Budget Box: 2023 Budget Highlights

By Karl Stephens - karls@landings.org
General Manager/COO

At the regular monthly meeting of The Landings Association on December 20, 2022, the Board of Directors adopted the 2023 Operating and Capital Reserve Budgets. You can review the approved Budget by visiting www.landings.org/resources > Governing Documents > Budget Book-2023 or click here.

There are 301 pages in the 2023 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. If there is something you would like included in the Budget Book not already included, please email me for consideration. Following are some highlights from the 2023 Budget.

The total 2023 operating budget is a 5% increase compared to the 2022 budget and an 8% increase compared to the projected 2022 year-end expenditures (see page 3 of the Budget Book), reflecting increased expenditures during 2022.





All changes from the 2022 Budget to the 2023 Budget are shown starting on page 9.

The 2023 Budget reflects a projected Capital Reserves Fund starting balance of $10,061,621. Total projected Assessment and Interest revenues is $4,266,180, along with capital expenditures of $5,206,193 (Page 5). All planned capital expenditures for 2023 are listed on pages 272-274 of the 2023 Budget Book.

The allocations per lot for the Operations and Capital Reserves Fund for the 2022 Budget ($2,170), 2022 Year-End ($2,170), and the 2023 Budget ($2,270) are reflected on page 5. The 2022 Operating revenues and expenditures were better than budget. Therefore, the 2022 Year-End allocation for Operations was reduced and reallocated to the Capital Reserves Fund.

The Cash Flow Projections on pages 54-56 in the 2023 Budget Book reflect an increase in each year of Annual Dues through 2026, based on the successful 2020 Annual Dues vote and pending a successful 2023 Annual Dues vote for years 2024-2026. The ending cash for the Operating Fund has been managed down to a $1.5 million level (the Board-approved minimum). The minimum level of the Capital Reserves Fund under the Threshold Funding Plan as adopted by Board of Directors is 30% of the current cost of replacement/maintenance of the Capital Asset Management Plan (CAMP) over a specified term. The cash flow for the Capital Reserves Fund shows that the balance will reach the 30% threshold in 2022. While it shows a slight dip in 2023 due to a combination of the rising costs of materials and labor and a larger scope of work to be completed, the balance is projected to reach 30% again in the target year of 2024 and reflects an ending cash balance of $9,455,768 that year. To determine adequate funding levels for the Capital Reserves Fund, an updated Reserve Study was completed in November 2022. The Reserves Subcommittee held extensive reviews of the updated inventory of The Landings Association’s assets. This inventory review included a description of each asset, its useful life, remaining useful life, and updated estimated replacement cost. The updated Reserve Study can also be found at www.landings.org/resources > Governing Documents or click here.

This article was originally published by The Landings Association on their website.

Visit landings.org to read the original article.