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Dec 2020

Commentary on 2020 Expenditures

As you read this issue of the Southwind, we will have seen Thanksgiving celebrated in a way as never before. Hopefully, you all enjoyed this day with friends and family as much as possible under very unusual circumstances. We all look forward to the upcoming holidays to be with those we love and hope the new year brings us better times than 2020.
As you will recall in my previous communications, I explained the purpose of a Reserve Study and how it guides the association on a path to fiscal stability, while allowing the association to make needed repairs or replacements adhering to our five-year financial plan. The Reserve Study gives the board flexibility of moving repairs or replacements from year to year to reflect more immediate needs. In the year 2020 our budget and reserve study identified specific items which as a matter of aging or need should be repaired or replaced on an accelerated basis. 
The Board of Trustees determined that due to the ongoing COVID-19 restrictions put upon our association and the subsequent closing of the Clubhouse and activities, the time to make these needed repairs or replacements could be done while the facilities were not being used. The repairs or replacements were made while not exceeding the budget approved for 2020, and no reserve funds were used for that purpose.
At the close of the year, and subsequent Audit by our CPA, the board will post the Financials for the fiscal year 2020 and our budget for 2021.  We will also add more information detailing description of expenses rather than general categories.
Questions always arise as to how our income is spent. As with any organization or business there is a need to periodically upgrade the facilities aesthetically to make them more attractive, welcoming, and professional. Items such as security and computer systems, flooring, furniture, heating, and air conditioning systems must also be updated. This is the purpose of a Financial Reserve study.
I will try to be as simplistic as possible in detailing certain major fixed expense items that impact our budget. Most of our expenditures fall under the category of Fixed Expense as opposed to Discretionary Spending.
  1. Landscaping/Lawn Cutting: $372,761 including tax, divided by 2400 homes = $155.32 per home per year. Divided by 18 cuttings per year equals $8.63 which is the cost each time your lawn is cut.
  2. Snow Removal:  $63,069 including tax, divided by 2400 homes = $26.28 cost per home per year. If we had 4 snowstorms and you were plowed out each time, it would cost you $6.57 as an average. If we get no snow, the total cost per home is still $26.28 for the year. The combination of these two major expense categories totals $435,830. About one-third of our total budget.
  3. Reserve account: $186,000 is charged as an expense but is transferred to our Reserve account for future emergencies. More like a savings account!
  4. Legal fees $     40,000 
  5. Insurance $     51,000
  6. Community Busing $     63,069
  7. Tree removal $     35,000
  8. Cleaning services, (reduced since March) $     54,000
  9. Scour hole cleaning [42 locations] $     62,000
  10. Engineering Fees - Ductwork project $     27,490
  11. Salaries, Office, Maintenance, Security, plus taxes $   120,157
  12. Data processing $     24,000
  13. Security system updates $     18,000
  14. Misellaneous contracts $     24,000
  15. Auditing $       7,000
  16. Maintenance, Repairs, Replacements $   175,057
  17. All other expense not detailed above $   157,755
TOTAL OF ALL INCOME : $1,480,358
Please remember the above represents major categories of expenses and does not include many smaller categories such as office supplies, pool contract and equipment, heating costs, etc. As stated above, a more detailed description of expenses will follow with the publication of our 2020 closing financial statement.  The above is merely a sampling of how our maintenance fees and other income is spent. It is by no means a complete financial statement and should not be interpreted as such.
Vincent DeChiaro, Vice President
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