Treasurer's Annual Report, 
May 6, 2009

John Filice, Treasurer

  1. Reserves as of March 31, 2009 :  
    1. Unrestricted capital reserve fund booked balance:                   $1,000,896.81   
    1. HVAC dedicated replacement reserve fund booked balance:$  278,835.00

                  Total Reserves                                                                   $1,279,731.81   

Note 1 re Reserve Funds:
Monthly Reserve Contributions Total $ 17,247 into respective Reserve Accounts as follows:

·        Monthly contributions to the general reserve for 2009 = $11,950

·        Monthly contribution to the restricted HVAC for 2009 =  $  5,297  

Note 2 re Reserve Funds:
The HVAC reserve fund includes an additional subsidy transfer of $ 42,376 from the general reserves as of January 1, 2009 .  

  1. Smith Barney Investment Firm:

·        Designated by Board of Directors to invest all Reserves as of January 2008.  

·        All reserve contributions are sent directly to Smith Barney from Simmons Management monthly.

·        All NON Smith Barney CD’s purchased prior to the Smith Barney account are being sent to Smith Barney for investment upon maturity. There are 3 (three) remaining CD’s not yet with Smith Barney that will mature between now and the end of 2010.

1.      Capital One: Matures 7/28/09 (4.88%)               $72,691.50

2.      Principal Bank: Matures 2/8/10 (4.89%)             $74,389.98

3.      WA First Bank: Matures 7/24/10 (5.25%)           $77,735.79  

  1. Capital Improvements

·        “Recommended” to be done in the next 5 years (through the end of 2012)

·        2007 Reserve Study is available upon request

  1. Boiler / Hot Water Heater: 2009 Expenditure

·        Board approved replacement of Boiler and Hot Water Heater

·        $185,000 low bid for combination boiler and hot water heater replacement, which is $ 45,000 less than the “high end” estimate below and $ 5,000 less than than the low end estimate below.

 1.      Boiler:

·        Originally estimated at $130,000 to $150,000

·        Projected gas cost savings on the boiler is $156,900 at the end of the 7th year from installation

·        Projected installation in 2009  

2.      Hot Water Heater:

·        Originally estimated at $60,000 to $80,000

·        Projected gas cost savings on the hot water heater is $64,800 at the end of the 7th year.

·        Projected installation in 2009  

  1. Interiors: 2009 Expenditure

·        Renovations to begin during 2009

·        $229,000 contract has been negotiated with our chosen contractor  

  1. 2009 Capital Projects Impact on Reserves

At the end of 2009 our Reserve Fund will be approximately $988,955 Calculated as follows:

 March ‘09 Reserve Total:                                   $1,279,732.00

                   Add April thru Dec. ’09 monthly  
                   contributions @ $17,247 / Month                  $   155,223.00                 

                     Less projected capital expenses
                     to be expended in 2009 inclusive  
                     of Engineer Consultant and Interior 
                     Designer Fees                                               ($   446,000.00)  

       Estimated Reserves End of 2009               $    988,955.00  

NOTE: This is taking into account that all fees for our boiler, hot water heater, and interiors expenses have been expended during calendar year 2009.  

  1. Budget versus Actual Expenditures

·        Over the past 5 – 10 years our budget estimates have fallen within 2% to 3%—plus or minus— actual expenditures.  

·        Our 2008 operating expenses, according to draft audit, were 6.05% over budget with utilities being approximately $31,000 over budget due to unexpected utilities price increases, thereby accounting for the majority of the 6.05 % overage.  

·        The association entered into a price agreement with Washington Gas Energy Services on 1/15/09 for the 24 month (2 year) period 7/1/09-6/30/11 that will reduce gas charges approximately $9,000 annually over that currently being charged.  

  1. Graphs

The following graphs, courtesy of fellow owner Joe Morris, show:

·        Annual Operating Expenses

·        Percent Change From Previous Year

·        Net Cash (End of Year)

·        Expenditures From Replacement Fund