Profit and Loss Financial Statement Narrative

For the Two Months Ended May 31, 2023 (FISCAL 2024)

Rochdale Village Inc. PROFIT & LOSS STATEMENT FY 2023 and FY 2024 vs. Budget

For the two Months ended May 31, 2023, Controllable InCoMe beFore Interest, depreCIatIon, aMortIzatIon, and InCoMe taxes InCreased $161,000 to $1,883,000 as CoMpared to $1,722,000 In the Fy2024 budget below you wIll FInd an explanatIon oF the aCCounts wIth sIgnIFICant varIanCes vs the Fy 2024 budget:

Controllable Income is defined as Revenue less variable expenses which are expenses that can be managed by the Company (“A measure of the Operating efficiency of the Company). It is commonly known as EBITDA (Earnings before Interest, Taxes and Depreciation and Amortization).

Operating Revenue and Expense variances are explained below:

Revenue

Total revenue - For the Two Months Ended May 31, 2023, Total revenue was relatively in-line with the FY 2024 Budget at $14,038,000 as compared to $14,105,000 in the FY 2024 Budget.

Apartment revenue - For the Two Months Ended May 31, 2023, Apartment revenue was in-line with the FY 2024 Budget at $12,331,000 as compared to $12,389,000 in the FY 2024 Budget.

Commercial rental revenue –

For the Two Months Ended May 31, 2023, Commercial rental revenue decreased $(34,000) less than 5% to $913,000 as compared to $948,000 in the FY 2024 Budget. The decrease in revenue is due to vacancies higher than the Budget and the seasonality of actual revenue as compared to the FY 2024 Budget which was spread out evenly over 12 months.

Expenses

Total expenses – For the Two Months

Ended May 31, 2023, total expenses decreased $(228,000) to $12,155,000 as compared to $12,383,000 in the Budget. The significant variances are explained in the following expense categories:

Administrative

For the Two Months Ended May 31, 2023, Administrative expenses decreased $(12,000) to $963,000 as compared to $976,000 in the FY 2024 Budget. This decrease is principally due to (1) An increase in Office expenses of $35,000 to $75,000 as compared to $40,000 in the FY 2024 Budget. The increase is related to the purchase of $23,000 of income affidavit forms and $17,000 for the purchase of medical supplies for the cabinets in the Groups and the management office.

Maintenance and operating costs

For the Two Months Ended May 31, 2023, Maintenance and Operating costs increased $313,000 to $2,375,000 as compared to $2,062,000 in the FY 2024 Budget This increase is related to the following:

Repair Material, Tools & Supplies

For the Two Months Ended May 31, 2023, Repair Material, Tools & Supplies increased $105,000 to $427,000 as compared to $322,000 in the FY 2024 Budget. The increase is principally related to the continued increase in prices for carpentry & floor tile supplies.

Contracted Services – Apartment

Restoration

For the Two Months Ended May 31, 2023, account restoration expenses increased approximately $126,000 to $372,000 as compared to $246,000 in the Budget. The increase in the Apartment Restoration costs is due to ap-

- by William Young

proximately 10 vacancies that required complete renovation and even though we reflected increases in pricing for supplies in our Budget, these prices continue to increase.

Power Plant –

For the Two Months Ended May 31, 2023, Total Power Plant expenses decreased $(141,000) to $2,549,000 as compared to $2,690,000 in the FY 2024 Budget. There were both positive and (negative) fluctuations in the expense categories which are explained below:

1. FUEL & UTILITIES a. Fuel, Heating and gas

For the Two Months Ended May 31, 2023, Fuel expenses increased $225,000 to $1,044,000 as compared to $819,000 in the FY 2024 Budget. The reason for this increase is due to increased usage: offset, in part, by lower costs related to National Grid and Engie (our Natural Gas supplier. Another factor that impacts the variance is the seasonality of the Budget being spread out based upon the %s from the prior year. If those %s are different in FY 2024, that will create a variance.

NOTE: The FY 2024 RISK of variances from the Budget will be the usage by cooperators, commercial malls and the Power Plant. If usage remains constant Natural Gas expenses will remain constant.

2. Water & Sewer

For the Two Months Ended May 31,

2023, Water and Sewer expenses decreased $(221,000) to $756,000 as compared to $978,000 in the FY 2024 Budget. This decrease is due to the usage by cooperators and the impact of seasonality in the Budget. The Water usage in the Budget was based upon prior years usage %s. As the actual usage changes as a %s change by month, the variances will change.

3. Salaries & Other Power Plant Expenses

For the Two Months Ended May 31, 2023, – Salaries & other expenses decreased $(117,000) to $560,000 as compared to $678,000 in the FY 2024 Budget. This decrease is principally related to the Budget reflecting a full staff and approximately $(57,000) less overtime than anticipated in the FY 2024 Budget.

Insurance Expense

For the Two Months Ended May 31, 2023, Insurance expenses were relatively in-line with the FY 2024 Budget at $1,371,000 as compared to $1,435,000 in the FY 2024 Budget. Although insurance costs are in-line with the FY 2024 Budget, insurance costs now represent approximately 10% of Rochdale Village’s revenue. The most significant category in insurance costs is in both General Liability and Workers Compensation policies. Management is meeting quarterly with the Brokers to review each major claim to evaluate reserves, modification rates and if there are safety policies that need to be improved.

Real Estate Taxes (Shelter Rent)

For the Two Months Ended May 31, 2023, Real estate tax (Shelter rent) expenses decreased $(81,000) to $602,000 as compared to $684,000 in the Budget. This decrease is related to the impact of the Article 78 settlement related to allocation of 16.5% of corporate expenses which is now included in the Shelter Rent calculation and decreasing our expenses. We discussed the impact with Freddie Mac and Wells Fargo in May 2023, and we will be decreasing our monthly Tax escrow requirement and taking that decrease and transferring the approximately $50,000 a month or $600,000 per year to the insurance escrow.

Employee Benefits

For the Two Months Ended May 31, 2023, Employee Benefits expenses decreased $(131,000) to $1,547,000 as compared to $1,678,000 in the Budget. The decrease is related to a decrease in SSOBA and Local 94 benefits due to vacancies as compared to the FY 2024 Budget where there were more employees Budgeted than the actual employees in April 2024.

Bad Debt Expense (NON-CASH EXPENDITURE)

For the Two Months Ended May 31, 2023, Bad debt expense (a non-cash expense) was in-line with the FY 2024 Budget. In 2022, the courts opened and are now having a favorable impact on evictions and collections from delinquent cooperators.

NOTE: It should be noted that this in- crease is NOT a write-off of receivables. The bad debt expense is an addition to the allowance for bad debt and the Company will continue to pursue collection of these receivables.

All Other Expenses were relatively inline with the Budget.

Looking forward

1. Computer Software and Paperless Solution – We anticipate that this project will begin after the Annual Audit is completed. (FY 2024).

Other Significant Infomation

1. PPP (Payroll Protection Program) –CONCLUSION - In a letter from the SBA to Citibank, the SBA has determined that the FINAL Forgiveness for Rochdale is $5,856,600 of the $6,029,300 PPP loan. That leaves a balance of $172,700 which will remain as a liability on Rochdale’s Balance Sheet to be repaid to Citibank.

2. Reserve Funds (Wells Fargo and HCR)- - The reserve and escrow balances were $29,841,827 as of May 31, 2023.

3. EMPLOYEE RETENTION CREDITS

In June 2023, the Company received $7,202,145.61 for the IRS related to the ERC Program. Of this amount, in June 2023, $5,842,394 was added to the HCR Reserves.