Presentation Fiscal Year 2011 Nov 2010 Oct 2011 Your Neighbors on - PowerPoint PPT Presentation

Fairlington Arbor Draft Budget Presentation Fiscal Year 2011 Nov 2010 – Oct 2011

Your Neighbors on the Finance Committee Rachael Robinson – Treasurer Les Bergen Bill Jenkins James Moser* Deborah Santiago *Former Arbor resident and Treasurer

Presentation Outline • Process • Major Factors • Operating Budget • Reserve Budget • Assessments and Income • Questions

Process • Operating Fund – The operating fund provides for the maintenance, operation, and normal repair of the common and limited common elements • Replacement Fund (Reserve Account) – The replacement fund provides for the major repair and replacement of the common and limited common elements • Per our condo documents, we must maintain 25% of the current annual assessments in this account • A Five Year Plan – Provides greater confidence in long term stability of replacement fund • Comprehensive Reserve Study – Provides backing for Five Year Plan

Major Factors • Past, Present, and Future – Operating expenses have risen an average of 3.6% per year over the past 10 years. Assessment increases may be higher in order to contribute to reserves and cover reserve items, like roof replacement. – Careful management has kept expenses in check – Water Usage • Arlington County water rates started rising dramatically in 2005, but appear to be moderating • Water now represents over 25% of our operating expenses • Conservation is critical – Do not water the grass – Water shrubs and trees in the early morning or late evening when it is cooler – Run the dishwasher and washing machine only with full loads – Turn off the faucet when brushing teeth – Take showers instead of baths – Monitor for leaky pipes and running toilets and take corrective action as necessary

Major Factors • Sewer Laterals (replacement fund item) – Contract to renew our sewer lines commits us to $100,000/yr until 2014 (work will complete prior to 2014) – Essential project - our sewer lines are fragile • They are made of terracotta and were installed in 1943 • Investment Returns (replacement fund item) – Interest rates on bonds, money markets and CDs have come down – We have drawn down our reserves as our roof replacement and sewer lining work has continued • Less money on which to earn interest

Major Factors • Roofs (replacement fund item) – The Arbor has 58 buildings all built in 1943 • They were built with a mixture of 50, 75, and 100 year rated slate roofs – Planned replacement of 50 year rated roofs began in 1997 • 23 done, 7 to go • Replaced with 75+ year rated slate – 17 roofs are rated for 75 years and reach design life in 2018 • Reserve Study indicates a possible life span in excess of 150 years! – Our roofs are in excellent shape and are monitored closely • Reserve Study indicates that more thorough repairs when problems arise will extend service life • Reserve Study indicates that chimney, gutter, and trim repairs should be undertaken on units undergoing roof replacement

Operating Budget Administration and Payroll FY 2009 Actual FY 2010 Budget FY 2010 Current Est. FY 2011 Proposed Administrative Postage $939 $500 $1,150 $1,200 Printing and Copying $0 $100 $274 $0 Misc. Administrative $12,752 $5,500 $10,400 $12,000 Audit $3,755 $4,000 $3,675 $4,000 Legal Expenses $1,489 $4,500 $2,300 $4,500 Management Fees $48,954 $48,960 $48,960 $50,429 Prop and Liability Insurance $62,141 $63,276 $62,427 $63,500 Insurance Deductable $6,777 $0 $15,000 $0 Uncollectable Charges $154 $0 $0 $0 Condo Fees $2,139 $2,266 $2,266 $2,381 Telephone Expenses $2,074 $2,400 $3,200 $3,000 Community Outreach $2,984 $3,200 $2,200 $2,200 TOTAL ADMINISTRATIVE $144,158 $134,702 $151,852 $143,210 Payroll Payroll Taxes $9,056 $10,561 $10,400 $10,900 Health Insurance $21,751 $22,600 $22,417 $24,600 Employee Benefits $0 $1,034 $0 $0 Workers Comp. Insurance $4,224 $5,280 $4,300 $6,900 Maintenance Salaries $118,413 $132,008 $132,000 $138,000 TOTAL PAYROLL EXPENSES $153,444 $171,483 $169,118 $180,400 • Postage: Increase allows for $500/budget and election mailings; $200 for incidental mailings • Management Fees: 3% increase for CFM • Prop and Liability Insurance: allows for small cost increase • Telephone expenses: budget line increased to include hard line at the pool • Health Insurance: provides coverage of health insurance premiums (CFM is seeking new provider, estimates 10% increase) • Maintenance Salaries: incorporates pay raises for staff and provides an overtime budget

Operating Budget Utilities and Maintenance FY 2009 Actual FY 2010 Budget FY 2010 Current Est. FY 2011 Proposed Utilities Electricity $9,317 $12,900 $9,000 $10,000 Water/Sewer $173,695 $200,000 $184,000 $190,000 TOTAL UTILITIES $183,012 $212,900 $193,000 $200,000 Repairs & Maintenance Electrical Supplies $1,107 $600 $500 $600 Sewer Maintenance $2,378 $1,000 $9,000 $3,000 (Ext.) Painting & Décor $63,708 $54,000 $54,000 $80,640 Interior Maintenance $100 $1,600 $1,000 $1,600 Misc. Operations Maintenance $7,892 $10,000 $10,000 $10,000 Gutter Porch & Dormer $10,140 $10,000 $10,000 $10,000 Rep/Maint-Concrete $1,572 $3,500 $6,000 $3,500 Rep/Maint Roof $2,515 $15,000 $10,000 $10,000 Rep/Maint Vehicle $1,825 $4,000 $4,000 $4,000 Rep/Maint Tennis Court $3,137 $1,000 $1,000 $1,000 Rep/Maint Fence $899 $500 $500 $500 TOTAL REPAIR & MAINT. $95,273 $101,200 $106,000 $124,840 • Water/Sewer: allows for a 3% rate increase by Arlington County and assumes the community continues to carefully monitor water usage • Exterior Painting & Décor: will return from a four year to a three year painting cycle; plan to paint Courts 1, 2, 7, 10, 12 in FY11; beginning in FY12 will paint 4 courts per year • Repair/Maintenance Roof: decreased due to substantial savings offered by new contractor

Operating Budget Pool, Landscaping, Services & Taxes FY 2009 Actual FY 2010 Budget FY 2010 Current Est. FY 2011 Proposed Pool Expenses Pool Management $32,455 $33,908 $32,455 $32,455 Rep/Maint Pool $3,164 $4,000 $8,000 $17,000 Pool Furniture $193 $500 $0 $500 Pool Telephone $1,040 $720 $87 $0 TOTAL POOL EXPENSES $36,852 $39,128 $40,542 $49,955 Landscaping Landscaping Other $8,764 $6,000 $5,000 $6,000 Tree Trimming $4,025 $7,000 $8,000 $7,000 Landscaping Contract $63,528 $67,000 $64,800 $67,500 TOTAL LANDSCAPING $76,317 $80,000 $77,800 $80,500 Maintenance Service Agreements Snow Removal $7,501 $8,000 $42,641 $8,000 Trash Removal $67,443 $68,678 $68,230 $68,230 TOTAL SERVICE AGREEMENTS $74,944 $76,678 $110,871 $76,230 Taxes & License Personal Property Taxes $560 $500 $500 $500 Income Taxes $0 $1,440 $1,260 $1,275 TOTAL TAXES AND LICENSES $560 $1,940 $1,760 $1,775 • Pool Management: continue with our new pool contractor at same cost as in FY10 • Repair/Maintenance Pool: covers for both pools will help protect the new whitecoat • Pool Telephone: line zeroed out – the new hard line is billed alongside the office phone/internet/fax • Landscaping Contract: extends into 2011 with minimal increase to cover cost of aeration • Trash Removal: contracts extends into 2011 with no increase • Snow Removal: budgeted at five year average, not including FY10 with its record snowfall

Reserve Budget 2010 Update Reduced contributions to reserves due to higher than budgeted operating expenses, including: • Insurance Claims – Sewer Collapse – Winter Blizzard – August windstorm • Snow Removal • Storm Sewer Repairs • Concrete Work Note, however, that lower than budgeted reserve expenses (roof) will result in a higher than budgeted ending balance.

Reserve Budget 2010 Update • Interest rates continue FY 2010 FY 2010 Budget Projection to be low • Higher than budgeted Beginning Balance 586,376 586,376 operating expenses will Income result in the actual Interest Earned 9,600 8,400 Annual Contribution 150,843 125,703 transfer to reserves to Total Income 160,443 134,103 be less than the Capital Expenditures budgeted contribution Sewer Laterals (100,000) (100,000) Roof (140,000) (84,300) • New roof in Court 12 is Total Expenditures (240,000) (184,300) complete and well Ending Balance 506,819 536,179 under budget • Sewer Lateral work is in process – fixed cost

Reserve Budget Five Year Plan FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Budget Forecast Forecast Forecast Forecast Forecast Assessment Change 6% 5% 5% 4% 4% 4% Beginning Balance 586,376 536,179 457,287 440,858 416,261 401,749 Income Interest Earned 8,400 8,500 8,893 8,486 8,099 9,240 Annual Contribution 125,703 160,408 170,427 182,757 199,323 216,831 Total Income 134,103 168,908 179,319 191,243 207,422 226,071 Capital Expenditures Roofs (84,300) (132,800) (95,749) (90,840) (93,565) (96,372) Sewer Laterals (100,000) (100,000) (100,000) (100,000) (83,350) Asphalt/Paving (22,510) Vehicle - (25,000) Tot Lot - - - - (22,510) - Signage - (15,000) - - - - General Operating Total Expenditures (184,300) (247,800) (195,749) (215,840) (221,935) (96,372) Ending Balance 536,179 457,287 440,858 416,261 401,749 531,448 • Continues basic plan established in 2010 Budget 5- Year Plan • Accelerate replacement of concrete asbestos roofs • Revised roof cost based on new bids