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HomeMy WebLinkAboutAttachment 3MORGAN TOWERS 2014 Budget Narrative Attachment 3 SUMMARY Morgan Towers' rent increase for 2014 is only $10. That is the total rent increase amount to which the building is entitled. Even though the budget reflects a shortfall, the building should have adequate funds in the short-term to meet its current needs and obligations. We anticipate the new rents to be effective September 1, 2014. There are currently two residents who do not participate in the Section 8 program and they will be affected by this rent increase. 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 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 6350 6351 Legal Expenses Auditing Expenses Bookkeeping Fees / Accounting Services Unit Type # of Units Current Rents Proposed Increase Proposed Rents One -Bedroom 151 $688 $10 $698 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 $2,200. In addition, budgeted for annual maintenance seminar at $500 for maintenance staff. Budgeted at $500 for classified advertising of rental units (Affirmative Marketing). Budgeted per audit for background screening fees of potential tenants. Budgeted per current for assistance in processing HUD paperwork at $756 per month • plus $1,250 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 per current contract rate at 6.5% of net rental, vending machine and laundry revenue. Budgeted per current expense plus 5% for Patricia Estanciero, Resident Manager, working 32 hours per week, earning $1,941 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 $2,912 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 per audit for project related legal expenses. Budgeted per audit plus $500 forannual audit, electronic submission and filing fees. Budgeted for project computer software updates at $128, project computer maintenance at $1;292 and web -based occupancy software at $1,911. Also included allowable bookkeeping fees of $4 PUPM for centralized services. Prepared by Fa1Lkenberg/Giiiam kgt Associates, Inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 a (323) 258-3512 Morgan Towers ACCT. DESCRIPTION 6390 Misc. Administrative Expenses 6450 Electricity 6451 Water 6452 Gas 6453 Sewer 6510 Payroll 6515 6520 6525 6530 Supplies Contracts Trash Removal Security Payroll/ Contract 6546 Heating/Cooling Repairs 6590 Misc. Operating Expense 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 Required 2014 Budget Narrative 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 internet usage at $79 per month. The service coordinator helps the elderly residents obtain supportive services from the community to help them live independently and in their home. Attachment 3 Page 2 Budgeted per 12-month current total of $43,274 plus 5%. Budgeted per 12-month current total of $39,528 plus 5%. Budgeted per audit plus 5%. Budgeted per audit. 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 $2,427 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 $3,640 per month and for Keyanue McCallon, Maintenance working 40 hours a week earning $3,987. 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 (less $1,703 for capital needs item, such as refrigerators/stoves) plus 5% for cleaning and plumbing supplies, electrical and maintenance supplies, appliance parts, paint, and hardware and tools, etc. Budgeted per audit (less $30,042 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 12-month current total of $12,780 plus 5%. Budgeted per audit (less $25,764 for fire sprinkler upgrade) 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 payment of fire alarm replacement at$54,107. Budgeted per audit plus 5% for heating and cooling repairs. Budgeted per audit plus 5% 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 2014 -2015 premium of $41,547 for property and liability. Budgeted per 2013-14 premium of $13,466 plus 5% for worker's compensation. Budgeted per current plus 5% for four employees at.$909.02 each per month for health insurance, $5.90 each per month' for life. insurance, and $15.81 each per month for dental insurance. Budgeted per audit plus $500 for elevator inspection fees at $700, generator permit fees at $309, and fire permit at $703. Budgeted per amortization schedule. Budgeted per amortization schedule. Budgeted per current monthly deposit amount of $3,127. Budgeted per amortization schedule. May 20, 2014 Prepared by aillkeiberg/Gtlliarn & Associates, inc. ■ Managing Agents 1560 West Colorado Boulevard, P.O. Box 7070, Pasadena, CA 91109-7070 IN (323) 258-3512 Budget Worksheet Income and Expense Projections U.S. Department of Housing and Urban Development 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. OMB Approval01?43 (exp. 12/31/2014) 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 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 129-38013 Name of Project ' MORGAN TOWERS Description of Account Acct. No. Audit (FYE 6/30/2013) PUPM 151/12 Current FY (no. of mos. 9) 379,425 PUPM 151/9 279.19 Budget from 9/1/14-8/31/15 PUPM 151/12 Rent Revenue - Gross Potential Rental 5120 486,070 268.25 493,689 272.46 Income Tenant Assistance Payments 5121 759,188 418.98 557,612 410.31 771,087 425.54 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 1,245,258 687.23 937,037 689.50 1,264,776 698.00 Vacancies Apartments 5220 4,005 2.21 2,216 1.63 12,648 6.98 5200 Stores and Commercial 5240 - - - Rental Concessions 5250 - - 324 0.24 - Garage & Parking Spaces 5270 - - - Miscellaneous 5290 - - Total Vacancies 5200T 4,005 2.21 2,540 1.87 12,648 6.98 Net Rental Revenue (Rent Revenue less Vacancies) 5152N 1,241,253 685.02 934,497 687.64 1,252,128 691.02 Income Nursing Homes/Assisted Living/Board & Care/ Other 5300 Elderly Care/ Coop/ Other Revenues 5300 Financial Financial Revenue - Project Operations 5410 19 0.01 13 0.01 19 0.01 Revenue Revenue from Investments - Res. Rec. 5430 789 0.44 - - 5400 Revenue from Investments - Repl. Res 5440 941 0.52 - Revenue from Investments - Miscellaneous 5490 - - - - Total Financial Revenue . 5400T 1,749 0.97 13 0.01 19 0.01 Other Laundry and Vending Revenue 5910 7,048 3.89 5,254 3.87 7,048 • 3.89 Revenue Tenant Charges 5920 ' 330 0.18 60 0.04 - 5900 Interest Reduction Payments Revenue 5945 - - - Gifts (nonprofits) 5970 - - - Miscellaneous Revenue 5990 - - - - Total Other Revenue 5900T 7,378 4.07 5,314 3.91 7,048 3.89 Total Revenue 5000T 1,250,380 690.06 939,824 691.56 1,259,195 694.92 Admin. Conventions and Meetings 6203 2,261 1:25 1,372 1.01 2,700 1.49 Expenses Management Consultants 6204 - - - 6200/ Advertising and Marketing 6210 250 0.14 - 500 0.28 6300 Other Renting Expense 6250 1,547 0.85 228 0.17 1,547 0.85 Office Salaries 6310 7,630 4.21 6,323 4.65 10,322 5.70. Office Expenses 6311 11,026 6.08 9,132 6.72 11,577 6.39 Office or Model Apartment Rent 6312 - - - - Management Fee 6320 62,376 34.42 54,612 40.19 81,846 45.17 Manager or Superintendent Salaries 6330 58,039 32.03 48,911 35.99 67,564 37.29 Administrative Rent Free Unit 6331 Legal Expenses - Project 6340 520 0.29 - - 520 0.29 Audit Expenses 6350 7,500 4.14 - - 8,000 4.42 Bookkeeping Fees/Accounting Services 6351 5,857 3.23 6,364 4.68 10,626 5.86 Miscellaneous Administrative Expenses 6390 14,374 7.93 10,915 8.03 14,448 7.97 Total Administrative Expenses 6263 T 171,380 94.58 137,857 101.44 209,650 115.70 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 ac men MORGAN TOWERS Description of Account Acct. No. Audit (FYE 6/30/2013) PUPM 151/12 Current FY (no. of mos. 9) PUPM 151/9 Budget from 9/1/14-8/31/15 PUPM 151/12 Utilities Fuel Oil/Coal 6420 6400 Electricity 6450 40,679 22.45 32,879 24.19 45,438 25.08 Water 6451 37,845 20.89 29,909 22.01 41,504 22.91 Gas 6452 28,439 15.69 20,833 15.33 29,861 16.48 Sewer 6453 45,600 25.17 - 45,600 25.17 Total Utilities Expense 6400 T 152,563 84.20 83,621 61.53 162,403 89.63 Operating & Payroll 6510 120,277 66.38 99,881 73.50 138,204 76.27 Maint. Supplies 6515 35,055 19.35 19,158 14.10 35,020 19.33 Expenses Contracts 6520 153,666 84.80 99,232 73.02 129,805 71.64 6500 Operating and Maintenance Rent Free Unit 6521 - - Garbage and Trash Removal 6525 12,501 6.90 9,395 6.91 13,419 7.41 Security Payroll/Contract 6530 62,123 34.28 74,415 54.76 38,177 21.07 Security Rent Free Unit 6531 - - - Heating/Cooling Repairs and Maintenance 6546 16,628 9.18 14,387 10.59 17,459 9.64 Snow Removal 6548 - - - Vehicle & Maint. Equip. Oper. and Repair 6570 - - - Misc. Operating & Maintenance Expenses 6590 5,953 3.29 11,255 8.28 6,251 3.45 Total Operating & Maintenance Expenses 6500 T 406,203 224.17 327,723 241.15 378,335 208.79 Taxes & Real Estate Taxes 6710 - - Insurance Payroll Taxes (Project's share) 6711 15,054 8.31 12,821 9.43 16,861 9.31 6700 Property and Liability Insurance (Hazard) 6720 34,019 18.77 27,589 20.30 41,547 22.93 Fidelity Bond Insurance 6721 - - - Workmen's Compensation 6722 12,941 7.14 10,099 7.43 14,139 7.80 Health Insurance & Other Employee Benefits 6723 35,626 19.66 27,104 19.94 46,909 25.89 Misc. Taxes, Licen., Permits, & Insurance 6790 1,750 ' 0.97 749 0.55 2,250 1.24 Total Taxes & Insurance 6700T 99,390 54.85 78,362 57.66 121,706 67.17 Financial Interest on Mortgage Payable 6820 125,669 69.35 85,009 62.55 94,661 52.24 Expenses Interest on Notes Payable (Long -Term) * 6830 6800 Interest on Notes Payable (Short -Term) * 6840 Mortgage Insurance Premium/Service Charge 6850 9,662 5.33 6,391 4.70 7,165 3.95 Miscellaneous Financial Expenses 6890 Total Financial Expenses 6800 T 135,331 74.69 91,400 67.26 101,826 56.20 Expenses Nursing Homes/Assisted Living/Board & 6900 Care/Other Eld. Care/ Coop/ Other 6900 Total Cost of Operations 6000T 964,867 532.49 718,963 529.04 973,920 537.48 Reserve for Replacements Dep. Required 37,524 20.71 28,143 20.71 37,524 20.71 Principal Payments Required 233,123 128.66 185,033 136.15 265,396 146.47 Debt Service for other approved loans Debt Service Reserve (if required) General Operating Reserve (Coops) Total Cash Requirements 1,235,514 681.85 932,139 685.90 1,276,840 704.66 Less Total Revenue 1,250,380 690.06 939,824 691.56 1,259,195 694.92 Net Cash Surplus (Deficiency) 14,866 8.20 7,685 5.65 (17,645) (9.74) 5/20/2014 I hereby 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.C. 3729, 3802) (Signature) Date (mm/dd/yyyy) Previeditions are obsolete *HUD Approved Secondary Financing page 2 of 2 Only for Budget Projections. ref. Handbook 4350.1 form HUD-92547-A (8/2000)