Financial Report A Look Back at 2013 [Telegraph-Herald (Dubuque, IA)]
(Telegraph-Herald (Dubuque, IA) Via Acquire Media NewsEdge) Everyone reviews their finances as tax season approaches. The same is true for the GTA. It's that time of the year again to see how we did in our previous year's finances. Let's take a look back"
First on the list of 2013 financial highlights would be the sale of the Vincent Farm. It was sold at $703,000, net of sales expenses, which left us a gain on sale of $401,605. We had some loss carried forward from previous years that allowed us not to pay tax on the said gain.
Another highlight was the decrease in our mortgage interest rate from 5.375% to 4.85%. Our annual mortgage payment for the Pool/ Recreation Complex went down from $494,000 to $469,000 which saved the Association $25,000 annually or $350,000 over the course of the loan's remaining life.
We had a new source of income by leasing office space at the Owners' Club to a real estate company which currently brings in $24,000 a year to the Association.
The staff, together with the Budget & Audit Committee and the Board of Directors, worked hard in 2013 on the 2014 Budget. The annual assessment went down for the first time from $1,117 in 2013 to $1,079 in 2014. Times are tough, and I know bills are painful, so I hope we made the pain a bit less when we sent the annual assessment invoice last November with a lower amount.
Next, let's see how our actual figures compared to our 2013 Budget.
Revenues were over budget by $342,568. If we did not have the gain on sale of the Vincent Farm, we would have been under budget by $59,037.
There were some revenues budgeted for 2013 but we never earned income on them. We thought of charging a minimal amount on vehicle passes and budgeted $15,000 income for the year, but the Board did not approve the program and it was not executed. We earn approximately $10,000 a year from Crop Reduction Program (CRP) payments for the Vincent Farm and it was on the budget for 2013. When we sold the farm, that income went away. We budgeted $4,800 for a cellphone company to rent one of our towers but it did not occur in 2013. The Maintenance Services revenue was under budget on Lawn Mowing, Condo and Townhouse Staining, Condo and Townhouse Daily Maintenance, and GTA Maintenance, but over budget on Property Owner Services, Property Owner Staining Services, and Snow Plowing. This is an ongoing effort to shift hours from one type of job to another depending on the weather conditions and the maintenance staff's available hours.
Helping the loss are the gains on other revenue lines. Snack bar sales were over budget by $9,260 and Maintenance Service Material Sales were over budget by $28,263. The latter was due to more work done within individual property owners services. Boat docking and storage revenue was over budget by $6,085 and boat rentals were $7,430 over budget, as well.
Expenses were under budget by $525,232. Wait" let me double check my figures. Yes, I am correct. Expenses were under budget by $525,232.
Every expense category was under budget except for Cost of Goods Sold which was over budget by $29,117. That increase was directly attributed to the increase in Snack Bar Sales and Maintenance Service Material Sales stated above.
Administrative expenses were under budget by $178,974. Due to lower mortgage interest, interest expense was under budget by $28,100. Legal fees were under budget by $25,200. The Association hired a new law firm who specializes in common interest community associations. They're very effective and efficient, saving the Association some money on legal fees. Education and training was under budget by $14,800. Managers did not go to the Community Association Institute (CAI) conference as it was held in Hawaii and the cost would have been beyond our budget. The money budgeted for the Communication staff's education was never spent since their 2013 website training was part of the contract on the new information technology system. Bad Debts expense was $13,800 lower than what was expected. Collection and aging of receivables was better. Almost every expense line was lower than what was budgeted due to management's careful spending of money.
Salaries and benefits were under budget by $198,139. These are due to the late hiring of our Lake and Marina Manager, Communication Specialist, replacement of one full-time Maintenance employee and late start for seasonal Maintenance staff. State Unemployment Tax was budgeted at a maximum of 8.4% but the actual rate for 2013 was 3.65%. Health insurance was budgeted to increase by 9%, as historical numbers stated, but there was no increase in our premium for 2013.
Maintenance expenses were under budget by $108,363. Half of the savings was due to lower hours in GTA Maintenance Services compared to what was budgeted. This is an offset on the lower revenue in GTA Maintenance Services as mentioned in the previous Revenues section. Deer management expense was $10,400 under budget. We budgeted to cull 150 deer but this depends on the actual number of deer counted in January. We ended up culling 55 deer last season.
Other expenses such as Association insurance, electricity and heating fuel were under budget by $68,873. We used the engineer's estimates for electricity and heating the new Pool/Recreation Complex when the 2013 budget was prepared. 2013 was the first full year of operating the new Pool/Recreation Complex and we're still learning the actual costs. Electricity was under budget by $65,300. Heating fuel was under budget by $3,990. Had we not had the very cold winter in 2013, the savings would probably have been even more than that.
Overall, we had a pretty good 2013. Our Operating income was $867,800 over budget. Excluding the gain on the Vincent Farm sale, we were still over by $466,195.
It's been a long winter. I'm sure everyone would agree with me, but I can totally smell spring in the air. And then, summer will be here before we know it. Please consider using the owner services and programs the GTA offers. If you're going to hire someone to stain your house, cut your grass, deliver mulch, or resurface your driveway, why not hire us? It helps to grow our non-assessment net revenue. Also, the Association has four vacant lots for sale. If interested, please contact Susan Miller or Joe Mattingley for more information at 815-777-2000.
Well, that's it for my sales pitch. What do you see in the crystal ball for 2014? Let's all hope it will be another good year.
WITH ONE CHART (on the next page)
2013 YEAR-END REVIEW
COMBINED OPERATING FUND
OPERATING BUDGET AMOUNT (UNFAVORABLE)
SALES AND INCOME
Assessment - Operating $ 2,540,790 $ 2,540,790 $ - 0.00
Sales $ 265,533 $ 231,770 $ 33,763 14.57
Other Income $ 3,551,675 $ 3,242,870 $ 308,805 9.52
TOTAL: $ 6,357,998 $ 6,015,430 $ 342,568 5.69
Cost of Goods Sold $ 248,587 $ 219,470 $ 29,117 (13.27)
Administrative $ 573,541 $ 752,515 $ (178,974) 23.78
Salaries $ 2,488,476 $ 2,686,615 $ (198,139) 7.38
Maintenance $ 864,452 $ 972,815 $ (108,363) 11.14
Other Expenses $ 1,285,517 $ 1,354,390 $ (68,873) 5.09
TOTAL: $ 5,460,573 $ 5,985,805 $ (525,232) 8.77
Net Surplus Before Investment Income $ 897,425 $ 29,625 $ 867,800
Investment Income: $ 6,604 $ 13,000 $ (6,396)
Consolidated Net Surplus (Deficit) $ 904,029 $ 42,625 $ 861,404
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