Memo To: Board of Directors From: Coreena Fetterhoff , Controller Treasurer & Charles King, General Manager Date: November 18, 220 Re: Motion- Approve 2021 Budget Version 2 and Fee Schedule V4 Motion I move to approve the 2021 Budget Version 2 and Fee Schedule V4 as presented. Background The proposed 2021 Budget V2 is attached. Highlights include: • Recognition of $3MM grant income from PPE loan forgiveness • A CPI Increase to Assessments of .3% • Year five & six ($1MM) of the $3MM Water Plant payback from Public Utilities expediting 2021. • Completion of Reserve account minimums met for 2021 • Budgeted increases for pay grades 2-5 to accommodate new minimum wage rates • 3% Utility rate increase • Usage of 2020 rollover funds to support building capital fund accounts • $250k rollover from the 2020 escrow fund transfer for culvert repairs The Fee Schedule V4 change includes: • Adjusting the Super Senior Annual Golf couples and Green Fee & Cart Super Senior pricing
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Memo To: Board of Directors
From: Coreena Fetterhoff, Controller
Treasurer & Charles King, General Manager
Date: November 18, 220
Re: Motion- Approve 2021 Budget Version 2 and Fee Schedule V4
Motion
I move to approve the 2021 Budget Version 2 and Fee Schedule V4 as presented.
Background
The proposed 2021 Budget V2 is attached. Highlights include:
• Recognition of $3MM grant income from PPE loan forgiveness
• A CPI Increase to Assessments of .3%
• Year five & six ($1MM) of the $3MM Water Plant payback from Public Utilities expediting 2021.
• Completion of Reserve account minimums met for 2021
• Budgeted increases for pay grades 2-5 to accommodate new minimum wage rates
• 3% Utility rate increase
• Usage of 2020 rollover funds to support building capital fund accounts
• $250k rollover from the 2020 escrow fund transfer for culvert repairs
The Fee Schedule V4 change includes:
• Adjusting the Super Senior Annual Golf couples and Green Fee & Cart Super Senior pricing
HOT SPRINGS VILLAGE PROPERTY OWNERS ASSOCIATION
2021 BUDGET
VERSION 2
TABLE OF CONTENTS
PAGE TITLE
1 2021 BUDGET GUIDANCE
2 KEY STRATEGIC & POLICY COMPLIANCE
3 STRATEGY OVERVIEW
4 CONSOLIDATED BUDGET OVERVIEW
5-6 2021 BUDGET -OPERATING OVERVIEW BY DIVISION
7 COMPENSATION OVERVIEW
8 ADMINISTRATION DIVISION SUMMARY
9 INNOVATION DIVISION SUMMARY
10 PUBLIC SAFETY DIVISION SUMMARY
11 PUBLIC WORKS DIVISION SUMMARY
12 PUBLIC UTILITIES DIVISION SUMMARY
13 FOOD & BEVERAGE DIVISION SUMMARY
14 GOLF DIVISION SUMMARY
15 RECREATION DIVISION SUMMARY
16-18 CAPITAL EXPENDITURES
19-39 APPROVED 2021 FEE SHEDULE (V4)
Page 1 of 39
Goals
• Ensure depreciation expense does not out pace capital spending on infrastructure
Total Capital Budgeted = $4.4mil
Total Estimated Depreciation = $3.4mil
• Ensure owner's equity remains stable, at a minimum
Assets - liabilities +/- net income > zero (change to equity)
Reserve additions of $1,174,768, $1mil net increase to fixed assets, and a reduction in debt of
$1.8mil including PPP loan and an increase of $1.6mil without PPP loan an increase of annual debt of $226k, combined indicate an increase to owner's equity.
• Ensure capital reserve balances equal 5/5th of the 5-year reserve plan
Public Utility Reserve 5/5th = $1,996,035
Non-Utility Reserve 5/5th = 2,388,000
Add $476,800 to Golf Reserve
• Build capital fund accounts allocated to non-reserve capital expenses
Utility capital fund addtions of $1,796,926
Non-utility capital fund additions of $815,084
Policies
• Budget Policy
Strategies identified in adopted budget guidance
• Audit & Funds Control
Budget is developed ensuring compliance with GAAP accounting
• Debt Usage and Management
Estimated Viability Ratio for 2020 - 3.36 (should not fall below 1.1)
Estimated Debt Service Coverage Ratio for 2020 - 4.59 (1.25 or higher but not below 1.1)
• Reserve Funds
Public Utility Reserve - see note above
Non-Utility Asset Repairs & Replacements - see note above
Operating Reserves- one month operating expense is the targeted level of reserves $2.5mil; per policy, current investments and line of credit meet targeted reserve levels.
• Delinquent Accounts/Bad Debt Write-Off Policy
100% of all balances that are more than 365 days outstanding and any other assessments deemed
"uncollectable" shall be accrued as a provision for bad debt and shall be included as a separate line
in the approved annual budget.
• Purchasing & Contracts Policies
Both policies state spending & approval levels for the GM and staff; all combined operating revenues and expenses over $50k are approved by the board. Any new contracts or unbudgeted expenses over $50k will be brought to the Board for approval.
Key Strategic & Policy Compliance Summary
Page 2 of 39
Revenue
0.3% CPI Increase to AssessmentsImproved realtor program to increase the sale of POA owned lots - Goal to sell 50 lots in 2021
100 Discovery Packages in 2021 with continued growth in future years
Increase in all vehicle decals - PO decals, NPO decals, and Workpasses
Strategic focus on increasing new home construction with a goal of 100 new roof tops
3% utility rate increase based on 2017 rate study; 3% increases planned in each future year as well.
Restructure of fees for water & sewer service connections & offer Duplex grinder systems
Introduce non professional survey fee
Increase in bag tag fees from $2.50 for 5 bags to $5.00 for 5 bags
Increase in library pass to $20
Restructure of facility rental fees
Indroduce annual bundle packages trial
Extended hours of operations for POA Restraunts
Increase of Golf Cash Card program to $1,100
Change to 12 month rolling annual recreation memberships (exclusion of Golf)Outdoor Pool - Increase annual pool membership by 25% through better programming and a pricing structure
that encourages participation.
Increase boat rental availability
Deferred Maintenance Reduction
Repair/replacement of at least 5% of culverts identified in the ten-year culvert replacement plan.
$250k rollover in funds culvert replacement
Mower and bunker rake replacement for Golf courses
EFIS repair to Ponce De Leon Center
Sanitation truck replacement program for Side Load trucks
4 new positions added in Golf maintenance
Marketing
Discovery package focus in marketing efforts
Build real estate program to facilitate POA lot sales
Consolidate staff resources and other marketing related expenses into one department
Targeted F&B program to improve quality and service
Reserves
Add $399,207 to Public Utility Reserves to reach 5/5th of a five-year plan
Add $476,800 to Golf ReservesAdd $298,761 to Non-Utility Reserves completing the 5/5th of the five-year plan
Subsidization
Paperless Accounts Payable software to increase efficiency and reduce staff time across the organization.
Security Camera systems at recreation & operational facilities as part of an overall risk management program.
Improve efficiency and coordination of Compliance & P&I functions
Increased gate personnel budget to support an additional staff person on duty at the East Gate at all times.
Close Waypoint for 3 months in winter
Continue menu pricing evaluation & Cost of Goods reduction focus in Food & Beverage
Freezing unfilled position for 2020 or increasing PT hours in proshops
New commercial, operational, and residential Development
Increase from 75 new home starts to 100 with planned incremental growth in future years.
Land acquisition and divestiture
Continue to acquire lots in strategic areas with zero to low cost acquisition strategies
Debt addition/reductionNo planned debt additions other than continuations of existing finance/lease programs with the exception of
the capital lease program for the sanitation trucks replacing a current liability
Strategy Overview
Page 3 of 39
2021 2020 2020 2019 Incr/(Decr) Incr/(decr)
Budget Budget Forecast Actual PY Budget PY Forecast
Minimum wage increasing from $10.00- $11.00 - 10% Increase budgeted for Paygrades 2-4 and 2.4% for paygrade 5 as part of gradual implementation of increasing minimum wage rates. No salary increases budgeted at Level 6 and up, to pay for minimum wage increases.
1,925,588$
Compensation Overview
Page 7 of 39
ASSESSMENTS2021 BUDGET 2020 BUDGET 2020 FORECAST 2019 ACTUAL
Capital (200,000) (255,000) (94,525) (103,001) (63,016) (55,000) -22% 105,475 4%
Total Net Administration (2,854,591)$ (3,023,411)$ (2,853,391)$ (2,737,458)$ (1,867,843)$ (168,820)$ -6% 1,200$ 0%
Budgeted Employee Counts 2020 2019 Difference
Full Time 23 24 -1 0
Part Time 7 5 2 replaced full time position with 2 part time
Total 30 29 1
DIVISION DESCRIPTION
Main Goals & Objectives for 2021
KEY STRATEGIES
Revenue
.3% CPI Increase to Assessments
Expense
paperless purchasing system to be implemented
first year for service dept. allocations based on usage
Expenses continuing CEO salary through max of July
Capital
new phone system
ADMINISTRATION DIVISION SUMMARY
This division includes the Administration department which includes Administration, Accounting, Member Services, Purchasing, & Risk Management and the Information Technology & Human
Resources Departments.
Improve efficiency in cost and time management with transaction processing and reporting.
Page 8 of 39
02021 BUDGET 2020 BUDGET 2020 FORECAST 2019 ACTUAL
Capital - (15,000) (6,182) 0 (4,121) (15,000) 100% 6,182 100%
Total Net Innovation (1,673,980) (1,220,420) (1,059,295) (442,654) (718,590) 453,560 37% 614,685 58%
2021 2020 Difference
Budgeted Employee Counts 11 15 -4
Full Time 4 6 -2
Total 15 15 15
DIVISION DESCRIPTION
Main Goals and Objectives for 2021:
Development - Focus on lot consolidation (clearing titles of POA owned lots and strategically aquiring COSL and NRPI delinquent lots) and suspension strategies as determined by BOD.
Key Strategies:
Revenue
No fee increase.
Conservative revenue expectations with consideration given to continuation of COVID-19. Anticipate better than average new home starts which will positively impact revenue.
Expense
Decrease in most categories.
Conservative budget but reorganization includes moving gates from Public Safety to Compliance.
Capital Priorities:
None.
Marketing, Tourism & Communications -Also combined two divisions from prior years. Strong focus on lot sales and Discovery Package bookings. Improved member communications and Real Estate Partners. Increased
awareness in SEO, website and Social Media traffic.
Permitting, Inspections & Compliance - This is a combination of two separate divisions in the past (P& I and Compliance). Also added Gates to this division which was previously in Public Safety.
Strong focus on gates in the coming year. Improved security and efficiencies in operation. Will re-bid the Allied Barton Contract to determine if our costs are still in line with market standards.
Capital (123,000) (25,000) (20,205) (34,690) (13,470) 98,000 392% 102,795 509%
Total Net Public Safety (4,097,871) (4,076,082) (4,064,349) (3,656,731) (2,719,089) 21,789 1% 33,522 1%
Budgeted Employee Counts 2020 2019 Difference
Full Time 52 49 3 *1 Additional Firefighters / 2 additional police
Part Time 2 2 0
Total 54 51 3
DIVISION DESCRIPTION
FIRE
Main Goals and Objectives for 2021:Safety, education, fire prevention, maintain a firewise community and protecting life and property.
Key Strategies:
To grow the Police department incrementally so that we can provide the essential services needed for our growing community.
Revenue
The only revenue the Fire Department has, comes from members that pays for our contract with LifeNet EMS.
Expense
The main expense for both the Fire and Police Departments is payroll. With the Federal wage increases for the year 2021, I have added a wage increase across all employees.
Capital Priorities:
Fire Department has not added any capital for the year 2021.
Police Department equipment to keep our officers safe and serving our members.
PUBLIC SAFETY DIVISION SUMMARY
The Hot Springs Village Police and Fire Departments are committed to providing the property owners of Hot Springs Village, their guests, and all others coming in contact with representatives of our department the most effective, efficient and professional police and fire protection services available.
With the wide range of knowledge within our department we have kept costs down on repairs to pumpers. Maintaing a efficient and effective Department through training, education
and allowing everyone a voice to reach our goals and accompishments.
To add 2 officers to strengthen our police force and help provide a safer enviroment for the officers. To ensure we continue to provide exceptional service for our residents. We must grow our department to serve the needs of our Village as it grows.
Available for Reserves (0) 718,796 924,015 308,533
Budgeted Employee Counts 2021 2020 Difference
Full Time 34 34 0
Part Time 0 0 0
Total 34 34 0
* Interest is in Operating Expenses - Total Debt Service $ 356,300
DIVISION DESCRIPTION
Main Goals and Objectives for 2021:
Maintain State Compliance Requirements and provide reliable and safe water supply and water reclamation.
Key Strategies:
Lean operations, maintenance, and capital spending goals for 2021 as another year of potential Covid working environment.
Revenue
3% Rate Increase based on recomendations from 2017 Rate Study. This cost of service plan included 3% rate increases annually for years 2-5 of the plan.
Revenue projections based on actual meter count averages for base rates and low end of three years prior to 2020, and new homes projected to increase to 100 in 2021.
Expense
Maintain adequate spending to sustatin existing water and wasterwater systems.
Capital Priorities:
Mini Excavator, Utility Hoist Truck, SCADA at Cedar Creek, and the Emergency Water Supply Connection with North Garland County Regional Water District
PUBLIC UTILITIES DIVISION SUMMARY
The Public Utilities Department consist of one (1) 6 MGD Water Treatment Plant, two (2) 1 MGD is funded by Utility Service Rates which should cover the cost of providing the service, maintaining the utility infrastructure and funding reserves for future repairs and replacements for Utility Infrastructure. This department is not funded by Assessments. The PU Department should also fund any fleet or equipment assets required for its operations and any related debt service.
Capital (456,800) (372,000) (210,492) (1,360,685) (203,787) 84,800 23% 246,308 117%
Total Net Recreation (2,291,240) (2,251,037) (2,001,261) (2,921,840) (1,334,901) 40,203 2% 289,979 14%
Budgeted Employee Counts 2021 2020 Difference
Full Time 24 28 -4
Part Time 49 74 -25
Total 73 102 -29
DIVISION DESCRIPTION
Main Goals and Objectives for 2021:
Key Strategies:
Revenue
Diversity and expand options for annual amenity purchases.
Expand payment options in order to make it easier for members to purchase.
Focus on sales and internal marketing
Expense
Extremely conservative with reductions in most categories.
Reorganization includes moving the Grounds Maintenance department from Public Works to Recreation.
Capital Priorities:
Items included in capital are considered must have items.
Capital includes one new boat for the lease fleet at the Desoto Marina which has a ROI of less than 18 months.
Pickleball - Make corrections to Pickleball Courts and build trust with Pickleball Club. Expand hours and improve response time to court maintenance corrections.
Coronado Center - Continue to look for ways to monitize building. Develop opportunities to use CCC for extension of Fitness Center and availability of new and or additonal classes.
Fitness Center - Change operational focus to sales with specific goals for new member recruitment and retention. Encourage Insurance Re-imbursement members to use the Fitness Center more frequently maximizing the revenue potential.
Outdoor Pool - Increase annual pool membership by 25% through better programming and a pricing structure that encourages participation.
RECREATION DIVISION SUMMARY
Parks and Recreation Administration, Parks and Grounds Maintenance, Outdoor Recreation, Dog Park, RV Park, Pickleball, Tennis, Desoto Marina, Coronado Community Center, Library, Coronad Fitness Center, Ponce de Leon Center (Woodlands), Outdoor Pool
Parks and Recreation Admin - Streamline event programming to include fewer events but more meaningful and farther reaching audience. Focus on sales and staff development to improve customer relations. Parks and Grounds Maintenance - Proactive approach and continual improvement of all Recreatio Maintenance areas. Reduce costs where possible through use of sustaniable materials. i.e. lawn and flower beds.
Page 15 of 39
ACCOUNT TYPE
ENDING
DEPT DEPT DESCRIPTION CAPTIAL DESCRIPTION
TOTAL 2021
BUDGET
1 COMPUTER EQUIPMENT A150 INFORMATION TECHNOLOGY PHONE SYSTEM 200,000$
2 FOOD & BEV EQUIP FB20 BALBOA CLUB REFRIGERATOR 5,000$
Tennis - Super Senior Couple(Annual) w/Upfront Payment $374.74 $393.75
Tennis - Super Senior Couple (Annual) w/ACH Billing (12 month signed contract required) $430.95 $452.81
Tennis - Employee (Annual) $214.14 $225.00
Page 26 of 39
2021 Fee Schedule
2020 2021 Approved
TENNIS 30 DAYS
Tennis - Property Owner (30 Day) $68.00 $71.50
Tennis - Super Senior (30 Day) $34.00 $35.75
Tennis - Employee (30 Day) $34.00 $35.75
Tennis - Non Property Owner (30 Day) $108.80 $114.40
TENNIS HOURLY RATES
Tennis - Property Owner (1 Hour) $3.40 $3.60
Tennis - Property Owner (2 Hour) $6.80 $7.15
Tennis - Super Senior (1 Hour) $1.70 $1.80
Tennis - Super Senior (2 Hours) $3.40 $3.58
Tennis - Employee (1 Hour) $1.70 $1.80
Tennis - Employee (2 Hour) $3.40 $3.60
Tennis - Family (1 Hour) $4.59 $4.85
Tennis - Family (2 Hour) $9.18 $9.65
Tennis - Non Property Owner (1 Hour) $5.44 $5.70
Tennis - Non Property Owner (2 Hour) $10.88 $11.45
Tennis - Reciprocal (1 Hour) $5.44 $4.85
Tennis - Reciprocal (2 Hours) $9.18 $9.65
Tennis - Junior Member Non Prime (2 Hours) $2.00 $2.10
Tennis - Junior Member Prime (2 Hours) $6.80 $7.15
Page 27 of 39
2021 Fee Schedule
2020 2021 Approved
Dog Park
Dog Park Access Annual Fee - Property Owner $25.00 $30.00
Dog Park Access Annual Fee - Non Property Owner $43.00 $48.00
Dog Park Access Fee One Week - Property Owner $7.50 $9.00
Dog Park Access Fee One Week - Non Property Owner $15.00 $17.40
DeSoto Recreation
Mini-golf Club & Ball Rental per Round $3.00 No Change
Annual Recreation Bundles
Annual Recreation Fee - Property Owner Bocce Ball, Dog Park, Fitness, Lawnbowling, Library, Outdoor Pool, Pickleball, and Tennis $550.00Annual Recreation Fee ACH - Property OwnerBocce Ball, Dog Park, Fitness, Lawnbowling, Library, Outdoor Pool, Pickleball, and Tennis
Annual Recreation Fee - Property Owner CoupleBocce Ball, Dog Park, Fitness, Lawnbowling, Library, Outdoor Pool, Pickleball, and Tennis $962.50Annual Recreation Fee ACH - Property Owner CoupleBocce Ball, Dog Park, Fitness, Lawnbowling, Library, Outdoor Pool, Pickleball, and Tennis
With Property Owner Couple purchase each additional property owner dependentBocce Ball, Dog Park, Fitness, Lawnbowling, Library, Outdoor Pool, Pickleball, and Tennis $150.00
Page 28 of 39
2021 Fee Schedule
2020 2021 Approved
FITNESS ANNUALS
Fitness Center - Individual (Annual) w/Upfront Payment $400.00 $450.00