The 2016 budget development was led by the General Manager working with Finance Operations to incorporate the inputs from all the department directors. The fundamental budget development process had been enhanced and this year there was greater integration of the Long Range Plan for defining the 2016 budget requirements. Continued use of a zero base planning model for labor expenses enabled the ability to review changes to prior year’s budget. These enhancements allowed HOA Staff to continually 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, effluent water 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 2016 budget pressures. New and resale home closings finished strong in 2015. As a result the forecast for 2016 was increased to track more closely to the 2015 results. The HOA assessment delinquencies have been kept to less than 0.3% overall utilizing the HOA Delinquency Administrative Procedure with continued proactive collection process improvements.
The annual Golf membership fees were unchanged for 2015. The additional $1 per round will continue to be collected for each round played including the annual memberships. This fee will be set aside in a separate account to fund the future golf infrastructure requirements. The 2016 revenue target is expected to yield a slight surplus in addition to the $1 fee per round. As in past years, the 2016 budget includes a $325K HOA subsidy for Golf taxes, insurance and RCI service fees and consultants. In addition $24/year/home has been approved to be collected from the HOA dues 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 2015 with all revenue and budget performance targets being exceeded. The 2016 budget reflects a lower F&B amenity dues cost of $10.90/home/month compared to the 2015 budgeted F&B amenity dues cost of $13.65. The restaurants will continue to provide greater and consistent level of service to enhance your dining experience and to retain your continued support. The 10% discount, when using your homeowner card with approved credit privileges, will be continued in 2016. The subscription to wedding website advertising was renewed in 2016 to increase banquet sales and revenue.
The Long Range Plan had been updated to include identified additional assets and the replacement costs not previously recognized. This annual update has been integrated into the budget development process and will occur during the first half of each year. This Long Range Plan is the key to defining a strategy to address major expenditures in the future, reduce the likelihood for special assessments and protect home values. The PCHOA Board will initiate the validation of the Long Range Plan by an independent certified Reserve Study consultant in early 2016. In 2015, $1,231,480 of the Reserve funds was utilized to fund asset replacements that were identified in the Long Range Plan. The Reserve (Long Term Savings) account balance net of the 2015 withdrawals was $6.032M at the end of 2015.
Two homeowner meetings were held in early November to review the community financials and budget requirements for 2016. A thorough and detailed budget presentation combined with a discussion provided residents with insight into the efforts by the General Manager, Finance Operations, Department Directors, the Board and the staff to efficiently manage the community cost. The meetings provided homeowners the opportunity to better understand the financial requirements and challenges that face the community.
The Board approved the 2016 budget at the November 18, 2015 Homeowners Associations Board Meeting. This budget resulted in a $120 increase in annual HOA dues bringing the 2016 HOA assessment to $2,100 per household. The Reserve (Long Term Savings) contribution has been increased to $373/house/year. There were three components to the increase: 1) increase the original HOA contribution from $230 to $275, 2) $74 Private Road transfer from operating fund dues to Reserve dues and 3) $24/home/year for Golf Infrastructure. The HOA will again utilize withdrawals from the Reserve to fund planned asset replacements identified in the Long Range Plan.
The accompanying pie chart and data table depict the specific 2016 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 2016 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 2016 homeowner budget presentation and accompanying budget information article are posted on the PebbleCreek HOA website.