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EAGLE CROSSING HOA

EAGLE CROSSING HOA. 2007 BUDGET PRESENTATION MONDAY, NOVEMBER 27, 2006 BY: BRENT WARNER, TREASURER. WHAT DOES OUR BUDGET CONSIST OF? MAJOR CHALLENGES FACED IN 2006 IMPACT FOR 2007 AND BEYOND FUTURE INITIATIVES FOR NEW BOARD. WHAT DOES OUR BUDGET CONSIST OF?.

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EAGLE CROSSING HOA

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  1. EAGLE CROSSING HOA 2007 BUDGET PRESENTATION MONDAY, NOVEMBER 27, 2006 BY: BRENT WARNER, TREASURER

  2. WHAT DOES OUR BUDGET CONSIST OF? • MAJOR CHALLENGES FACED IN 2006 • IMPACT FOR 2007 AND BEYOND • FUTURE INITIATIVES FOR NEW BOARD

  3. WHAT DOES OUR BUDGET CONSIST OF? BUDGET IS BROKEN DOWN INTO TWO AREAS WITH THREE MAJOR COMPONENTS OF EXPENSES: • INCOME • EXPENSES • ADMINISTRATIVE • UTILITIES • GROUNDS MAINTENANCE

  4. WHAT DOES OUR BUDGET CONSIST OF? INCOME ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS I’LL EXPLAIN THIS LATER

  5. WHAT DOES OUR BUDGET CONSIST OF? INCOME RESERVE FUNDING LET ME COME BACK TO THIS, TOO.

  6. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES ADMINISTRATIVE EXPENSES (OVERHEAD OF THE HOA) • MANAGEMENT FEES WHAT WE PAY THE MANAGEMENT COMPANY. • PROFESSIONAL FEES LEGAL FEES FOR COLLECTION, COVENANT ENFORCEMENT, TAX PREP, RESERVE STUDY (IN 2006) • ADMINISTRATIVE EXPENSES MAILING FEES, COPY CHARGES, FAX FEES, OTHER TYPES OF OFFICE EXPENSES PAID BY HOA

  7. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES ADMINISTRATIVE EXPENSES (CONT’D) • INSURANCE EXPENSE DIRECTOR’S LIABILITY INSURANCE POLICY AND HOA INSURANCE POLICY • PROPERTY TAXES YES, WE PAY PROPERTY TAXES. IT’S ON THE COMMON AREA. • WEBSITE EXPENSE CONTRACT FOR WEBSITE MONITORING AND DOMAIN NAME. SHOULD HAVE A NEW SITE UP IN EARLY 2007. • SOCIAL COMMITTEE EXPENSE EXPENSES FOR GARAGE SALE SIGNS, NEWSPAPER ADS, NATIONAL NIGHT OUT, VARIOUS OTHER PLANNED SOCIAL EVENTS IN NEIGHBORHOOD.

  8. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES UTILITY EXPENSES • SECURITY LIGHTING STREET LIGHTING PAID TO IPL TO LIGHT OUR STREETS. THIS IS NOT PAID BY THE COUNTY BUT BY THE HOA. GROUNDS MAINTENANCE (EVERYBODY’S FAVORITE WHIPPING BOY!) • SNOW REMOVAL TO REMOVE SNOW. • LAKE MAINTENANCE TO TREAT OUR PONDS ON A SCHEDULED BASIS TO PREVENT ALGAE AND OTHER CRAP THAT CAN GET INTO OUR PONDS.

  9. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES GROUNDS MAINTENANCE (CONT’D) • MOWING AND TURF CARE TO MOW OUR COMMON AREA GRASS. MOST AREAS ARE CUT WEEKLY, SOME ARE “BUSH HOGGED” MONTHLY OR ONCE A YEAR. BOARD ENTERTAINED SEVEN BIDS FOR MOWING WITH PRICES RANGING FROM $61,200 TO $202,300. • FERTILIZATION AND WEED CONTROL FOUR APPLICATIONS OF PRE-EMERGENT FERTILIZER APPLIED TO COMMON AREA GRASS AND BEDS. BOARD ENTERTAINED SIX BIDS WITH PRICES RANGING FROM $15,000 TO $82,200

  10. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES GROUNDS MAINTENANCE (CONT’D) • MULCH TO MULCH OUR PLAYGROUNDS, TREE BEDS, COMMON AREA PATHS, ENTRANCE WAY, ISLANDS, ETC. BOARD ACCEPTED BID OF APPROXIMATELY $30,000 TO MULCH IN 2007. $10,000 WAS BUDGETED FOR THIS YEAR FOR A PARTIAL MULCHING, WITH REST TO BE DONE IN 2007. BOARD OPTED TO MULCH EVERYTHING IN 2007, HENCE THE ADDITIONAL $20,000 IN MUCLH.

  11. EXPENSES GROUNDS MAINTENANCE (CONT’D) COMMON GROUND MAINTENANCE ON-SITE PERSON TO PULL WEEDS, PICK UP TRASH, TURN OVER BEDS, WATER FLOWERS, PLUS OTHER MAINTENANCE DUTIES ON OUR COMMON AREA. ONE BOARD PERSON TO LIASION WITH THIS PERSON AND LANDSCAPING COMPANY TO ENSURE ALL DUTIES ARE PERFORMED. THIS REPLACES BED MAINTENANCE AS A LINE ITEM IN OUR BUDGET. POOL UTILITIES PHONE AND ELECTRICITY PROVIDED TO BOTH POOLS WHAT DOES OUR BUDGET CONSIST OF?

  12. WHAT DOES OUR BUDGET CONSIST OF? EXPENSES GROUNDS MAINTENANCE (CONT’D) POOL CONTRACT OPENING AND CLOSING OF POOLS, WEEKLY TESTING AND CHEMICAL TREATMENT, CLEANING OF POOLS AND OTHER POOL DUTIES. SECURITY OFF DUTY HCSD AT $25/HOUR AND PRIVATE SECURITY COMPANY FOR BOTH POOLS. COMMON AMENITY MAINTENANCE MAINTENANCE TO COMMON AMENITIES SUCH AS REPAIR TO POOL HOUSES (BATHROOMS, EQUIPMENT, ETC.)

  13. Budget Progression

  14. MAJOR CHALLENGES IN 2006 ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS COLLECTION OF DUES CONTINUES TO BE A PROBLEM FOR EAGLE CROSSING. BUDGETED AMOUNT OF $10,300 IS BASED ON CURRENT WRITE-OFFS PLUS ADDITIONAL BASED ON CURRENT COLLECTION REPORTS. BOARD CONTINUES TO REVIEW POSSIBLE ALTERNATIVES TO IMPROVE SITUATION. NEW ATTORNEY HIRED – 120 ACCOUNTS PLACED WITH ATTORNEY. PRIOR ATTORNEY STILL WORKING 57 ACCOUNTS. TOTAL OF 177 ACCOUNTS PLACED WITH ATTORNEY’S BOARD IS CONSIDERING INTIATING FORECLOSURE ON HOMES WITH DELINQUENT DUES.

  15. MAJOR CHALLENGES IN 2006 ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS DELINQUENCY RATE OF APPROXIMATELY 20% IS WAY TOO HIGH!! IDEAL RANGE: 3 – 5% HOPEFULLY, TOUGHER ACTION (FORECLOSURE OR THE THREAT OF FORECLOSURE WILL HELP BRING DELINQUENCIES IN LINE. AS NEIGHBORHOOD TURNS OVER, WHICH WE SHOULD SEE OVER THE NEXT FEW YEARS, NEW HOMEOWNERS SHOULD HAVE THE ABILITY TO AFFORD HOMES, INCLUDING HOA DUES, REDUCING THE DELINQUENCY RATE. WITH GARNISHMENTS, HOMES SOLD, CASH FROM DELINQUENT BORROWERS WILL COME IN SITUATION WILL IMPROVE.

  16. IMPACT FOR 2007 AND BEYOND RESERVE FUNDING SET WILL ALLOW BOARD TO BUDGET FOR LARGE EXPENDITURES WITHOUT THE NEED FOR A SPECIAL ASSESSMENT. IF BOARD CHANGES FUNDING STRATEGY, MAY RESULT IN AN INCREASE IN DUES. CHANGING FROM A PERCENTAGE INCREASE METHOD TO A FIXED CONTRIBUTION. WILL HELP FACILITATE THE PREPARATION OF A LONG-TERM BUDGET FOR PLANNING PURPOSES. DELINQUENCIES DEPENDING ON SUCCESS OF COURT ACTION AND COLLECTION, MAY NEED TO INCREASE ALLOWANCE ACCOUNT, RESULTING IN AN INCREASE IN DUES.

  17. IMPACT FOR 2007 AND BEYOND FUTURE OF HOA DUES $400 LIKELY NOT CEILING OF DUES. MORE LIKELY IN THE $450 - $500 RANGE, ALTHOUGH IT IS DIFFICULT TO TELL. CANNOT “CAP” DUES BECAUSE EXPENSES ARE NOT CAPPED. BUDGET AND FINANCE COMMITTEE DID A STUDY OF SIMILAR NEIGHBORHOODS TO DETERMINE THEIR FEE STRUCTURE AND COMPARED TO OURS.

  18. IMPACT FOR 2007 AND BEYOND HOA DUES COMPARISON SAMPLED 11 HOA’S OF THE ELEVEN SAMPLED: • FOUR HAD ONE POOL • EIGHT HAD PONDS • THREE HAD PLAYGROUNDS (ALL HAD JUST ONE) • TWO HAD WALKING TRAILS DUES RANGED FROM $190 IN HOA’S THAT HAD NO AMENITIES TO $600 IN HOA’S THAT HAD ONE POOL AND A SMALL AMOUNT OF COMMON AREA GRASS. MOST COMMUNITIES WERE IN THE $350 TO $400 RANGE WITH LIMITED COMMON AREA AMENITIES. EAGLE CROSSING HAD MORE ACRES OF COMMON AREA GRASS, MORE MILES OF WALKING TRAILS, MORE POOLS, MORE PLAYGROUNDS AND MORE HOMES THAN MOST, IF NOT ALL THE OTHER NEIGHBORHOODS. YET, OUR DUES WERE IN THE SAME RANGE AS THE OTHER NEIGHBORHOODS, REGARDLESS OF THEIR AMENITIES.

  19. IMPACT FOR 2007 AND BEYOND HOA DUES COMPARISON

  20. IMPACT FOR 2007 AND BEYOND • LOOK AT NATIONAL AND LOCAL HOUSING MARKET • MORE HOMES FOR SALE THAN BUYERS • NOT ISOLATED TO EAGLE CROSSING/CP MORGAN HOMES • EARLY IN THE LIFE OF EAGLE CROSSING • MANY HOMES FOR SALE • FORECLOSURE/BANKRUPTCY • DISSATISFACTION WITH NEIGHBORS/NEIGHBORHOOD • DIVORCE • JOB TRANSFER

  21. …AND BEYOND??? • EARLY IN THE LIFE OF EAGLE CROSSING (CONT’D) • PART OF NORMAL CYCLE FOR NEW CONSTRUCTION NEIGHBORHOODS • TREND MAY CONTINUE BEFORE STABILITY IS SEEN • BRANCHES

  22. INITIATIVES FOR 2007 BOARD • MONITOR COLLECTION OF DELINQUENT DUES, INCLUDING PROGRESS OF THOSE ACCOUNTS WITH ATTORNEY (FOLLOW COLLECTION POLICY) • COVENANT ENFORCEMENT • WORK COMMITTEES (SAFETY & AWARENESS, BUDGET & FINANCE, SOCIAL COMMITTEE, BEAUTIFICATION, ETC.

  23. QUESTIONS

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