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FOUR SEASONS BREEZE | SEPTEMBER 2022 11 On Aug. 17, a Town Hall meeting was held to present a mid-year financial update of the HOA 2022 budget. Through six months, the overall budget versus expenses is as follows: Budget $2.6M Expenses $2.4M Variances $0.19M Although the year-to-date variance, $190K, a healthy outlook, this positive amount is misleading. Our budgeting process is constructed of equal monthly splits for most expenses. Therefore, seasonal variabilities can provide abnormalities, month to month. Let's take a closer look at the specific budget categories and understand the variances at mid-year. Category Variance Utilities $79,459 Landscape $88,937 Swimming Pool/Spa ($8,937) Community $142 Common Areas ($32,088) Admin $44,874 Springdales ($806) Front Yard $17,766 1. Utilities reflects the lesser use of electric and water in the first five billing months. However, peak utility usage will significantly increase the next four months and balance this variance. 2. The landscape budget is fully committed for the remainder of the year. Current variance represents fall planting and tree trimming. 3. Common area expenses are associated with two contract increases and overall maintenance requirements. 4. Admin costs were less for the first six months because of two employee vacancies which have been filled. Additional salary expenses will be seen in the remainder of the year from an increase in operating hours at The Courts and Summit. 5. Front Yard costs are similar to the general landscape category as these funds will be utilized as fall activities begin. At this mid-point of the year, it would be reasonable to assume that the 2022 budget should finish close to the plan. Planning Thoughts, 2023 Budget The development of the 2023 budget will present some serious challenges. The major issue is the exceptional rate of inflation, 9.1 percent nationally and even higher in the Inland Empire at 9.4 percent. As each of us have felt the pinch of rising prices, so too has the HOA which does not have an immunity to the higher prices. The budget process will begin in August and follows this process: • Initiation of Process - Finance Committee's Budget Sub-Committee • Meeting with Committee Chairs • Preparation of Initial Draft Budget • Draft Reviewed and Revised with Finance Committee • Conduct Budget Workshop with BOD • Preparation of Formal Budget for Approval at November BOD Meeting As we initiate this process, there are several guiding principles that we consider in the plan. Foremost is the vision of Four Seasons as a premier, resort, retirement community. Additionally, the following guiding principles are paramount to our community: • Protecting homeowner investment • Maintaining community amenities and grounds to owner expectations • Managing the costs associated with the budget The greatest areas of concern in development of the budget will be Contracts and Reserves. Contracts represent over 50 percent of our budget. Salaries and materials are huge components of the contracts and are expected to have a significant influence on contract offerings. The Reserves, which represent repair and replacement funds for the community facilities, are also impacted by the rising costs for these items along with the low interest rates of reserve funds in relationship to the inflation rate. As you can see, we have our work cut out to produce a reasonable budget that can provide what we have come to expect at Four Seasons. ~Barry Ginnetti TOWN HALL MEETING SUMMARY A Mid-Year Financial Update

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