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Home My WebLink AboutKimball BudgetKIMBALL TOWERS 2011 Budget Narrative Attachment 3 SUMMARY The 2011 Budget for Kimball Towers proposes a rent increase based on escalating costs, such as the addition of the asset management fee and increased insurance costs. Last year's rents increase was effective December I, 2010. We anticipated this rent adjustment request to be effective September 1, 2011. Currently residents pay 30% of income up to a maximum of $570. ACCT. DESCRIPTION EXPLANATION 5I20 Rental Revenue The proposed rents are as follows: 5220 Vacancy Factor 5410 Financial Revenue -Project Operations 5440 Revenue from Investments - Replacements Reserves 5910 Laundry and Vending 5990 Misc. Revenue 6203 Conventions and Meetings 6204 Management Consultants 6250 Other Renting Expenses 6310 Office Salaries 6311 6320 6330 Office Expenses Management Fee Manager's Salaries 6331 Administrative Rent -Free Units 6340 Legal Expenses 6350 Auditing Expenses 6351 Bookkeeping Fees / Accounting Services 6390 Misc. Administrative Expenses Unit Type # of Units Current Rent Proposed Increase Total Rent One -Bedroom I5I $570 $15 $585 Budgeted at 1 % of rents. Budgeted per audit. Budgeted at $0. The amount remains in the reserve for replacement account and may not be used for operations. Budgeted per audit for laundry and water vending income. Budgeted per audit for key income and other miscellaneous revenue. Budgeted per audit plus $500 for building staff to attend occupancy related training. Budgeted a Community Development Commission asset management fee of $20,000. Budgeted at $500 for background screening fees of potential tenants. Budgeted per current plus 5% for assistance in processing rents at $250 per month plus $750 for additional work related to front-line assistance. Also budgeted for office assistant, Jennifer Hart, working 40 hours per week at $2,773 per month plus additional amount for sick, overtime and salary increase. Budgeted per audit plus 5% for telephone and Internet, office equipment and maintenance, printing and copying expenses, office supplies, postage, etc. Budgeted a 0.25% rate increase from 7.25% to 7.50% of net rental and laundry revenue. Budgeted per current expense plus 5% for Patricia Estanciero, Resident Manager, working 32 hours per week, earning $1,733 per month. Note that the manager's salary is split between Morgan and Kimball Towers. Also budgeted for Floria Gouleva, Assistant Manager, working 32 hours per week, earning $2,357 per month. Budgeted additional amount for overtime, sick and salary increases. Budgeted at $585 each per month for the manager's unit and assistant manager's unit. Budgeted per current plus $500 for project related legal expenses. Budgeted per audit plus $500 for annual audit, electronic submission and filing fees. Budgeted per current plus 5% for quarterly computer maintenance at $750, project computer software updates at $930 and $2,600 for RealPage Software. Budgeted per current expense for Resident Council at $100 per month and for a service coordinator at $1,000 per month. Also includes an allowable I0% fee (of service coordinator costs) at $1,200 for quality assurance services. Prepared by Falkenberg/Gilliam & Associates, Inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 111 (323) 258-3512 Kimball Towers ACCT. DESCRIPTION 6450 Electricity 6451 Water 6452 Gas 6453 Sewer 6510 Payroll 6515 Supplies 6520 Contracts 6525 Garbage and Trash Removal 6530 Security Payroll/ Contract 6546 Heating/Cooling Repairs 6711 Payroll Taxes 6720 Property and Liability Insurance 6722 Worker's Compensation 6723 Health Insurance & Other Employee Benefits 6790 Misc. Taxes, Licenses and Permits Reserve for Replacement Deposits 2011 Budget Narrative Page 2 EXPLANATION Budgeted per audit plus 5%. Budgeted per 12-month total of $31,543 plus 5%. Budgeted per 12-month total of $52,536 plus 5%. Budgeted per audit plus 5%. Current is low because Kimball Towers has not received sewer bill from Public Works for reimbursement. Budgeted per current expense plus 5% for Roberto Estanciero , Superintendent, working I9 hours a week earning $2,022 per month. Note that the Superintendent's salary is split between Morgan and Kimball Towers. Also budgeted for Jordan Gouleva, Assistant Superintendent, working 40 hours a week earning $2,947 per month and for Charles Ray, Maintenance working 40 hours a week earning $3,120. Budgeted additional amount for sick, overtime and salary increases. Budgeted per audit (less $4,700 for purchase of refrigerators/stoves) plus 5% for cleaning supplies, plumbing supplies, electrical and maintenance supplies, appliance parts, paint, and hardware and tools, etc. Budgeted per audit (less $333,619 for capital needs items, which are ineligible to be included in the budget) plus 5% for elevator maintenance, plumbing and electrical repair, carpet cleaning, landscaping, exterminating, generator service, etc. Budgeted per audit plus 5%. Budgeted per audit plus 5% for guard service, quarterly fire alarm inspections, annual fire alarm monitoring, fire/sprinkler alarm repairs, smoke detector purchases and installation, and fire extinguisher service. Budgeted per audit (less $11,364 for isolation valve replacements) plus 5% for heating and cooling repairs. Budgeted at 7.65% of salaries for Social Security and Medicare plus $224 each for SUI/ETT taxes. Budgeted per audit plus 5% for property and liability insurance. Budgeted per current premium of $16,272 plus 5%. Budgeted per current expense plus 5% for four employees at monthly cost of $699.38 each for health insurance, $5.90 each for life insurance, and $15.05 each for dental insurance. In addition, budgeted for pension cost which is 5% of each employee's base payroll Budgeted per audit plus $500 for elevator inspection fees, generator permits, and other misc. fees. Budgeted per monthly deposit of $7,000. May 24, 2011 Prepared by Falkenberg/Gilliam & Associates, Inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 ■ (323) 258-3512 OMB Approval No. 2502-0324 (exp. 09/3/2011) Budget Worksheet U.S. Department of Housing Income and Expense Projections and Urban Development Office of Housing Federal Housing Commissioner Public reporting burden for this colleclion of information is estimated to average 1.5 hours per response, including the time for reviewing instruclions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may not collect this information, and you are not required to complete this foram, unless if displays a currently valid OMB control number. This information is collecled in accordance with Title II of the National Housing Act which requires that HUD regulate rents for certain cooperative and subsidized rental projects. The Department formulated the processes by which owners could request increases. The requirements for tenant participation in the rent increase process, which is included in Section 202 (b) of the HCD Amendments of 1978, necessitated that the Department design procedures to give consideration for tenant comments. The information gathered is not of a confidential nature. The information is required in order to obtain benefits. Project Number Name of Project KIMBALL TOWER Description of Account Acct. No. Profit/Loss (FYE 6130/2010} Current FY (no. of mos. 9) Budget from 911/11-8/31/12 Rental Rent Revenue - Gross Potential 5120 529,508 383,992 635,453 Income Tenant Assistance Payments 5121 353,782 340,423 424,567 5100 Rent Revenue - Stores & Commercial 5140 Garage & Parking Spaces 5170 Flexible Subsidy Revenue 5180 Miscellaneous Rent Revenue 5190 Excess Rent 5191 Rent Revenue/Insurance 5192 Special Claims Revenue 5193 Retained Excess income 5194 Total Rent Revenue Potential at 100% Occupancy 5100T 883,290 724,415 1,060,020 Vacancies Apartments 5220 2,721 894 10,600 5200 Stores and Commercial 5240 Rental Concessions 5250 Garage & Parking Spaces 5270 Miscellaneous 5290 Total Vacancies 5200T 2,721 894 10,600 1 Net Rental Revenue (Rent Revenue less Vacancies) 5152N 880,569 723,521 1,049,420 Income Nursing HomeslAssisted Living/Board & Care/ Other 5300 Elderly Care/ Coop! Other Revenues 5300 Financial Financial Revenue - Project Operations 5410 109 23 109 Revenue Revenue from Investments - Res. Rec. 5430 5400 Revenue from Investments - Repl. Res 5440 3,738 Revenue from Investments - Miscellaneous 5490 - Total Financial Revenue 5400T 3,847 23 109 Other Laundry and Vending Revenue 5910 7,119 5,383 7,119 Revenue Tenant Charges 5920 5900 Interest Reduction Payments Revenue 5945 Gifts (nonprofits} 5970 Miscellaneous Revenue 5990 140 320 140 Total Other_Revenue 5900T 7,259 5,703 7,259 Total Revenue 5000T 891,675 729,247 1,056,788 Admin. Conventions and Meetings 6203 2,237 4,085 2,737 Expenses Management Consultants 6204 20,000 62001 Advertising and Marketing 6210 - - f 6300 Other Renting Expense 6250 52 500 Office Salaries 6310 33,793 34,546 41,344 Once Expenses 6311 25,880 13,954 27,174 Office or Model Apartment Rent 6312 - Management Fee 6320 60,363 51,844 79,240 Manager or Superintendent Salaries 6330 51,713 41,841 56,542 Administrative Rent Free Unit 6331 17,784 10,960 14,040 Legal Expenses - Project 6340 - 1,080 1,580j Audit Expenses 6350 3,500 3,000 4,000 Bookkeeping Fees/Accounting Services 6351 1, 555 3,740 4,494 Miscellaneous Administrative Expenses 6390 13,200 9,900 14,400 Total Administrative Expenses 6263 T 210,025 175,002 266,051 Previous editions are obsolete page 1 of 2 ref. Handbook 4350,1 form HUD-92547-A(812000) Project Number Name of Project KIMBALL TOWER Description of Account Utilities Fuel Oil/Coal Acct. No. Profit/Loss (FYE 6/30/2010) Current FY (no. of mos. 9) Budget from 911111-8131112 6420 w 6400 Electricity 6450 45,693 33,157 47,978 Water 6451 29,734 20,985 33,120 Gas 6452 47,681 40,672 55,163 Sewer 6453 45,300 0 47,565 Total Utilities Expense 6400 T 168,408 94,814 183,826 Operating & Payroll 6510 101,809 73,993 109,418 Maint. Supplies 6515 58,354 36,788 56,337 Expenses Contracts 6520 497,185 136,430 171,744: 6500 Operating and Maintenance Rent Free Unit 6521 Garbage and Trash Removal 6525 14,257 10,408 14,970 Security Payroll/Contract 6530 28,412 22,226 29,833 Security Rent Free Unit 6531 Heating/Cooling Repairs and Maintenance 6546 33,000 15,703 22,718 Snow Removal 6548 Vehicle & Maint. Equip. Oper. and Repair 6570 Misc. Operating & Maintenance Expenses 6590 Total Operating & Maintenance Expenses 6500 T 733,017 295,548 405,020 Taxes & Real Estate Taxes 6710 Insurance payroll Taxes (Project's share) 6711 17,009 14,314 16,904 6700 Property and Liability insurance (Hazard) 6720 33,345 22,707 35,012 Fidelity Bond insurance 6721 Workmen's Compensation 6722 13,748 9,190 17,086 Health Insurance & Other Employee Benefits 6723 30,725: 18,815 45,351 Misc. Taxes, Limn., Permits, & Insurance 6790 789 8 1,289 Total Taxes & insurance 6700T 95,616 65,034 115,642 Financial Interest on Mortgage Payable 6820 - - Expenses Interest on Notes Payable (Long -Term) * 6830 6800 Interest on Notes Payable (Short -Term) * 6840 Mortgage Insurance Premium/Service Charge 6850 Miscellaneous Financial Expenses 6890 Total Financial Expenses 6800 T - - - Expenses Nursing Homes/Assisted Living/Board & 6900 Care/Other Eld. Care/ Coop/ Other 6900 Total Cost of Operations 6000T 1,207,066 630,398 970,539 Reserve for Replacements Dep. Required 84,000 63,000 84,000 Principal Payments Required - - - Debt Service for other approved loans Debt Service Reserve (if required) General Operating Reserve (Coops) Total Cash Requirements 1,291,066 693,398 1,054,539 Less Total Revenue 891,675 729,247 1,056,788 Net Cash Surplus (Deficiency) (399,391) 35,849 2,249 5/24f2Q77 thereby certify that all the information stated herein. as well as any information provided in the accompaniment herewith, is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.G. 3729, 3802) (Signature) Date (mmlddlyyyy) Pre iou editions are obsolete *HUD Approved Secondary Financing page 2 of 2 Only for Budget Projections. ref. Handbook 4350.1 form HUD-92547•A (8/2000) Kimball Tower Capital Improvement Budget Demolition and Reinstallation of Office Roof - $60,000