• 2019 AH Annual Assessment • Guiding Principles • Approach to Covering our Hurricane Losses – Hurricane Wilma – Hurricane Irma • Cash Positions Since January 2017 – Fidelity Brokerage Account • 2018 vs 2019 Operating account analysis • 2018 vs 2019 Reserve Analysis • 2018 vs 2019 Revenue Analysis • 2019 Budget by unit • New Payment Method • Summary
% To Total Total Settlement Total Settlement $ 4,250,000.00 100.0% Attorney's Fee's $ 426,726.00 10.0% Contingency Fee's (33 1/3%) $ 1,415,250.00 33.3% Keys Claims Consultant & Cost $ 641,764.00 15.1% Sub Total $ 2,483,740.00 58.4% Tol Money Due AH from Wilma $ 1,766,260.00 41.6% Lost Depreciation: $ 789,947.00 Windows Exterior including Tile Pool House • Source: Court Settlement. Final Closing Statement September 5, 2014
• 100% of money went back into the home % To Total owners property Total Settlement • $795,957 dollars were spent from the reserve account on the following assets: Total cost to repair AH $ 9,413,131.00 100.0% • Replacing major pipes • Updating social room Attorney's Fee's $ - 0.0% • Mechanical closets AH Projects outside of Insurance $ 795,957.00 8.5% • Lobby A/C AH Insurance deductable $ 888,984.00 9.4% • Roof vents Sub Total $ 1,684,941.00 17.9% • AH portion of painting the outside of the building Tol Money Due AH from Irma $ 7,728,190.00 82.1% • Trash chutes • $888,984 to pay AH insurance deductible • Total of $1,684,941 was spent out AH reserve to cover our out of pocket expense
TOTAL RESERVE BALANCE PRE-IRMA $ 3,818,646 POST IRMA $ 2,218,265 DIFFERENCE IN RESERVE POSITION $ 1,600,381
The operating expense for 2019 is $7,229 less than the 2018 projected actual 2018 total and $115,625 more than the 2018 budget. Major Contributors: Add: • $87,000 are onetime expense Annual A/C maintenance $11,000 that should not be repeated! Interest on line of credit * $31,000 Painting fire escape floor * $50,000 Increase in insurance coverage $38,000 Cost for extra carpeting * $ 6,000 Sub Total $136,000 Other overall reductions ($ 20,375) Variance from the 2018 budget $115,625 * Onetime expenses
2018 total cost for reserved items was $5,581,526, 2019 plan has $4,256,700 in the budget for a difference of $1,324,826. The majority of this difference is the insurance deductible of $1,050,000 from 2018. Why aren’t we reserving for our deductible in 2019? • Our new deductible is $615,000 or $3,090 per homeowner • Most owners already carry hurricane & wind protection We wanted to leave it up to you as the homeowners on how you wanted to fund this. Your choices are through your insurance company or to self insure. The second driver that caused the reserve total to go down from last year was the estimated reserve used in the 2018 budget was $1,964,913 and this year we are using $2,200,035.
2018 2019 PLAN BUDGET VARIANCE Misc. Income $ 3,000 $ - $ (3,000.00) Interest Income $ 15,000 $ 8,000.00 $ (7,000.00) Rental Income $ 9,600 $ 13,860.00 $ 4,260.00 Transfer Fees' $ 1,500 $ 500.00 $ (1,000.00) Carryover $ 50,000 $ - $ (50,000.00) Total $ 79,100 $ 22,360.00 $ (56,740.00)
2018 Budget 2019 Projected Budget Variance Unit Number Annually Quarterly Annually Quarterly Annually Quarterly 1 $ 8,991 $ 2,248 $ 8,661 $ 2,166 -3.7% -3.6% 2 $ 8,508 $ 2,127 $ 8,196 $ 2,050 -3.7% -3.6% 3 $ 8,508 $ 2,127 $ 8,196 $ 2,050 -3.7% -3.6% 4 $ 6,291 $ 1,573 $ 6,067 $ 1,518 -3.6% -3.5% 5 $ 8,695 $ 2,173 $ 8,377 $ 2,095 -3.7% -3.6% 6 $ 8,964 $ 2,241 $ 8,635 $ 2,159 -3.7% -3.7%
• Some misconceptions about ACH are as follows: • ACH is not safe – That is not true. ACH is in fact safer than issuing a check. Each homeowners routing number and account number will be stored at the bank level and will be completely protected by the bank’s firewalls. • The AH can take any amount of money out of my account whenever they want . – That is a false statement. The homeowners are only authorizing the AH to take out payments required to satisfy their quarterly HOA fees. • This will not save the AH – That is a false statement. We are going to save money on printing bills, buying envelopes, stamps and mailing them, labor in stuffing the envelopes, opening the envelopes when they come back, the labor to post the transaction when we get the check in the office, the time to scan and deposit the checks, and any filing that needs to take place. • It will be difficult to set up ACH- That is not true. The office will do everything. You don’t need a computer.
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