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Home My WebLink AboutMorgan Tower BudgetMORGAN TOWERS 2013 Budget Narrative Attachment 2 SUMMARY Morgan Towers is entitled to annual rent increases based on HUD's automatic Annual Adjustment Factors (AAF). Last years' AAF was low and Morgan Towers was unable to obtain a rental increase. We will submit this rent adjustment request and anticipate the new rents to be effective September 1, 2013. ACCT. DESCRIPTION 5120 Rental Revenue 5220 Vacancy Factor 5410 Financial Revenue -Project Operations 5430 Revenue from Investments - Residual Receipts 5440 Revenue from Investments - 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 The proposed rents are as follows: EXPLANATION Unit Type # of Units Current Rents Proposed Increase Proposed Rents One -Bedroom 151 $687 $1 $688 One -Bedroom 1 Staff Budgeted at 1% of rental income. 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 for annual occupancy training at $2,000, which includes professional training, food, lodging and mileage for office staff, 2 annual occupancy -related classes at $200 total for office staff, for subtotal of $2,400. In addition, budgeted for annual maintenance seminar at $500 for maintenance staff. Budgeted at $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 $1,250 for additional work related to front-line assistance. Budgeted per audit plus $500 for telephone and Internet, office equipment and maintenance, printing and copying expenses, office supplies, postage, etc. Budgeted at 6.25% of net rental, vending machine and laundry revenue. Management fee has not increased since October 2011. Budgeted per current expense plus 5% for Patricia Estanciero, Resident Manager, working 32 hours per week, earning $1,872 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 $2,773 per month. Budgeted additional amount for overtime, sick time and salary increases. In addition, budgeted for 5% year- end bonuses, in lieu of pension contributions. Budgeted at $500 for project related legal expenses. Budgeted per current plus $500 for annual audit, electronic submission and fling fees. Budgeted for project computer software updates at $116, project computer maintenance at $1,292 and web -based occupancy software at $1,819. Also added allowable bookkeeping fees of $3 PUPM for centralized services. Prepared by Faikenberg/Gilliam & Associates, be. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 R (323) 258-3512 Morgan Towers ACCT. DESCRIPTION 6390 Misc. Administrative Expenses 6450 Electricity 6451 Water 6452 Gas 6453 Sewer 6510 Payroll 6515 6520 Supplies Contracts 6525 Trash Removal 6530 Security Payroll/ Contract 6546 Heating/Cooling Repairs 6590 Misc. Operating Expense 6711 Payroll Taxes 6720 Property and Lability 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 Required 2013 Budget Narrative Page 2 EXPLANATION Budgeted per current for Resident Council at $100 per month. Resident Council is a tenant association that represents the tenants. They are elected by the tenants and provide support, activities and refreshments to all residents. Also budgeted for a service coordinator at $1,025 per month and her monthly interne usage at $79 per month. Also added an allowable 10% fee (of service coordinator costs) at $1,230 for quality assurance services. The service coordinator helps the elderly residents obtain supportive services from the community to help them live independently and in their home. Budgeted per audit plus 5%. Budgeted 12-montli current total of $36,188 plus 5%. Budgeted per audit plus 5%. Budgeted per audit plus 5%. Current is low since expense hasn't been paid. Budgeted per current expense plus 5% for Roberto Estanciero, Superintendent, working 40 hours a week earning $2,340 per month. Note that the Superintendent's salary is split between Morgan and Kimball Towers. Also budgeted for Philip Flores, Assistant Superintendent, working 40 hours a week earning $3,467 per month and for Keyanue McCallon, Maintenance working 40 hours a week earning $3,813. Budgeted additional amount for overtime, sick time and salary increases. In addition, budgeted for 5% year- end bonuses, in lieu of pension contributions. Budgeted per audit plus 5% for cleaning and plumbing supplies, electrical and maintenance supplies, appliance parts, paint, and hardware and tools, etc. Budgeted per audit (less $10,898 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, fire alarm inspections, annual fire alarm monitoring, fire/sprinkler alarm repairs, smoke detector purchases and installation, and fire extinguisher service. Current is high due to fire sprinkler repair at $ I 6,314. Budgeted per audit plus 5% for heating and cooling repairs. Budgeted per current plus $500 for nutrition center expenses. Budgeted at 7.65% of salaries for Social Security and Medicare plus $224 each for SUI/ETT taxes. Budgeted per current premium of $36,785 for property and liability insurance. Budgeted per current plus 5%. Budgeted per current plus 5% for four employees at $833,97 each per month for health insurance, $5.90 each per month for fife insurance, and $ 15.05 each per month for dental insurance. Budgeted per audit plus $500 for elevator inspection fees, generator permit fees, etc. Budgeted per amortization schedule. Budgeted per amortization schedule. Budgeted per current monthly deposit amount of $3,127. Budgeted per amortization schedule. May 28, 2013 Prepared by FalkenbergiGiEiam & Associates, Inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 ■ (323) 258-3512 Budget Worksheet Income and Expense Projections U.S. Department of Housing and Urban Development Office of Housing Federal Housing Ccmmissioner Public reporting burden for this collection cf information is estimated to average 1.5 hours per response, including the time for reviewing instn:cticns, searching existing data sources. gathering and maintaining the data needed, and completing and review:rig the colection of Information. This agency may not collect this Info: mat°on, and you are not required to complete this form, cnless it displays a currently valid OMB control number. Ora Approval No. 2502-0324 (exp. 12/3112014) This information: is co:Iec;ed in accordance ailh Title II or the National Housing Act which requires that HUD :egu:ate rents for certain cooperative and subsidized rental projects. The Department fermutated the processes by wtich owners could request increases. The requirements for tenant participation in the rent increase process, which is included in Section 2C2 (b) of the HCD Amendments of 1976, necessitated that the Department design procedures to give consideration to: tenant comments. The irformetoe 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 6130/2012) PUPM 151112 Current FY (no. of mos. 9 ) PUPM 15119 Budget from 911113-8/31/14 PUPM 151/12 Rental Income 5100 Rent Revenue - Gross Potential 5120 475,881 262.63 359,863 264,80 478,461 264.05 Tenant Assistance Payments 5121 764,052 421.86 573,035 421.66 768,195 423.95 Rent Revenue - Stores & Commercial 5140 - - - Garage & Parking Spaces 5170 - - Flexible Subsidy Revenue 5180 - - Miscellaneous Rent Revenue 5190 - - Excess Rent 5191 - - - Rent Revenuellnsurance 5192 - - - Specia! Claims Revenue 5193 - - - Retained Excess Income 5194 - - - Total Rent Revenue Potential at 10C% Occupancy 5100T 1,239,933 684.29 932,898 686.46 1,246,656 688.00 Vacancies 5200 Apartments 5220 1,435 0.79 2,726 2.01 12,467 6.88 Stores and Comme, ciai 5240 - - - Rental Concessions 5250 68 0.04 - - Garage & Parking Spaces 5270 - - - Miscellaneous 5290 - - i Total Vacancies 5200T 1,503 0.83 2,726 2.01 12,467 6.88 Net Rental Revenue {Rent Revenue less Vacancies) 5152N 1,238,430 683.46 930,172 684.45 1,234,189 681.12 Income 5300 Nursing HomesLAssisted Living/Board & Care/ Other Elderly Care/ Coop,' Other Revenues 5300 Financial Revenue 5400 inancial Revenue - Project Operations 5410 14 0.01 I 14 0.01 14 0.01 Revenue from Investments - Res. Rec. 5430 - - - - Revenue from Investments - Repl. Res 5440 376 0.21 - - Revenue from Investments - Miscellaneous 5490 - - - Total Financial Revenue 5400T 390 0.22 14 0.01 14 0.01 Other Revenue 5900 Laundry and Vending Revenue 5910 6,898 3.81 5,166 3.80 6,898 3.81 Tenant Charges 5920 - - - 'Merest Reduction Payments Revenue 5945 - - Gifts (nonprofits) 5970 - - - Miscellaneous Revenue 5990 2,258 1.25 240 0.18 - Total Other Revenue 5900T 9,156 5,05 5,406 3.98 6,898 3,81 Total Revenue 5000T 1,247,976 688.73 935,592 688,44 1,241,101 684.93 Admin. Expenses 62001 6300 Conventions and Meetings 6203 2,660 1.47 2,211 1.63 2,900 1.60 Management Corsuitants 6204 - - - Advertising and Marketing 6210 180 0.10 - 500 0.28 Other Renting Expense 6250 838 3.46 1,176 0.87 1,338 0.74 Office Salaries 6310 7,935 4.38 5,740 4.22 9,188 5.07 Office Expenses 631 i 9,632 5.32 8,369 6.16 10,132 5.59 Office or Model Apartment Rent 6312 - - - - Management Fee 6320 61,518 33.95 46,882 34.50 77,568 42.81 Manager or Superintendent Salaries 6330 59,037 32,58 39,921 29.38 66,458 36.68 Administrative Rent Free Unit 6331 Legal Expenses - Project 6340 - - 350 0.26 500 0.28 Audit Expenses 6350 6,500 3.59 7,500 5.52 8,000 4.42 Bookkeeping Fees/Accounting Services 6351 2,446 1.35 4,589 3.38 8,698 4.60 Misce':laneous Administrative Expenses 6390 13,990 7.72 10,736 7.90 15,678 5.65 Total Administrative Expenses 6263 T 164,736 90.91 127,474 93.80 200,960 110.91 Previous editions are obsolete page 1 of 2 ref. Handbook 4350.1 form HUD-92547-A (8/2000) Project Number 129-38013 Name of Project MORGAN TOWERS Description of Account Acct. No. Audit (FYE 6/30/2012) PUPM 151112 Current FY (no. of mos. 9) PUPM 15119 Budge: from 9/1/13-8131/14 PUPM 151112 Utilities Fuel Oil/Coal 6420 6400 Electricity 6450 39,600 21.96 IIIIIIIEBESI 22.10 41,79C 23.06 Water 6451 34,502 19.21 27,493 20 Gas 6452 33,052 18.25 21,865 16 09 Sewer 6453 45,500 25.17 Total Utilities Expense 6400 T 163,264 84.58 79,391 Operating & Payroll 6510 120,361 66.42 84,141 61 91 134,773 74.38 Maint. Supplies 6515 31,378 17.32 24,117 • Expenses Contracts 6520 102,322 56.47 93,600 6500 Operating ar.d Maintenance Rent F'ee Unit 6521 - Garbage and Trash Removal 6525 12,290 6.78 9,120 5.71 12,905 Security Payroll/Contract 65,30 39,415 21.75 54,12E 39.83 Security Rent Free Un t 6531 - HeatinglCcoling Repairs and Maintenance 654E 26605 14.68 ':3,195 Snow Removal 6548 - - Vehicle & Maint. Equip. Oper. and Repair 657C - - Misc. Operating & Maintenance Expenses 6590 2,5C6 1,3E 5,421 3.99 5,921 Total Operating & Maintenance Expenses 6500 T 334,879 184.81 283,720 208.77 Taxes & Real Estate Taxes 6710 - Insurance Payroll Taxes (Prcject's share) 6711 15,323 8.46 '.0,780 7.93 6700 Propery and Liability Insurance (Hazard) 6720 32,989 18.21 25,325 18.64 35,785 Fidelity Bond insurance 6721 - - - Workmen's Compensation 6722 11,286 6.23 13,137 9.67 13,794 7.61 Health Insurance & Other Employee Benefits 6723 31,944 17.63 25,755 .4isc. Taxes, Licen., Permits, & Insurance 6790 1,218 0.67 1,890 Total Taxes & Insurance 6700T , 92,760 51.19 76,887 Financial Interest on Mortgage Payable 6820 152,714 84.28 96,623 71.10 Expenses Interest on Notes Payable (Long -Term) ` 6830 6600 Interest on Notes Payable (Short -Term)* emo I ~Mortgage Insurance Premium/Service Charge 10,794 6.97 8,454 4.67 Miscellaneous Financial Expenses 6890 IIIIIIIIIIIIIIIIIIIIIII Total Financial Expenses 6800 T 163,508 90.24 106,094 78.07 119,773 66.10 Expenses Nursing Homes/Assisted Living/Board S. 6900 Care/Other Eld. Carel Coop/ Other Total Cost of Operations 6000T 909,147 + 673,666 495.63 946,878 MN Reserve for Replacements Dep. Required 37,524 20.71 28,143 20.71 37,524 NM Principal Payments Required 218,49,2 120.58 173,419 127.61 1 245,737 Debt Service for other approved loans �MI e (If required) d) Central Service ReseOperating �� IIIIIIIII General Operating Reserve (Coops) �� Total Cash Requirements 1;165,163 643.03 875;128 643.95 1,233,139 680.54 Less Total Revenue 1,247,976 688.73 935;592 688.44 1,241,101 684.93 Net Cash Surplus {Deficiency) 82,813 45.70 60;464 , 44.49 7,962 4.39 5P28/2013 I hereby certify that all the informatio' stated herein, as wel' 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 aid'or civil penalties. (18 U.S.C. 1031, 1010, 1012; 31 U.S.G. 3729. 3602) ( igneture) Date (mmlddlyyyy) rev'. - editions are obsolete 'HUD Approved Secondary Financing page 2 of 2 Only for Budget Projections. ref. Handbook 9350.1 form HUD-92547-A (812000) CAPITAL IMPROVEMENT BUDGET MORGAN TOWER • Replace roofing and roof -top ventilation units. Estimate: $225,000/Paid by Morgan Tower replacement reserves • Install Grease Interceptor and renovate employee bathroom drain system. Estimate: $90,000/ Paid by Kimball Tower replacement reserves • Up -grade Fire Suppression system including underground fire line and auxiliary pump system. Estimate: $200,000/ Paid by Kimball Tower replacement reserves