2014 proposed budget delegates 101513 final

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  • 2014 proposed budget delegates 101513 final

    1. 1. 2014 Draft Budget October 15, 2013
    2. 2. HRCA Budget The annual budget for the Highlands Ranch Community Association is a financial and operational document that is designed to carry out the obligations of the HRCA. The annual budget also follows the policies of the Board of Directors, which reflects the requests for services and facilities by the members.
    3. 3. Agenda • • • • • Budget Process & Goals HRCA Finance Committee Budget Highlights / Assumptions 2014 Budget Drafts – Administrative – Recreation – Backcountry – HR Cultural Affairs Association – HR Scholarship Fund Questions
    4. 4. 2014 Budget Process • June - August - Draft Budget Development • August - October - Finance Committee Review •Reviewed each aspect of the HRCA, HRCAA, & HRCSF •Ten meetings and over 330 hours • October 7 - Board Review with Finance Committee • October 10 - Budget Draft mailed to Delegates • October 15 - Presentation to Delegates •Post budget presentation on Website • November 19 - Board Adoption
    5. 5. 2014 Budget Goals • Guideline for revenues, expenses and funding – Reverse the $30.00 assessment to Recreation (increased) and Administration (decreased) for prior year’s Backcountry transfer • Funding available for: – Administrative Operations • Quality Community Events – Recreational facilities and programs – Bond obligations – Reserve and Capital Improvement funds • McKinstry Project – Backcountry
    6. 6. 2014 Budget Goals • Develop and promote new services & appropriate fees to generate revenue and recover costs • Provide realistic operating budget which creates ongoing value to homeowners at a fair assessment fee • Ensure that budget is aligned with all corporate initiatives – Directors Visionary Statements & Objectives – Five Year Strategic Plan – Community Survey – Implementation of the Compensation Analysis results • Consideration of McKinstry Project – Potential of $163,000 / year in utilities savings – Investing $2.4 Million in Capital and Reserve Improvements
    7. 7. 2014 Budget Goals • Enhance budget presentations – Increase budget discussions by providing proposed budget information earlier and at open meetings – Comprehensive income & expense statements – Simplify presentation and show how member assessment dollars are allocated to various member services – Comparison of Assessment increases to regional CPI – Comparison with similar competitor organizations
    8. 8. 2014 Finance Committee Thank you! For your time, commitment, involvement and input into the development of the 2014 Budget!
    9. 9. 2014 Finance Committee • Jeff Suntken Chair/Treasurer (Consulting) • Chris Caro (Investment Institution) • Lyle Daley (Federal Government Agencies) • Sheela Damle (Management, Consulting) • Scott Grimes (Public Accounting) • Kirk Mooneyham (Captive Insurance) • Shon Payne (IT Services Provider) • Kay Schneider (Quality Improvement Non-Profit) • Suma Shamasundar (Software / Web Development)
    10. 10. 2014 Administrative Fund Revenue Highlights • 150 New Properties • Architecture Submittal Requests estimated to generate $90,000 • New home and resale transfer fee increased $100 to $130 • Sub-Association Management fees increased by 3% or $13,000 • Introduction of Sub-Association Maintenance Services $23,400 • Interest Income of 0.4% on investments • Increase in legal revenue fees consistent with new legal firm expense fees
    11. 11. 2014 Administrative Fund Expense Highlights Staff Compensation & Benefits •All new staff justified by non-assessment revenue •Limited overall staff salaries to 3% increase, consistent with MSEC and other consulting organization forecasts for 2014 •Health insurance costs budgeted at 5.1% increase – CIGNA self-funded plan allows HRCA to maintain current level of benefits while reducing premium increase from 20% to 10% – Implemented second year of increased health and dental insurance contributions paid by employees which will reduce the budgeted medical insurance expense by $93,000 / year – Continue to motivate staff to move to HSA plan over PPO plan
    12. 12. 2014 Administrative Fund Expense Highlights Administration Function Expenses •Decreased bad debt provision 10% due to decreased write-offs from bankruptcies and foreclosures •Decreased printing and postage cost by 10% due to new E-Bill, Newsletter and Activity Guide opt-out options Sub-Association Management •Increased sub-association staffing and operating expenses to support additional property management and maintenance services
    13. 13. 2014 Recreation Fund Expense Highlights • Engaged McKinstry for Energy Savings Program at a total cost of $2,479,100. Partially funded by a $1,500,000 internal loan from the OSCA Fund. • Created a Capital Improvement Fund to support the 5 Year Plan with an initial deposit of $250,000. • Over $570,000 of expenditures form the 2013 budgeted Recreation Reserve were deferred • Through the budgeting process, over $835,000 in Capital and Reserve expenditures were removed or deferred to future years in order to keep 2014 expenditures in line
    14. 14. 2014 Admin / Recreation Fund Expense Highlights Capital and Reserve Expenditures eliminated or deferred to future •Administration Fund (Capital) – New Accounting Software – Web Site Upgrade $40,000 $20,000 $ 60,000 •Recreation Fund (Capital) – – – – Web site Upgrade Kiosks and Virtual Tour Website Digital Displays Tennis court divider nets and shade structure $24,000 $20,000 $11,200 $20,000 $ 75,200 •Recreation Fund (Reserve) – – – – •Total NR Gym & Racquetball Court Flooring & walls NR Lobby Remodel Continuous lap pools Reduction in emergency provision $160,000 $400,000 $ 75,000 $ 65,000 $700,000 $835,200
    15. 15. 2014 Recreation Fund Expense Highlights Utilities •Utility usage will decline due to implementation of McKinstry Energy Savings Program ($163,000 Guarantee). •Utility rate increases are estimated to be: – Natural gas prices to increase 5.0% – Electricity costs to increase 5.0% – Water costs to increase 3.0% •Reduced some facility operating hours saving $55,000. •Decreased general insurance rates by 3%
    16. 16. Administrative Funds • Administrative Operating Fund • Administrative Reserve Fund
    17. 17. Administrative Function • Administration and Management Functions • Community Improvement Services – Architecture and Covenant Compliance • Accounting and Finance Reporting – Billing and Collections • Community Relations, Events & Communications • Sub-Association Management – Serving 21 properties
    18. 18. 2014 Administrative Fund Summary Revenues $ 3,218,100 Expenses 3,192,210 Net Operating Revenues 25,890 Transfers Due from Prior Years Surplus Operating Funds 54,300 $( 28,410)
    19. 19. 2014 Administrative Fund Revenue Sources
    20. 20. 2014 Sub-Association Management Revenue
    21. 21. 2014 Administrative Fund Sub-Association Summary Sub-Association Services Revenue Contracted Management Fees Management Services Expenses Staff Office, Insurance, Legal, Other Total $431,000 $51,400 $482,400 $432,980 $25,950 $458,930 $23,470
    22. 22. 2014 Administrative Fund Expenses
    23. 23. 2014 Administrative Fund Transfers (Capital / Reserves) Capital Portable credit card machines Web Site Requirements / Design Total $ 3,000 10,000 $13,000 Reserve Computer/Software Telephone Furniture replacements Total $33,300 5,500 2,500 $41,300
    24. 24. Recreation Funds • Recreation Operating Fund • Recreation Reserve Fund • Backcountry Fund
    25. 25. Recreation Functions • Facility Operations • Recreation Programming • Transfers
    26. 26. Recreation Operations • HRCA manages 323,600sq. ft. / 7.4 acres of recreation facilities. • 860 Employees – 110 Benefited Employees • Avg. Operating Hours (M – F)17 Hours/Day, (Sat – Sun) 14 Hours/Day • Closed 4 Days / Year
    27. 27. 2014 Recreation Fund Summary Revenues $19,612,575 Facility Operating Expenses Program Expenses Multi-Facility Expenses $ 6,545,035 $ 2,808,670 $ 4,706,630 Total Operating Expenses $14,060,335 Net Operating Revenues $ 5,552,240 Transfers $ 5,554,210 Net Operating Revenues after Transfers $ (1,970)
    28. 28. Recreation Programs • 3 Planning periods (Activity Guides) per year • Diverse programming for all ages and interests   • Fees cover direct expenses
    29. 29. 2014 Budgeted Program Revenues • $4,410,875 in revenues • 22.5% of total revenues • Projecting 3.1% revenue growth over 2013 Forecast
    30. 30. 2014 Recreation Fund Program Revenue HRCA Program Revenue Growth 4.50 4.00 Revenues in millions 3.50 3.00 2.50 2.00 1.50 1.00 0.50 14 20 et dg 3 Bu 2 01 t as rec Fo 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 Year
    31. 31. 2014 Recreation Fund Revenue Sources
    32. 32. 2014 Recreation Fund Expenses
    33. 33. 2014 Recreation Fund Capital Expenditures McKinstry Pool Pump Frequency Drives McKinstry Water Conservation McKinstry Thermal Equalizers ADA Pool Lifts McKinstry Mechanical Insulation Website Requirements / Design Slider Window / Fire Escape Mobile Web Trac Security Cameras Wireless Access Total Cost $ 99,870 $ 73,150 $ 39,280 $ 30,300 $ 23,210 $ 10,000 $ 8,900 $ 8,600 $ 8,000 $ 2,100 $303,410
    34. 34. 2014 Recreation Fund Reserve Expenditure Summary Computer/Software/Telephone $ Northridge Southridge Eastridge Westridge Design Improvement Plans McKinstry Project Emergency Reserve Total Recreation Reserve 53,900 114,800 432,900 145,200 153,500 50,000 2,243,590 100,000 $3,293,890
    35. 35. 2014 Recreation Fund Major Reserve Expenditures NR Pool Handling and Chiller (McKinstry) ER Pool Air Handling Units (McKinstry) Other McKinstry Upgrades SR Building Settling - Auditorium SR Compaction Grout - Pool 5 Year Plan - Improvement Planning/Design Cost $777,410 $643,710 * $822,470 $185,000 * $100,000 * $ 80,000 * Previously budgeted in 2013 and deferred to 2014
    36. 36. 2014 Recreation Fund Transfers To Bond Requirements To Recreation Reserve Fund To Capital Improvement Fund $3,590,800 $1,200,000 $ 250,000 To Backcountry Fund $ 210,000 To Capital Equipment $ 303,410 Total Recreation Fund Transfers $5,554,210
    37. 37. Fund Balance Projections (12/31/14) • Administrative Operating Fund • Administrative Reserve Fund $ 272,200 $ 185,100 • Recreation Operating Fund • Recreation Reserve Fund $ 772,850 $2,889,300 • Backcountry Operating Fund • Backcountry Reserve Fund $ 209,400 $ 123,750 • OSCA Fund $ 795,000 • Bond Funds $3,501,050 Please refer to the Fund Balance Projections for more detail
    38. 38. Recreation Reserve Fund 12/31/12 Balance 2013 Reserve Transfers Interest Income 2013 Projected Expenditures Estimated 12/31/13 Balance $3,090,663 1,350,000 12,500 (870,000) $3,583,163 2014 Reserve Transfers 1,200,000 Loan from OSCA Fund 1,387,500 Interest Income 12,500 2014 Projected Expenditures (3,293,890) Estimated 12/31/14 Balance $2,889,273
    39. 39. 2014 Budget Summary • $32 (or 6.3%) Increase in Assessments • Total Revenues projected $22,830,675 • Maintain quality facilities and services
    40. 40. 2013 Assessment Changes ActualProposed 2012 2013 Increase % Inc AFCA $ 51.00 $ 21.00 $ (30.00) (58.82)% $ 5.25 RFCA $457.00 $487.00 $ Total $508.00 $508.00 $ 30.00 0 Qtr Amt 6.56% 121.75 0.00% * $127.00 • *The CPI (Consumer Price Index) for years ending 6/30/11 (+3.46%) and 6/30/12 (+1.76%), US Department of Labor, Bureau of Labor Statistics, Denver/Boulder region. • HRCA’s accumulated Recreation Assessments are still 12% below the accumulative CPI % increases since 1990.
    41. 41. 2014 Proposed Assessments   Actual Revised Proposed Function   Reverse  Revised  Actual  2013  BC  2013   2014  2013 Adjustment Adjustment Assessment Increase      Assessment  Amount   AFCA  $   21.00   $    30.00   $     (7.00)  $       44.00   $         4.00   $       48.00  RFCA  $  487.00   $   (30.00)  $      7.00   $     464.00   $       28.00   $     492.00  Total   $  508.00   $         -     $          -     $     508.00   $       32.00   $     540.00  * The CPI (Consumer Price Index) for years ending 6/30/12 (+1.76%) and 6/30/13 (2.77%), US Department of Labor, Bureau of Labor Statistics, Denver / Boulder Region
    42. 42. 2014 Proposed Assessments • What is the proposed $4.00 Administrative assessment increase for? – – – – – Staff payroll increases (3%) Increase in health insurance & benefits Anticipated decline in re-sales (transfers) Marketing and Rebranding Other New Admin Expenditures New Admin Expenses per home $ 44,200 $ 22,600 $ 19,000 $ 30,000 $ 9,240 $ 120,440 $ 4.00
    43. 43. HRCA Administration Assessments Compared to CPI 60.00 50.00 40.00 HRCA 30.00 CPI 20.00 10.00 20 13 20 11 20 09 20 07 20 05 20 03 20 01 19 99 19 97 19 95 19 93 19 91 19 89
    44. 44. 2014 Proposed Assessments • What is the proposed $28.00 Recreation assessment increase for? – – – – – – – – – Adjust back the $30 less $7 from prior year Staff payroll increases (3%) Increase in health insurance & benefits Increase in Capital Expenditures New Capital Improvement Fund Provision Increase in Program Revenues Reduction in Rec Reserve Provision Reduction in Utilities (McKinstry ¾ year) Other New Rec Expenditures $ 585,000 $ 192,500 $ 77,500 $ 113,400 $ 250,000 ($ 131,300) ($ 150,000) ($ 122,500) $ 1,400 $ 816,000 New Rec Expenses per home $ 28.00
    45. 45. HRCA Recreation Assessments Compared to CPI 600.00 500.00 400.00 HRCA 300.00 CPI 200.00 100.00 20 14 20 12 20 10 20 08 20 06 20 04 20 02 20 00 19 98 19 96 19 94 19 92
    46. 46. “Competitor” Comparisons Recreation Provider Comparison Recreation Provider Castle Rock Facility Castle Rock Center Square Footage 39,423 City of Golden Golden Community Center 62,500 HRCA Northridge Eastridge Westridge Southridge Outdoor Pool No Resident Fee Senior (1) Adult (1) Household 69,000 85,000 72,000 72,000 No Senior (1) Adult (1) Household $300 $420 $932 RFCA Per Household $540 2 2 1 1 Backcountry Wilderness Area Open Space (7300 acres) 11.3 miles of trails Foothills Annual fee accesses all centers The Ridge Lilly Gulch Peak Wellness Center Outdoor Pool Facilities 83,000 36,000 30,000 Town of Parker Parker Rec Center 47,250 So. Suburban Annual fee accesses for all centers Family Sports Goodsen Center Buck Center Lone Tree Center Outdoor Pool Facilities 84 miles of trails Worksheets/RAC/Rec Provider Comparison 2013 No No No Annual $311 $467 $823 Gov't Subsidy * Subsidy Unknown $46/hhold 0 included Senior (1) Adult (1) Household $270 $399 $639 $218/hhold Senior (1) Adult (1) Household Youth 2-17 Adult 16-14 Household $276 $420 $660 $310 $455 $310 52% Sales Tax $5m/yr 2% Use Tax 46% User Fees $46/hhold 5 150,000 80,000 53,000 54,000 1 No No No No 4 included * Subsidy may be derived from mil levy or sales tax used to support operations
    47. 47. Comparison Membership Costs Cost (Household Rate) Recreation Centers
    48. 48. 2014 Proposed Rollfoward of the Primary Funds Administrative Est. Fund Balance @ 12/31/12 Estimated Net Revenue 2013 $ 1,077,160 $ (776,445) Estimated Fund Balances 12/31/13 $ 300,715 Proposed 2014 Net Revenues ( $ 272,305* $ 429,490 95,335 28,410) Estimated Fund Balances 12/31/14 Recreation $ 524,825 ( 1,970) $ 522,855* * Represents 1 month of Admin & 2/3 month of Recreation Operating Expenses
    49. 49. 2014 Budgets Backcountry Fund
    50. 50. 2014 Backcountry Fund Mission Statement Pro vid e v is ito rs with unp re c e d e nte d o p p o rtunitie s to e njo y na ture ne a r whe re the y liv e , while p ro te c ting a nd c o ns e rving na tura l, a rc ha e o lo g ic a l, his to ric a l, a nd c ultura l re s o urc e s fo r the e njo y m e nt o f future g e ne ra tio ns .
    51. 51. 2014 Backcountry Fund Highlights • Will add $70,000 in three miles of trails • Programs: Youth Camps, Hayrides, Camping, Horseback Riding, Elk, Turkey, and Coyote Hunts, Nature Hikes and Education, Archery Range, – Will expand our youth camps this year to allow 200 more kids into the camps. – Turkey and coyote hunts new in 2014 – Elk Banquet and hunting earn over $12,000   • Noxious weed management, hunting, restoration, volunteer projects • Cattle grazing, historical site assessments on homesteads
    52. 52. 2014 Backcountry Fund Summary Revenues $ 237,210 Less: Expenses $ 443,430 Net Operating Revenues (Deficit) ($206,220) Transfer from Recreation Fund $ 210,000 Net Income after Transfers $ Less: 3,780 Capital Expenditures Reserve Transfer Transfer from OSCA Fund ($ 83,100) ($ 50,000) $ 77,500 Net Income (Deficit) after Transfers ($ 51,820) Add:
    53. 53. 2014 Backcountry Fund Capital & Reserve Expenditures Capital • Trails • Signs • Tables, chairs, computer, saddle Total Capital Expenditures $ 70,000 7,500 5,600 $ 83,100 Reserve • Signs Total Reserve Expenditures 7,500 $ 7,500
    54. 54. Highlands Ranch Cultural Affairs Association 2012 Separate 501(c)3 Cultural Organization • • • • 37 Cultural Events Event Revenues SCFD Grant Funded Community Partner funded
    55. 55. Highlands Ranch Cultural Affairs Association 2014 Revenue SCFD Grants Community Partners HRCA & Other Donations Event Fees $ 85,000 56,000 5,200 86,825 $233,025 Expenses Direct Event Expenses HRCA Staff & Facilities Other Expenses Net Revenues $172,650 48,600 11,775 $233,025 $ 0
    56. 56. HRCAA Revenue Sources
    57. 57. Highlands Ranch Community Scholarship Fund 2013 • 501(c)3 Organization • Funded by Sponsorships & Event Revenues • $186,000 in Scholarships from 2004-2013
    58. 58. Highlands Ranch Community Scholarship Fund 2014 Revenues Operating Expenses (includes 25 scholarships @ $1,000) $36,470 28,700 Net Revenues Notes: Estimated accumulated YE Fund Balance $ 7,770 $32,470
    59. 59. Questions?

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