United Business Plan August 9, 2018
30. We. Have. Two. Of our board members missing, but we do have a quorum so. Is. The media do we have any media here, I don't, see. Any. So, it's just we are being recorded. Welcome. To our audience out there and, it. Will be replayed, also, for those who couldn't see it live. May. I have a motion. To approve the agenda. Okay, Pat second, time okay. Any, discussion of the agenda. If. Not it is, approved, without. Objection. Chairs. Remarks. This. Is the. Just. About final. Meeting. On a long. Long, process that was started months ago this. Is what we call version, two although, in effect it's really eight, nine or ten because, we've been working on this so long in different areas. After. Today it, will go to the board in at their September, meeting, for. Approval. And. I. Don't. Anticipate, too, many changes there can be questions, today, on each different line item, but. A, lot, of work has been done to, come up with this budget and, I. Will turn it over to Brad. I think you're going to start. Thank. You honourable, madam president. Ma'am oh oh I'm sorry, hmm, are. There any member comments did. Anybody, turn something in on Chris. Germany cards, I'm. Sneaking. In. Maxine. McIntosh, 68c. I'm. Disappointed. In the attendance, here heaven, knows this board has asked, people time and again please make. Herself heard and when. That skill. Minard, president, here is a terrific. President, I've never heard her looser patience or be rude to anyone, even. Maybe some people who were being rude to the board and it's. A wonderful opportunity and, people that. Come out complaining me about assessments, too high or something not being included here's your chance to say if people, aren't here but I want to know I appreciate the, effort all of you have made to get a better attendance. Thank you thank, you Maxine, well I hope we're getting a good attendance, on TV. All. Right now. Thank. You thank you very much Madam. President members of the board, United. Members. It's a pleasure to be here today to to. Share the results of an awful lot of work and. A, lot of work by this, board your. Committees, advisers. And the members who've shown up at those committees as well, as a. Number. Of staff, folks. Particularly. Betty and her team and of course as. The biggest parts of your your, budget or in general services and maintenance and construction. Ernesto. And Bruce have been intimately involved in in many of your deliberations. As, well, I. Think. There. Were some challenging, policy, issues that this board address, in terms of. Really.
Deferred Maintenance and, priority, for addressing some of those things I think we went through that and really. Quite. A lot of detail and, came up with a plan that accelerated. Certain. Programs and changed others and and I think those. Decisions, were wise they were supported, by staff and they're reflected, in the documents, before you today, so. With that before. I jump, into the budget thing I thought it might be kind. Of fun to share, with. You and though you know but maybe met certain members of the community some of the things we've been working on. Of projects, and I did this yesterday with with jrf and I thought I would just share. A few things and this is just sort of a listing of the, the photos I wanted to share and, you. See this going on right, now it. Said this is a summertime activity. Almost, exclusively, they, can't have rain and cold when. You're slurry. Sealing or laying new asphalt and, so I know it's incredibly. Inconvenient. At times but. I can assure you we go to more lengths, here. Than. Any city or county ever would we, just put the signs up at a city or county and start laying asphalt here, we leave. All the driveways, open, and shuttle. People and do things so if you feel inconvenience. You can't get in and out or you've got a problem please. Call resident services will help you with. Ever whatever issue that. You have but we do go to great lengths, to, maintain, access to just about, everything. I'm sure there are some people who we've missed that that somehow it can't get where they need to go and we'll help. Them in any way we can but, big program, important, program I know, we have your some. Of yours going on now we got chair after doing a lot, as well so there's. A lot of coordination between those, two programs because, they must be coordinated but anyway big program. Back. There don't miss that this is pretty exciting, and and I think the board. Took. A pretty big. Leap on this one we did a lot of research we had a lot of data from Walnut Creek. It's. Always a question of you. Know how many visits should somebody be entitled to how do you price at all those sorts of things and so you really don't know until you get some some experience and so. Far our experience. Is very, very positive we have a little over 150. Participants. In the program we expect that will. Continue to grow I. Think, in addition to just being a really nice service, and very very. Competitively. Priced it's a it's a heck of a bargain I. Think. Also you're gonna you're gonna find. That you're gonna save some. Resources in other areas, as a handyman out there you know most residents will have a list of things and and many. Of them are already, mutual, responsibilities, and they just happen to there and so they just take care of it real quick and so I think there, are some of those benefits and then, just getting, somebody out in a manner where, maybe somebody, who's a little older or, a. Little, feeble and and they can help. And look around and see problems and and, also report things that require maybe a. Journey. Level sort. Of assistance. And so I think we have that benefit too so I think it's a great program and a lot of benefit, to the resident, of course but all I think also the mutual as well getting. Some of these smaller things taking, care of them just getting another another. Set, of eyes onto some of these manners so I think it it's, a win and. You can you can check it I'm calling it maybe, early but I'm calling it. Probably. And I hear about this as much as anything is, walkway lighting. And and how dark it is in the community and those sorts of things so I think I know we're replacing some, of these we add a few here and there it's always. Good. And we we address areas. Where residents complain and try to solve problems I don't, know that you could do enough of this really it's a I hear, about this complaint quite frequently. And. Of course we we have been and and really, this is one of the bigger installations. We've done of. More. Drought-tolerant. Landscaping. And, koltes ak8 you've. Seen a lot, of this going on at various clubhouses, and gate houses, you. Will be doing there's. Not much landscaping, at four right say we're going to do gate four but I'm not sure there's any landscaping, there that's in in. The. Kind of the right of way but you have.
Certainly. Gate. 16, we just we just did, gate 12 we're getting ready to, do and, then 11, and 10 as well with with, drought, tolerant. Water, efficient landscaping, or going to be doing a lot more of that, as. Time goes on. And. Then. We've this is one you know we've been doing this for a really couple years and just really stepped it up on the prior to paint which, is essentially, and United your dry rot program, and so, here, you know you can see we've we removed some beam's and replace some some. Structural elements, here that were rotted, as. Part of this manner. We, this is a daily. Activity, for. Our prior to paint crew to remove. Affected. Wood and to replace it and, to. Ensure. That things are sealed properly, and, painted, properly so that we don't have intrusion. Into, into. The structural components, of these units which which, caused dry rot and other issues down, the road so I think it's been very, successful. I think it's exactly the right way to approach this I. Get. A lot of praise from, our painter about our painters all the time but what a what a good job they do and. We. Do have some of the best-looking, and best painted. Units. Pretty much anywhere and they, do a good job I know we extended, that program. A little bit this year and I think we can because, they do do a good job and, but, mainly because that. Good painting tied together with the prior to paint program, allows. You to get a little bit more out. Of that paint and that savings. We. Were able to put into to. Our waistline. Epoxy. Program so I think that's that was a win-win for everyone. Speaking. Of that. This. Is sort of a before and after on on, waistline. Remediation. You can see. The. Difference is there we, also have have, a lesser program for, supply lines as well we do some of that so. Very. Important this. Doesn't get much. Much. Much chatter but it's very, important. Replacing. These. Old sort. Of built the old tar roofs with with. This nice PVC. Roofing, material, that lasts a lot longer that. Is. Solar, reflective. Just. A huge. Enhancement. For the community, we're doing quite a few of these now. And I think the response, has been been very good and, I think where the response is really going to be good it's where you get 20 or 25 years out, of this instead. Of 15. Out. Of the prior material, we're using so I think it's a. Huge win for the community. And. Then of course we have the push Maddox, you. Kind of get, a glimpse of the differences, here, we've. Been rolling through this for. A couple of years now there's there's obviously, years. To go but. An. Upgrade that I think in the future the, community will benefit from. So. I just want to share a couple of those things, just.
What You've been doing and I'm sure they're things I didn't put on there that maybe could have been put on there and and, now we're. Going to be doing a, a, little. Kind of vignette for, your annual, meeting, that will, it'll be sort of a video, with some steals and, some narrative and maybe interviews, Eileen's, putting all that together well some of this information will be in there so, it's certainly appreciate, any. Of your input in terms of things that that, you think are important that should be covered in, terms of what, the board's been up to this last year so I appreciate, that I just. Put. This calendar, on here to show that there's been an awful lot of meetings we've we've, met and and this is just the noticed meetings. This doesn't include this is a public meetings that anybody could go to there's. Been a bunch of them and. There's also been smaller meetings where, maybe you. Know the, the, finance, chair and vice chair get together with Betty and try to hash something out or M&C, meets with their nest and so there's a lot of different smaller get-togethers, that aren't really public meetings where we're trying to figure something out but there's. Been a lot of opportunity. To participate and, I, think, we've publicized, it fairly well and. Sort. Of always welcome, residents thoughts, on things, we should be addressing how, we spend our money all those things are are. Valid. Discussions with our members. So. I just wanted I know some. Of this isn't entirely applicable to. Mutual finances, but a I, think as, a background is probably important, to to, know you know what the heck I'm thinking, about and. For the community to know as I'm. Putting these things together and, I have you know three of these budgets, to try to put together and, and. They. Kind of work together you. Know third and united share, a lot, of the same. Meant your. Residents you, know have to be secured, by by. Security. Personnel, who are funded through the grf budget, you, know so all these things kind of kind of fit together, ERF owns all the equipment, and stuff that you, all use and so, they, all have to tie together and relate to one another and, be. Compatible and so that's important, and so as I'm thinking about, about. What. Kind of things are important, to fund and not fund and again those are ultimately board decisions, but I have to make recommendations, on them. You, know department, heads I've never met a good department, head that didn't want you, know twice as many new positions, as I was willing, to even think about let alone recommend. Approval and, and and I was proven correct again this year thank you your nesto. And. So. You. Know when I look at at those, kinds of requests, I mean that the number one thing is what's, it going to do for the customer does it does it does, it provide direct customer, service, or is it a support, position.
That. Really isn't going to enhance customer, service but maybe, it enhances, you know reporting, or or compliance. With some state. Or federal statute, of those sorts of things those are valuable too but they don't reach the same level as directly. Providing. A service. To. A customer and that is really what, we're trying to. Emphasize. And then next Lee is is, it does it create some efficiency, and I think this is where you get into summit Chuck's these next two this, is great an efficiency. That. Is going to create some savings, that I comply to. Number one and. So those. Kind of kind of initiatives. Typically. Would get you know a high priority. In the budgetary process and I would throw technology, in there too because in, most of the technology, work we're doing it. Creates huge efficiencies, because our processes. Have been so primitive for so long so paper-based. You. Know you have five people you. Know touching the same piece of paper that shouldn't, even exist in the first place and. So those kinds of projects. That eliminate, those systems. They. Get a pretty pretty high priority. And then, I. Think there is so much deferred, maintenance I say facility, here but I'm really talking about everything. Whether. It be a. Clubhouse, or gate house or Manor. There's. Been so much deferred maintenance that, that. There. Has to be a huge emphasis on, trying to catch up on some of that and. To, do it properly not just you. Know put some wood putty on it and a coat of paint but to do, go underneath that and. Repair. These structural, and infrastructure. Deficiencies, from, the ground up and then and then move forward and so I think those. Obviously, get a high priority as well in my mind ultimately. You, decide what, these priorities, are and and, what's best for for. Your members and and, we, respect that but we try to do enough work and give you enough information so, so. That hopefully you'll you'll, agree with our assessment but when you don't you'll, have enough information to move off in a different direction and feel comfortable you're doing the right thing so I just, want to share that I.
Just. In terms of and I'm looking. At this really globally right now but. There's. A 14, positions increased. In VMs. And and, most, of them are in well. The landscaping. Security. And resident. Services and there's, a position or two here there but though that's where the that's where it's going all. Direct. Customer. Service. Departments. And, so, that's that was where the need is that's, where we provided, it could, we use, some. More back-end, administrative. Support Hecky, apps we, could but. It's not as important as those things and so will will struggle long and and hopefully chuckle, we'll, kick, out the next great thing that will create some efficiencies, or will free up some administrative, time with resources, we have, so. Now. Let me go back yard I need all that again. Assessment, increases, or and this is pretty consistent with with, what you've done historically. Or very low you. Know less than two percent right around two percent that's. Been been, pretty consistent, over the last several years I've a slide on that, we. Did move some of the major, mutual. Components. To reserve I think, appropriate. I still, feel not. So much maybe. In the Mutual's, but in grf that we tend to overstate. Our operational. Costs by, by. Not capitalizing, things that should come out of reserve so that's just an ongoing. Adjustment. We're trying to make. And. Then, and. I think most importantly. You. Identified, your top priorities. Mainly. Waste. Lines but other things as well and you said that that's where we want to put our resources and so this, budget does that. Can. I just give, you a sense of overall, staffing. I, think. If the high was probably, 2013. At it may be, 770. And. Then, you can see with, the positions, that I've requested were at 741. So we're still still. Low there's a couple of things. That factored into that I think over. Over. Certainly, the last 10 years. Through. Some. Interesting. Changes. In, and say, turf. Management. Techniques. You. Know we probably reduce landscape. Personnel, by maybe 75, probably, 100 at one time we've added a few back and so. Do. Our edge spraying, mulching. Mowers you're not carrying stuff off big mowers. Just. Things you do. To. Be more efficient Curt was pretty good at at. Developing. Techniques, that would make the crews more efficient, and allow them to move faster and. Sometimes. Faster. Is not better and. I think kind of kind, of add that now so we're looking at some different techniques I know you had a meeting this morning to talk about some of these techniques and and, how.
They Work what their effects are in the community, and and, so. We're. Evaluating that and I think adding, a few, landscape. Sessions. Back will be helpful in that regard, as. Well as we're, contracting, out more. Of the major. Kind, of project, work right now they just happened to be in third though, I think United, will benefit greatly from what's going on over. On ridge route has that little force that was behind those, commercial. Buildings there was kind of a safe, harbor, for, you. Know homeless and vagrants and and other folks who might on occasion, want to jump that wall and and take your bike or spend, the night in the laundry room and so. Swim. In the pool you know, and. So so. We're cleaning, all that out using. Contract, labor. And, installing. Seven-foot. Shepherd's. Crook fencing, in there, to. Deter, those. Kind of entries into. The community, and so. Similarly. We. Have using contract, labor for a fire. Fuel. Modification. That was ordered by the Orange, County Fire Authority that's a it's a big big project. If, I had to, pull you, know ten landscapers. You, know out of the field for two months to do that work that, would have devastated, our, residents. And so we contracted, that out and it so it's a big big. Job at some you know $200,000. In contracted, labor and. So, the. N that'll protect the community. But. Also it doesn't affect our landscape crews so that. Some of that's reflected, in these lower, numbers, in that maybe. I'm a little more willing than in. Past management, has been to do more contracted. Work and I, think given the tight labor market, I think the union's more, willing to work with us on that because, they can't find him either so, so. I think that it's kind of a win-win and, I think the opportunity, to bring in outside. Help when you need it is is positive, for the community. Here's. Where the, positions, line up and you can see landscape, you know they get the bulk of these there's. I should explain there's, a couple of. Positions. Increase, in my office those are folks that are already here doing work and I have. Borrowed. Those, positions, from another department, and and they're, kind of insistent, that I give them back and so that it. Was a while back so, anyways we're going to come back and. That, is the assistant. Corporate, secretary, and. Eileen. The communications, director so, those are the two positions, and they've been around for a while so. And. Here you can see a couple positions to nap positions, in security, we are and that's a little bit misleading because we are getting some efficiencies, in security, as. We. Used always have to gain ambassadors, at each at. Each gatehouse, and so now. As. You bring this technology forward and as resident, services is. Answering, many many more of the. Of, the gate. Access a, calls. There's. Less, of a need to have two gate ambassadors, at every gate and so. Many of them are reducing. Down to one and so that. Savings. Is. Kind of being converted to, more. Security. And patrol staff, that will be out there to to. Help residents in, to secure. Our community, so you know I think that's a that's positive, as well. And. This is just kind of the rundown. Of. Of. Your assessment, change that is included, in proposed, only as part of this budget and you, can see that the mutual is you. Know it's. A little over five bucks and chair asks a little over four bucks for a, total. Increase. Of. 953. Which, I think, equates to about two percent or less than two percent yeah. So. CPI. Last month in Orange County was 4.1 percent. To. Be a sense. Where. Things are headed, where. They've been headed for a couple of months and so. Being less, than two percent i think is pretty positive. But. This is kind of interesting and, because if you look at, yeah. I'm just taking a five-year peek at, assessment, levels and, you. Know it's been a, couple. Of percent, or less than a couple of percent sometimes, less than a percent some of these are pretty tight. Like, between, 16. And 17 it, was almost flat but I. Think. If you look over this whole period you're, well below, CPI.
That Entire period well, below. It. Might be quicker if I finish but, I'll whatever. The board wants it doesn't matter to me I love. To be interrupted quite frankly. You're. Going to proceed okay. And. Then I thought, this is an interesting stat. Here I mean, we have been spending, a lot, of money, fixing. A lot of deferred maintenance over, the last several years at, least two, or three years, whether. It be dry rot or push, Maddux or waste. Lines things, that have never been addressed before you, address them and yet. Your. Balances, are still the same. And. So to me that shows that you're being fairly, efficient, you're you're moving things around. To. Address the priorities that you've identified and. That's, I think, a more responsible, way to do it then, just a jak assessments, up every time a new need arises you're not doing that you. Set priorities and, you've adjusted things, so, that your priorities, can be met while still taking. Care of these other things and I think that's entirely, proper, exercise. Of your. Policymaking. Role, and in keeping with your fiduciary, responsibilities, your members I applaud, you for that. So. This will give you a look here I mean, you can kind, of look at these numbers, I just look at the bottom line how. Much are we are, we spending and you can see. During. This. Period. Here, you're about three and a half. Million. More than you were a. Million. Of that is property, taxes. Your. Property taxes and that that's up here somewhere it's in the next slide, so. Even. Though you're spending, millions. Of dollars addressing, these critical, infrastructure, issues, and, installed a major, solar project. Your. Reserves are about, where. These were five years ago and your. Assessments, are not much, higher less, than CPI way less and. Your. Overall budget isn't, that much more than it was a few years ago so I think. It paints, a pretty good picture for the work you're doing. Particularly. In light of all. The deferred maintenance that you're facing I mean that's always. A problem, it's. Always cheaper to do it sooner the, longer you wait the more entrenched. Super and difficult the problems become to fix and and, so you're a little bit stuck with that but I think you're you're, addressing it in a very responsible way. Someone. Talked about enameling, talk about this a lot it's quite frankly. Most. Of your your. Revenue. Comes. From assessments, that that, the. Grf has a little more robust picture intermón opportunities. To make money in terms of, broadband. And internet, cable. Golf those. Are the things they do here, really a chargeable, services. Laundry. And then, a series of fees and, the. Totality of that is was, that Betty Beth about. 1.4. Million so. Given. Them that you have, 54. Million in, total, expenditures. Noting. That 10 of that is property taxes, and its really a pass-through so, you really it's really a 44 million. Dollar operation. And, so, you've got 1.4. Million in revenue that's not assessment, that's. Pretty clear. Again. This is kind of articulates. Some of that I don't see much here. To. Quibble with. And. Then. On the expenditure, side, and. You can see that that. Huge property tax again. You're. Just really a conduit, for Orange County, here to facilitate. Their, their. Collection. Of property, taxes, in in, a cooperative, housing, environment. Which is highly. Unusual in California, anyway and, and I don't I would doubt that the that. The tax collectors, an Assessor, the other two counties who have these do this the way we're doing it I suspect, they may have a different arrangement I somebody.
Might Know the answer to that but I. Know. Can. I have a lot of County experience, in Sacramento, in Riverside County and property. Taxes are very important to, counties we. Didn't have any coops so I've never even seen a feature, like, happens. Here so. It's clearly. Unusual, to, get employee salaries, are a pretty big piece of what we do and then, utilities, and I. Think, you've taken a big, step towards. Addressing that. Utility. Cost with your solar installation. I think. Probably. Obviously. Water is a big a big piece and we're starting. To address that with with some landscape, reduction you know we. Were. Insistent, on trying, to grow grass in places, where grass doesn't want to go and we should just stop you. Know if you got a 50 year old ficus, in your front yard you. Don't get to have grass pretty, much, you. Know it's just the this they won't grow you can water it you can see that you can do whatever you want to it but it's, not gonna do very well so you either take out the ficus or take out the grass and I that's a policy decision that this board makes and usually, opt for the tree so. I. Think. We can reduce our. Water. Consumption, through turf reduction, and, reasonably not eliminating. Every blade, of grass here but but, just addressing, areas and. We. Really need to do is a nice study. And. And, survey, all this and come up with these areas that that where, we put so much effort in trying to grow grass in areas, to just make any sense let's stop and, and, remove it and have a program to go forward so, I know you guys we talked about that a lot and we'll continue to talk about it but, you can see most of your other other. Expenses, pale in comparison, to the big big, three there. Again. I nothing, here got me too excited, and I thought this is kind of interesting though is that your employee. Compensation costs. Are. Considerably. Less than they were in 2015. Even a little. Up from last year not very much. And, expenses, related. You. Have had been pretty flat all, in all. Though. Some, of these are, like the, materials, and other things are a number of these categories in bed go in the detail if you're interested I know you work on it where, well it looks like that's gone down well not really it's just been moved over to reserves so, I want to want to remind the board of that though I know you were all involved in in, making those decisions. In. Water water. Continues. To and. And. Sewer as well continues, to increase I think that's inevitable. And. So are really, I think sewers. A hard. One to address. But. Certainly on the water side as I previously discuss we have opportunities, for savings or at least try to hold it flat in. This environment of. Drastically. Escalating, water costs, where you can anticipate that to continue. You. Know not much to quibble, with here. I know Betty would you add anything on the expense side, okay. And. Here you see you're really. This your property tax there and you, can see it's going up well. 1.2. Million since. 2015. Now. That's. Sad for our residents, because they have to pay more property, tax but their house is worth a heck of a lot more to, values. Have gone up in this village over. 15% this, year I, mean. It's been a pretty good year I. Think it's actually little higher than that but I don't have the exact number at hand. But. I mean, as with all of Orange, County and and in California. Generally the, values are going up rather. Quickly and so, well. For, probably. Our newer residents that might be a tax hit, but for some, of us or maybe lived in the same place for a long time you're, probably feeling pretty good right now. Our, insurance rates have been fairly. Stable. You. Know given given, the nature of that market. So. Not a ton there now, but. You want to cover this but this is your component, piece you know. Is operating, fund buy programs, we get a sense of of. Where, your. Money goes and, and obviously. The biggest, part of this is shrub, bed maintenance. At. 1.9 million and then you've got almost a million for lawn maintenance, that's. A lot of acres you know a lot of shrubs. Slope. Maintenance, you, know your slopes are in wonderful, shape I. Can't. Say that about your mutual, partner, we have a lot of work to do on their slopes but there's, a more complicated, and difficult and, taller and and they're on the edge of a wilderness and there's all kinds of things going but your slopes look, very good they're well maintained, they were planted properly to begin with and and so just.
Keeping Them nice is the goal and I think we're doing a pretty good job at that. Overall. Not a lot on the operating, side. Here's, your maintenance program, in the operating fund again. Some. Of these things, are. Up I think for me, and. And maybe this maybe I'll go back a slide. And. Maybe this is a good point to say because. These are the kinds of things that the, typically board members have questions about and, so if there are questions about any. Of these line items maybe maybe, stop me before I move on and then, we can cuz, it's the meet of your budget right here, what. Do you spend the money on I don't think anybody would quibble too much. With. The assessment, increase of less than 2% getting, given all the work you're you're doing I mean and I think that's that's the qualifier, but, it's you know kind of where it fits into these various slots that that people may have issues, here. And. Then. This is really kind, of the direct. Service. To residents peace, we. Have seen more requests. For carpentry, services, I know or Ness when I talked about that recently, I. Think, the janitorial, service, stands out and and, merits. And explanation, there are a couple things going on, there, one. Is, we. Used to have landscapers. Do a lot of things that weren't landscaping. And. When you're having a drought and, you're not watering any nothing's, growing that probably works out okay. But. Then it starts raining again, and you got all your landscapers. Cleaning carports you, know that's not helpful so, I've discontinued. That practice, but I've had to now, have somebody else do that work which is the, custodial, service and so that's, reflected. In this janitorial, budget, here is, that they're picking up those things were used to be done by. Landscapers, in, addition, that, also. Funds, the, program the. Hated program, of picking. Up. TVs. And mattresses, and things that, residents. Improperly. Put, next to the dumpsters and so. Like. So we're doing. We're. Calling off a lot of material, that residents, stick out by the dumpsters, waste, management, will not pick that up and so we have to pick it up so I have two guys full-time, that. Drive, around and pick. Up things that residents. Put. By. The dumpsters cost the community, 100 grand a year more than another grand a year. They, have a truck. Two. Guys and, then, we fill up I think. He, said a 40, cubic. Yard dumpster, every day. That's. Kind, of a lot and. That's not just at the bottom that's the whole thing and so. If, residents, I'd. Like to get rid of these two guys they're. Nice guys they work hard I can find something, else for them to do so if residents would stop putting. Things next to the dumpster. They. Can call resident services and we will come and pick it up right, out of your manner we work in partnership with waste management on, that they'll send somebody out you don't even have to take it down to the dumpster they'll. Come right in, your manner and get it from you so again. That's in that line item. Again. Most, of this other stuff I you know I don't take, I have, some question, and maybe you're Nestor you can answer this why, is pest control going down so much is this because it's contracted, out that, was my view of it. Sure. Yeah. The. We're. Contracting, out the. Service. However. Were just anticipating, based, on that it's a lot of it is based on infections, and. These pictures are just telling us that we're we're, not having an upward trend so, we're, catching up with a lot of it and, it's, just the. Numbers are are, not needed to be that height so that's, reflective, of that. Some. Of them one of the things and. Again it goes back back. To landscaping, we, always, did.
This Bee. Remediation. In-house and, so you. Know bees, don't. Own. Your not very thoughtful they. Don't go. On the ground or, next year front door you know they're up in a tree or they're up behind your hat in your attic or near your house and so, you. Know we always had to go steal a boom, from, landscaping. And have. Somebody, come over then you call a carpenter. To come and cut. A hole and then you get the bee guy in to, get to be a out, and you call a carver here to come in and. Replace the hole and then, you call painter to come and paint it and so. It seems like our stucco, and so, it what, seems like a fairly simple, thing it kind, of turns into a, lot of coordination and you're taking equipment or way from, somebody who needs it and so. That's a really good one for. Contracting. Out yeah, you know I've got a one-stop shop there, they, come out they handle it it's done and. They go away and so again. That helps us on the landscaping, side, and. Then it doesn't you, know tie a lot of folks up with with these small. Items that a that, a fully-equipped you, know, one-stop. Shop and just do it all at once and so those, are the right kind of things to. Contract, out. Here. You can see I think, these programs, were I wasn't. In. Some of these where you see them zeroed, out. Likely. Moved to reserve so you know. And. Here you see your your. Reserved. Contributions. A. Little. Higher we've got more things in. Reserve, a little less in top ratings you'd expect that and then. Because, here your contributions, to, your. Contingency, fund as well so. All. In all I think a. Very. Conservative. Responsible. Way addressing, infrastructure. And, deferred maintenance issues. Maintaining. A reasonable, reserve and contingency, fund. To. Address things that that that may come up there, unplanned. And. Then, I think I'll let Betty talk about the reserves plan she. Loves this stuff. We, got a certificate in, reserves planning, so she's got to do this I do, like the reserve study so. We are looking at slide 32 now and, I just wanted to walk you through, what. Your reserve plan looks like when, we, put the the financing, piece together, with the maintenance piece, so, you're. Seeing just a very brief summary here, of a, financial. Plan showing. Money going in and money coming out of a reserve but. Just. Know that there is a book, of data, that goes behind this for, each component, in those, reserve, plans that you're responsible for our, Ernesto, and Bruce, have gone through and identified. The scope of work the, basis for replacement, the age of, asset, the condition of the asset, and so we're projecting planned. Expenditures. So, this is really a cash, flow based, reserves, plan where. You, your, emphasis is on those planned expenditures, in future years. You. See a total here of thirteen point three million but. There's dozens and dozens and dozens of components, behind, this that are addressed individually, to come up with that total so, we start. The year by looking at your your audited, reserve balance at the end of 2017, and, we, say all right January, 1st 2018 we're starting with nineteen point three million dollars in this reserve. Fund to. Which we project, planned. Expenditures, of 11.6. Million and so, that final, column there the green shaded number on the far right is your, anticipated, reserve balance, we, do that for every, year until. We. Get a, 30, year plan that is then on the next slide. Those. Ending, balances, are graphed against. A threshold, this is called the threshold. Basis. Of Reserve's planning, and you say you know what even after, considering, all the money going in and coming out of our reserve we, want to stay above a threshold. Or a buffer. That is a comfort, level for the board's knowing. That you still have money in reserve for, unexpected. Items, or. The. Need to accelerate, a program, or new code, requirements. That require some. Compliance, issues, to be addressed, you. You don't want to go all the way down to zero in your reserves and so. United. Mutual currently, has a threshold of just over ten million dollars this, red line here shows that ten million dollars inflated, each year, just. So we don't keep it flat and lose the the value of money over time and then, those ending, reserve balances are, projected, to sometimes. Come down to, the threshold but, then build back up for expenditures, in future years and so you may wonder after, 2026.
You Know why our reserve, balances projected. To go up so high and. Then come down by the end of that 30-year period and so, in, your handout. For the agenda package if you look at your reserve components, you, can focus on, roofs. And asphalt. Carport. Renovation, and. Solar. Panels, those, four items have some pretty heavy expenditures, towards, the end of your 30-year plan now. Obviously we, update the reserve plan all, components of it every. Single year so, it doesn't get done once and then stand for 30 years that wouldn't be realistic, the, Civil. Code requires, a a. Certain. Level of review each year in a major review every third year because. Of your on-site staff we have eyes on these. Components at all times, do you have up-to-date information, through. Your operations. And we're able to give you a new, revised, projection, each year so just know that this is required. Through. Civil Code you've met that requirement you're, able to check the box that says yes, we have sufficient funds to meet our obligations, over the next thirty years. But, we review that in detail, every year to make sure we keep up with any changes, in what's. Anticipated. In. These next few slides starting. On slide 34, are just, the, components, I was referring to it's, just a very, brief. Summary. Of the planned, expenditure. In 2019. Just, the first of the thirty years and it's. Ordered. Here. Alphabetically. So, if you have a question on a particular, component we can go back to it but, you. Can see here your your biggest item at the top is, for building structures that's basically dry, rot program, or any, other components. Of a building structure like stair, treads. And so forth that might need attention. And you. Have electrical systems, your, your paint and your prior to paint is a big, reserve program as is, your tree maintenance your. Tree maintenance is not. Level. Every. Year you have I think a thirty four, month, tree. Trimming program, and so, because, of the fluctuation. In. Those expenditures where one year you might have almost no tree trimming and then over. A million dollars in the following year it's, appropriate, to have that as a reserve expenditure so, it's.
Not A direct impact on your assessment, you can draw on funds that you accumulate, over time to. Afford. Those expenditures in. The years where there's a big hit and. Then. Of course your waistline remediation. On page 35, this, is going from one point five to two point three million dollars the board asked. For some extra. Attention. On this program to accelerate, the remediation. Work that's being done there. In. Total you, have about thirteen, point three million planned, as. Your reserve expenditures, we do report. These each month as the, year progresses at your M&C meeting and your finance meeting to, give you a project status, and any variance explanations, that are needed when you, deviate. From that plan I. Think. You have it that I just wanted to add a couple of comments. You. Know one thing is there was some some. Discussion. About. How. We valued, various, aspects, within. The. Reserve plan, particularly, replacement, cause I know the solar was one of the issues that came up and and. I think probably the typical, way is to, look. At what it costs, you and if you're doing a replacement and, you start there and then inflate it over time and you, come up with a number I. Think in this case maybe maybe, that the solar number. May, be a little exaggerated, because so much of that project was underground you, know we had a lot of conduit, work and the. Wiring and things that you probably won't have to replace when you do that so I asked, your your. Indulgence, I want to have take, one more peek, at that make sure we've got it right because we had to have the same discussion last year and I don't know if we put any more that's enough work into it, TV, solid answer but but. We'll have that before before. You come back with the resolution to your next meeting so we'll have that discussion. And. Then the. Other thing that so. Yeah I guess you could quibble about all these you know well you. Know that. Stairwell. You've. Got it under priced or overpriced, it, is at best a guesstimate, we're talking about buying something 20, or 30 years from now I you. Know I think. What. You paid for the current one plus, some inflated, value is the best you're gonna be able to do you, don't know even what materials, you'll be using if if they'll, be in there some sort of economic stress, at that time that you need to buy them and so it'll be you know more or less expensive, than you anticipated, a lot of factors, what. New environmental, rules or regulations are going to come down the pipe that are going to change, the way you do business. It's. All a bit, of a guess and. I think, the. Fact that you look at it every year is good and if you see something that looks like, it's not quite right then you make the adjustment then, but. I think, thirty. Years as I said, this to grf six. Months ago we can't, plan on a thirty year basis, and particularly, for the kind of work they do so so, we put together a five-year, CIP. That, they adopted, that that, we can we can deal with five years we we pretty much know what's going to happen in five years over. Thirty years it's a little a little trickier and then, lastly I. Think. There's generally, a. History. Of, the. Board allocating. You know a certain amount of resources, for. Reserve. Capital. Projects, and then. A lot, of that money doesn't get spent and, so I think that there clearly that's a that, is something that's happened here I am doing. My best to put an end to that. Horrible practice, and, to, spend the. Money that you authorized. To make the repairs that you want completed, and I think we've. Come a long way in getting there really likely if you say, well we're gonna spend thirteen million dollars where we likely spend thirteen probably not maybe. Twelve you, know but. On the other hand. Things. Come up you could spend more - so. And, that has happened we've we've had some you, know and it hasn't happened in the mutual.
That. I'm aware of we had a couple, of big sinkholes, that happened on grf property, that cost us a bunch of money we had a. Pipeline. That broke, out of the blue at at, clubhouse. For and about wiped the place out and we ended up getting our money back on that but we had to spend quite, a bit so those things just just, happened and and it's. Good to have a little bit of cushion to deal with. That but our intent, is to, spend, all the resources, that you've allocated and, I think, again, it's taken, a bit to put. Put. Those processes. And systems in place allow, that to happen because that just has not been the culture here and, so, but, I think now with the work Ernesto, has. That, we're seeing a. Lot, more productivity. Than you've ever seen here before and, I think the numbers bear that out pretty clearly so. With that out, again thank you and we look, forward to your your. Policy. Direction. As the final ingredient, in this budget, process. Okay. I'd like to make a couple of comments before we go and get questions from the rest of the board, first. Of all I'd like to remind. Our emphasize, to, our, residents. That, we are unique, in. That your, property taxes. Are included. In your monthly. Assessment. They. Aren't in third if you have friends who live in third there's. Monthly, assessment, is a little higher in ours and yet they still get property, tax bills up and, above those every, year if we, took out property. Tax and did not have it in our assessment, our, specimens. Would be much lower. But. You would still get property, tax bills a couple times a year by. Evening. It out over the 12 months we feel that we are doing. The best service, to our residents even when property, taxes, do go, up and we have no control, over those the. Other thing I want to point out is insurance. Even though it's only gone up two dollars is we, added earthquake. Insurance, this, last year which, we had not had we. Were very fortunate to get a good. Rate. On that, but. It. Is. In our. Insurance. Package, now so, a couple, of dollars more for that is just kind of peace of mind. I. Reiterate. What. Brad. Has said it's. Up to you the, residents. To. Make sure that, you are not, causing. Us to spend more money than we need, to and, I'm, specifically, talking about the, waist. Line. Waste, of, pickups. And, you. Think oh well it's not a big thing it's just me but, if it's over 100, in dollars a year yes it is that. Goes into your budget, and so, it's important, that you take advantage of that and, when we look at our reserve contributions. Yes. They've gone up a little but go back to the other slides and see that our balances. Have been holding, fairly, steadily which, means that we have been spending, those monies, responsibly. In, fact. I think. Very. Very well we, have been doing things in United that have been kicked down the road for years and years and years. Particularly. With our infrastructure. That we are now tackling. And using, and yet, we are not asking, the residents to, kick, in a special, assessment for that or for. Their assessments, to go up that much more so as as. You look at this budget as we have we're. Pretty proud of what we're coming up with this year I. Go, to Carl. You had a question. I. Had. A question and, now you can actually hear, me I believe. My. Question had to do with the fact that for, our. Audience. Besides. The people around this board okay, and the people at home. There. Are certain things in here they may not understand, and there's a lot of material here and you, know maybe. From. A layman's perspective of, some some, of these things okay, can, be possibly, simplified, okay and my understanding, right now is the fact that what, you're recommending, right now is a $9 and 53 cent per month increase, in the assessment, is that is that correct based on what you presented you, yes. For that yes, that's correct, and really. Five. And a half, roughly. Is is, roars, and then another four. Or so for draft so and and you, mentioned, the word CPI, which, sometimes, is completely. An unknown entity to some people, okay so you, indicated, that was in Orange County and CPI was around four percent and this only represents a 2%, last month it has been been two to three percent for quite some time and I'm wondering if Betty could, we put, a little explanation to, what that CPI, is and, how that all works out for the home ordinance if you will well.
We're, Looking at the Bureau of Labor Statistics report, the CPI in the Los Angeles Orange County area and we, look at the all urban consumer. CPI, you is, what it's called because, it's a bigger basket and. How. That directly, relates, to the, materials, and supplies and, labor that you're using you, know it's not specific, to our industry, but, it's still a general, guideline that we can see where, things are trending it's. Been below, and last. Year was consistently, around 2%, it, just has increased, recently so. Year-over-year May, this, year compared to me last year it was a four point one percent increase, so. Our assessment. Increase right now really is within. The realms. Of inflation. And all those other things with, the additional work that we'll have to do to get all of those items. Corrected. Like the waistline, remediation. And increase. In wages. Because of the fact that obviously, raises. Are in order because that's what happens with, various different things so all of this rep is represented, in this nine dollars and 53 cents is that correct correct okay. Thank, you that's all I wanted to do just so that the, homeowners may have a better explanation as. To what's going, alright. Pat you were next yes. First. Of all I just I've got two items, I'd, like to have a clarification, on, the property taxes, actually, the. Property taxes, are paid on top. Of the, assessments. And they have nothing to do directly, with the, assessments. So, if our assessments. Are hundred and fifty dollars well five. Hundred fifty dollars then, the property, tax would be added to that and they, don't. Come out of the assessments, I think the, only problem. Here is that they're all paid together, yes with the assessment, not, that they come out of the assessments, right, the terminology, we use for. What's presented today is the total basic, assessment, so when we talk about per manor per month of five. Hundred and seventy eight dollars and fifty two cents. On top. Of that we'll be added the property, tax that's unique to each unit. And, because we can't although. We include it here in the business plan and it's in the dollars and you, see the 9.8 million dollars as as Brad went through the slides and it's in that total fifty, four million dollar business plan, we, haven't represented, it per manor per month because it, varies, so widely. Between yes. You went depending, on when it was purchased and the the value thank, you very much and then the second, item I have, I think it's just a typo. Here it's. On. Excuse. Me I can't get my glasses here it's, on slide number 17. And I. Think you'll see that there's an obvious mistake. On. The last line down maintenance, and construction, the. Whole thing does not, add. A cross properly. And I think that the. 2019. Maintenance. And construction should. Be more like 19950. Now. The hon percent sure on that are. You looking at the staffing. Yes. Full-time. Staffing, mmm-hmm right maintenance and construction did, not have a net, change. In their staffing. Well. This, increased. Decrease, figure doesn't, doesn't. Add up right then okay, I'll check I'll check the numbers to see if we that third column has it my only concern, would be you don't want to be publishing, something that's got an obvious error in it like. I will bring out my my. High financing, on your great my phone right now and thank you click now I'm sure you will Betty thank you. Few. Questions, maybe, first. Is on slide 17. In. Reference, to that you made a comment that we. Are cutting on gate ambassadors. Cover. Types I came in after. Like, 1 o'clock at night came, into the community and, I, see kind of very. Senior, single. Lady sitting, in the booth I think. That's, not one place we want to cut cause. Even. Though you're showing that we are cost of that because. That could turn out to be a major issue if. The. Today's you, know. Things. That are going on it. Might turn to be. Headache. Other than savings, does it coming up if. There's, a robbery, attempt, or something, like that Berkeley attempt. My. Next question is on slide 21. Total. Revenue, you are showing a decrease. Between. 2018. Plan and. 2019. If. You're showing a decrease then, further. Down somewhere, you are showing that. We. Are. We. Are still. Maintaining. Our. Funds. Properly. Even though we are cutting. Down in. 1. Million dollars, in savings. Not. $156,000. Positive. Variance I. Would. Want. To make sure that's the correct figure, one. Point. Four to six, yes. I think that's correct part. Of that is I, think. Chargeable. Services has been overstated for, a couple of years and I. Think where, we. Are bringing that down to what is more. Realistic, and our experience, and, I think the other factor we, have to take into that with your preventative, maintenance program. With. Your handyman program. And, other things we're doing like that I think. Residents. Will be less likely at. Least those residents, to.
Use Chargeable, services, and a lot of times they won't have to because. They'll have a handyman will come over and just take care of it if. It's a covered service so, for. Those reasons we've. Lowered. Our forecast on that okay, yeah my, other question, on slide 24. You're. Showing. 36%. Of the expenditure. To, be property, and sales tax. But. Actually, we collect, our, property. In sales tax, from. Individual. Members. Then. Why is that included. Here. Unless. This is strictly, the property, and sales tax which slide are you looking at, 24. 24. Sorry we were on 34, okay 24. So. We're here if we are charging the individual, members. Property. Taxes, why. Are they included. In our expenditures. So, when we are presenting, the budget in dollars, if. You look at your business plan in the agenda package. The. Attached, operating, statement we're always presenting, the total dollars, it's. Only when we express it per manor per month that we limit it to the basic assessment, and that does not include, property. Taxes but. You need to see all the components of your fifty four million dollar business plan including, the property tax. We. Just don't we can't exist even though it's fully offset by. Revenue. Okay. My next question is on slide 29. I'm, particularly. Talking about, your comment, on, people. Throwing or TVs, and furniture. Now. We know, when. A manor is being vacated. Most. Of the time don't we no. We. Do not know. Maybe. We should start advertising so, that people, will. Be more aware that when there is a makayley. Manner. People. Are aware that hey, there's. Some movement going on here and maybe. We can stop. The ears. That. Come in to clean up the place from. Dumping and making. It burden for us, also. On the pest control on the same slide. My. Question, is I see a lot, more problems. With ants, and rabbits. In my area anyway gate, 51. Are. We. Doing. Anything to control, rabbit, population, because I don't see. We. Don't do much for rabbits. I'm. Not gonna be on TV here saying work we're. Doing something rabbits we're just not doing. If. It's really a reactive, program you do it I mean, we don't have a specifically. To address rabbit rabbits, could be a tremendous. Problem particularly. In slopes and other. Undermining. Things but we don't have specific Pro program. However, if we do get calls that. There is a particular. Issue we'll go on press, it so. It's, part, of the program and, any, one time I see four or five rabbits running around my, yard in the evening time yeah and, and and that's okay, because. They're cute, but when when, when, the population, gets stream, is when we experience problems, with slope. Undermining. And, other. Issues and. They they, do a pretty good number on the grass and, and, your shrub beds as well. When they're excessive. And that, their that. Damages, is, fairly. Easy to spot they they leave very obvious, traces where they've been. My. Next question is on slide 35. You're. Talking about wall, replacement. What. Kind of walls are we talking about because I have never seen any wall being replaced, in the community. Yeah. This is a program that addresses the contingency. Program that, addresses walls, to have rotated, or. A. Variety. Of reasons, so we just have one this. Happen to be in third with were. Bridge. One, of the walk walkway. Bridges, was, repaired, and the way they did that is they they, they, put a column and they. They've. Supported, it an existing, wall that. Wall was never designed to hold that load so, the wall rotated, so.
We Had to go out there and actually replace. Entire wall replace, the footing replace the wall so, this is another. Instance this word the soil condition. Allow. The wall to rotated, walls, rotate, eventually, it'll, be an, impending, collapse, of that wall so we go out there and we do those two please. You. See that a lot of patios, and, an, area you get a lot up. Especially. On your hilly hilly areas, you'll see, things. Moving and twisting, right, right we saw that after the big rains that we got recently, just a lot, of our buildings unfortunately, this is breakfast, we're trying to change drained. Or roofs in, the. Vicinity of the building which, is it's, definitely. Something you don't want to do you, need to take that water away from the building and because of the excessive, rains that we have the, the. The, soil. Around the building, got. Saturated and, because it gets saturated, the. Supporting. Forces. On, the soil give, away so the, walls begin, to rotate that's, another problem that we've seen and we repaired several, no. Like. Brett said Manor. Walls my. Last question. Strictly. Since this is going to be public. On. Slide 11 the. Before. Picture, should be an old, push mattock not this new, unit. With a panel, removed. You. Should show there the old push mattock. This. This is not the old push medic, this, is the same as this one is, the covering. And. You're, absolutely correct. Yeah. It's a, it's. The guts I'll have a new one I. Told. Eye leaves you couldn't get away with that. All. Right Danny. I know you have quite a few for us so would you mind if I take two short questions before, we get to you all. Right Janie you had one, answer. Okay Maggie, okay. Minor, very. Short, and very minor, I. Noticed. That paving. Is still, in the maintenance and construction, it's. Been in maintenance, construction, until. 2015. On all the budgets I've seen, and on, all the green books I've seen, someone. Recently told me that walkway, paving. Was a landscape. Issue and that, landscape, should have been doing it for quiet. And it. Was not and I said no and. So this is where it should be and, they're paving is M and C and.
That's, Sidewalks, thank, you you're, absolutely correct there's, actually two components, of this there's, a reactive. Component, which, is addressed by General Services and. That's when. Somebody, calls that there's a crack in the sidewalk or, its place slab that, is causing an issue they'll, go out there those either find it or replace, this laughs and then the other component is, a larger. Amount that you put it in your reserves to. Do, most. Of the concrete work before. We do the paving work so, there's two, components associated with that and one of them it's in reserves, the only one it's an operator right right and I'm finding, that under budget version one in the the. This. Book, okay. That, was my question of another. Part is to jump on the recycle bandwagon. With a mate's waste. Management. If the, recycle. Bin is this, spoiled. By. Food. And, other things, it, costs, four, times, the, regular price, for that, bin to be taken, care of so. Whenever we do this blast, things. Went out tomorrow okay. We need to put that in there too it. Is two things one your furniture, doesn't go wherever you want it to and your food waste doesn't, go wherever you want it to and. So that's it, I. Think the third thing is is that. So. Far up through May we were doing very well for, water we. Were nice a little, bit lower than, 2015. In all the prior years a last, July. And August are, here, and we're. Certain, that the, water will be back up to normal or maybe a little past thank. You that's all. Point, one more before you get to us but. When cash, we. Have used. Almost, all of them the. Communication. Means that we have, to. Try to do, this problem we have a brochure that, they get at the desk on moving. In moving out so anybody who, we know is moving out turned in their cards they get that and it talks about not. Putting things near the trash bins another. Thing that was interesting that mr. Leonard brought to my attention not, too long ago is. That, if you, put your recyclables, cans. Bottles. Etc in. A plastic. Bag and, put, it in the recycle, bin. That. Contaminant, they won't take it right, so if. You think you're doing good by putting all your recyclables, in, a plastic. Bag and taking them out all at one time empty. That bag. In. The recycle, bin don't put, them the. Bag in the recycle, bin or use a paper, bag, yeah, and. If anybody's interested the. Waste, management, website. Has. Just, a tremendous. Amount of this information. On it so, if you have any questions, go, on, there and look thank. You, all right man it's your turn. Yes. Thank, You India before you put me on a timer, I have some remarks to make regarding the presentation they made this morning I, have, it on okay. I'd. Like to comment. On the. Information in this report and then I will have some special. Information. That hasn't been let's. Say highlighted. So. First, regarding, this report, here, I. Want. Everybody to recognize that, oh we've. Had a number of meetings on all these topics. And. It's. Being come clear. Through from all these meetings that, VMs. Staff the. Department, heads all. The way up to Brad they work hard on coming up with these numbers and. They. Also look. At every, new plan such as waistline remediation. Things that we haven't dealt with before and, they, came up with meaningful. Amounts, in programs. Along. This line for example, we. Had a director, that was proposing a $20 per month increase in the assessment, because he was concerned about waistline, remediation, just, like all of us are but. Staff. Came back and said no we think that we've. Got the program under control. Director. Was still wasn't satisfied so we held a special meeting that staff, was supposed to come back with some. Additional, findings, they. Came back to us with an accelerator program and. They. Were able, to do it by reducing some other programs, and they. Still only increased, the budget for a waistline remediation. For. Two. Million dollars which, was a proposal this year to only two point three million dollars but, that is that $800,000. Increase over the prior year. Same. Thing and landscaping, and, this year's budget, we. Have an increase. Of over. $900,000. For tree maintenance bushes. And lawn. Maintenance, something. That needs to be done, so. Again, when. Directors came up with concerns about certain areas so, on they. Were able, come back with. An assessment. Where. Costs, just. These two items alone, or over 1.7. Million dollars but because they were able to do other reductions, and the, other topic I'm going to talk about afterwards. Reserves, they'r