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8 FOUR SEASONS BREEZE | JANUARY 2021 THE FOUR SEASONS 2021 BUDGET AND HOA FEES In December you received a large document from the Association which included the 2021 budget and the HOA fee changes. The purpose of this article is to review the budget process and explain the determination of the HOA fee recommendations to the Board of Directors (BOD). BUDGET PROCESS The Four Seasons budget process is a comprehensive analysis of our three cost centers. Yes, we have three unique and independent budgets representing the Springdales, Front Yard and the Master(includes all facilities, common land, trails, roads, etc.). Each of these budgets is evaluated for spending trends over previous and current budget periods. Also, contracted services are reviewed for potential contract increases. This process began in August with the Finance budget subcommittee. Meetings were scheduled and conducted with the Chairs of the various committees for their input regarding ongoing budget requirements, new projects anticipated, and potential reserve replacement/repair plans. The BOD provided guidance to minimize (as much as possible) increases to HOA fees and to maintain the reserve at least 100 percent funded. After gathering the above information, the subcommittee prepared an initial draft budget and presented it to the entire Finance Committee. Based on the input, adjustments were made, and a presentation was developed for presentation to the BOD. This was accomplished at the Nov. 12 association open meeting. RECOMMENDATIONS Springdales The biggest driver to the Springdales' budget is the insurance policy which increased $6.5K and represents over 98 percent of the operational budget. In 2021 the contract subcommittee will be issuing an Request for Proposal (RFP) to different insurance brokers to minimize increases for the policy. The numbers below reflect the operational and reserve contribution for 2021. Front Yard The Front Yard expenses are all about landscape maintenance. The drivers of the budget expenses are the landscape company ($4.2K#)and irrigation repairs ($17K#). Based on these increases and a less than a dollar increase for reserve contribution, the budget increase was $5.60 per unit per month. However, the Finance Committee recommended using a Front Yard net income fund balance from 2019 to offset $3.60 of this increase. Thus, reducing the 2021 fee increase to $2. The BOD agreed. Master The Master budget is the biggest by far and affects all homeowners. The largest impact on these expenses are landscape maintenance ($79K #), patrol services ($35K#) and administration ($49K#). Due to uncertainty with respect to our obligations with the Conservancy, expenses were not assigned to the Conservancy for 2021. If we do have responsibility for the Conservancy in 2021, the funding not utilized in 2020 will be recommended for any potential Conservancy expenses. An issue raised by some residents was the potential for an HOA fee refund because of the closure of our amenities. We as a community must understand that regardless of open or closed facilities at Four Seasons, expenses for the common areas continue to exist. An analogy to this situation would be like an individual owning a second home. When you are not using this property, you would still be responsible for taxes, insurance, maintenance, possibly even an HOA fee, etc. However, the Finance Committee performed an examination of the Master budget expenses during the COVID closure. The Committee recognized that janitorial and pool monitor services were reduced or eliminated. As a result of this review, approximately $86K were identified. The Finance Committee recommended to the BOD to utilize the COVID savings to offset $2.60 of the HOA fee increase for this budget year on the Master. However, the BOD went further and approved a zero increase for the Master budget for 2021. Summary As you can see, the Finance Committee and BOD take very seriously the budgeting process and resulting impact that the fee will have on all homeowners. In 2020, the HOA assumed full responsibility for our three budgets. The variance is a slight positive net income of less than 2 percent when the COVID and Conservancy expenses are removed. This is a commendable achievement, considering that the overall budgets are approximately $5M. The following is a summary of BOD approved HOA fees for 2021: If you have additional questions or need clarification of our financial processes, please come to a Finance Committee meeting on the last Tuesday of the month or email me at b2ginnetti@gmail.com. ~ Barry Ginnetti Finance Committee 2020 2021 Fee Change Recommendation Springdales 2021 Fee (Increase) Plan 1 $96,94 $98.83 $1.89 (2%) $98.83 ($1.89)* Plan 2 $104.58 $107.26 $2.66 (2.6%) $107.26 ($2.68)* Plan 3 $117.99 $122.04 $4.05 (3.4%) $122.04 ($4.05)* *BOD approved 2020 2021 Fee Change Recommendation 2021 Fee (Increase) Front Yard $68 $73.60 $5.60 (8%) $70 ($2.00)* *BOD approved 2020 2021 Fee Change Recommendation 2021 Fee (Increase) Master $227 $230.40 $3.40 (1.5%) $228 ($1.00)* *BOD approved no increase for Master Cost Center 2021 HOA Fee Springdales Plan 1 $98.93 Plan 2 $107.26 Plan 3 $122.04 Front Yard $70 Master $227

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