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Home My WebLink AboutAttachment 2: Morgan BudgetMORGAN TOWERS 2012 Budget Narrative SUMMARY Morgan Towers is entitled to annual rent increases based on HUD's automatic Annual Adjustment Factors (AAF). This year's AAF's were 0% for San Diego Area, and therefore the building is not allowed to increase rents for the 2012 budget year. We will submit this budget for approval for the 2012 budget year. ACCT. DESCRIPTION EXPLANATION 5120 Rental Revenue The proposed rents are as follows: 5220 Vacancy Factor 5410 Financial Revenue -Project Operations 5430 Revenue from Investments - Residual Receipts 5440 Revenue from Investnents- Replacements Reserves 5910 Laundry and Vending 6203 Conventions and Meetings 6210 Advertising and Marketing 6250 Other Renting Expenses 6310 Office Salaries 6311 Office Expenses 6320 Management Fee 6330 Manager's Salaries 6340 Legal Expenses 6350 Auditing Expenses 6351 Bookkeeping Fees / Accounting Services 6390 Misc. Administrative Expenses Attachment 2 • Unit Type # of Units Current Rents Proposed Increase Proposed Rents One -Bedroom 151 $687 $0 $687 .One -Bedroom 1 Staff Budgeted at 1% of rents. Budgeted per audit. Budgeted at $0. The amount remains in the residual receipts account and may not be used for operations. 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 vending machine income. Laundry facilities are leased. Budgeted per current for the following training: • Annual occupancy seminar at $1,800, which includes professional training, food, lodging and mileage for office staff. • 2 annual occupancy -related classes at $200 for office staff. • Annual maintenance seminar at $I 900 for maintenance_staff Budgeted per audit plus $500 for classified advertising of rental units. Budgeted per audit plus $500 for background screening fees of potential tenants. Budgeted per current plus 5% for assistance in processing HUD paperwork at $630 per month plus $I,250 for additional work related to front-line assistance. Budgeted per audit plus 5% for telephone and Internet, office equipment and maintenance, printing and copying expenses, office supplies, postage, etc. Budgeted at current rate of 5.0% of net rental and laundry revenue. Budgeted per current expense plus 5% for Patricia Estanciero, Resident Manager, working 32 hours per week, earning $1,803 per month. Note that the manager's salary is split between Morgan and Kimball Towers. Also budgeted for Rosa Flores, Assistant Manager, working 32 hours per week, earning $2,635 per month. Budgeted additional amount for overtime, sick time and salary increases. Budgeted per audit plus $500 for project related legal expenses. Budgeted per audit plus $500 for annual audit, electronic submission and filing fees. Budgeted for project computer software updates at $803, project computer maintenance at $1,890 and web -based occupancy software at $1,733. Also added allowable bookkeeping fees of$2 PUPM for centralized services. Budgeted per current for Resident Council at $100 per month, for a service coordinator at $1,000 per month and her monthly internet usage at $79 per month. Also includes an allowable 10% 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 ■ (323) 258-3512 Morgan Towers ACCT. DESCRIPTION 6450 Electricity 6451 Water 6452 Gas 6453 Sewer 6510 Payroll 6515 Supplies 6520 Contracts 6525 Trash Removal 6530 Security Payroll/ Contract 6546 Heating/Cooling Repairs 2012 Budget Narrative Page 2 EXPLANATION Budgeted per 12-month total of $40,339 plus 5%. Budgeted per audit plus 5%. Budgeted per audit plus 5%. Budgeted per audit plus 5%. Budgeted per current expense plus 5% for Roberto Estanciero, Superintendent, working 32 hours a week earning $2,103 per month. Note that the Superintendent's salary is split between Morgan and Kimball Towers. Also budgeted for Philip Flores, Assistant Superintendent, working 37 hours a week earning $3,074 per month and for Keyanue McCallon, Maintenance working 40 hours a week earning $3,467. Budgeted additional amount for overtime, sick time and salary increases. Audit was high due to due to additional temp help, which no longer applies. Budgeted per current plus 5% for cleaning and plumbing supplies, electrical and maintenance supplies, appliance parts, paint, and hardware and tools, etc. Budgeted per audit (less $32,260 for capital needs items such as flooring and cabinets/countertops) 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 plus 5% for heating and 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 6820 interest on Mortgage Payable 6850 Mortgage Insurance Premium Reserve for Replacement Deposits Principal Payments Requi red 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 audit plus 5%. Budgeted per current plus 5% for four employees at $758.83 each per month for health insurance five employees at $5.90 each per month for life insurance, and five employees at $15.05 each per month for dental insurance. In addition, budgeted for pension cost which is 5% of each employee's base payroll. Budgeted per current plus 5% for elevator inspection fees at $850 and generator permit fee at $360. Budgeted per amortization schedule. Budgeted per amortization schedule. Budgeted per current monthly deposit amount of $3,127. Budgeted per amortization schedule. Rev..hrne 4, 2012 Prepared by Farkket berg/Gitilaam. & Associates, Inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 ■ (323) 258-3512 Budget Works heet U.S. Department of Housing OMB Approval No. 2502-0324 and Urban Development (exp. 1213112014) Income and Expense Projections Office of Housing Federal Housing Commissioner Public reporting burden for this collection of information is estimated to average 1.5 hours per response, Including the time for reviewing instructions, 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 form, unless It displays a currently valid OMB control number. This information is collected 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 conk' 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 129-38013 Name of Project MORGAN TOWERS Description of Account Acct. No. Audit (FYE 6/30/2011) PUPM 151/12 Current FY (no. of mos. 9) PUPM 151/9 Budget from 1011112-9130/13 PUPM 151/12 Rental Rent Revenue - Gross Potential _ 5120 501,104 MEM 359,293 264.38 512,480 282.83 Income Tenant Assistance Payments 5121 716,107 395.20 568,209 418.11 732,364 404.17 5100 Rent Revenue - Stores & Commercial 5140 - - - Garage & Parking Spaces 5170 - - - Flexible Subsidy Revenue 5180 - - - Miscelianeous 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 1,217,211 671.75 927,502 682.49 1,244,844 687.00 Vacancies Apartments 5220 4,946 2.73 933 0.69 12,448 6.87 5200 Stores and Commercial 5240 - - - Rental Concessions 5250 1,047 0.58 68 0.05 - Garage & Parking Spaces 5270 - - - Miscellaneous 5290 - - Total Vacancies 5200T 5,993 3.31 1,001 0.74 12,448 6.87 Net Rental Revenue (Rent Revenue less Vacancies) 5152N 1,211,218 668.44 926,501 681.75 1,232,396 680.13 Income Nursing-Homes!Assisted-L-ivingfBoard &--Care/ Other 5300 Elderly Care/ Coop! Other Revenues 5300 Financial Financial Revenue - Project Operations 5410 29 0.02 12 0.01 29 0.02 Revenue Revenue from Investments - Res, Rec. 5430 702 0.39 - - 5400 Revenue from investments - Repl. Res 5440 77 0.04 - - Revenue from Investments - Miscellaneous 5490 - - - - Total Financial Revenue 5400T 808 0.45 12 0,01 29 0.02 Other Laundry and Vending Revenue 5910 7,222 3.99 5,106 3.76 7,222 3.99 Revenue Tenant Charges 5920 - - - 5900 Interest Reduction Payments Revenue 5945 - - Gifts (nonprofits) 5970 - - - Miscellaneous Revenue 5990 100 0.06 2,258 1.66 - Total Other Revenue 5900T 7,322 4.04 7,364 5.42 7,222 3.99 Total Revenue 6000T 1,219,348 672.93 933,877 687.18 1,239,647 684.13 Admin. Conventions and Meetings 6203 1,510 0.83 2,448 1.80 3,000 1.66 Expenses Management Consultants 6204 - - - 6200! Advertising and Marketing 6300 6210 1,081 0.60 - 1,581 0.87 Other Renting Expense 6250 1,378 0.76 329 0.24 1,878 1.04 Office Salaries 6310 15,202 8.39 6,045 4.45 9,188 5.07 Office Expenses 6311 - 10,785 5.95 7,171 5.28 11,324 6.25 Office or Model Apartment Rent 6312 - - - - Management Fee 6320 57,215 31.58 45,481 33.47 61,981 34.21 Manager or Superintendent Salaries 6330 58,532 32.30 43,604 32.09 64,706 35.71 Administrative Rent Free Unit 6331 Legal Expenses - Project 63440 1,080 0.60 - - 1,580 0.87 Audit Expenses 6350 9,725 5.37 6,500 4.78 10,225 5.64 Bookkeeping Fees/Accounting Services 6351 3,340 1.84 2,325 1.71 8,074 4.46 Miscellaneous Administrative Expenses 6390 13,200 7.28 10,453 7.69 15,348 8.47 Total Administrative Expenses 6263 T 173,048 95.50 124,356 91.51 188,885 104,24 Project Number 129-38013 Name of Project MORGAN TOWERS Description of Account Acct. No. Audit (FYE 6/30/2011) PUPM 151/12 CurrentFY (no. of mos. 9) PUPM 151/9 Budget from 10/1/12-9/30/13 PUPM 151112 6400 Previous editions are obsolete Utilities Fuel Oil/Coal page 1 of 2 ref. Handbook 4350.1 form HUD-92547-A 8/2000) 6420 Electricity 6450 39,820 21.98 30,163 22.19 42,356 23.38 Water 6451 39,849 21.99 26,064 19.18 41,841 23.09 Gas 6452 37,270 20.57 26,296 19.35 39,134 21.60 Sewer 6453 45,600 25.17 45,600 33.55 47,880 26.42 Total Utilities Expense 6400 T 162,539 89.70 128,123 94.28 171,211 94.49 Operating Expenses 6500 & Payroll 6510 136,017 75.06 88,047 64.79 123,348 68.07 Maint, Supplies 6515 49,074 27.08 21,360 15.72 51,528 28.44 Contracts 6520 143,960 79.44 69,863 51.41 117,274 64.72 Operating and Maintenance Rent Free Unit 6521 - - Garbage and Trash Removal 6525 12,662 6.99 9,320 6.86 13,295 7.34 Security Payroll/Contract 6530 28,235 15.58 27,520 20.25 29,647 16.36 Security Rent Free Unit 6531 - - - Heating/Cooling Repairs and Maintenance 6546 25,624 14.14 22,671 16.68 26,905 14.85 Snow Removal 6548 - - - Vehicle & Maint. Equip. Oper. and Repair 6570 - - - Misc. Operating & Maintenance Expenses 6590 - - - Total Operating & Maintenance Expenses 6500 T 395,562 218.30 238,781 175.70 361,997 199.78 Taxes Insurance 6700 & Real Estate Taxes 6710 - - Payroll Taxes (Project's share) 6711 18,281 10.09 11,767 8.66 15,506 8.56 Property and Liability Insurance (Hazard) 6720 32,764 18.08 24,689 18.17 34,402 18.99 Fidelity Bond Insurance 6721 - - - Workmen's Compensation 6722 14,819 8.18 12,351 9.09 15,560 8.59 Health Insurance & Other Employee Benefits 6723 28,440 15.70 23,708 17.45 39,565 21.83 Misc. Taxes, Licen., Permits, & insurance 6790 2,000 1.10 1,210 0.89 1,271 . 0.70 Total Taxes & Insurance 6700T 96,304 53.15 73,725 54.25 106,304 58.67 Financial Interest on Mortgage Payable 6820 155,279 85.69 107,608 79.11 126,932 70.05 6800 Pd.'" Interest on Notes Payable (Long -Term) * 6830 Interest on Notes Payable (Short -Term) * 6840 Mortgage Insurance Premium/Service Charge 6850 11,855 6.54 7,961 5.86 9,471 5.23 Miscellaneous Financial Expenses 6890 Tota! Financial Expenses 6800 T 167,134 92.24 115,469 84.97 136,403 75.28 Expenses Nursing HomeslAssisfed Living/Board & 6900 Care/Other Etd. Care/ Coop/ Other 6900 Total Cost of Operations 6000T 994,587 548.89 680,454 500.70 964,800 532.45 Reserve for"ReplacementsDO. Required 37 524 20.71 28,143 ..20.71 37;524 . 20 71 Principal Payments Required 204,777 113.01 162,634 119.60 233,124 128.66 Debt Service for other approved loans Debt Service Reserve (if required) General Operating Reserve (Coops) Total Cash Requirements 1,236,888 682.61 871,131 641.01 1,235,448 681.81 Less Total Revenue 1,219,348 672.93 933,877 687.18 1,239,647 684.13 Net Cash Surplus (Deficiency) (17,540) (9.68) 62,746 46.17 4,199 2.32 Rev. 6/4/2012 I Warning: (Signature) hereby certify that all the information stated herein, as well as any Information provided In the accompaniment herewith, is true and accurate. HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, I 1912; 31 U.S.C. 3729, 3802) Date (mmlddlyyyy) Previo0 ditions are obsolete *HUD Approved Secondary Financing page 2 of 2 ref. Handbook 4350.1 form HUD-92547-A (812000) Only for Budget Projections. CAPITAL IMPROVEMENT BUDGET MORGAN TOWER Replace roofing: Estimate: $ 150,000/Paid by replacement reserves Replace roof top ventilation units: Estimate: $75,000/ Paid by replacement reserves