2022 Budget Assumptions & Notes
General Overview Staff Involvement
o Managers from every department were involved in the payroll/staffing, operational expense, and the capital reserve budget build. The executive team reviewed the budget with each manager to ensure all information, trends and considerations were captured. We met with certain members of the B&F committee to discuss progress and obtain advice about the budget deliverable.
o Capital Projects were toured & inspected by managers & staff to determine the need for the project completion.
o Some capital projects were moved into OPEX for repair/maintenance/updating completion rather than a complete replacement.
Budget Development
o The budget has been assembled with the assumption that we have full staff in every department.
o Each GL Code/Line Item was forecasted to where the business is anticipating on finishing for 2021 based on year to date spend. (Budget shows year over year +/‐ as well as the forecasted +/‐)
All Departments Payroll
o Payroll has been budgeted for a 3% increase in wages for all employees. This is once again based on the Consumer Price Index (CPI).
o Employment Cost Index Summary: Compensation costs for civilian workers increased 2.9 percent for the 12‐month period ending in June 2021 and increased 2.7 percent in June 2020. Wages and salaries increased 3.2 percent for the 12‐month period ending in June 2021 and increased 2.9 percent for the 12‐
month period ending in June 2020. Benefit costs increased 2.2 percent over the year and increased 2.2 percent for the 12‐month period ending in June 2020.
Incentive/Bonus
o The incentive payout structure has changed. HGA will now give incentive to employees on their paychecks.
The bonus will be grossed up on the paycheck so that the employee receives the full bonus after taxes.
Grossing up is roughly a 50% increase on the dollar amount given for bonus. To ensure that the incentive/bonus is more exclusive, in various departments the payout has been lowered.
Staff
o Custodial
o Moved from 9 FTE to 8 FTE – During 2021 part time staff was converted to full time w/ benefits to make the job postings more attractive to entry level talent. Overall staffing requirements are now 10 FTE (8FT & 4 PT). With the change from 7 day a week cleaning and upkeep in the buildings to 5 (back to pre‐covid) we felt we could reduce FTE.
o Roads & Grounds
o Moved from 12 FTE to 15 FTE – During 2021 part time staff was converted to full time with benefits
to make the job postings more attractive to entry level talent. Overall staffing requirements are now
16.5 FTE (15 FT & 3PT).
o Fuel/Gas budgeting has increased in all departments with vehicles, equipment and tools requiring gas. Per the U.S. Energy Information Administration fuel in West Coast less California Areas is sitting around $3.60 a gallon. CPI for Urban Consumers estimates a roughly 40% ballpark increase so far in 2021. Estimates for 2022 are across the board that pricing may go down or possibly continue to increase due to supply and demand.
o Based on Department – there will be roughly a 3‐30% increase of the fuel line expenses.
Utilities
o Gas & Electric – We are anticipating a relatively flat year over year. A small decrease of 2%. We included a 3%
increase for gas and electric, but we did not budget for the $71K surcharge that we incurred in February 2021 o Water & Sewer – We are anticipating an increase of about 4% based on information provided to us by the
City of Aurora.
Insurance
o HGA Insurance expense is budgeted at 9.5%based on the estimate provided by McGriff, HGA’s Insurance Broker, at a meeting on September 7, 2021. McGriff believes this increase is the best and final offer from the insurance providers.
o With a 9.5% Increase, 2022 Budget is sitting @ $1,747,313 which is about $150K Increase over 2021 forecast.
Outside Contractors
o Custodial – In 2022, Custodial will not have an outside contractor’s budget. During COVID mitigation, abatement and additional outside support was charged to the department however, as things have changed and we know more about the COVID virus, we do not foresee the need for the department to have budget going forward.
o Paint – In 2022, the Paint Department will not have an outside contractor’s budget. Projects requiring outside service/3 rd party would be the larger capital reserve project.
o Maintenance –
o Misc. Outside Contractors – 5.8% Increase roughly $1K, increased slightly based on inflation.
o Glass Replacement Contractor ‐ Based on the 2021 YTD forecast we have cut this category by $8K compared with the 2021 budget, which is a 20% decrease.
o HVAC/Boiler Contractor ‐ We have left this flat compared to the 2021 budget. For the 2021 YTD Forecast, we anticipate not spending any of this category. This category may fluctuate, we primarily use our internal Maintenance team to perform the labor; however, there are instances that have come up historically that require contractors.
o Roof Repairs Contractor – Roughly a 7% increase year over year, $500. Increased based on inflation.
Our internal maintenance team perform most of the labor however there are instances that have come up historically that require contractors.
o Electrical Contractor ‐ This line item is relatively flat year over year compared to budget. A slight decrease of 8% compared to the 2021 budget of about $2800.
o Concrete Repairs – Increased 33% compared to the 2021 budget due to additional small projects that will require vendors to come in and fix. Most repairs are completed under the Cap Res Concrete and Rail Project.
o Siding Repairs Contractor ‐ We have not increased this line‐item year over year. Most repairs can be completed in‐house.
o Sewer/Plumbing Contractor – We have increased this budget by 50% for 2022 compared to the 2021 budget. The 2021 expenses will exceed the allotted budget for sewer & plumbing replacement work.
We have had several sewer line replacements so far this year. We added $30K to the 2021 forecast
line that will put us over the budget. Due to the conditions of some pipes/lines throughout the
o Roads & Grounds
o Outside Contractors – General – Decrease of 20% in this line item from last year. $7k drop is deferring the CP‐1 retaining wall project, due to the material cost increase. Hoping the wood/stone comes down in price in 2023. Also, the patch/fix is holding – so it went from important to Medium on the project list scale.
Stump removal
Mosquito abatement Repairs & Equipment
o Clubhouse – Doing Repairs/Labor not replacement. Regrout & cleaning of tiling within locker rooms. Possible refinishing of the auditorium floor rather than replacement.
o Custodial – Custodial van, added $1K to get the van painted – paint is peeling off the van and the brand looks terrible. The expense line was flat except for the addition of van paint.
o Maintenance – will have a significant increase in 2022 for Sewer/Plumbing Repair. We have seen an uptick in repairs needing to be performed in 2021 which may exceed budget. These types of repairs must be
completed. Maintenance will see a significant decrease In the Repairs‐Equipment Supplies. Units were fixed as needed this year and most of the equipment is in very good shape.
o Restaurant – Department will have some non‐capital equipment needs in 2022 that include microwave, sandwich table, range, and a waffle machine.
o Roads & Grounds – Completed many repairs on equipment in 2021, especially with trucks from the record snowstorm in March 2021. This line item has decreased roughly 25% year over year.
Software & IT
o We will continue to use current programs that are in place through most all departments. We will be researching Accounting/Community Mgmt. Type Software – researching vendors to understand options we have and gaps we may consider covering.
o The Security Department will also be researching and potentially implementing a new software that includes report platforms and patrol tracking etc. They are looking for a web‐based software that would be under the OPEX budget. (This may be covered by Community Mgmt. Software)
Supplies
o Custodial – This department will see a 20% increase in supplies from 2021 budget, or about $5K. We are still seeing in some instances increases for specific products and supplies from COVID impacts. The increase keeps us slightly lower than the 2021 usage.
o Maintenance – Supplies, line M684, will see a significant reduction to the budget. Moving from $24,000 budget in 2021 to $7,200. The 2021 forecast has the department finishing at around $5,000 for the year.
o Paint – Supplies will be nearly flat year over year
o Roads & Grounds – Supplies will increase roughly 30% in 2022. Rock, wood mulch, and general items have increased nearly 15‐30% due to availability.
o Security – Department will see a slight uptick in the supply line.
Dues from 2020
o With the elimination of the annual year‐end refund, the savings in 2020 from Insurance, Gas & Electric, and
Maintenance have been applied against total expenses for these categories for 2022. The deficit for Water &
Water & Sewer ($118,472) Deficit Gas & Electric $151,518 Surplus Maintenance $166,333 Surplus
Total $219,850 Total Surplus
The total surplus from the 2020 budget year allows for credits to the 2022 budget. If there had not been a surplus in 2020, the total funding amount for the 2022 budget would have had a budget increase of
$219,850.
By Department Information & Notes
