MVF 2015 Budget Presentation - Pt 2 of 2

Personnel Changes:

o Maintenance Specialist: As previously noted, a new part-time position will be added to the Recreation department to assist in the ongoing repair and maintenance of MVF facilities. Currently much of this work has been outsourced to vendors or Brickman.

o Community Management: Covenant inspector position converted from full-time to part-time position for 2015.

o Temp/seasonal labor: In compliance with Montgomery County’s minimum wage legislation, an increase to temp/seasonal labor hourly rates is being made in 2015. Additionally, to avoid confusion and the complexity of the various wage and labor regulations, MVF will utilize the exemption for recreation seasonal staff overtime starting in 2015. So as not to harm the seasonal staff from being incented to teach swim lessons or step in to cover vacancies in staffing, MVF will adjust hourly rates accordingly. This is factored into the 2015 budget.

o IT Manager: With the 2014 retirement of MVF’s IT Manager, personnel costs in the Finance & Administration department are lower; however, these costs are offset by the full year cost of the outsourced contract.

Operating Costs:

· Business Expenses – Business expenses in the Parks & Recreation cost centers (User fee and Village-wide) has been increased to account for the cost of registrations under the new cloud-based system, Active.com

· Office Supplies/marketing – Flourish marketing campaign expenses are projected to be lower for 2015.

· Office Expenses – As noted in personnel changes, the offset to the lower personnel costs are an increase to office expenses/service contracts for the outsourced IT contract. Other service contracts for 2015 will also increase but at nominal levels.

· Legal Fees- The legal budget for Architectural Standards department has been significantly reduced in 2015 due to hiring in-house counsel. Court costs such as filing fees are included in the Architectural standards budget. The EVP budget continues to hold some legal funds in the event outside counsel is needed.

Other/Security – 2015 costs for security of MVF facilities will increase 2.5% based on the existing contract.

Capital Needs:

· Apple Ridge pool: As with the Whetstone pool renovation, $100,000 is projected to be used to improve the Apple Ridge pool with new amenities during its renovation in 2015/16. This will be funded by the Operating Fund (Designated Users Fund).

· MVF Trail system: Funding for the pathway project will continue in 2015 budget. The $50,000 will be funded by revenues from the Capital Contribution fee, project expenses will be used to enhance the Village-wide trail system.

· South Valley Park Fencing: $40,000 in funds are proposed to be used to fence areas around South Valley Park. Funding for this project will come from the Capital Contribution fee.

RESERVES

During 2013 and the spring of 2014, MVF’s reserve advisor, Design/Management Associates, Inc., worked on the completed the reserve study update. Overall, the updated study indicated that MVF has been on track with its reserve contributions over the last 6 years. While there were numerous changes made at the component level of the study, the new format will provide a much easier method to track assets as they are evaluated and replaced into the future.

In line with the previous study, the new study continues to project moderate increases in the annual contribution needed. The 2015 budget proposes to increase the Contribution to Reserves (CTR) to $987,000—MVF $300,000; DU $687,000.

The Reserve plan includes $1,371,437 in reserve capital expenditures for 2015, of which $751,235 relates to Designated Users; $100,000 of this will be used to start the planning and engineering process for the Apple Ridge pool renovation in 2015. Because not all items listed on the expenditure detail need to be repaired or replaced during the year, the detail list for each Fund provides a column that differentiates the items as “Potential” (asset replacement is due, but may still be in good working order) or “Necessary” (asset will be repaired or replaced in the year). The goal of this differentiation is to provide a further understanding as to the range of capital investment that is included. Please see the Reserve Plan section later in this book which provides a summary and detailed list of projected expenditures from the different funds.

In summary, we are presenting a budget that meets the community’s priorities, maintains and enhances facilities and parks and supports important programs, services and amenities. By working together, we can and will continue to move Montgomery Village Foundation forward – Montgomery Village is flourishing!

Sincerely,

David B. Humpton, Executive Vice President

W. Gregory Snellings, CPA, Chief Financial Officer