Show pageOld revisionsBacklinksBack to top This page is read only. You can view the source, but not change it. Ask your administrator if you think this is wrong. ====== The Budget ====== (This page was created & written by Patrick Parker, former treasurer & bookkeeper.) **Current Budget** The house discusses and votes on the annual budget every year (usually in May so that a budget can be determined by June 1st to give the required one month notice of any possible rent increase). Here is a spreadsheet of our current budget, along with previous years: FYE 2024 Google Doc with Sasona FY2024 budget Sasona Budget category Monthly Yearly comment CHEA 11,428.91 137,146.92 Utilities (past year's total plus estimate for June, rounded up + 4% 1,560.00 18,720 Technology (internet) 167 2,000 Grease Trap 117 1,400 Grounds 25 300 Extra Tech 4 50 Office 5 60 Licenses, Fees, Permits, Dues, Subscriptions 97 1,160 Maintenance 50 600 Food 1,600 19,200 Kitchen 42 500 Total 15,095.91 181,136.92 Surplus of 5% (Required by NASCO) 754.8 9,057.55 though we are drawing down our existing $10k surplus in this budget we are simultaneously budgeting for another $9k surplus for the next year (this 5% is required by NASCO and it's where our surpluses come from. Total Including Surplus of 5% 15,850.71 190,194.47 Current Rent 14,397 172,767 New Total Rent (Not including extra members or associates) 15,851 190,194.47 close to 15% increase from the budget before last Surplus: 833.33 10,000.00 drawing down from full surplus of $10k is the only way to get the number in the $30-40 increase per room range. New Total Rent Minus Surplus: 15,016.21 180,194.47 Increase from Last Budget: 619 7,427.79 Divided by 17 Rooms for a Total Rent Increase Per Room of: 36.41 436.93 Google Doc with CHEA FY2024 budget CHEA Budget Category Annual Monthly ACBA Dues $275.00 $22.92 Insurance $3,638.88 $303.24 Bookkeeping $16,427.54 $1,368.96 Legal Fees $1,388.74 $115.73 CPA $0.00 $0.00 Travel Expenses for Ops manager $500.00 $41.67 NASCO Ed $650.00 $54.17 GMM/Events $200.00 $16.67 Staff Payroll $10,400.00 $866.67 Social Security Employer $644.80 $53.73 Medicare Employer $150.80 $12.57 NP Lease $307,146.00 $25,596.50 Web Hosting $378.98 $31.58 Domain Registration $110.00 $9.17 Bank Service Charge $300.00 $25.00 Contingency (% based) $4,996.73 $416.39 Total $347,207.47 $28,934.96 FYE 2023 FYE 2023 Google Doc Rent increase was 3.5%. Budget was passed 2023-1-22. The covid pandemic (and other things) kept us off schedule. We expect to return to the usual schedule this year. FYE 2023 Budget Monthly Yearly CHEA 10,556.39 126,676.68 Utilities (past year's total plus estimate for June, rounded up + 4% 1,560.00 18,720 Technology (internet) 167 2,000 Grease Trap 117 1,400 Grounds 25 300 Extra Tech 4 50 Office 5 60 Licenses, Fees, Permits, Dues, Subscriptions 97 1,160 Maintenance 50 600 Food 1,600 19,200 Kitchen 42 500 Total 14,223.39 170,666.68 Surplus of 5% (Required by NASCO) 716.67 8,600.00 Total Including Surplus of 5% 14,940.06 179,266.68 FYE 2019 FYE 19 Google Doc No increase in rent this year. FYE 2019 Budget Monthly Annual CHEA 9,723.56 116,682.66 Utilities (past year's total plus estimate for June, rounded up + 4%) 1,518.50 18,222 Technology (internet) 110 1,320 Grease Trap 104.18 1,250 Grounds 25 300 Extra Tech 20 240 Office 5 60 Miscellanious 20 240 Maintenance* 160 1,920 Food 1,400 16,800 Kitchen 40 480 Total 13,126.24 157,514.66 Surplus of 5% (Required by NASCO) 656 7,876.00 Total Including Surplus of 5% 13,782.24 165,390.66 Current Rent ('18-'19)(Not Including Doubles/Associates) 13,019 156,228.00 Last Year's Surplus -$1,000 -12,000 Budget (FYE 19) 12,782.24 153,390.66 Last Year's Budget (FYE 18) 13,199.55 158,394.55 FYE 2018 Budget #6 FINAL.xlsx it looks like this: FYE 2018 Budget Monthly Annual CHEA 9,296.00 11,551.95 Utilities (past year's total plus estimate for June, rounded up + 4%) 1,500.00 18,000 Technology (internet) 110 1,320 Grease Trap 85 1,020 Grounds 25 300 Extra Tech 20 240 Office 5 60 Licenses, Fees, Permits, Dues, Subscriptions 50 600 Maintenance* 160 1,920 Food 1,280 15,360 Kitchen 40 480 Total 12,571.00 150,851.95 Surplus of 5% (Required by NASCO) 628.55 7,542.60 Total Including Surplus of 5% 13,199.55 158,394.55 Current Rent ('16-'17) 12,785 153,420 New Total Rent (Not including extra members or associates) 13,200 158,394.55 Difference: 415 4,974.55 Divided by 17 Rooms for Total Rent Increase Per Room 24.41 292.6 In the 2 year tradition of keeping room rents as even dollars, this budget was passed as a flat $25 rent increase across for the base rent of each room. From house meeting 6-25-2017: Motion to approve Version 6 of the budget for FY18, with a $25 per room rent increase to go into effect August 1, 2017. Indya motions, Clayton seconds. Motion passes: 12-0-0. A "Budget to Actuals" comparison report compares the projected budget numbers above to what we are actually spending. Utilities expenses will have large fluctuations throughout the year. *The majority of the Maintenance Budget is held by NASCO Properties, and so is not fully represented in the CHEA Budget. See: MaintenanceBudget Budget Notes (The following notes were written by the Treasurer in an attempt to explain some important aspects of the budget. It is meant to be informative, not an explanation of policy -- it has not been voted on.) The Basics The budget is just a list of our income and costs. We just have to make sure we are bringing in enough money to cover our projected costs, that's all it is. We make an educated projection of what our expected costs will be, and then we ensure that we have enough money coming in to cover them. Fiscal Year CHEA's fiscal year is from July 1st to June 30th. I have no idea why. NASCO Properties' fiscal year is from May 1st to April 30th. Rent increases from NP go into effect September 1st. Since the fiscal year spans across two years (e.g. 2011 and 2012), we indicate the fiscal year by the year it ends. So we refer to Fiscal Year Ending in 2012, or FYE12. (See: FinancialCalendar) Vacancy Rate The NASCO Properties Management Plan requires us to maintain a 5% vacancy rate. "The co-op shall collect charges each month budgeted at 5% (or a different rate if so determined by NASCO Properties) over the sum of its lease payment. This vacancy reserve serves as a buffer for vacant rooms or member nonpayment and allows to co-op to pay its lease payment to NASCO Properties in full even when there are problems in collection." - From the NP Management Plan, which our lease requires us to follow. However, the NP Board voted in 2010 that the houses no longer have to collect the 5% vacancy fund; the 5% vacancy fund is now part of our lease payments to NP. So our lease payment increased by 5% to cover the vacancy fund. We will receive annual checks for the amount over and above the 5% that is in our vacancy fund. The reserve is "full" when it hits 5% of a year's lease payments. The NP board hasn't mandated that Daniel return the surplus (beyond a 'full' reserve) on any specific timetable -- but he thinks probably either quarterly or biannually. That gives a check big enough to do something with, but without waiting too long, and it also keeps down the accounting work associated with doing this. (Info as of Feb 2012) (This may seem like a high vacancy rate, but it wasn't too long ago that Sasona had 4 or 5 rooms vacant at one time, sometimes for months at a time. It is vitally important to prepare for the worst.) Tips for Creating a Budget 1. Add up all the utilities bills for the past fiscal year, and increase the total by 4% to account for inflation (or whatever the current inflation rate is). Add that into the utilities row of the budget, so you'll have a reasonably accurate number for how much utilities will cost. 2. Talk to NASCO Properties or our NASCO Properties Board Rep to determine how much lease payments will increase for the following fiscal year. Double-check their number. Understand how they got that number; do the math yourself. Add that into the lease payments row, so we'll have an accurate number for how much rent we'll be paying. 3. Once all of the expenses are accurate, increase rent by enough to cover all our expenses while having some money in reserve as a cushion. Then play with higher rent increases to see how much we can increase the food budget or other expenses we would like to spend more money on. 4. Determine whether the house has any other expenses that have not been added to the budget. If so, add them. 5. Create several proposals, based on varying expense amounts. Send them to the board for the board to look over them closely, look for mistakes, offer suggestions, etc. Send them out to the house; explain them to the house; ask for suggestions & questions. When everyone understands the budget and there is some growing consensus, put the budget on the agenda so the house can pass the budget proposal they like the best. (The above is just tips for future treasurers, and it has not been voted on.) Debt Service Coverage Ratio The DSCR is simply a ratio of the amount of leftover money you have (Income minus Expenses), divided by the amount of debt you have. If you have a DSCR of 1 or above, you have enough money to pay your debts. If your DSCR is below 1, you are steadily slipping towards bankruptcy. The DSCR is the bottom line of our budget -- we need to play with the numbers till the DSCR is 1 or higher. Example: Say we bring in $10 a year in rent. Our yearly expenses are $8.80. So after we have paid all our expenses, we have $1.20 leftover ($10 - $8.80 = $1.20). However, we have to pay $1 a year to pay off our loan. Money Leftover (Income - Expenses) = $1.20 Debt = $1 DSCR = Leftover / Debt In this case, DSCR = $1.20 / $1 = 1.2 So we have enough money to pay our debts, and we have 20 cents left. Banks like the DSCR to be at 1.2 or above. Jim Jones says that the banks look at NP's DSCR, and not at CHEA's, so ours does not have to be at 1.2. However, our DSCR should be at 1 or higher -- because otherwise we don't have enough leftover money to pay our debts. Here is more info on the Debt Service Coverage Ratio: http://en.wikipedia.org/wiki/Debt_service_coverage_ratio [This has been left out of recent budgets for some reason] Old Budgets FYE 2012 Sasona Budget - FYE 2009-2012 Numbers for FYE12: Food budget: $1350/month (See: FoodBudget) Miscellaneous: $125/month Utilities: $1094/month Gas: $185/month Internet: $188/month Beautification: $35/month House plants: $5/month Accounting: $500/year Grease Trap: $800/year Water filters: $600/year NP Rep reimbursement: $100/year == FYE 2009 == FYE 09 Budget.xls (Prop 2 was passed) The budget in the column labeled "Prop 2" was passed by the house meeting June 1st, 2008. This budget is valid until June 30th, 2009. (FYE = Fiscal Year Ending in 2009.) Prop 2: Avg. rent increase = $30/room Food Budget increase = $70 Total food budget = $950 DSCR = 1.05 This spreadsheet also includes the budget passed for the last part of FYE '08. Rent Increase: Rent Increase FYE 09.xls This spreadsheet indicates how the $30 average rent increase was spread out proportionately for each individual room according to room price. The column labeled "Parker's Prop" was accepted by the house meeting 6-7-08. Explanation of the spreadsheet: Column A is the monthly rent for the room. Column B is the percentage of the total rent for that room, calculated by dividing monthly rent by the total rent (sum of rent for all rooms). Column C is the percentage of total rent (Column B ) multiplied by the total rent increase. That gives us a rent increase proportional to the price of the room. Column E is just Column D rounded off to the nearest 5 or 10 so we have pretty numbers. In "Parker's Prop," a.k.a. the Parker-Sullivan Proposition, Ruth Sullivan's rent was not increased, because it was felt that her room is already expensive enough (the room off the dining room). So the cost of the increase to her room was added to other rooms to make up for it. Approved CHEA Budget under Kagawa.xls -- This is the budget that was created and given to Kagawa in 2005 to get the Kagawa loan. CHEA budget, including draft of FYE 2008.xls -- This budget was approved at a house meeting, 3-11-07. It should have gone effect at the beginning of the new fiscal year, 7-1-07. There are mistakes in this budget. Room Rents (This needs to be updated. It was just a way to get a sense of what rooms cost how much, grouped according to price.) Rent Rm. # $415 1 $430 6 $450 2 $450 11 $450 10 $550 5 $575 15 $575 4 $575 3 $600 16 $655 9 $655 14 $655 12 $680 7 $680 8 $695 17 $695 13 Total Monthly Rent Income: $9,785. Total Yearly Rent Income: $117,420. The breakdown: 5 rooms from $415-$450. 5 rooms from $550-$600. 7 rooms from $655-$695. CKG Edit thebudget.txt Last modified: 2025/11/30 03:34by jessimunn