1. 2014 Draft
Budget
October 15, 2013

2. HRCA Budget
The annual budget for the Highlands Ranch Community
Association is a financial and operational document
that is designed to carry out the obligations of the
HRCA.
The annual budget also follows the policies of the Board
of Directors, which reflects the requests for services
and facilities by the members.

3. Agenda
•
•
•
•
•
Budget Process & Goals
HRCA Finance Committee
Budget Highlights / Assumptions
2014 Budget Drafts
– Administrative
– Recreation
– Backcountry
– HR Cultural Affairs Association
– HR Scholarship Fund
Questions

4. 2014 Budget Process
•
June - August - Draft Budget Development
•
August - October - Finance Committee Review
•Reviewed each aspect of the HRCA, HRCAA, & HRCSF
•Ten meetings and over 330 hours
•
October 7 - Board Review with Finance Committee
•
October 10 - Budget Draft mailed to Delegates
•
October 15 - Presentation to Delegates
•Post budget presentation on Website
•
November 19 - Board Adoption

5. 2014 Budget Goals
• Guideline for revenues, expenses and funding
– Reverse the $30.00 assessment to Recreation (increased) and
Administration (decreased) for prior year’s Backcountry transfer
• Funding available for:
– Administrative Operations
• Quality Community Events
– Recreational facilities and programs
– Bond obligations
– Reserve and Capital Improvement funds
• McKinstry Project
– Backcountry

6. 2014 Budget Goals
• Develop and promote new services & appropriate fees to generate revenue
and recover costs
• Provide realistic operating budget which creates ongoing value to
homeowners at a fair assessment fee
• Ensure that budget is aligned with all corporate initiatives
– Directors Visionary Statements & Objectives
– Five Year Strategic Plan
– Community Survey
– Implementation of the Compensation Analysis results
• Consideration of McKinstry Project
– Potential of $163,000 / year in utilities savings
– Investing $2.4 Million in Capital and Reserve Improvements

7. 2014 Budget Goals
• Enhance budget presentations
– Increase budget discussions by providing proposed budget information
earlier and at open meetings
– Comprehensive income & expense statements
– Simplify presentation and show how member assessment dollars are
allocated to various member services
– Comparison of Assessment increases to regional CPI
– Comparison with similar competitor organizations

8. 2014 Finance Committee
Thank you!
For your time, commitment, involvement and
input into the development of the 2014
Budget!

9. 2014 Finance Committee
• Jeff Suntken Chair/Treasurer (Consulting)
• Chris Caro (Investment Institution)
• Lyle Daley (Federal Government Agencies)
• Sheela Damle (Management, Consulting)
• Scott Grimes (Public Accounting)
• Kirk Mooneyham (Captive Insurance)
• Shon Payne (IT Services Provider)
• Kay Schneider (Quality Improvement Non-Profit)
• Suma Shamasundar (Software / Web Development)

10. 2014 Administrative Fund
Revenue Highlights
• 150 New Properties
• Architecture Submittal Requests estimated to generate $90,000
• New home and resale transfer fee increased $100 to $130
• Sub-Association Management fees increased by 3% or $13,000
• Introduction of Sub-Association Maintenance Services $23,400
• Interest Income of 0.4% on investments
• Increase in legal revenue fees consistent with new legal firm expense
fees

11. 2014 Administrative Fund
Expense Highlights
Staff Compensation & Benefits
•All new staff justified by non-assessment revenue
•Limited overall staff salaries to 3% increase, consistent with MSEC and
other consulting organization forecasts for 2014
•Health insurance costs budgeted at 5.1% increase
– CIGNA self-funded plan allows HRCA to maintain current level of benefits
while reducing premium increase from 20% to 10%
– Implemented second year of increased health and dental insurance
contributions paid by employees which will reduce the budgeted medical
insurance expense by $93,000 / year
– Continue to motivate staff to move to HSA plan over PPO plan

12. 2014 Administrative Fund
Expense Highlights
Administration Function Expenses
•Decreased bad debt provision 10% due to decreased write-offs from
bankruptcies and foreclosures
•Decreased printing and postage cost by 10% due to new E-Bill,
Newsletter and Activity Guide opt-out options
Sub-Association Management
•Increased sub-association staffing and operating expenses to support
additional property management and maintenance services

13. 2014 Recreation Fund
Expense Highlights
• Engaged McKinstry for Energy Savings Program at a total cost of $2,479,100.
Partially funded by a $1,500,000 internal loan from the OSCA Fund.
• Created a Capital Improvement Fund to support the 5 Year Plan with an
initial deposit of $250,000.
• Over $570,000 of expenditures form the 2013 budgeted Recreation Reserve
were deferred
• Through the budgeting process, over $835,000 in Capital and Reserve
expenditures were removed or deferred to future years in order to keep
2014 expenditures in line

14. 2014 Admin / Recreation Fund
Expense Highlights
Capital and Reserve Expenditures eliminated or deferred to future
•Administration Fund (Capital)
– New Accounting Software
– Web Site Upgrade
$40,000
$20,000
$ 60,000
•Recreation Fund (Capital)
–
–
–
–
Web site Upgrade
Kiosks and Virtual Tour Website
Digital Displays
Tennis court divider nets and shade structure
$24,000
$20,000
$11,200
$20,000
$ 75,200
•Recreation Fund (Reserve)
–
–
–
–
•Total
NR Gym & Racquetball Court Flooring & walls
NR Lobby Remodel
Continuous lap pools
Reduction in emergency provision
$160,000
$400,000
$ 75,000
$ 65,000 $700,000
$835,200

15. 2014 Recreation Fund
Expense Highlights
Utilities
•Utility usage will decline due to implementation of McKinstry Energy Savings
Program ($163,000 Guarantee).
•Utility rate increases are estimated to be:
– Natural gas prices to increase 5.0%
– Electricity costs to increase 5.0%
– Water costs to increase 3.0%
•Reduced some facility operating hours saving $55,000.
•Decreased general insurance rates by 3%

16. Administrative Funds
• Administrative Operating Fund
• Administrative Reserve Fund

17. Administrative Function
• Administration and Management Functions
• Community Improvement Services
– Architecture and Covenant Compliance
• Accounting and Finance Reporting
– Billing and Collections
• Community Relations, Events & Communications
• Sub-Association Management
– Serving 21 properties

18. 2014 Administrative Fund
Summary
Revenues
$ 3,218,100
Expenses
3,192,210
Net Operating Revenues
25,890
Transfers
Due from Prior Years Surplus Operating Funds
54,300
$(
28,410)

19. 2014 Administrative Fund
Revenue Sources

20. 2014 Sub-Association Management
Revenue

21. 2014 Administrative Fund
Sub-Association Summary
Sub-Association Services
Revenue
Contracted Management Fees
Management Services
Expenses
Staff
Office, Insurance, Legal, Other
Total
$431,000
$51,400
$482,400
$432,980
$25,950
$458,930
$23,470

22. 2014 Administrative Fund
Expenses

23. 2014 Administrative Fund
Transfers (Capital / Reserves)
Capital
Portable credit card machines
Web Site Requirements / Design
Total
$ 3,000
10,000
$13,000
Reserve
Computer/Software
Telephone
Furniture replacements
Total
$33,300
5,500
2,500
$41,300

24. Recreation Funds
• Recreation Operating Fund
• Recreation Reserve Fund
• Backcountry Fund

25. Recreation Functions
• Facility Operations
• Recreation Programming
• Transfers

26. Recreation Operations
• HRCA manages 323,600sq. ft. / 7.4 acres of recreation
facilities.
• 860 Employees
– 110 Benefited Employees
• Avg. Operating Hours (M – F)17 Hours/Day, (Sat – Sun)
14 Hours/Day
• Closed 4 Days / Year

27. 2014 Recreation Fund
Summary
Revenues
$19,612,575
Facility Operating Expenses
Program Expenses
Multi-Facility Expenses
$ 6,545,035
$ 2,808,670
$ 4,706,630
Total Operating Expenses
$14,060,335
Net Operating Revenues
$ 5,552,240
Transfers
$ 5,554,210
Net Operating Revenues after Transfers
$
(1,970)

28. Recreation Programs
• 3 Planning periods (Activity
Guides) per year
• Diverse programming for all
ages and interests
• Fees cover direct expenses

29. 2014 Budgeted Program
Revenues
• $4,410,875 in revenues
• 22.5% of total revenues
• Projecting 3.1% revenue growth over 2013 Forecast

30. 2014 Recreation Fund
Program Revenue
HRCA Program Revenue Growth
4.50
4.00
Revenues in millions
3.50
3.00
2.50
2.00
1.50
1.00
0.50
14
20
et
dg
3
Bu 2 01
t
as
rec
Fo
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
Year

31. 2014 Recreation Fund
Revenue Sources

32. 2014 Recreation Fund
Expenses

33. 2014 Recreation Fund
Capital Expenditures
McKinstry Pool Pump Frequency Drives
McKinstry Water Conservation
McKinstry Thermal Equalizers
ADA Pool Lifts
McKinstry Mechanical Insulation
Website Requirements / Design
Slider Window / Fire Escape
Mobile Web Trac
Security Cameras
Wireless Access
Total
Cost
$ 99,870
$ 73,150
$ 39,280
$ 30,300
$ 23,210
$ 10,000
$ 8,900
$ 8,600
$ 8,000
$ 2,100
$303,410

34. 2014 Recreation Fund
Reserve Expenditure Summary
Computer/Software/Telephone
$
Northridge
Southridge
Eastridge
Westridge
Design Improvement Plans
McKinstry Project
Emergency Reserve
Total Recreation Reserve
53,900
114,800
432,900
145,200
153,500
50,000
2,243,590
100,000
$3,293,890

35. 2014 Recreation Fund
Major Reserve Expenditures
NR Pool Handling and Chiller (McKinstry)
ER Pool Air Handling Units (McKinstry)
Other McKinstry Upgrades
SR Building Settling - Auditorium
SR Compaction Grout - Pool
5 Year Plan - Improvement Planning/Design
Cost
$777,410
$643,710 *
$822,470
$185,000 *
$100,000 *
$ 80,000
* Previously budgeted in 2013 and deferred to 2014

36. 2014 Recreation Fund
Transfers
To Bond Requirements
To Recreation Reserve Fund
To Capital Improvement Fund
$3,590,800
$1,200,000
$ 250,000
To Backcountry Fund
$ 210,000
To Capital Equipment
$ 303,410
Total Recreation Fund Transfers
$5,554,210

37. Fund Balance Projections
(12/31/14)
• Administrative Operating Fund
• Administrative Reserve Fund
$ 272,200
$ 185,100
• Recreation Operating Fund
• Recreation Reserve Fund
$ 772,850
$2,889,300
• Backcountry Operating Fund
• Backcountry Reserve Fund
$ 209,400
$ 123,750
• OSCA Fund
$ 795,000
• Bond Funds
$3,501,050
Please refer to the Fund Balance Projections for more detail

38. Recreation Reserve Fund
12/31/12 Balance
2013 Reserve Transfers
Interest Income
2013 Projected Expenditures
Estimated 12/31/13 Balance
$3,090,663
1,350,000
12,500
(870,000)
$3,583,163
2014 Reserve Transfers
1,200,000
Loan from OSCA Fund
1,387,500
Interest Income
12,500
2014 Projected Expenditures
(3,293,890)
Estimated 12/31/14 Balance
$2,889,273

39. 2014 Budget Summary
•
$32 (or 6.3%) Increase in Assessments
•
Total Revenues projected $22,830,675
•
Maintain quality facilities and services

40. 2013 Assessment Changes
ActualProposed
2012
2013
Increase
% Inc
AFCA
$ 51.00
$ 21.00
$ (30.00)
(58.82)% $ 5.25
RFCA
$457.00
$487.00
$
Total
$508.00
$508.00
$
30.00
0
Qtr Amt
6.56%
121.75
0.00% *
$127.00
•
*The CPI (Consumer Price Index) for years ending 6/30/11 (+3.46%) and 6/30/12
(+1.76%), US Department of Labor, Bureau of Labor Statistics, Denver/Boulder region.
•
HRCA’s accumulated Recreation Assessments are still 12% below the accumulative
CPI % increases since 1990.

41. 2014 Proposed Assessments
Actual
Revised
Proposed
Function
Reverse
Revised
Actual
2013
BC
2013
2014
2013 Adjustment Adjustment Assessment Increase
Assessment
Amount
AFCA
$ 21.00 $ 30.00 $ (7.00) $ 44.00 $ 4.00 $ 48.00
RFCA
$ 487.00 $ (30.00) $ 7.00 $ 464.00 $ 28.00 $ 492.00
Total
$ 508.00 $ - $ - $ 508.00 $ 32.00 $ 540.00
* The CPI (Consumer Price Index) for years ending 6/30/12 (+1.76%) and 6/30/13 (2.77%),
US Department of Labor, Bureau of Labor Statistics, Denver / Boulder Region

42. 2014 Proposed Assessments
• What is the proposed $4.00 Administrative assessment increase for?
–
–
–
–
–
Staff payroll increases (3%)
Increase in health insurance & benefits
Anticipated decline in re-sales (transfers)
Marketing and Rebranding
Other
New Admin Expenditures
New Admin Expenses per home
$
44,200
$ 22,600
$ 19,000
$ 30,000
$
9,240
$ 120,440
$
4.00

45. HRCA Administration
Assessments Compared to CPI
60.00
50.00
40.00
HRCA
30.00
CPI
20.00
10.00
20 13
20 11
20 09
20 07
20 05
20 03
20 01
19 99
19 97
19 95
19 93
19 91
19 89

46. 2014 Proposed Assessments
• What is the proposed $28.00 Recreation assessment increase for?
–
–
–
–
–
–
–
–
–
Adjust back the $30 less $7 from prior year
Staff payroll increases (3%)
Increase in health insurance & benefits
Increase in Capital Expenditures
New Capital Improvement Fund Provision
Increase in Program Revenues
Reduction in Rec Reserve Provision
Reduction in Utilities (McKinstry ¾ year)
Other
New Rec Expenditures
$ 585,000
$ 192,500
$ 77,500
$ 113,400
$ 250,000
($ 131,300)
($ 150,000)
($ 122,500)
$
1,400
$ 816,000
New Rec Expenses per home
$ 28.00

49. HRCA Recreation Assessments
Compared to CPI
600.00
500.00
400.00
HRCA
300.00
CPI
200.00
100.00
20 14
20 12
20 10
20 08
20 06
20 04
20 02
20 00
19 98
19 96
19 94
19 92

50. “Competitor” Comparisons
Recreation Provider Comparison
Recreation
Provider
Castle Rock
Facility
Castle Rock Center
Square
Footage
39,423
City of Golden
Golden Community Center
62,500
HRCA
Northridge
Eastridge
Westridge
Southridge
Outdoor
Pool
No
Resident
Fee
Senior (1)
Adult (1)
Household
69,000
85,000
72,000
72,000
No
Senior (1)
Adult (1)
Household
$300
$420
$932
RFCA
Per
Household
$540
2
2
1
1
Backcountry Wilderness Area Open Space (7300 acres) 11.3 miles of trails
Foothills
Annual fee accesses
all centers
The Ridge
Lilly Gulch
Peak Wellness Center
Outdoor Pool Facilities
83,000
36,000
30,000
Town of Parker
Parker Rec Center
47,250
So. Suburban
Annual fee accesses
for all centers
Family Sports
Goodsen Center
Buck Center
Lone Tree Center
Outdoor Pool Facilities
84 miles of trails
Worksheets/RAC/Rec Provider Comparison 2013
No
No
No
Annual
$311
$467
$823
Gov't
Subsidy *
Subsidy
Unknown
$46/hhold
0
included
Senior (1)
Adult (1)
Household
$270
$399
$639
$218/hhold
Senior (1)
Adult (1)
Household
Youth 2-17
Adult 16-14
Household
$276
$420
$660
$310
$455
$310
52% Sales Tax $5m/yr
2% Use Tax
46% User Fees
$46/hhold
5
150,000
80,000
53,000
54,000
1
No
No
No
No
4
included
* Subsidy may be derived from mil levy or sales tax used to support operations

51. Comparison
Membership Costs Cost
(Household Rate)
Recreation
Centers

52. 2014 Proposed Rollfoward of
the Primary Funds
Administrative
Est. Fund Balance @ 12/31/12
Estimated Net Revenue 2013
$ 1,077,160
$ (776,445)
Estimated Fund Balances 12/31/13
$
300,715
Proposed 2014 Net Revenues
(
$
272,305*
$ 429,490
95,335
28,410)
Estimated Fund Balances 12/31/14
Recreation
$
524,825
( 1,970)
$
522,855*
* Represents 1 month of Admin & 2/3 month of Recreation Operating Expenses

53. 2014 Budgets
Backcountry
Fund

54. 2014 Backcountry Fund
Mission Statement
Pro vid e v is ito rs with unp re c e d e nte d o p p o rtunitie s to
e njo y na ture ne a r whe re the y liv e , while p ro te c ting a nd
c o ns e rving na tura l, a rc ha e o lo g ic a l, his to ric a l, a nd
c ultura l re s o urc e s fo r the e njo y m e nt o f future
g e ne ra tio ns .

55. 2014 Backcountry Fund
Highlights
• Will add $70,000 in three miles of trails
• Programs: Youth Camps, Hayrides, Camping, Horseback Riding,
Elk, Turkey, and Coyote Hunts, Nature Hikes and Education,
Archery Range,
– Will expand our youth camps this year to allow 200 more kids
into the camps.
– Turkey and coyote hunts new in 2014
– Elk Banquet and hunting earn over $12,000
• Noxious weed management, hunting, restoration, volunteer
projects
• Cattle grazing, historical site assessments on homesteads

56. 2014 Backcountry Fund
Summary
Revenues
$ 237,210
Less: Expenses
$ 443,430
Net Operating Revenues (Deficit)
($206,220)
Transfer from Recreation Fund
$ 210,000
Net Income after Transfers
$
Less:
3,780
Capital Expenditures
Reserve Transfer
Transfer from OSCA Fund
($ 83,100)
($ 50,000)
$ 77,500
Net Income (Deficit) after Transfers
($ 51,820)
Add:

57. 2014 Backcountry Fund
Capital & Reserve Expenditures
Capital
• Trails
• Signs
• Tables, chairs, computer, saddle
Total Capital Expenditures
$ 70,000
7,500
5,600
$ 83,100
Reserve
• Signs
Total Reserve Expenditures
7,500
$
7,500

58. Highlands Ranch Cultural
Affairs Association 2012
Separate 501(c)3 Cultural Organization
•
•
•
•
37 Cultural Events
Event Revenues
SCFD Grant Funded
Community Partner funded

59. Highlands Ranch Cultural
Affairs Association 2014
Revenue
SCFD Grants
Community Partners
HRCA & Other Donations
Event Fees
$ 85,000
56,000
5,200
86,825
$233,025
Expenses
Direct Event Expenses
HRCA Staff & Facilities
Other Expenses
Net Revenues
$172,650
48,600
11,775
$233,025
$
0

60. HRCAA Revenue Sources

61. Highlands Ranch Community
Scholarship Fund 2013
• 501(c)3 Organization
• Funded by
Sponsorships & Event
Revenues
• $186,000 in
Scholarships from
2004-2013

62. Highlands Ranch Community
Scholarship Fund 2014
Revenues
Operating Expenses
(includes 25 scholarships @ $1,000)
$36,470
28,700
Net Revenues
Notes: Estimated accumulated YE Fund Balance
$ 7,770
$32,470

63. Questions?