Finance Committee: A Positive First Quarter

Fred Raach, Chair

March results increased the first two month’s positive performance by $26,000, raising the total for the first quarter to $141,000 better than planned in the Budget. This positive position is largely due to several cost-saving or revenue-enhancing changes developed and implemented after the Budget was approved and will continue to benefit the bottom line for the rest of this year. First quarter results were also helped by the delay in the approval of PG&E’s proposed rate increases. The increases have now been implemented, so savings from this source will be reduced in future months.

In March, revenue from Operations was $9,000 larger, and expenses were $17,000 less than planned. For the three months, revenue from Operations exceeded the budgeted amount by $116,000, and expenses were $25,000 below what was budgeted.

Personnel costs at the end of February were $41,000 over Budget. This overage was reduced by $32,000 in March, in part from unfilled positions in the Administration and Facilities and Landscaping Departments and Increased efficiency in the Food and Beverage Department.

At this point in the year, the Budget projected that $2,768,000 of dues would be needed to supplement the revenue generated by the Operations area to cover its expenses. As noted above, net revenue at the end of March is $141,000 better than Budget, reducing the needed funds to $2,627,000. The chart below illustrates how much each of the departments needed dues funding to support their activities through the end of March.

There were two significant changes in the chart compared to last month. The Administration Department’s “slice” grew 11% this month as a result of an increase in planned, e.g., the initial installment of 2024 federal and state income taxes and the cost of printing and mailing the audit information to residents, and unplanned expenses, primarily added legal fees associated with resident litigation. The Food and Beverage Department produced positive net revenue in March, which reduced the size of its “slice” by 48%.

Reserve spending this year of $372,000 is about $100,000 more than last year at this time, reflecting increased capacity to execute needed reserve projects. Spending of Community Enhancement funds continues to be closely monitored, with less than $40,000 spent so far. The unallocated balance of the fund was $394,000 at the end of March.

Detailed financial information is available as part of the Agenda each month in the eNews announcement of the Finance Committee meeting.