Agenda 2014 Highlights 2015 Proposed Budget Key Expense Trends - PDF document

12/8/2014 2015 Budget Meeting December 10, 2014 Agenda � 2014 Highlights � 2015 Proposed Budget � Key Expense Trends � Your Capital Reserve � Our Website Resources � Stucco Wall Replacement Project � Questions 1

12/8/2014 2014 Highlights � Replaced Mailboxes (capital expense) � Garage Door Painting � New House Numbers (Social Club) � Mildew Walls Cleaned � Updated Alarm System � The Big Snow Expense � Hail damage claim receipts $62,636 2015 Operating Budget 2014 2014 2015 Increase Budget Projected Budget (2015 vs 2014) Operating 675,648 668,458 682,155 13,697 Expenses Quarterly 1,224 1,224 1,236 12 Assessment Special Snow 0 69,000 0 (69,000) Assessment Total 675,648 737,458 682,155 (55,303) Spending Assessment 4,896 4,944 48 Per Home 2

12/8/2014 2015 Budget (Fixed) 2015 2014 Quarterly Fixed Contract Cost Incr. % Incr. Budget Projected Assessment 234,043 234,043 0 0% 424 Master Association Landscape Maintenance 126,109 124,491 1,618 1.3% 228 Property & Liability Insurance 47,994 56,032 (8,038) -14.3% 87 Trash Removal 24,840 24,840 0 0% 45 Management Fees 35,322 35,322 0 0% 64 Total Fixed Contract 468,308 474,728 (6,420) -1.4% 848 2015 Budget (Variable) 2015 2014 Quarterly Variable Cost Incr. % Incr. Budget Projected Assessment * Snow Removal 61,500 60,000 1,500 2.5% 111 Misc. Bldg. Maintenance 29,000 32,248 (3,200) -10.1% 53 One Time Projects 20,000 47,605 (27,605) -58.0% 36 Landscape Improvements 4,000 4,000 0 0% 7 Large Tree Pruning 4,000 3,850 150 3.9% 7 General Maintenance 7,000 7,556 (556) -7.4% 13 General Administration 4,960 4,960 0 0% 9 Common Utilities 2,500 2,500 0 0% 5 Reserve Contribution 80,887 31,011 49,876 160.8% 147 Total Variable Cost 213,847 193,730 20,117 10.4% 387 * Note: Excludes an additional $ 69,000 spent 3

12/8/2014 2015 Budget Recap 2015 2014 Quarterly Operating Expenses Incr. % Incr. Budget Projected Assessment Total Fixed Expense 468,308 474,728 (6,420) -1.4% 848 Total Variable Expense 213,847 193,730 20,117 10.4% 387 Total Operating Expense 682,155 668,458 13,697 2.0% 1,236 Total Revenue 682,155 675,489 6,666 1.0% Quarterly Assessment 1,236 1224 12 1.0% 1,236 Yardley Key Expense Trends HM Landscape Snow Projects Misc Bldg Genl Maint 129 130 THOUSANDS 126 120 124 123 124 123 HM Landscape 110 100 Snow Removal 90 [Note: 2010 SNOW $75K] 80 72 70 62 60 48 50 40 40 35 33 32 Projects 30 29 23 22 Misc Bldg 20 20 20 8 10 6 5 4 7 0 0 Genl Maint 0 2011 2012 2013 2014 2015 4

12/8/2014 Your Capital Reserve Savings fund for Roofs. Roads, etc . As of December 1, 2014 Value: $1,095,726 ($7,940 per owner) Allocation Current Target Stocks 45.9% 40 % Bonds 25.0% 50 % Short-term Reserve 29.10% 10 % Note: Next planned capital expenditure is in 2021 for asphalt paving. Visit Yardley Web Site to view Village Files Link to Yardley web page: www.yardleyvillage.com Or: http://hersheysmill.org/villages/s-to-z-villages/yardley/ 5

12/8/2014 Stucco Wall Replacement Project � Scope � Time Table � Status of Legal Suit � Expenses Stucco Wall Replacement Project GENERAL STATEMENT � All estimates stated are Joe Ciasullo’s. The estimates are based on our current contractors proposal to complete houses1640, 1641,1642 and applying such information to the number and type of houses being discussed. � The estimates do not include the replacement cost of new windows and sliding doors, or the legal and engineering consulting costs 6

12/8/2014 Scope 1) Higher than normal moisture readings detected at 66 areas on 36 houses in the 2013/2014 probes. 2) High readings primarily below windows, but some sliding doors and dormers. 3) Invasive testing completed at four houses: 1640, 1641, 1642 & 1659. 4) Testing involved cutting stucco & cladding away from 2 x 2 foot square at specific locations to determine the damage and possible causes. 5) Primary causes appear to be water entering the wall due to the poor installation of the windows and sliding doors and other deficiencies in the stucco system. 6) Problems appear to be systemic in nature and not restricted to the current 36 houses. 7) Current estimate to repair & re-stucco all walls except fronts of all village houses is estimated at $3.8 million Time Table 1) Current plan is to complete the repair of the walls with existing high moisture readings on 12 houses in 2015, and the remaining 24 houses in 2016. The estimated cost of the 36 houses is $850,000. 2) It is expected that such work could commence in the April/May timeframe. 3) Prior to the April timeframe, the board intends to determine the viability of utilizing less expensive siding material such as: Hardie Plank or Premium Vinyl. 7

12/8/2014 New Siding Materials 4) New siding materials creates added issues: a) Requires addressing entire buildings rather than individual houses. b) Adds 29 more houses, for a total of 65. c) While cost per unit is reduced by 15% to 39%, it also adds $298,000 or $743,000 to initial outlay of $850,000. d) Changes the look of village over a period of time if started immediately. e) Current estimate to repair all walls, except the front of all village houses: � with Hardie Plank $3.2 million. � with Premium Vinyl $2.3 million. � Compared to $3.8 million for stucco. Status of Legal Suit 1) Complaint was filed against K.Hovnanian at Hershey’s Mill, Inc. and K.Hovnanian Construction Mgmt. Inc. on August 20, 2014, in the Court of Common Pleas, Chester County, PA. 2) As expected, K.Hovnanian’s legal reps responded on October 2, 2014, denying any responsibility for the specific issues. 3) Our response demanding jury trial was filed on October 30, 2014. 4) We received our first set of interrogatories from K.Hovnanian’s legal reps on November 20, 2014, for which we are currently compiling appropriate responses. 5) We have barely scratched the surface of the normal legal steps leading to a conclusion. 6) Our legal counsel, two separate engineering experts, and our repair contractor have supported the validity of our legal claim against K.Hovnanian 8

12/8/2014 Expenses 1) Expenses incurred to date by Yardley Village H.O.A. through October 31, 2014: 2013 Special Capital Total Assessment Reserves Expenses Village Moisture Probes 87,896 Selected Moisture Retests 1,500 Engineering Services 24,191 Repairs: 1632 & 1637 18,402 Legal 34,267 Total Expense-To-Date 87,896 78,360 166,256 2) Expect legal and engineering services to reach $150,000 by the end of 2015, and could reach at least $400,000 before conclusion. 9