Explanation of Major Expense Budget Items – Part 2
Explain some of the major Expense line items:
Per Section 13.1 of the CC&Rs, the Association and FSC I, LLC d/b/a Fred Smith Company have entered into an agreement pursuant to which FSC I provides to the Association, for the use of each owner of a Unit in the Community, a Bronze level membership in the Sports Club. That agreement provides that the Association will pay to Fred Smith Company $58 per month for each Bronze membership, as compared to the $89 per month Fred Smith Company charges families who are not owners of a Unit in the Community for a Bronze membership in the Sports Club. The Amenities Fee represents the cost to the Association of those Bronze level memberships.
- The Amenities Upgrade Fee represents the additional cost to the Association of Silver, Platinum, or Gold level memberships in the Sports Club, and equals the Specific Assessment income amount.
- The Administrative Fee reflects the payment to Fred Smith Company by the Association of an administrative fee of $45, upon the transfer of a Unit (other than the initial transfer to or by a Builder), to be paid from the Administrative Charge described among the Income items.
- The Utility Expense represents utility charges with respect to street lighting in the Community (for which the Association is responsible, pursuant to the Utilities Agreement) and for common areas within the Community, such as electricity costs for common area lighting and powering common area irrigation systems and fountains.
- The Association leases space located in the Community town center, for use as the Community mail room, and the amount shown is the rental under that lease.
- Association assessments, fees, and other charges collected via credit card are subject to a service charge imposed by the credit card company, and the CC Discount Fee represents the budgeted amount for those service charges.
- Pursuant to an agreement between the Association and Fred Smith Company, the Association pays Fred Smith Company a fee of $5 per month per Unit for providing common area maintenance within the Community. The budget contemplates that this fee will be paid for 1,022 Units.
- Pursuant to an agreement between the Association and Fred Smith Company, the Association pays Fred Smith Company a fee of $7.50 per month per Unit for providing management services to the Association. The budget contemplates that this fee will be paid for 1,022 Units.