Item	2007(act)	2008(act)	2009(act)	2010(act)	2011(act)	2012(bud)
Capital Reserves Emergency Reserves Cash Total	$0 $0 $68,479 ------------ $68,479	$0 $0 $36,662 ------------ $36,662	$995 $17,000 $7,426 ------------ $25,421	$5,200 $14,500 $7,208 ------------ $26,908	$15,412 $17,109 $7,294 ------------ $39,815	------------

Reserve Study A reserve study was completed and approved by the board in 2010 and approved by a vote of owners in January 2011 (96% to 4%). Currently the capital reserves are below the target balances outlined in the Reserve Study. The owners voted in 2010 to set the annual reserve rate at $5,000 year. A vote to raise the reserve rate to $8,000 in 2011 was defeated by a vote of 34% to 66%.



Painting Program

The Association paints and completes siding repairs on roughly 13% of the homes in the community each year. In 2009, the owners voted (87% to 23%) to lengthen the repainting cycle from five to eight years in an effort to clear up a backlog of 58 homes that were past due. Starting in 2011, siding repairs were expanded to include the back of homes as well as the front (vote 64% to 36%). "Hms past due" refers to homes that were due to be painted, but were not.

Item	2006(act)	2007(act)	2008(act)	2009(act)	2010(act)	2011(act)
Homes painted Hms past due (5 yr cycle) Hms past due (8 yr cycle)	0 32 --	0 45 --	23 58 --	10 50 --	12 50 0	12 50 0

Collections and Legal Action

As required, names, addresses and cause numbers will be disclosed for any member in litigation with the Association.  

Address	Amount	Comment
1500 Brentwood	$1,411	Lawsuit filed
1905 Wilshire	$1,061	Lawsuit filed
1506 Brentwood	$933	Lawsuit filed
Reported as of November 31, 2011

Latest Financial Report
Reported as of October 1, 2011

Budget Summary Expense Breakdown

Annual Budget - 2011



The Associations 2011 budget and four prior actuals are displayed below.

Category	2010 (act)	2011(bud)
INCOME - - - - - - - - - - - - - - - - - - -
HOMEOWNERS DUES AND FEES Regular Assessments Early payment discounts Special Assessments	$71,250 ($4,220) $0	$83,220 ($2,400) $0
OTHER INCOME Interest income Donations/grants Collection fees Fines Miscellaneous income Bad debt/ write-off Group purchase owner repayment	$448 $0 $975 $175 $1,593 ($1,677) $718	$400 $0 $200 $0 $0 $0 $0
EXPENSES - - - - - - - - - - - - - - - - - - -
GENERAL AND ADMINISTRATIVE Bank Charges Credit card/PayPal Fees Postage Website-domain/hosting Website-program/admin Meetings-business Meetings-social Courier Fees Reproduction and copies Office supplies Record storage/digitizing Inspection/licenses/permits Other administrative expenses	($190) -- ($309) ($30) -- ($33) ($1,209) -- ($372) ($684) -- ($159) --	($200) ($750) ($500) ($50) ($600) ($250) ($1,200) -- ($450) ($600) ($100) ($200) --
PROFESSIONAL SERVICES Accounting and management fees Legal fees Annual audit Reserve/Engineering studies	($8,700) ($91) ($1,324) --	($9,425) ($1,500) ($1,200) --
TAXES AND INSURANCE Insurance- D&O/liability Insurance-property Federal income tax Property taxes Franchise tax Tax-other	-- ($2,071) ($418) ($107) -- --	($1,100) ($1,100) ($500) ($750) -- --
UTILITIES Electricity Telephone/cable/Internet Water and sewage	($1,498) -- ($8,454)	($1,500) -- ($8,400)
CAPITAL REPAIR AND RESERVE Roadway/curve/sidewalk Water mains/sewers/storm drains Garage roof/walls/doors/foundation Fence/wall/ironwork Gates/traffic spikes Exterior lighting Mailboxes Fire lane striping Emergency reserve Capital reserve	-- -- -- -- ($1,000) -- -- ($5,000)	-- -- -- -- ($1,000) -- -- ($2,100) ($5,000)
PAINTING Painting Exterior siding repair	($9,131) ($5,699)	($9,093) ($7,794)
LANDSCAPING Landscape-mowing/trimming Landscape-tree trimming Landscape-fertilization/insecticide Landscape- seasonal color Landscape- irrigation repair Landscape- shrub replacement Landscape-other	($10,635) ($1,134) ($421) ($39) ($7,380) ($1,460) ($5,927)	($18,120) ($1,000) ($1,299) ($1,500) ($3,000) ($275) --
GROUP PURCHASES (for owners) Home repair/paint Lawn and garden Other	($780) ($745) ($1,593)
MAINTENANCE OTHER Lightbulbs Parts and supplies Day Labor - other Signs/locks/keys Miscellaneous contract work Tools, appliances, furniture	($133) ($1,001) -- ($398) -- --	($300) ($300) -- ($264) -- --

State of the Association Report

A State of the Association was prepared in 2009 to explain to owners of financial condition of the Association. The key points of this report were at the Association had been deficit spending for number of years, the Association's reserves had reached critically low levels, the Association's painting and siding repair program was significantly backlogged, and the Association had claimed tax exemptions it was not entitled to. As a result of this analysis, the owners have taken action to remedy the situation, which included increasing the assessment rate, setting up dedicated reserves, insuring the physical property, restructuring the paint and repair program, and changing its tax policy.


Bids and Contracts - 2012

Below are the bids and contracts for the Associations services.

Bids and Contracts - 2011

Below are the bids and contracts for the Associations services.

Bids and Contracts - 2009

Below are the bids and contracts for the Associations services.

Federal and State Taxes

The Beverly Oaks Homeowners Association files federal taxes as an IRS 528 corporation. The IRS describes "528" as a "quasi not-for-profit" class - a for profit corporation with some special considerations. The primary consideration is that the Association can have dues income without paying tax on it. Beverly Oaks has elected this status since 1983. The Association does not have a 501(c) (4) not-for-profit, Federal tax exempt designation letter. The Association has not been issued a sales tax exemption from the state. The Association is not exempt from paying property taxes.

The Association does qualify franchise tax exemption and filed for this exemption in 1987. The Association is required to report to the State every four years to maintain this status.

The Association pays property tax on the roadway, storage garages, cul-de-sac gardens and mailbox peninsulas. The property has been given a nominal valuation of $22,000 in 2009 even though the improvements have a replacement cost of $1,500,000 (road/water lines/sewer).

FEDERAL TAX FORMS 1099 should be prepared and mailed to all contractors by January 30;

FEDERAL TAX FORMS 1096 should be prepared and mailed to IRS listing all 1099’s mailed by January 30;

FEDERAL TAX FORM 1120H should be prepared and mailed to IRS March 15.


Audits

The association shall, as a common expense, annually obtain an independent audit of the records. Copies of the audit must be made available to the unit owners.

An audit required by this subsection shall be performed by a certified public accountant if required by the bylaws or a vote of the board of directors or a majority vote of the members of the association voting at a meeting of the association.

PROPERTY CODE, TITLE 7. CONDOMINIUMS, CHAPTER 82. UNIFORM CONDOMINIUM ACT, SUBCHAPTER A. GENERAL PROVISIONS, Sec. 82.001. SHORT TITLE. This chapter may be cited as the Uniform Condominium Act. Added by Acts 1993, 73rd Leg., ch. 244, Sec. 1, eff. Jan. 1, 1994. Link to Property Code