010/2011 - $742,375 – 6% adjustment– 2011/2012 - $940,175 – 6% adjustment– 2012/2013 - $1,161,975 – 6 adjustment…(6-6.5%

through 2026 then increase reduces to 5% for remainder of plan)

Olivas

DAC Comments

• Operating Fund• After reviewing the first draft of the operating

budget, the DAC requested that landscape extras be reduced to reflect a budget of $64,020, which represented a 14.1% increase rather than the proposed 25.3% increase to that expense line.– Action Taken: The landscape extra line was adjusted.

• Reserve Fund• The DAC requested that the reserve assessment

originally proposed at $4.07 be reduced to $0.– Action Taken: the fund balance, which exceeded

minimum balance requirements, was adjusted – also, excess landscape savings were added to the fund balance.

Olivas Reserve Fund Notables

• Next year’s spending plan = $308,500– Deck coating ($20,000), walkway replacement

($30,600), landscape ($50,000), building components ($151,000)

• Target minimum balance = $321,100• Actual fund balance exceeds minimum

target throughout entire plan (including % adjustment):– 2009/2010 – $909,600 – 6.8% adjustment– 2010/2011 - $733,600 – 5% adjustment– 2011/2012 - $1,018,100 – 5% adjustment– 2012/2013 - $1,345,200 – 5% adjustment…(5%

through 2036)

Fairways

DAC Comments

• Operating and Reserve Fund• After reviewing the first draft of the

operating and reserve budgets, the DAC approved the recommended increase to the overall proposed district budget in the amount of $12.98

• At final draft, the total district proposed monthly assessment was increased by $16.20.

Fairways Reserve Fund Notables

• Next year’s spending plan = $27,300– Landscape ($10,100), walkway repair/replacement

($3,000), roof repair ($3,000)• Target minimum balance = $16,800• Actual fund balance exceeds minimum

target throughout entire plan (including % adjustment):– 2009/2010 – $25,700 – 12.7% adjustment – 2010/2011 - $26,200 – 12.5% adjustment– 2011/2012 - $31,500 – 12.8% adjustment– 2012/2013 - $24,200 – 12.3% adjustment…

(12% range through 2025 when the adjustment reduces to 3% range in future years)

Sonata

DAC Comments

• Operating and Reserve Fund• The Sonata DAC members who attended

the budget review meeting agreed that the presented draft of the operating and reserve budgets will be acceptable after small adjustments based on final water and insurance costs are established. – Action Taken: Due to a reduction in water,

insurance rates and landscaping, the projected increase of 5.1% in the operating budget was reduced by 2.2%. The reserve assessment increased by 25.2% as a result of landscape related savings.

Sonata Reserve Fund Notables

• Next year’s spending plan = $76,600– Landscape ($37,100), building components ($5,500),

walkways and patio replacement ($8,800)

• Target minimum balance = $75,500• Actual fund balance exceeds minimum target

throughout entire plan • Actual year ending balance and funding

adjustments (%) for the next fours years as follows;– 2009/2010 – $1,104,300 – 25.2% adjustment – 2010/2011 - $1,168,900 – .8% adjustment– 2011/2012 - $1,232,300 – .8% adjustment– 2012/2013 - $1,179,300 – .8% adjustment…(.8-1% range

throughout entire plan)

Valle Vista

DAC Comments• Operating Fund• After reviewing the first draft of the operating budget and after extensive

discussions and site walkthroughs with staff, the DAC approved the 2010 operating budget as proposed.

– Action Taken: After a water rate reduction and landscape savings the proposed operating budget of 5.9% was reduced to 2.1%.

• Reserve Fund• The Valle Vista DAC presented the following recommendations/changes to

the 30-year reserve forecast:• Walkway replacement - After a walkthrough with the maintenance

supervisor, the DAC agreed that there were several areas that needed to be replaced, but felt the funding schedule of roughly $15,000 per year over the next four years was in excess of what may be needed.

• Grounds Restoration - the DAC agreed with the $30,400 budgeted number and acknowledged this is just a rough estimate.

• Building Components – the DAC agreed with the budgeted amount of $25,500 for 2010 but feels the amount budgeted for 2012 is on the high side, DAC was informed that this amount is mainly intended for wood trim repair and replacement prior to painting in 2013.

– Action Taken: The building repair line in 2012 was adjusted from $146,000 to $80,000 and the walkway replacement line was reduced from roughly $15,000 to $8,000 to $9,000 per year over the next four years. The fund balance was adjusted to produce a reserve assessment reduction of 12.2% - the overall assessment increase is $0.

Valle Vista Reserve Fund Notables

• Next year’s spending plan = $92,700– Walkway replacement ($13,000), landscape

($30,400), building components ($23,500)• Target minimum balance = $75,400• Actual fund balance exceeds minimum

target throughout entire plan (including % adjustment):– 2009/2010 – $574,030 – (12.2%) adjustment – 2010/2011 - $565,130 – 2.9% adjustment– 2011/2012 - $505,430 – 3.1% adjustment– 2012/2013 - $460,630 – 3% adjustment…(2.9-

3.5% throughout entire plan)

The Final Numbers at a Glance

District FY09 FY10 $ Change % Change FY09 FY10 $ Change % Change FY09 FY10 $ Change % Change

Cribari 150.14 132.51 -17.63 -11.7 92.28 109.91 17.63 19.1 242.42 242.42 0.00 0.0

Montgomery 159.63 154.95 -4.68 -2.9 160.70 165.38 4.68 2.9 320.33 320.33 0.00 0.0

Heights 177.50 170.95 -6.55 -3.7 120.43 126.98 6.55 5.4 297.93 297.93 0.00 0.0

Hermosa 182.55 184.39 1.84 1.0 154.37 167.23 12.86 8.3 336.92 351.62 14.70 4.4

Verano 163.35 162.03 -1.32 -0.8 168.03 169.35 1.32 0.8 331.38 331.38 0.00 0.0

Del Lago 188.16 178.69 -9.47 -5.0 46.90 56.37 9.47 20.2 235.06 235.06 0.00 0.0

Highland 165.28 174.77 9.49 5.7 41.27 45.80 4.53 11.0 206.55 220.57 14.02 6.8

Glen Arden 125.58 123.91 -1.67 -1.3 80.76 82.43 1.67 2.1 206.34 206.34 0.00 0.0

Olivas 172.59 167.07 -5.52 -3.2 81.24 86.76 5.52 6.8 253.83 253.83 0.00 0.0

Fairways 194.75 207.09 12.34 6.3 30.50 34.36 3.86 12.7 225.25 241.45 16.20 7.2

Sonata 155.22 149.22 -6.00 -3.9 23.84 29.84 6.00 25.2 179.06 179.06 0.00 0.0

Valle Vista 141.91 144.84 2.93 2.1 24.10 21.17 -2.93 -12.2 166.01 166.01 0.00 0.0

MONTHLY ASSOCIATION ASSESSMENTS PER 1000 AFADistrict Operating District Reserve District Total

2010 2009 Difference % Change

Association Operating Assessments 7,082,133 7,297,740 215,607 -3.0%

Association Reserve Assessments 4,766,970 4,426,300 (340,670) 7.7%

Total Association 11,849,103 11,724,040 (125,063) 1.1%

Club Operating Assessments 6,031,071 6,017,086 (13,985) 0.2%

Club Reserve Assessments 1,289,113 1,150,938 (138,175) 12.0%

Club Facility Fund Assessments 304,320 456,480 152,160 -33.3%

Total Club 7,624,504 7,624,504 - 0.0%

Total Club & Association 19,473,607 19,348,544 (125,063) 0.6%

CLUB/ ASSOCIATION ASSESSMENT CHANGE SUMMARY

What’s Next?

March 23, 2009Total operating budget recommendations reviewed with Board of Directors – including any fee changes

April 6-10, 2009Evaluate Montgomery Roof replacement project funding and loan program

April 6-10, 2009Replacement Reserve plan by district reviewed with Board of Directors

April 14, 2009Total Operating budget and Reserve Plan presented to Board of Directors

April 28, 2009Board of Directors formally approves and accepts FY 09/10 budget

FOURTH MILESTONE

May 1-15, 2009 Pro Forma budgets assembled and printed

May 18, 2009 Budgets are distributed to members

PROJECT COMPLETION

Association Draft Operating Budget Presentation - FY 09/10 Final Draft - April 25, 2009.

Documents

Transcript of Association Draft Operating Budget Presentation - FY 09/10 Final Draft - April 25, 2009.