2009 FINAL  BUDGET SURVEY - Dec 7

Homeowners’ monthly dues fund ongoing expenses and the reserves. The Reserves are used to maintain capital expenses such as roads, lighting, pools, painting, etc. while 61% the dues are used to maintain Beachwalk and provide daily services. The 2009 operating budget is $1,455,000 and we ended 2008 with  $2,670,000 in Reserves. The Board needs direction from the community about which, if any, expenses you would want us to consider reducing. This survey is preliminary. The Board is not advocating in favor of  any specific change. The intent is to get input from the community. All major changes will be put to a vote of the community.

161 homeowners responded to the survey. Results are shown below.

Security
Yes  58 No 65 Maybe 30          
Reduce security to morning and evening patrol only. This will save about $60,000 per year in operating costs but leave us without guard service during the day.

Yes 73 No 47 Maybe 31         
Reduce security to morning and evening patrol service plus full service on weekends and during the summer months. This will save us about $30,000 per year in operating costs but leave us with less weekday guard service.

Landscaping
Yes  84 No 37 Maybe 37           
Convert one acre of (out of 18 acres) our irrigated landscape area to native plants or non-water mulched area. Our water costs were $71,830 in 2008 with about  95% for landscape irrigation. We also spent $20,403 in sprinkler repair. With one acre less to irrigate, we could expect to save about 5% of these costs or $4000- $5000. It is not clear how much, if any, our $196,800 landscape contract would be reduced.

Yes 45 No 92 Maybe 23      
Change tree trimming from once every three years to once every five years and require more extensive pruning providing the tree would respond.  This  would save about $27,000 per year but would result in less sunlight in some areas  and could result in tree debris and falling branches.

Fencing
Yes 16 No 130  Maybe 14       
Make all homeowner fences, arbors and gates a homeowner responsibility. This would save about 90% of our $92,849 labor costs per year plus about $60,000 in fence, gate, and arbor materials (estimated savings range $130-$150,000). The downside is that this could mean that some homeowners would not maintain their fences, detracting from the look of our HOA. Note that the HOA could repair unsightly fences and assess the homeowner.

Yes  33 No 111  Maybe 13      
Make rear fences, fences between homes, and arbors a homeowner responsibility. This would save about half of the above amount and would mean that the most visible fences would be repaired by the association, but it could mean that homeowners would not do needed repairs on common fences and fences visible from pathways and other common areas.

Pools
Yes  44 No 95 Maybe 18      
Convert satellite pool 2 to open space. This will cost about $60,000 and remove an amenity. It will reduce operating costs about $10,000 per year and remove about $80,000 in reserve costs included in the current reserve study (see categories: pool 2, roofing, and painting. (Note: Pool 2 has new fencing and the exterior of the cabana has been refurbished).

Yes 49 No  78 Maybe 22          
Convert satellite pool 3 to open space. This will cost $60,000 and remove an amenity. It will reduce operating costs about $10,000 per year and remove about $100,000 in reserve  costs included in the current reserve study. See categories: pool 3, roofing, fencing, and painting.

Yes 34 No  90 Maybe 25          
 Convert satellite pool 4 to open space. This will cost $60,000 and remove an amenity. It will reduce operating costs about $10,000 per year and remove about $100,000 in reserve costs included in the current reserve study (pool 4, roofing, fencing, painting categories).

Yes  46 No  75 Maybe 28      
Convert satellite pool 5 to open space. This will cost $60,000 and remove an amenity.  It will reduce operating costs about $10,000 per year and remove about  $100,000 in reserve costs included in the current reserve study (see categories: pool 5, roofing, fencing, and painting).

Yes  61 No  42 Maybe 48       
Install solar water heating for the main pool. This will cost about $50,000. There is a lifetime warranty on the panels and a three year warranty on labor. Many factors are involved in estimates of savings; the range is $8000-$11,000 per year. 

Yes 87 No  49 Maybe 17      
Lower the water temperature in the main pool and satellite pools from 82 degrees to 80 degrees. We spend about $32,000 in natural gas at the main pool plus the spa and three water heaters. The US Department of Energy estimates that “every one degree reduction in pool temperature can cut energy use 5-10%.” This will save in a range of $3000-$4,000 per year in operating costs, but may make the pool less comfortable for swimmers.

Yes  21 No  114 Maybe 17 
Close the main pool from December 15th to March 15th. In 2007 43% of our natural gas bill was during this period, in 2008 it was 49% ($15,680).  However, this would mean closing our main amenity for three months.

Roof Replacement

Yes  13 No 122 Maybe 14        
Remove roof replacement from reserves. When roofs need to be replaced, fund the cost by a special assessment. This would remove about $3,300,000 from reserve costs (some reserves would remain for roof repairs) but potentially this could mean a large assessment in 8-10 years if roofs are not funded out of the reserve.

Yes  25 No 73 Maybe 47       
Allow $3000 per home for roof replacement expenses ($1,359,000) in reserves.   Pay for the rest with a special assessment when roofs need to be replaced. This would remove just under $2 million from reserve requirements.

Lighting
Yes  12 No 120 Maybe 20    
Remove the bollard lights in front of homes. This would save approximately 7250 kwh of electricity ($1300) per year (plus bulb replacement costs). The current reserve study estimates the replacement cost of these lights at $280,000. We would not save all of this because the association would have to pay for bollard demolition costs and install posts to accommodate our 246 mailboxes. The United Sates Postal Office will dictate the placement of mail boxes if the bollard light posts that support mailboxes  are removed. There might be some streets that are dark at night without these lights.

Yes 341 No 90 Maybe 27          
Remove the bollard lights in front of homes located on well lighted streets. This would   save a part (depending on how many lights were removed) of the above operating and reserve   costs.

Yes 53 No 87 Maybe 16  
 Make mailboxes (and posts if needed,) and outdoor garage lights a homeowner responsibility. The current reserve study allots $13,500 to replace mail boxes. The garage lights have no reserve line and are replaced out of  operating expenses.

Yes  37 No 108 Maybe  12       
Turn all 139 pathway lights off at midnight. This would save about 1780 kwh ($320) per year in electrical costs and reduce bulb replacement costs. However,this would make the paths too dark for safe use without a flashlight.  

Cost Saving Proposals
Yes 196 No 123 Maybe 14      
Remove the Aqua gate. In 2008 the association spent $3453 on access gate maintenance. The current reserve study has $34,700 for entry area fencing, which means all three gates. The Aqua gate could account for about one-third of this amount. However, removal of the Aqua gate would increase traffic through our community.

Yes  59 No 67 Maybe 32       
Increase the clubhouse 2 rental fee from $90 to $200. If usage remains as in the past (45 to 50 paying rentals per year), this would raise $4950-$5500 per year.

Yes  62 No 59 Maybe 36           
Charge $100 per year for advertising in the Breeze. If ads were allowed from individuals and companies outside of Beachwalk and if space were provided for 20 ads, this would generate $2000 per year, roughly half the annual cost ($4118 in 2008)  of printing the Breeze. But management or a volunteer would have to work out the  logistics of collecting money for the ads and residents would not have access to free ads.

Yes  76 No 57 Maybe 26   
Publish the Breeze bi-monthly now that we have information on the WEB. This would save roughly $2,000 per year.

Yes 31 No 106 Maybe 22    
Institute a $50 paperwork and document charge for each architectural application. Given 10 such requests per month, this would generate $6,000 per year. But, this charge might create an incentive for owners to make changes without architectural approval.

The savings described above are estimates and actual savings and costs could vary significantly. A new reserve study has been distributed to homeowners in early December 2009.

Treasurers Update-June 20

As we do every fall, the board will soon be determining the budget for 2010, in either late September or early October. There will be a special meeting announced (details TBD), which all homeowners are encouraged to attend. Everybody would like to avoid costly dues increases. The Board is open to considering creative (and realistic) solutions for cutting our expenses. If you have some ideas, please email Sari at Keystone.

• Our next Reserve Study will be prepared by Advanced Reserve Solutions. The analyst will be on site soon to review our common area assets. As required by law, homeowners will be provided a copy of the study summary along with a number of other policy documents in a fall special mailing.

• People have been asking what big projects are coming up after the main pool renovation. If you look in the Reserve Study you will see a section on each item that lists the useful life remaining. The figures are only estimates, but it will give you a sense of where projects are in the queue. The Board has the discretion to prioritize projects as necessary to optimize scheduling and funding. For the immediate future, the next big project will be painting of the buildings, including dwelling units and common areas.

• For 2009, our cumulative utility consumption is far below previous years due to the permanent closing of two of the small pools, as well as the temporary closing of the main pool. Unfortunately our delinquency rate and collection expenses are far above previous years due to the state of the economy. Hopefully conditions will stabilize soon and we can get beyond this recession.

2010 Reserves -June 12

Discussion is beginning on Budgets for next year, annual budget and reserves.  A new law effective January 1, 2009, requires associations to provide a schedule for regular and special assessments including size and duration needed to sufficiently fund the reserves.  The specific Davis-Sterling law is:

Reserve Funding Plans. (Passed in 2007, Civil Code §1365(b)).Beginning January 1, 2009, associations must distribute a reserve funding plan (“RFP”) to all members along with the association's annual operating budget. The RFP must (i) describe how the association will pay for repairs and replacements of reserve items, and (ii) provide a schedule of special assessments, including size and duration of the special assessment, and increased regular assessments needed to sufficiently fund the RFP.

The question for the community is how do we do this?