| GVR
2007 Annual Budget
General
Comments
Green
Valley Recreation currently operates twelve facilities
and one Member Services Center. It is anticipated
that GVR will open the Canoa Ranch Facility during
the last quarter of 2007. Each facility offers a
variety of activities, programs, and classes. It
is always Green Valley Recreation’s intention to
maintain facilities and recreational programs at
an optimal level, provide capital maintenance, repairs
and replacements as needed, improve existing facilities,
and deposit to and preserve the operating, replacement,
and addition reserves. For 2007, GVR’s Annual Budget
is three percent lower than prior year’s budget.
This is due to reduced income levels and reduced
expenditures, particularly in the capital fund areas.
This has permitted the Board of Directors to maintain
the dues at its existing rate of $385 per household
this coming year.
2007
Annual Budget
Each
year, the budget process begins in May and ends
in October. The budget will have at least four to
five generations before the Board of Directors approves
the final draft in October. During the budget process,
it is important to review history, present events,
foreseeable and unforeseeable events. While we had
a very successful year during 2005, 2006 is proving
to give strong indications that capital revenue
streams will be down in 2007. New Member Capital
Fees will generate 42% less than prior year projections
and Initial Fees will generate 48% less than prior
year projections. Capital and operations will be
impacted by both inflation and energy costs, which
will pose potential trouble for both construction
projects and overall operating costs during the
next year and future years. Because energy costs
are affecting construction including higher costs
for metals, cement and other materials, it will
become exceedingly difficult to complete as many
capital projects as GVR has done in the past. Budgeted
replacement capital projects are down 19% comparable
year-to-year and budgeted addition capital projects
are down by 42% comparable year-to-year. The Board
of Directors felt it was important to decide what
projects were the most crucial to complete during
2007, which meant excluding capital projects that
were not considered a priority for 2007. Major equipment
replacements during 2007 total $229,465, which is
a 72% increase comparable year-to-year and include
$74,962 HVAC in replacements (Air Conditioning Units).
We are
estimating there will be at least 12,540 households
by the end of the year, which will generate $4,827,900
during 2007. In addition, we will collect approximately
$112,300 in prorated dues during the year. Grand
total dues collections expect to be at least $4,940,200,
which is a 4% increase from prior year. Ninety-four
percent of total dues collections will fund operations,
while six percent will fund the replacement fund.
Other sources of income of $714,046 will assist
with member services and operation costs, while
6% will be used towards regular maintenance tasks
and projects.
Capital
sources of income for the replacement fund total
$1,007,250 and will pay for major repairs and replacements
of equipment and facilities. Capital sources of
income for the addition fund total $209,048 and
will pay for new equipment and expansion of facilities.
We are
anticipating that the Canoa Ranch Facility will
open during the last quarter of 2007. If it does
open, GVR will pull approximately $79,864 from the
Canoa Ranch Operating Reserve. The funding pull
would include $21,530 for staffing, $27,900 for
furniture, fixtures, and equipment, $27,195 for
water, electric, gas, and waste management, and
$3,239 for operating supplies. If the facility does
not open when expected, the funding will remain
in the Canoa Ranch Operating Reserve.
Depositing
to the three reserves continues to be a top priority
for the Board of Directors and during 2007, $20,000
will be deposited to the operations reserve (3.75%
increase comparable year-to-year), $802,625 will
be deposited to the replacement reserve (48.48%
increase comparable year-to-year), and $100,048
to the addition reserve for future expansion of
facilities (27.80% comparable year-to-year). The
Reserve Study was finished during 2005 by Association
Reserves, and the replacement reserve deposit is
based on the study recommendations for full funding.
The study will be updated annually.
The
GVR 2007 Annual Budget Grand Total is $6,557,378.
Total member service and operation costs for 2007
represent $5,341,080 of which $2,901,284 are wages
and benefits. Total capital repairs and replacements
will cost $1,007,250, and facility improvements
and additions will cost $209,048.
GVR
will have to plan very carefully how it spends its
funding in the future because as revenues shrink
and facilities open up (Canoa Ranch and Las Campanas
Phase III), additional funding will be needed to
operate them, and the member dues does not incorporate
these costs into the equation at this time. GVR
has an established foundation, but if the foundation
is not maintained, it could be easily eroded away.
Planning projects and forecasting funding will be
extremely important in the years ahead.
Julie
Dall’Aglio, Controller
Green Valley Recreation, Inc.
|
