MVF Finances - October 2014

Treasurer’s Summary

Overall results through the end of October continue ahead of budgeted projections led by greater than expected revenues from assessment collection fees, disclosure fees and advertising as well as lower than budgeted personnel and operating expenses.

MVF overall net income for the month is $129,642 which is lower than the budget but exceeds October 2013. Year to date net income is $825,432 which exceeds the budget by 39.0% and October 2013 by 213.0%.

The following summarizes MVF’s overall results for October 2014:

- Total revenues through October were $6.8M which exceeds the budget by 2.5% and exceeds the same period in 2013 by 9.2%.

- Total operating expenses through October were $5.9M, which is 2.9% under budget and .1% over the same period last year.

- Reserve Fund contributions through October were $791,670 as prescribed in the 2014 budget.

- Year to date expenditures for reserve related assets total $1,679,842 vs. $685,189 in 2013.

Capital contribution fees received through October were $210,917 vs 137,521 in 2013. A lump sum payment of $110,000 was paid to MVF during February 2014 related to the sale of the Cider Mill apartment complex. Included in 2013 is a $39,600 payment related to the sale of the Avalon-Rothbury apartments.

Operations Fund

The results from the Foundation’s Operating Fund at the end of October, 2014:

Budget: For the month of October 2014, the revenue budget variance is greater than the budget primarily due to higher than budgeted revenues from collection and disclosure fees but offset partially by lower than expected management fees. Personnel costs budget variance is primarily due to lower than expected full-time wages due to organization changes made earlier in 2014. Operating costs budget variance is primarily due to higher than budgeted office supplies but partially offset by lower office expenses. The budget also expected to use $55,452 of expected undesignated reserves, which was not necessary.

Prior Year: For the month of October 2014 vs. October 2013, the revenue variance is due to higher assessments from the Designated User assessment increase effective January 1, 2014 but offset partially by lower management fees due to the loss of PPM revenue. Personnel costs are lower than the year ago period primarily due to the workers compensation premium adjustment for 2013 based on the 2012 final payroll audit. Operating cost variance is due to higher costs from legal expenses, occupancy and office supply/expenses.

The results from the Foundation’s Operating Fund through the end of October, 2014:

For the year-to-date period ending October 2014, the budgeted revenue variance is primarily due to higher than budgeted assessment collection fees, advertising revenues, disclosure revenues via homewisedocs.com, rental fees and the capital contribution fee received from the sale of the Cider Mill apartments; however these are offset partially by a significant shortfall in camp registration revenues. Personnel costs budget variance is due to several vacant positions, which have now been filled at lower graded positions, and lower than expected summer/seasonal wages. Operating cost budget variance is due to lower than expected business expenses, office supplies/expenses, equipment maintenance, legal, and landscaping/maintenance costs. Reserve/capital costs reflect the higher revenue received from the Cider Mill capital contribution fee being moved from the Operating Fund to the Reserve Fund. Reserve contributions have been made pursuant to the budget. Note that the year-to-date budget projected to use $110,905 of undesignated reserves which was not necessary.

Balance Sheet:

As of October 31, 2014, MVF’s Balance Sheet:

Through the end of October 2014, MVF continues to maintain very a solid financial position with over $7.7M of its $14.3M assets (53.8%) currently invested or held in bank accounts. While using undesignated reserves the last 2 years (2012 & 2013) to keep assessments low, MVF holds nearly $1.8M undesignated operating surplus which is partially allocated to maintain the MVF assessment the same for the 3rd year in a row.

Investment Activity:

On October 28, the Investment committee met to review a recommended portfolio from the Reserve advisors. The recommendation included moving MVF’s 100% fixed income portfolio to an allocation of 30% equity, 65% fixed income, and 5% in cash and real assets. The committee approved the recommended portfolio and directed the advisor to being the process of selling and purchasing securities in the portfolio to begin the transition process.

Capital Spending:

As of the end of October, 2014, year to date capital expenditures totaled $1,489,663 of which 1,290,581 are related to Designated Users and $199,082 is MVF.

Happy Holidays from the MVF Finance Team!