Well, here we are. The holidays are upon us. I think there may be some elves decorating the Clubhouse for the Annual Holiday party as I write this. What else could be on my mind? The 2017 Budget! We are a week away from the December 12 Board Meeting where we will discuss and hopefully approve next year’s budget and there are a number of things that you should know about.
A little history. We have spent the last 5-7 years slowly building reserves after the locker remodel in 2010 and have had minimal dues increases. We have also been deferring major maintenance work with the exception of redoing the pool bottom ($80,000) in 2015. Other smaller items have been funded through operating expense and we have been able to contribute about $50,000 to reserves annually. But this decision was made annually at the end of the year depending on how much income remained. Last year, however, we did not increase dues and budgeted to only contribute $12,950 to reserves. Part of the reason was that we recognized that we needed to use this year to define and determine the scope of needed work on the Clubhouse and pool equipment.
Budgeting Philosophy. At last month’s board meeting we reviewed a draft 2017 Operating Budget and initial estimates on the costs associated with the Clubhouse renovation, the pool equipment and unanticipated costs for the damaged locker room wall. Faced with increased operating expenses and a list of project costs, we felt the need to define and articulate our budget philosophy. In a nutshell, we will move towards multi-year planning with a desire to contribute a defined annual amount to reserves that is based on an annual reserve study. We will budget so that operating revenue (dues and pool income) covers operating costs, smaller planned maintenance projects and allows for this annual reserve contribution. Larger maintenance projects will be funded from reserves and through assessments.
2017 Budget. Our operating expenses are increasing for this year. Part of this comes from budgeting for a few items “above the line” that we haven’t before: the reserve contribution and the loan principle payment for the 2010 locker room remodel. Vendor costs have increased and so have our payroll costs. In addition, we have had to lower estimated pool income because of a later release date for Seattle School’s summer break. The bottom line is that we are anticipating a dues increase for 2017 that is more significant than it has been in the last 5-7 years.
2017 Maintenance Projects. There are a number of major projects that must be done next year. We have defined the scope and costs to replace the failing siding and the single-pane windows on the front of the Clubhouse. Since the siding is 60 years old, we are recommending replacing all sides of the building. We are also going to take this opportunity to spruce up the look for the front with a new overhang, signage and lighting. The pool pit needs replacing and if you’ll recall, this summer we discovered that our excess water was not draining properly to the sewer system and this needs to be remedied. And to put the icing on the cake, the wall that failed at the entrance of the locker room needs to completely be redone (tiled and waterproofed) and the locker room drainage needs to be re-engineered. We are fine tuning estimates but all of these things are adding up to the conclusion that we will not be able to fund the needed work without an assessment or our reserves will be seriously compromised.
We will discuss this at the December 12th Board meeting. Please attend if you want to learn more about the details and express your opinion.
So on that happy note; I am searching for a good “end of my column” transition statement that recognizes the holidays and the final days of 2016. But I am not finding one. Instead, I’ll just offer a couple of thoughts.
With all the tension unleashed during the last few months and the uncertainty ahead, I know that I have done a lot of thinking about what is important to me and what specifically I can do to influence my “world.” Some of these things are big picture issues and others are smaller, local, day-to-day things. Universally, my family and my various communities are important to me. Blue Ridge is one of those communities and I want to continue to do my part to help make it a great place to live. I wish you a nice holiday and a healthy and happy New Year.