Budget Box: Budget Book Highlights

At the regular monthly meeting of The Landings Association on December 17, 2019, the Board of Directors adopted the 2020 Operating and Capital Reserve Budgets. These documents were placed on the Association’s website (www.landings.org > Governing Documents > Budget Book-2020) on December 13th for review by the Landings community. 

There are 312 pages in the 2020 Budget Book, which may seem a little overwhelming to the casual reader. However, our goal is to provide a comprehensive explanation of all components, processes, and requirements of the budget process, as well as thorough explanations of programs and service levels, and their associated revenue and expenditures. Following are some highlights from the 2020 Budget Book.

The total 2020 operating budget is a 3% decrease compared to the 2019 budget and a 2% decrease compared to the projected 2019 year-end expenditures (see page 5). The 2020 operating budget also is a 4% decrease compared to the 2018 operating budget.

Most of the major changes from the 2018 to 2019 Operating Budgets and the 2019 to 2020 Operating Budgets are summarized beginning at the bottom of page 5. Included are items such as the elimination of off-duty police expense, elimination of marinas marketing, and reduced scope in the center island program and the mailbox/sign painting program, to name just a few. All changes from the 2018 Budget to the 2020 Budget are shown starting on page 9. This page is a new addition to the Budget Book, and these items were discussed during the November Budget Workshop.

The 2020 Budget reflects a projected Capital Reserves Fund starting balance of $7,123,351, total projected Assessment and interest revenues of $2,237,419, and capital expenditures of $2,407,307 (page 7). The full detail of all capital expenditures for 2020 are listed on pages 284-285 of the 2020 Budget Book.

The allocations of $1,850 per lot for the Operations and Capital Reserves Fund for the 2019 Budget, 2019 Year-End, and the 2020 Budget are reflected on page 7. The 2019 Year-End Estimate allocation for Operations is lower than what was budgeted since all available funds (over $1.5 million) from the Operating Fund are reallocated to the Capital Reserves Fund. The amount of the Assessment allocation depends on the current infrastructure needs. As discussed in the October and November Budget Workshops, the infrastructure needs are continuing to increase as our community nears its 50th Birthday.

The Cash Flow Projections on pages 52-54 in the 2020 Budget Book assume a flat Assessment of $1,850 through 2025. Even though an Assessment vote is scheduled for spring 2020, at this point, we do not know the final proposed amount and need to understand the gap between available revenue and expenditure requirements without an Assessment increase. The ending cash for the Operating Fund has been managed down to a $1.5 million level (Board approved minimum), and the ending cash for the Capital Reserves Fund shows that the balance falls below the target ($7 million) and threshold ($5 million) and ends 2025 at $950,894. In order to project adequate funding levels for the Capital Reserves Fund, we currently have an independent Reserve Study being completed. The completion of the Reserve Study has been pushed back to January 2020 from December 2019 to accommodate additional information that was requested by the Reserve Analyst regarding more detailed information on individual roads scheduled for each year. The Reserves Subcommittee will meet to review potential funding plans, and the Budget Workshop for the community to review the Reserve Study results is rescheduled for January 27.