2014 Budget2014 Budget

HistoryHistory

• Revenue & Expense Adjustments 2010 – 2014

– Since 2009 there has been one RFCA increase of $8 or 1.75% in 2011

– Since 2009, there has been no AFCA increase

Revenue Generation & Revenue Generation & Cost Control SummaryCost Control Summary

• What has Highlands Ranch Community Association done to combat rising Assessment increases? (2010 to 2014)

Revenue generation and cost control measures have saved the association over $4 million and held assessments lower:

 • Administrative Function Revenues & Cost Reductions

$1,460,0000– Avoiding Assessment Increases of approximately $9.76 /

year  • Recreation Function Revenues & Cost Reductions

$2,650,000– Avoiding Assessment Increases of approximately

$18.19 / year

 • Total Assessment Increases avoided $27.95/

year

Administrative Revenue Administrative Revenue IncreasesIncreases

Increased Revenues by over $1,100,000

• Transfer fee increased from $50 to $100 to $130

• Increased Sub-Association Management Services

• Created new web advertising (Yellow Pages)

• Implemented new Architectural Submittal fees

Administrative Expense Administrative Expense Reductions / ControlsReductions / Controls

– Decreased expenses by over $360,000• Limited staff pay increases• Reduced health insurance costs

– Increased health plan deductibles and co-insurance– Increased employee contributions– Increased participation in lower cost HSA plan

• Reduced HRCA 401(k) plan contribution from 7% to 5%• Reduced newsletter and invoicing production and mailing costs

by introducing opt-out option• Changed Administrative Assessment billing to once a year vs.

quarterly • Renegotiated office supplies and equipment contracts• Reduced telephone lines and renegotiated managed service

contract• Reduced payroll service costs• Reduced volunteer, business and community expenses

Recreation Revenue Recreation Revenue IncreasesIncreases

– Increased Revenues by over $550,000

• Growth in recreation programs despite competition and

depressed economy

• Increased program fees

• Introduced business & non-resident memberships

• Increased guest fees

Recreation Expense Recreation Expense Reductions / ControlsReductions / Controls

Decreased expenses by over $2,100,000

•Limited staff payroll increases

•Reduced staffing (programming, operating hours, &

maintenance)

•Wage freeze on all seasonal employees

•Reduced health insurance and 401(k) contribution costs

(see administrative comments above)

•Reduced facility operating hours

•Reduced registration and membership hours

•Closed or reduced childcare facility hours

Recreation Expense Recreation Expense Reductions / ControlsReductions / Controls

• Reduced utility gas costs by using Seminole verses Xcel

• Consolidated recreation facility contracts (from 4 to 1) for

maintenance, snow removal, landscaping, janitorial and

office supplies

• McKinstry projected utility savings of $163,000 annually

• Eliminated trash service expense by using Preferred

Provider, ProDisposal

• Reduced Activity guide and Newsletter production and

mailing costs by offering homeowners online options

2014 Recreation Fund2014 Recreation FundDeferred Deferred Maintenance/ExpenseMaintenance/ExpenseCapital and Reserve Expenditures eliminated or deferred to future•Administration Fund (Capital)

– New Accounting Software $40,000– Web Site Upgrade $20,000 $ 60,000

•Recreation Fund (Capital)– Web site Upgrade $20,000– Kiosks and Virtual Tour Website $11,200– Digital Displays $20,000– Tennis court divider nets and shade structure $24,000 $ 75,200

•Recreation Fund (Reserve)– NR Gym & Racquetball Court Flooring & walls $160,000– NR Lobby Remodel $400,000– Continuous lap pools $ 75,000– Reduction in emergency provision $ 65,000

$700,000

•Total $835,200

2014 Assessments2014 Assessments

  Actual Revised 2014 Assessment

FunctionActual 2013

Reverse 2013

AdjustmentBC

Adjustment

Revised 2013

Assessment 2014

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

2014 Assessments2014 Assessments

• What is the $4.00 Administrative assessment increase for?

– Staff payroll increases (3%) $ 44,400– Increase in health insurance & benefits $ 24,600– Anticipated decline in re-sales (transfers) $ 21,400

– Marketing and Rebranding $ 30,000

New Admin Expenditures $ 120,400

New Admin Expenses per home $ 4.00

2014 Assessments2014 Assessments

• What is the $28.00 Recreation assessment increase for?– Staff payroll increases (3%) $ 202,600– Increase in health insurance & benefits $ 90,600– Bank, insurance & credit card fees $ 20,000– Reserve Study $ 40,000– Increase in utility rates $ 31,000– Supplies & Expenses Inflation (Non-Utilities) $ 35,900 – Increase in Capital Expenditures $ 131,300– New Capital Improvement Fund Provision $ 250,000– Other Operating expenses $ 14,600– New Rec Expenditures $ 816,000

New Rec Expenses per home $ 28.00

HRCA Assessments HRCA Assessments Compared to CPICompared to CPI

• Review CPI Data as it applies to the Community Declarations

HRCA Administration HRCA Administration Assessments Compared to Assessments Compared to CPICPI

HRCA Recreation HRCA Recreation Assessments Compared to Assessments Compared to CPICPI

2014 2009 Variance % IncreaseHRCA Admin $ 48.00 $ 51.00 $ (3.00)

(5.88%)HRCA Rec$492.00 $449.00 $ 43.00 9.58%

HRCA Total $540.00 $500.00 $ 40.00 8.00%

 

CPI Admin $ 53.00 $ 47.87 $ 5.13 10.72%CPI Rec $564.02 $509.42 $ 54.60

10.72%

CPI Total $617.02 $557.29 $ 59.73 10.72%

Variance $ 77.02 $ 57.29 $ 19.73 2.72%

HRCA Assessments Compared HRCA Assessments Compared to CPIto CPI

Recreation Assessment Recreation Assessment IncreaseIncrease

•2014 RFCA increase from $487 to $492– $5 increase meets both criteria below of Declaration– Can be approved by the BOD without delegate vote

•Limitations (both met):•May not be > Maximum RFCA = $564.02• RFCA starting from $298.56 in 1993 compounded by CPI

•May not be > 120% of preceding year RFCA = $584.40•2013 RFCA = $487.00 * 120%

Administrative Administrative Assessment IncreaseAssessment Increase

• 2014 AFCA increase from $21 to $48– $27 increase does not meet both criteria and requires a 2/3

voting power of delegate body

• Limitations (not met):• May not be > Maximum AFCA = $53.00• AFCA starting from $24.00 in 1982 compounded by CPI

• May not be >120% of preceding year AFCA = $25.20• 2013 AFCA = $21.00 * 120%

2014 Total 2014 Total AssessmentsAssessments

Year $/Year $/Qtr

2014 $540.00 $135.00

2013 $508.00 $127.00

Increase $ 32.00 $ 8.00

Percent Increase 6.3%