Treasurer’s Report

For the Year to Date September 30, 2018

November 3, 2018

The certified public accounting firm of Doane CPA Firm audited the books of the Association for the year ending December 31, 2017. Their final report, which indicates the financial position of the Association as of the end of 2017, will be mailed to the membership this month with the annual meeting minutes.

This report will reflect the data from the last financial statement available, which is as of September 30, 2018.

The Association ended September with a loss of income to expenses of $102,413 for the year to date. This appears alarming but actually isn’t. In preparing the 2018 budget, the Association carried forward $80,000 in prior years’ surpluses to offset fees for 2018, which essentially means $80,000 of the expenses incurred during 2018 are being paid with funds collected prior to 2018, which do not appear on the current financial statements. Also, $50,000 was budgeted for depreciation but is not included in the amount collected from owners since it is not funded with real money. These two items create a loss on paper, but in reality, income and expenses are right on track for the amounts budgeted.

There was $1,169,048 in operating funds, which is higher than normal, due to Westgate paying its fourth quarter fees in September. Accounts receivable totaled $205,466, $172,702 of which is fourth quarter maintenance fees invoiced in September but not due until October, leaving an actual receivable amount of $32,764. Accounts receivable over 30 days totaled $30,420, $9,730 of which was paid in October, and most of the remaining balance of which is in attorney collection. Accounts payable were $27,885.

The most significant overbudget items in 2018 were:

  • Vehicle maintenance in the grounds department, overbudget by $7,076, due to aging vehicles needing more repairs.
  • Landscape chemicals, overbudget by $7,628, due to more spraying needed to keep weeds at bay during an exceptionally wet summer, and additional costs for spraying around the natural areas.
  • Trash removal, overbudget by $7,666, due to extra pickups needed for overages in household trash.
  • Building paint, overbudget by $2,247, due to moving to a higher quality paint that will last longer.
  • Administrative payroll, overbudget by $8,153, due to being double staffed for a period of time while training a new accounting manager.
  • Health insurance in administration, overbudget by $4,350 due to Brenda, who was on Medicare, retiring and the Association hiring an employee who is now on the Association’s insurance.
  • Tree care, overbudget by $5,804, due to trees dying that were stressed by last year’s hurricane, and $8,000 spent on stump grinding. Tree trimming in the natural areas was overbudget by $5,873.
  • Workers’ compensation, overbudget by $6,713, due to the new carrier reclassifying some of the employees and raising rates.
  • Vehicle insurance, overbudget by $4,410, due to the purchase of two used vehicles to replace utility carts that no longer ran.
  • Laundry room maintenance, overbudget by $2,564, due to extra hours needed to address cleanliness complaints expressed at last year’s annual meeting.
  • Uniforms, tools and equipment in the building department, overbudget by $2,308.
  • Temporary help in grounds is overbudget by $95,694, but the amount is offset by underbudget amounts in grounds payroll, taxes, health insurance and workers comp totaling $79,440. There was also an unplanned increase in costs for temporary labor due to labor shortages as a result of the hurricane.

The primary underbudget areas include:

  • Building payroll, health insurance and payroll taxes, underbudget by a total of $22,767, due to staffing shortages in that department.
  • Bad debt/foreclosures, underbudget by $15,000, due to there being no bank foreclosures during 2018.
  • Lighting, underbudget by $4,519, due to the Association getting a great deal on bulbs at the beginning of the year and stocking up. Building materials is underbudget by $5,345.
  • Mulch, underbudget by $5,931 as of September 30. However, the majority of this amount was used up in October.
  • Electrical and plumbing contractors, underbudget by $2,773, due to not having to do as many sewer line replacements as anticipated. This amount will be used up, however, during the installation of electric service to the new trash compactors.
  • Water and sewer, underbudget by $1,829, due to less irrigation needed during an exceptionally wet summer.
  • Directors’ expenses, underbudget by $2,150, due to directors teleconferencing for most meetings rather than attending in person.
  • Federal income taxes, underbudget by $3,117, due to there being no taxes due for 2017.

Income from laundry equipment is $88,385. Total interest income thus far is $1,206: $799 from operating funds and $407 from reserve funds.

The Association ended September with $873,572 in reserves, the largest of which is the multi-unit roof reserve, at $406,946. The Association is building this reserve to cover the eventual replacement of the 1.2 million dollars in reroofing that had to be done after the 2004 hurricanes. The multi-unit building reserve carries a balance of $216,006, and the lakeloft reserve has a balance of $21,908. The landscaping reserve has a balance of $7,946, and the equipment reserve balance is $54,065. The parking lot resurfacing fund has a balance of $26,688, and the laundry reserve has a balance of $136,606. The cash reserves are primarily invested in CDs, money markets and savings accounts at CenterState Bank, Mid-Florida Federal Credit Union, Quantum National Bank, Citizens Bank, TD Bank and SunTrust. The interest rates on these accounts vary, with an average rate of return of approximately .21 percent.

Respectfully submitted,

John R. “Randy” Kuhl