The 2017 budget development was led by the General Manager working with Finance Operations to incorporate the budget inputs from all the department directors. The fundamental budget development process had been enhanced this year with greater integration of the Long Range Plan for defining the 2017 budget requirements. Staff used the zero based planning model for labor expenses to review changes from prior year’s budget which included the impacts of the new minimum wage for 2017. This planning model allowed HOA Staff to provide a higher level of precision in this year’s labor planning and budgeting process.
Maintaining the high standards of community appearance as the facilities mature presented many financial challenges. Aging infrastructure, aging golf and fitness equipment, increased water cost, pending electric utility rate increases, street maintenance cost and maturing landscaping cost were among the many upward budget pressures. The addition of new facilities and new units to maintain has added to the 2017 budget pressures. New and resale home closings finished strong in 2016. As a result forecasts were adjusted accordingly. The HOA assessment delinquencies have been kept at 0.3% overall utilizing the HOA Delinquency Administrative Procedure with continued proactive collection processes.
The annual Golf membership fees have been increased for 2017 to cover the additional operating cost of the anticipated new nine at Tuscany Falls in 2017 and the increased contribution to the Golf Infrastructure Fund (GIF). This fee will be set aside in a separate account to fund the future golf infrastructure requirements. The 2017 Golf revenue target is expected to yield a slight surplus after deduction of the contribution to GIF. For 2017, the budget includes a $340K HOA subsidy for Golf taxes, insurance and RCI service fees and consultants and an increase of the HOA dues contribution to $36 per year per home for the future golf infrastructure requirements.
The Food & Beverage Department is continually implementing operational improvements to match homeowners’ needs. As a result the F&B Department had another successful year in 2016 with all revenue and budget performance targets being met or exceeded. The 2017 budget has a slightly higher F&B amenity dues cost of $12.20 per home per month. The restaurants have continued to provide a greater and consistent level of service to enhance your dining experience and to retain your continued support.
The Board approved a HOA Reserve Study to be conducted by Criterium Engineers in 2016 to validate the planned asset replacement in the Long Range Plan. The Long Range Plan had been updated to identify additional assets and revised replacement costs in preparation for the Reserve Study. Once finalized a Reserve Study presentation to the community is planned shortly after the first of the year. In 2016, $1.67M of the Reserve funds was utilized to fund asset replacements that were identified in the Long Range Plan. The Reserve account balance net of the 2016 withdrawals was $6.54M at the end of 2016.
Two homeowner meetings were held in early November to review the community financials and budget requirements for 2017. A thorough and detailed budget presentation provided residents with insight into the efforts by the General Manager, Finance Operations, Department Directors, the Board and staff to efficiently manage the community cost. The meetings provided homeowners the opportunity to better understand the financial requirements and challenges that face our community. For 2017 the Budget presentation reflected a new format separating the Operating Fund Budget from the Reserve Fund Withdrawal Plan. The Operating Fund Budget identified the operating requirements spending funded with the HOA dues collected in 2017. The Reserve Fund Withdrawal Plan identified the planned expenditures for assets being replaced with funding from the HOA Reserve whose contributions were from dues collected over multi years.
The Board approved the 2017 budget at the November 16, 2016 Homeowners Associations Board Meeting. This approved budget resulted in a $210 increase in annual HOA dues bringing the 2017 HOA dues assessment to $2,310 per household per year. The Reserve contribution has been increased to $515 per house per year of which $36 per home per year will go the Golf Infrastructure Fund.
The accompanying pie chart and data table depict the specific 2017 budget requirements for each function in the community and break out that portion of your HOA dues needed to support each function. A complete detailed copy of the 2017 PebbleCreek HOA Budget is available to view at the Resident & Guest Services at the Eagle’s Nest Clubhouse front desk and has also has been posted on the PebbleCreek HOA website at www.pebblecreekhoa,org. A copy of the 2017 homeowner budget presentation and accompanying budget information article have also been posted on the PebbleCreek HOA website.