2019 AH Annual Assessment Guiding Principles Approach to - - PowerPoint PPT Presentation

• 2019 AH Annual Assessment
• Guiding Principles
• Approach to Covering our Hurricane

Losses – Hurricane Wilma – Hurricane Irma

• Cash Positions Since January 2017

– Fidelity Brokerage Account

• 2018 vs 2019 Operating account analysis
• 2018 vs 2019 Reserve Analysis
• 2018 vs 2019 Revenue Analysis
• 2019 Budget by unit
• New Payment Method
• Summary

Lost Depreciation: $ 789,947.00 Windows Exterior including Tile Pool House

• Source: Court Settlement. Final Closing

Statement September 5, 2014

Total % To Total Settlement Total Settlement 4,250,000.00 $ 100.0% Attorney's Fee's 426,726.00 $ 10.0% Contingency Fee's (33 1/3%) 1,415,250.00 $ 33.3% Keys Claims Consultant & Cost 641,764.00 $ 15.1% Sub Total 2,483,740.00 $ 58.4% Tol Money Due AH from Wilma 1,766,260.00 $ 41.6%

Total % To Total Settlement Total cost to repair AH 9,413,131.00 $ 100.0% Attorney's Fee's

• $

0.0% AH Projects outside of Insurance 795,957.00 $ 8.5% AH Insurance deductable 888,984.00 $ 9.4% Sub Total 1,684,941.00 $ 17.9% Tol Money Due AH from Irma 7,728,190.00 $ 82.1%

• 100% of money went back into the home
• wners property
• $795,957 dollars were spent from the

reserve account on the following assets:

• Replacing major pipes
• Updating social room
• Mechanical closets
• Lobby A/C
• Roof vents
• AH portion of painting the outside of the

building

• Trash chutes
• $888,984 to pay AH insurance deductible
• Total of $1,684,941 was spent out AH

reserve to cover our out of pocket expense

TOTAL RESERVE BALANCE PRE-IRMA 3,818,646 $ POST IRMA 2,218,265 $ DIFFERENCE IN RESERVE POSITION 1,600,381 $

Major Contributors: Add: Annual A/C maintenance $11,000 Interest on line of credit * $31,000 Painting fire escape floor * $50,000 Increase in insurance coverage $38,000 Cost for extra carpeting * $ 6,000 Sub Total $136,000 Other overall reductions ($ 20,375) Variance from the 2018 budget $115,625 * Onetime expenses

The operating expense for 2019 is $7,229 less than the 2018 projected actual 2018 total and $115,625 more than the 2018 budget.

• $87,000 are onetime expense

that should not be repeated!

2018 total cost for reserved items was $5,581,526, 2019 plan has $4,256,700 in the budget for a difference of $1,324,826. The majority of this difference is the insurance deductible of $1,050,000 from 2018.

Why aren’t we reserving for our deductible in 2019?

• Our new deductible is $615,000 or $3,090 per homeowner
• Most owners already carry hurricane & wind protection

We wanted to leave it up to you as the homeowners on how you wanted to fund this. Your choices are through your insurance company or to self insure.

The second driver that caused the reserve total to go down from last year was the estimated reserve used in the 2018 budget was $1,964,913 and this year we are using $2,200,035.

2018 PLAN 2019 BUDGET VARIANCE

• Misc. Income

3,000 $

• $

(3,000.00) $ Interest Income 15,000 $ 8,000.00 $ (7,000.00) $ Rental Income 9,600 $ 13,860.00 $ 4,260.00 $ Transfer Fees' 1,500 $ 500.00 $ (1,000.00) $ Carryover 50,000 $

• $

(50,000.00) $ Total 79,100 $ 22,360.00 $ (56,740.00) $

Unit Number Annually Quarterly Annually Quarterly Annually Quarterly 1 8,991 $ 2,248 $ 8,661 $ 2,166 $

• 3.7%
• 3.6%

2 8,508 $ 2,127 $ 8,196 $ 2,050 $

• 3.7%
• 3.6%

3 8,508 $ 2,127 $ 8,196 $ 2,050 $

• 3.7%
• 3.6%

4 6,291 $ 1,573 $ 6,067 $ 1,518 $

• 3.6%
• 3.5%

5 8,695 $ 2,173 $ 8,377 $ 2,095 $

• 3.7%
• 3.6%

6 8,964 $ 2,241 $ 8,635 $ 2,159 $

• 3.7%
• 3.7%

2018 Budget 2019 Projected Budget Variance

• Some misconceptions about ACH are as follows:
• ACH is not safe – That is not true. ACH is in fact safer than issuing a check. Each

homeowners routing number and account number will be stored at the bank level and will be completely protected by the bank’s firewalls.

• The AH can take any amount of money out of my account whenever they want. – That is

a false statement. The homeowners are only authorizing the AH to take out payments required to satisfy their quarterly HOA fees.

• This will not save the AH – That is a false statement. We are going to save money on

printing bills, buying envelopes, stamps and mailing them, labor in stuffing the envelopes,

• pening the envelopes when they come back, the labor to post the transaction when we get

the check in the office, the time to scan and deposit the checks, and any filing that needs to take place.

• It will be difficult to set up ACH- That is not true. The office will do everything. You don’t

need a computer.