We want to bring you up to date on the current state of Mt. Park’s finances during this time of the Covid-19 pandemic. We have had to take extraordinary steps to cope with Covid’s impact on our revenue stream while still meeting necessary and unalterable expenses. Here are the facts.
Revenue Losses during the Covid Pandemic:
At least 25% of our budget has been affected by the loss of fees for services. In normal times, revenue from assessments only accounts for 75% of our income. The rest of our revenue normally comes from fees for services. In total through July of this year, we are more than $330k below our budgeted income. Principal elements of this shortfall are noted below:
- We have received no income from PlaySchool and KidZone Camp enrollment from March through June. We have had reduced income since July because limited enrollment has been mandated by the Governor’s orders. We would expect YTD income in excess of $380k under normal circumstances; to date we have only received $198k.
- We received no income from patron memberships since the pandemic began and we only began getting limited income for Patron Memberships since August. Normally we would expect to receive $115k at this point from patron memberships; we have received $60k.
- Room rentals, the pool and paid classes still remain closed due to state restrictions so we still have not received any revenue from these sources. We would expect to receive $180k YTD in normal times; to date we have received $80k.
Actions Taken to Date to Reduce Expenses:
Starting in March cuts have been made in many areas, such as
- Salary and wage expense were reduced by furlough and layoffs, saving $280k.
- Repairs, maintenance and reserve projects have been delayed when feasible
- Service, supplies and across the board expenses have been cut, saving $90k.
Even after reducing our expenses, many costs are necessary and unalterable. These include:
- Insurance for buildings and general liability
- Debt: payments towards our 2009 loan for clubhouse renovation
- Reserves: required deposits into our maintenance reserves
- Utilities, Telephones and Internet
- Landscaping; trail maintenance; tree maintenance; and equipment to maintain the Common Properties
- Required repairs and maintenance to buildings
- Services: such as pool, alarms, HVAC, plumbing, professional fees
- Supplies: such as janitorial, pool chemicals, office
With the actions taken so far, a financial crisis has been averted. We have a favorable balance between income and expense. Furthermore, our budget forecast shows that the year will close in the black, being able to meet all of Mt. Park’s obligations. Hopefully, the Tri-County will move beyond Phase 1 soon and we will not have to regress back to stricter state rules during this pandemic. If so, we will be revising our financial forecasts.
FAQ – Why do I need to continue to pay my full assessment?
Assessments are critical to maintaining current operations.
With 25% of the income stream gone, cutbacks and reductions in staff and services are helping the finances to stay in the black
, but there are other major expenses which have not or cannot be cut, such as landscaping, debt repayment, insurance and reserves.
We thank everyone for their patience and cooperation during this challenging time. If you have questions or are interested in attending a finance committee meeting, please contact us at firstname.lastname@example.org. The finance committee typically meets the third week of the month during the day depending on the closing of the previous month’s books.
Eleanor Kurtus and Chip Kyle