NIGUEL SHORES MID-YEAR FINANCIAL UPDATE
As of June 30, 2012
The Niguel Shores Finance Committee is comprised of 6 owners and meets on a monthly basis to review, monitor and make fiscal recommendations on topics such as budgets, expenses, investments and reserves. One of the objectives for 2012 is to provide owners a mid-year update on the 2012 budget, actuals to date and comments on expectations for year-end variances. The mid-year update includes expenses and income incurred thru June 2012.
The Committee has organized the information from a top line perspective, with all budgeted line items included. Various committees within Niguel Shores recommend and monitor these expenses on a monthly and sometimes weekly basis and provide input to the Finance Committee on potential variances and monies needed in the upcoming year. The budget process for 2013 will begin in June 2012 with a Reserve Study and continue thru October with committees recommending monies needed for 2013. The Finance Committee reviews these recommendations for clarity and provides a total budget recommendation to the Board in late October. The Committee could not function without transparency from the various committees, and wishes to thank all involved for their never ending hard work on all our behalf.
The Finance Committee welcomes questions and feedback on this mid-year update and invites you to submit comments/questions to the Niguel Shores website (www.niguelshores.org). Members of the Finance Committee will also be available at the August 7 Open Board meeting for comments and questions on any of the provided information.
NIGUEL SHORES INVESTMENTS
The Niguel Shores investment monies are monitored and reviewed on a monthly basis by the Controller, Niguel Shores CFO and an Investment Sub-Committee, comprised of several Finance Committee members. In addition to this committee and staff within Niguel Shores, an agent is utilized to optimize the overall quality of our laddered CD portfolio.
The investments of Niguel Shores are required to be placed in financial instruments insured by the Federal Government as required under the Davis-Sterling Common Interest Development Act.
The budgeted yield for investments in fiscal year 2012 is $43,000 and the Committee believes that target will be achieved. Niguel Shores currently has $3,257,426 within the investment portfolio.
INCOME UPDATE
2012 Budget 2012 Actuals $ Remaining
$3,350,100 $1,696,584 $1,653,516
The major Income items include quarterly assessments, bank interest income, document response, architecture and gate access fees and newsletter commercial ads. All the major items, except gate access fees and commercial ads are trending better than anticipated. The commercial ads are 15% down versus budget and we do not expect to achieve budget in this area. Overall, we anticipate the income to meet the budget for year-end 2012.
MAINTENANCE BUDGET UPDATE
2012 Budget 2012 Actuals $ Remaining
$484,325 $245,030 $239,295
Maintenance is one of the largest budgets for Niguel Shores and is closely monitored and managed to ensure community needs are met and expenditures are reasonable and within budget. The Maintenance Committee assists the Niguel Shores staff identifying maintenance issues, ensuring all work is completed within budget and adheres to proper code, workmanship and guarantees.
As a point of information, the Niguel Shores Maintenance staff consists of 4 full-time and 1 part-time employees. The daily maintenance and some special projects are performed by the Facility Manager and staff. In addition, the Facility Manager oversees outside contractors that complete various projects within Niguel Shores.
The year to date expenditures for maintenance needs is slightly over budget, with some monthly variances due to scheduled or unscheduled maintenance. We are anticipating a budget variance for pool supplies, due to cost increases for chemicals. Overall, Maintenance is expecting to remain within their budget for 2012. Niguel Shores is a community with some infrastructure over 40 years old; hence the Maintenance Committee is considering several long term projects that will require reserve funding over the next few years. Examples of projects being considered are pool decking, concrete replacement and repair, electrical needs, and beach fencing.
LANDSCAPE BUDGET UPDATE
2012 Budget 2012 Actuals $ Remaining
$927,300 $386,019 $541,281
The Landscaping Budget includes monies for expenses such as water, pest control, sprinklers, tree work and routine planting/slope maintenance. This budget does not include the master landscape budget. The Landscape Committee meets on a monthly schedule to recommend work and has made every effort to stay within the budget. To date, the landscape budget is on track and the expectation is to spend all remaining planting monies by year end 2012. The water budget is currently showing a positive variance and we anticipate ending the year with a small savings.
TRAFFIC AND SAFETY BUDGET UPDATE
2012 Budget 2012 Actuals $ Remaining
$345,100 $165,248 $179,852
The Traffic and Safety budget includes funds for fobs, decals, and surveillance equipment at the gates, spa and in the office. In addition, this Committee monitors the contract for our guard services. To date, this budget is showing a positive variance, partially due to the timing of supply purchases. We expect the Traffic and Safety budget to remain within budget for the remainder of 2012.
GENERAL AND ADMINISTRATIVE BUDGET UPDATE
2012 Budget 2012 Actuals $ Remaining
$1,593,375 $785,593 $807,782
The General and Administrative budget (G&A) includes operational costs such as printing, postage, computers and other services needed to manage the Association. In addition, this cost center includes payroll for the office staff and legal expenses. Although the overall budget is showing a positive variance for the year, legal services is over budget by 39% and collection costs are trending higher than anticipated. Collection costs will be offset as this type of charge is assessed to the delinquent homeowner. Expectation is legal services will continue to remain over budget for 2012.
NIGUEL SHORES RESERVE AND STUDY UPDATE
A review of the Association’s reserves is required every three years by an independent contracted consultant. The independent consultant specializes in performing reserve analysis and provides recommendations. The Niguel Shores General Manager, Controller and representatives of the Finance and Maintenance Committees also provide input to the consultant during the analysis. During the interim years, a similar review is conducted by the in-house staff and committees.
The purpose of the reserve analysis is to identify certain assets in the common areas of Niguel Shores that will need to be repaired or replaced within a defined timeframe. Since the cost to repair or replace these assets may be expensive, the reserve analysis identifies and determines the cost to repair or replace and determines a financial plan to accumulate the needed funds.
A partial list of assets identified in the reserve analysis is: street resurfacing, fencing, lighting/electrical, pool, tennis courts, irrigation, slope repair and master landscape. As of June 30, 2012, the balance in the reserve funds is $2,812,033. For the calendar year 2012, 25% of estimated Association annual income is allocated to the reserve.
The reserve review currently being prepared will be completed in late summer and a summary document will be distributed to all Niguel Shores Association owners in conjunction with the annual assessment notice in November 2012.
Post a Comment