Budgets: Annual, Acquisition, and
Capital Reserve
May 2, 2012
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If we don’t get to you during the session, we will
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Goals for Today
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Discuss the importance of budgeting to the
health and sustainability of a nonprofit
corporation.
Review the difference between budgeting for
operations and budgeting for acquisition or
capital replacement.
Learn from examples of two counties with
excellent budgeting processes.
Today’s Presenters
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Janice Novotni, Executive Director, Fairfield
Affordable Housing, Inc.
Marti Goetz, General Manager, Miami Valley
In-Ovations, Inc.
Cathy Allen, Technical Assistance
Consultant, Disability Housing Network
DHN Recommendations
for Budgeting
Housing Corporation
Self-Assessment Tool:
Cathy Allen
Self-Assessment Tool: Budgeting
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4. The board determines the direction of the
organization and takes primary responsibility for …
c) funding strategy.
5. The Board creates, revises, and insures
compliance with policies in the areas of planning,
finance, community relations, and organizational
operations.
6. The Board reviews the resource needs of the
organization and approves a comprehensive funding
strategy.
10. The Board reviews, approves and monitors the
operating budget and financial plans for
development activities.
Self-Assessment Tool: Budgeting
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46. Goals for the current fiscal year and
beyond are developed and approved by the
Board with input of staff.
49. There is a realistic plan/strategy for
matching human and financial resources with
objectives.
Self-Assessment Tool: Budgeting
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60. Housing Corporation has an operational budget
covering at least the following categories:
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Debt Service
Utilities
Reserve
Maintenance
Lawn Care
Management Overhead
Insurance
Property Taxes (If exemption not granted)
Self-Assessment Tool: Budgeting
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61. Housing Corporation has an acquisition
budget (Showing Revenue Sources) and
tracking system;
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Appraisals
Inspections
Earnest Money
Title Insurance
Closing Fees
Self-Assessment Tool: Budgeting
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62. Housing Corporation has a capital
replacement budget and reserve.
63. Housing Corporation has a renovation
budget based on property inspection and
special tenant accommodations.
64. Housing Corporation has a monthly
report showing Budget/Expenses/Supporting
Revenue
Duties of Nonprofit Board Members
in Ohio
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Duty of Care
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Duty of Loyalty
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Conflict of interest provisions
Duty of Compliance
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Requires “prudent” action
Requirement to follow laws, as well as policy
Duty to Manage Accounts
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Requirement to develop budget
Annual/Operating Budgets
Janice Novotni, Fairfield
Affordable Housing,
Inc.
Snapshot of
Fairfield Affordable Housing, Inc.
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10 houses/operated on contract with Fairfield County
Board of DD
5-unit house/operated on contract with Fairfield JFS
for youth aging out of foster care.
Low-Income, senior apartment building with 42 units
that we own and manage.
2 staff: Full time executive director and Full time
maintenance technician
Fiscal year is calendar year.
Budget Process Overview
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Process begins in July of each year when director
begins gathering information.
Based on available estimates, director completes
blank home budget form (house by house).
Director then completes additional cost estimate
forms. (Administration and maintenance.)
Organizational budget is sent to FCBDD by October
15 for review and approval.
FAH Board approves budget at November Board
meeting
Revenue
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FAH’s only source of income is rent.
Rent amount for each house is based on actual
operating costs (house budget)
Three sources of rent:
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Tenants (amount set by county board)
Metropolitan Housing Authority subsidy
County Board subsidy
Amounts change annually as part of budgeting
process.
Costs – House by House
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Data gathering begins by requesting estimates
from contractors and others…
Can be difficult to project a year in advance.
Home budget worksheet sent to CBDD.
Many of the amenities we provide tenants are
required by the county board per our contract –
mowing, security systems, etc.
2 of the 10 houses are past their 15 year
commitment
Costs – House by House, cont.
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We build mortgage costs into the rent
amount for all homes, even those that are
paid off.
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Helps keep rent amounts even for tenants
Cost of homeowners insurance also evenly
divided among homes
Costs - Administration
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We make estimates for all of the various costs (see handout)
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Salary and payroll taxes
Insurance
Office space and utilities
Office supplies
Accounting (monthly and annual reports/990/audits)
Postage and shipping
75% of the total administrative costs are apportioned to the 10
houses.
25% to the senior apartment building and JFS house.
Costs - Maintenance
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Maintenance includes:
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In-house staff
Equipment
Supplies
Contractor fees for projects we cannot do
internally.
Home inspections conducted by Metro (@
$75 per home for homes that currently do not
have a voucher)
Acceptance/Approval Process
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County board has opportunity to review and
accept budget (October).
FAH Board Approval (November).
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Budget sent out in board packet before November
meeting
Board members with questions generally call prior
to the meeting
After approval, board reviews financial statements
at quarterly board meetings
Capital Reserve, Acquisition and
Renovation Budgeting
Marti Goetz, Miami
Valley In-Ovations
Snapshot of Miami Valley In-Ovations
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77 properties, including:
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Housing Manager is CB employee, on loan 100% to
nonprofit
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61 in Montgomery County
11 in Miami County
6 in Darke County
Fees paid by Miami and Darke CB’s to Montgomery County
for salary reimbursement
Repairs & ongoing maintenance done by CB Staff
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Painting, carpentry, driveways etc are contracted out
Capital Reserve Budgeting
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Inspections are conducted on each property.
Property Maintenance Spreadsheet is filled out
for 1-3, 4-6 & 7-10 year schedule. (includes
equipment & improvements – see next slide).
Based on our estimated needs for the
following years, the county board sets aside
an amount for capital replacement. A
separate contract is drawn between the
nonprofit and the county board delineating
responsibilities and shares of expenses.
Property Maintenance Schedule
MVIO Home Maintenance Schedule
11/15/2011
WINDOWS
GARAGE
DOOR
OPENER
SEPTIC
SYSTEM
May-27
Dec-00
May-27
2008
Jan 2008
2001
1996
10+
N/A
10+
1998
BENCHWOOD RD. 3088, DAYTON,
2003
OHIO 45414 2003
10
10
Dec 2008
Dec 2008
4-10
N/A
Sept 2008
Sept 2008
N/A
N/A
Nov/09
BENCHWOOD RD.3086, DAYTON,July
OHIO
2009
45414 2003
10+
10+
0-3
0-3
4-10
N/A
0-3
0-3
N/A
N/A
11/09
BRITTON AVE. 699, DAYTON, OHIO 45429
Aug-10 Aug 2008
10+
10+
Jul 2002
Jul 2002
10+
N/A
Jun 2007
10+
N/A
8-15
0-7
BURCHDALE ST. 4233, KETTERING,
Aug-10
OHIO 45429
Mar 2007
4-10
4-10
May 2010
Aug 2010
4-10
N/A
10+
10+
N/A
8-15
7
BURMAN AVE. 610, TROTWOOD,N/A
OHIO 45426 Mar 2011
Mar 2007
Mar 2007
4-10
4-10
10+
N/A
Oct 2002
Sept 2006
N/A
N/A
6-10
BURMAN AVE. 612, TROTWOOD,N/A
OHIO 45426 Sep 2009
Mar 10
Mar 10
Feb 2002
Feb 2002
10+
N/A
Sept 2008
Sept 2006
N/A
N/A
6-10
CEDAR BLUFF CR. 4179, DAYTON
Jan
OH2010
45415 10+
7-10
7-10
n/a
Jul 2004
Jul 2004
n/a
8-15
Nov 2003
CEDARCLIFF CR. 3000, DAYTON,Oct
OHIO
2010
45414 10+
10+
10+
0-3
4-10
10
N/A
4-10
10
N/A
N/A
Mar 2011
CEDARCLIFF CR. 3002, DAYTON,Oct
OHIO
2010
45414 June 2009
Mar 2011
Mar 2011
Jan 2007
Jan 2007
10+
N/A
4-10
10
N/A
N/A
Nov 2009
CLIFFWOOD PLACE 6911, HUBER
0-3
HEIGHTS
0-3
0-3
0-3
Oct 2010
Oct 2010
0-3
4-10
4-10
CONCEPT CT. 297
0-3
0-3
0-3
Dec 2010
Dec 2010
Apr 2010 x2 n/a
Nov-06
Aug-01
Aug-01
Jan 2009
Jul-09
Mar-01
Jun/09
1996
Oct-00
2000+
1996
Oct-00
June-2010 1995+
ASHVIEW CT. 5072, HUBER HEIGHTS,
Jan 2011
OH 45424
10+
Jan-11 Jul -09
Mar-01
AIRMar-08
CONDITIONER
FURNACE
WATER
SOFTNER
WATER
HEATER
DRYER
WASHER
Jan-02
OVEN
REFRIDGERA
TOR
Dec-00
STOVE
DISHWASHER
Property Address
Estim ated Cost
COST TO REPLACE IN THE
NEXT 3 YEARS
COST TO REPLACE IN THE
NEXT 4-7 YEARS
COST TO REPLACE IN THE
NEXT 7-10YEARS
COST TO REPLACE IN THE
NEXT 10-15 YEARS
AMITY RD. 13212, BROOKVILLE, OHIOJul-09
45309
May 2011
Jul-09
Jul-09
Oct-09
Nov-11 Apr 2008
Oct-09 2005
4-10
n/a
4-10
n/a
0-7
8-15
4-10
Residential Development
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Residential Planning Committee, includes
county board staff and nonprofit housing
corporation staff.
Meets twice per month.
Discusses need for new development,
vacancies, individual moves between
properties, and provider agency and quality
assurance concerns.
Community Capital Assistance
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Beginning with the 2013-2014 allocations,
housing corporations will have to prepare a
4-year plan and submit specific requests for
new purchases or for renovation/
rehabilitation.
Housing corporation and county board plans
together (Residential Planning Committee).
Availability of residential support dollars is an
important consideration.
Acquisition (County Board Funds)
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The nonprofit acquires homes for cash with
reserves from a fund to purchase new homes.
The amount available changes from year to
year.
The county board found that fronting funds to the
nonprofit allows for flexibility in closing.
The nonprofit then invoices the county board to
replenish funds.
Renovation
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For accessibility, explore using Medicaid
waiver environmental modification.
Include grants from DODD (RRP and RHAP)
in planning.
HOME, CDBG, CHIP, etc. as applicable.
Manpower is a consideration in such
projects.
DHN Technical Assistance
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Funded by Ohio Developmental Disabilities
Council.
Provides DHN consultant who can:
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Assist with self-assessment
Attend/facilitate board meetings
Attend/facilitate stakeholder meetings
Facilitate strategic planning retreats
Provide consultation on board development,
policy development and housing operations
Upcoming Events
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Spring Regional Meetings:
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East: May 8
South: May 9
West: May 15
Northwest: May 16
Staff Contacts
Jacalyn Slemmer, Executive Director
614-595-4110
jacalynslemmer@disabilityhousingnetwork.org
*
Cathy Allen,
Technical Assistance Consultant
419-732-1770
cathyallen@disabilityhousingnetwork.org
www.disabilityhousingnetwork.org
Questions and Answers