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Proposed 2014 WCA Budget Draft Contains $2 Assessment Increase

The 2014 draft budget that emerged from the roughly 90-minute Westchase Community Association (WCAO) Budget Workshop on Aug. 20 produced a projected assessment of $322.

The amount represents a two dollar increase over the 2013 assessment. If adopted, it would be the first increase in the WCA assessment since 2008.

As a draft, the budget still could see changes. The WCA Board of Directors will consider it – and perhaps amend it – at their Sept. 5 meeting. Afterwards, VMs then have 10 days to reject the plan. If they do not, the spending plan that emerges from the Sept. 5 meeting will be the official 2014 budget.

The WCA assessment covers costs associated with staffing and maintaining the two Westchase swim and tennis centers as well as deed restriction enforcement within the community.

While the budget saw increases and decreases across a number of budget lines, the major driver of the slight increase can be found in three areas: the WCA’s reserves, which increased by $8,000; the swim and tennis center’s staff payroll, which increased by $16,000; and the management contract with Greenacre Properties, Inc., which increased $5,000 (the first of two increases in the new five year contract beginning 2014.).

The WCA’s reserves help maintain and replace large capital items by estimating their lifespans and then setting aside an appropriate amount each year to replace them at the indicated time. Added to the reserve schedule were the new vending machines, the security fences around the machines, the new water slide at the West Park Village pool and the West Park Village pool’s new geothermal system.

According to Association Manager Debbie Sainz, the increase in swim and tennis center payroll was driven by an increase to lifeguard staff pay by 50 cents per hour and the expansion of staff hours needed to supervise the new pool slide, which requires a dedicated lifeguard during its operation.

Jumping on the revenue side is expected income from the association’s increasingly popular summer camp, which Sainz expects will bring in $17,000 more than what was budgeted for in 2013 ($66,000).

On the expenditure side, the budget projects a number of increases. Anticipating a round of amendments to Westchase’s Covenants, Conditions and Restrictions and other governing documents, Sainz budgeted $7,500 for legal review of the changes as well as $8,000 more for costs associated with printing and mailing materials associated with the project. Sainz also increased the WCA’s events line by $1,000. This expenditure covers its Movies in the Park program, which is seeing increases in projector rentals. In addition to projected increases in insurance costs (approximately $4,500), an increase of $1,500 will occur in the line covering Internet and telephone, largely due to new wireless service at the Westchase Swim and Tennis Center complex.  

One of the more significant cuts in the budget came to capital improvements. After budgeting $57,500 for capital improvements in 2013 to help cover costs for the pending tennis building at the Westchase Swim and Tennis Center, the 2014 capital improvements line was cut to $25,000. Of that amount, Sainz suggested budgeting $10,000 for two toddler pool shade canopies for both pools. While the draft budget originally had $19,000 included for the possible incorporation of splash features at the Westchase Swim and Tennis kids’ pool, the consensus of those at the workshop was that the estimate was likely too low. Pending the development of plans and the acquisition of bids, $15,000 was kept in the budget; the balance of the project’s costs, if adopted, will likely be budgeted in 2015.

Despite the $7,500 budgeted for legal review of expected document amendments, overall funds budgeted for legal issues dropped approximately $11,000 from 2013 amounts.

Another notable decrease occurred on the swim and tennis center supplies and expenditures line, which decreased $6,200. This is largely due to the association’s new ability to recoup credit card fees, which are booked on this line, from those who register for programs online.

Another major increase occurred to the line for bad debt, which entails fines and assessments written-off as uncollectible. While the budget draft appears to increase this line nearly $20,000 to $62,000, that is largely due to an accounting change.

In the past, the WCA often underestimated revenues from collected fines with its budget. This year, however, the association is booking all expected fines levied by the Covenants Committee on the revenue side of the ledger. Because a significant amount of these are uncollectable each year, an offset was then included on the line for bad debt. Sainz stated that the bad debt line for unpaid assessments actually declined by $2,000 to $40,000; the balance of the bad debt line – $22,000 – is the projected amount of expected uncollectable fines. This is offset on the revenue side, however, and thus creates a negligible effect on assessments.

Under Florida law, associations are quite limited in their ability to collect unpaid assessments and deed restriction fines when a property is sold through foreclosure. These amounts must be written off annually as bad debt. Failure to do so has put many of the state’s HOAs in a financially distressed state during the real estate collapse.

Only one major change was made to the draft budget Sainz presented at the workshop. The original draft, calling for an $8 increase in the assessment, included $12,100 for fuel, insurance and lease costs for a vehicle to enable to Operations Manager Kelly Shires to run errands to pick up needed supplies for the vending machines and pools. It was pitched as a solution to a gap in insurance coverage about which WCA President Joaquin Arrillaga had expressed concerns. Those present at the workshop, however, argued that paying delivery costs and using a courier for such errands offered a less expensive approach. Thus, the vehicle costs were removed from the budget and $2,400 was included in the office supply line to cover courier costs for errands.

The draft budget will now be considered by the WCA board at its Sept. 5 meeting, where it could still see changes. If the board adopts a 2014 spending plan at that session, it will trigger a 10-waiting period during which time VMs have an opportunity to reject the spending plan. Barring VM objection, the approved budget becomes the official spending plan for the community.

Click here to view a PDF of the draft budget.

How Are the Programs Doing?

The WCA’s draft budget, which contains 2012 actuals, the 2013 budget and 2013 year-to-date totals through June 31 gives residents a peek at the performance of the WCA’s programs. Both the tennis and swim programs are set up so that 80 percent of their income goes to the coaches while 20 percent goes to the association to offset the program’s costs.

In short, recent numbers suggest a growing swim program but a tennis program whose youth component may be struggling.

Based on spreadsheet numbers, the WCA’s swim coach has clearly grown the swim program since his 2012 hiring. Excluding revenues from infant swim classes, which were held in 2012 but are no longer available, projected swim program income for 2013 – based upon the first six months of the year – is up 28 percent over 2012.  The program’s projected net income (which subtracts costs such as salaries from revenues) will likely be $4,000 higher – an increase of 15 percent.

Tennis, however, provides another story. In 2012 an assistant was hired by the association to expand programs and enhance revenue. Largely assigned to adult programs, the assistant has expanded adult program revenue nearly 92 percent, growing it from $9,700 in 2012 to a projected $14,300 this year. Meanwhile participation in the youth tennis program appears to have shrunken considerably. Tennis revenue overall (youth and adult programs combined) fell from $105,037 in 2012 to a projected $89,472 this year – a decline of 15 percent in one year. The program’s net (subtracting expenses from revenues) also declined, falling from $21,158 to a projected $13,802, a decrease of 34.76 percent. That program was overseen by former Westchase Tennis Pro Mike Larscheid, who recently resigned due to the board’s decision to restructure the tennis program.

The final major program run by the association is its summer camp. Revenue and expenses for the 2013 summer camp were not fully available (financials only ran through June 31). According to WCA Manager Debbie Sainz, camp revenues are expected to exceed 2012 proceeds, however. For 2014, Sainz projects the camp will bring in $83,000, a 50 percent increase over 2012 revenues. The net, roughly $7,400 in 2012, is also budgeted to reach $13,000.

By Chris Barrett, Publisher

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