FINANCE COMMITEE
MINUTES
FINANCE COMMITTEE MEETING November 29, 2010
BALANCE SHEET at the end of the fiscal year 10/31/10 $ 76,248 RBC (Operating, Laundry, Money Market)
56,850 BOA (Reserve Account)
14,480 SUN TRUST (Insurance Fund for next year)
$148,249 Total
PROJECTS SCHEDULED & NECESSARY Balcony restoration & waterproof building finished; Cooling tower refurbished; 12 Stack hot water risers replaced; water pipes to hot water heaters on roof; cleaned all sewer drains; elevators updated; south side expansion joint repaired to stop garage leaks; lobby updated; north side parking lot patched and coated.
BAD NEWS
This past winter was cold and our Boiler shut down a cople of times which cost us high water and gas. About $40,000 extra out of our operating account. Also higher this year were elevator maintenance $6,000; Cable $2,000; lawn upkeep $2,000.
GOOD NEWS
$100,000 difference between project expenses on west/north side of building and east/south side of building. Electric costs were down $11,000; Insurance costs were down $15,000 with AAA rated carriers and 2% deduction instead of 5%.
In house projects included new ramp, cleaning of cooling tower.
ACCOUNTS RECEIVABLE was $84,000 end of last fiscal year and
$23,000 end of this fiscal year.
September 17, 2010
Dear Daytona Beach Ocean Towers Unit Owner:
Proposed Budget #1 covers a 7% increase over the current budget and Proposed Budget #2 is a $40.5% increase to fully cover Mandated Reserves if no Waiver is approved.
Our current Budget was adopted in 2007 and was a 6% Decrease from the previous budget. This Budget #1 7% IINCREASE is required principally to raise the amount set aside in our DEDICATED RESERVE FUND TO 10%
In the past Reserves have been funded with an extra fee each July invoiced at $57,192. This is 1/13th or 7.69% of the annual total budget. This has not provided a sufficient "cushion" to avoid Special Assessments from time to time for necessary Major Capital expenditures. In addition, lenders have become resistant to writing mortgages for units in the building due to the meager Reserve set aside. As a result, sales are becoming limited to CASH BUYERS. Such a limited market has a negative affect on the market value of All units, whether or not they are for sale. An increase Reserve Fund of 10% or $79,554 invoiced annually would meet lenders requirements and also enable us to build up a more realistic Reserve Fund.
Our Reserve Fund covers 8 basic Major Capital expense components. Based on their estimated replacement cost and useful duration, we should be setting aside $125,500 annually to cover these espenses. Obviously, even this 7% increase to $79,554 annually falls short, but we do have the usual option of WAIVING full Reserve funding. If this is is not Waived, annual invoices for the coming fiscal year would be 40.5% higher than those shown below.
To simplify payments, there will be just 12 INVOICES INSTEAD OF 13 EACH YEAR. The new monthly payments will be:
$283 One Bedroom $132 Business #12
$326 One Bedroom $68 Business #14
$423 Two Bedroom $395 Business #15
$140 Business #9 $295 Business #16
$132 Business #10 $68 Business #110
There are no invoices for Association owned Residential unit 102 and Business units 5 & 11, and an additional charge for utilities is added to Business unit 110.)
These results seem much higher per month, but by eliminating the extra monthly July payment, the 12 regular invoices mean one bedroom owners will be paying just $198 more annually, one bedroom deluxe units will be $233 more, and two bedroom units will be increased b y $435 per year. Collected funds will simply be deposited 10% to the Reserves Fund and 90% to the Operating Account. This will also simplify bookkeeping.
Budget Ballots were distributed on September 24, 2010 and the tally will be reported at our Budget Board Meeting on October 12, 2010 at 6:30 PM in the Clubhouse.
