crooked river ranch...the accompanying notes are an integral part of the financial statements. 4...

__________________________________________________________

CROOKED RIVER RANCH CLUB

AND MAINTENANCE ASSOCIATION

(An Oregon Domestic

Not-For-Profit Corporation)

__________________________________________________

FINANCIAL STATEMENTS (Audited)

For the Years Ended

April 30, 2019 and 2018


AND MAINTENANCE ASSOCIATION

(A Not-For-Profit Corporation)

CONTENTS

Independent Auditors’ Report ................................................................................................................. 1

Financial Statements:

Balance Sheets .................................................................................................................................. 3

Statements of Income and Changes in Association Equity ....................................................... 5

Statements of Cash Flows .............................................................................................................. 6

Notes to Financial Statements ....................................................................................................... 8

Supplemental Information:

Statements of Income by Department .......................................................................................... 19

Schedule of Income – Entire Ranch

Budget and Actual (Non - GAAP Budgetary Basis - Unaudited) ....................................... 20

Schedule of Homeowners Dues Compared to

Administration Costs (Non – GAAP - Unaudited) ............................................................... 21

CAPSTONE CERTIFIED PUBLIC ACCOUNTANTS, LLC

698 NW York Dr, Bend, OR 97703 phone: 541-382-5099 fax: 541-388-1056 735 SW 9th St, Redmond 97756 phone: 541-548-3569 fax: 541-548-3580

PO Box 1563, Sisters, OR 97759 phone: 5411 549-1237 fax: 541- 549-4465

To the Board of Directors

Crooked River Ranch Club and

Maintenance Association

Crooked River Ranch, Oregon

INDEPENDENT AUDITORS’ REPORT

We have audited the accompanying financial statements of Crooked River Ranch Club and

Maintenance Association (a not-for-profit Corporation) which comprise the balance sheets as of

April 30, 2019 and 2018 and the related statements of income and changes in Association equity,

and cash flows for the years then ended and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial

statements in accordance with accounting principles generally accepted in the United States of

America; this includes the design, implementation and maintenance of internal control relevant

to the preparation and fair presentation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the

United States of America. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

entity’s internal control. Accordingly, we express no such opinion. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of significant

accounting estimates made by management, as well as evaluating the overall presentation of the

financial statements.

2

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of Crooked River Ranch Club and Maintenance Association as of April 30,

2019 and 2018 and the results of its operations and its cash flows for the years then ended in

accordance with accounting principles generally accepted in the United States of America.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a

whole. The supplementary information is presented for purposes of additional analysis and is

not a required part of the financial statements. Such information, except for the portion marked

“unaudited”, is the responsibility of the Association’s management and was derived from and

relates directly to the underlying accounting and other records used to prepare the financial

statements. The information has been subjected to the auditing procedures applied in the audit

of the financial statements and certain additional procedures, including comparing and

reconciling such information directly to the underlying accounting and other records used to

prepare the financial statements or to the financial statements themselves, and other additional

procedures in accordance with auditing standards generally accepted in the United States of

America. In our opinion, the information is fairly stated in all material respects in relation to

the financial statements as a whole. The information marked “unaudited” has not been

subjected to the auditing procedures applied in the audit of the financial statements and,

accordingly, we do not express an opinion or provide any assurance on it.

Omission of Required Supplementary Information about Future Major Repairs and

Replacements

As discussed in Note 8 and as allowed by Oregon Revised Statute 94.783, management has

elected to omit the Supplementary Information of Future Major Repairs and Replacements that

accounting principles generally accepted in the United States of America require to be

presented to supplement the basic financial statements. Such missing information, although not

a part of the basic financial statements, is required by the Financial Accounting Standards

Board, who considers it to be an essential part of financial reporting for placing the basic

financial statements in an appropriate operational, economical, or historical context. Our

opinion on the basic financial statements is not affected by the missing information.

Capstone Certified Public Accountants, L.L.C.

Bend, Oregon

July 31, 2019

The accompanying notes are an integral part of the financial statements. 3

CROOKED RIVER RANCH CLUB AND MAINTENANCE

ASSOCIATION (A Not-For-Profit Corporation)

BALANCE SHEETS (See Independent Auditors’ Report)

April 30, 2019 2018

Current assets:

Cash and cash equivalents (Notes 1 and 6):

Operating cash, on hand in checking and investment accounts 556,928 $ 626,697 $

Capital reserve plan cash in checking interest bearing accounts

and certificates of deposit 1,092,466 988,720

Total cash and cash equivalents 1,649,394 1,615,417

Dues receivable (Note 2) 252,918 303,332

Less allowance for uncollectible dues 91,241 104,369

Net dues receivable 161,677 198,963

Prepaid expense - 543

Inventories (Note 3) 117,801 103,201

Total current assets 1,928,872 1,918,124

Property and equipment - at cost (Note 4) 6,383,656 5,737,512

Less accumulated depreciation 4,237,896 4,176,114

Net property and equipment 2,145,760 1,561,398

Total assets 4,074,632 $ 3,479,522 $

ASSETS


CROOKED RIVER RANCH CLUB AND MAINTENANCE

ASSOCIATION (A Not-For-Profit Corporation)

BALANCE SHEETS (See Independent Auditors’ Report)

April 30, 2019 2018

Current liabilities:

Accounts payable 114,493 $ 71,571 $

Deferred dues revenue (Note 1) 127,214 139,123

Unredeemed gift certificates / golf credit book 41,178 39,214

Other current liabilities (Note 1) 140,609 125,875

Current portion of long-term debt (Note 6) 21,668 -

Total current liabilities 445,162 375,783

Long-term debt, net of current portion (Note 6) 229,423 -

Total liabilities 674,585 375,783

Association equity:

Undesignated for operations 2,307,581 2,115,019

Designated for capital reserve plan 1,092,466 988,720

Total association equity 3,400,047 3,103,739

Total liabilities and association equity 4,074,632 $ 3,479,522 $

LIABILITIES AND ASSOCIATION EQUITY



AND MAINTENANCE ASSOCIATION (A Not-For-Profit Corporation)

STATEMENTS OF INCOME AND CHANGES IN ASSOCIATION EQUITY (See Independent Auditors’ Report)

For the Years Ended April 30, 2019 2018

Revenues:

Membership dues 1,393,641 $ 1,335,143 $

Fee income 1,187,629 1,200,929

Merchandise sales 206,057 222,582

Rental income 60,252 54,427

Interest income 6,157 2,710

Loss on dispositions of assets 375)( -

Miscellaneous 8,309)( 15,466

Total revenues 2,845,052 2,831,257

Less cost of goods sold 117,422 130,874

Gross profit 2,727,630 2,700,383

Expenses:

Bank charges 32,461 29,839

Community relations 45,959 43,952

Cleaning 8,615 8,604

Interest expense 55 -

Legal services 29,295 37,986

Office and insurance 119,916 114,438

Personnel 1,181,910 1,197,355

Repair and maintenance 268,545 264,960

Road materials 202,836 189,254

Professional services 62,621 61,431

Federal, state and local taxes 71,195 82,260

Utilities 219,877 210,842

Operating leases 63,630 63,630

Depreciation 124,407 113,876

Total expenses 2,431,322 2,418,427

Net income from operations 296,308 281,956

Association equity, beginning of year 3,103,739 2,821,783

Association equity, end of year 3,400,047 $ 3,103,739 $




STATEMENTS OF CASH FLOWS (See Independent Auditors’ Report)


Operating activities:

Membership dues 1,430,927 $ 1,348,915 $

Fee income 1,069,894 1,214,082

Merchandise sales 206,057 222,582

Rental income 60,252 54,427

Interest income 6,157 2,710

Miscellaneous (8,309) 15,466

Cost of goods sold (132,022) (128,175)

Bank charges (32,461) (29,839)

Community relations (45,959) (43,952)

Cleaning (8,615) (8,604)

Interest (55) - Legal services (29,295) (37,986)

Office and insurance 3,151 (86,380)

Personnel (1,181,910) (1,197,355)

Repair and maintenance (225,623) (297,795)

Road materials (202,836) (189,254)

Professional services (62,621) (61,431)

Local and state taxes (71,195) (82,260)

Utilities (219,877) (210,842)

Operating leases (63,630) (63,630)

Net cash provided by operating activities 492,030 420,679

Investing activities:

Acquistion of property and equipment (709,144) (297,731)

Cash used in investing activities (709,144) (297,731)

(217,114) 122,948




STATEMENTS OF CASH FLOWS - Continued (See Independent Auditors’ Report)


Total from previous page (217,114) 122,948

Financing activities:

Proceeds from long-term debt 251,091 -

Cash used in financing activities 251,091 -

Net increase in cash and cash equivalents 33,977 122,948

Cash and cash equivalents, beginning of year 1,615,417 1,492,469

Cash and cash equivalents, end of year 1,649,394 $ 1,615,417 $

Reconciliation of net income to cash provided

by operating activities:

Net income from operations 296,308 $ 281,956 $

Adjustments to reconcile change in net assets to

net cash flows from operating activities:

Depreciation 124,407 113,876

Allowance for doubtful accounts adjustment (13,128) (3,660)

Loss on disposal of assets 375 -

Changes in operating assets and liabilities

Decrease (Increase) in current assets:

Dues receivable 50,414 17,432

Prepaid expense 543 (543)

Inventories (14,600) 2,699

(Decrease) increase in current liabilities:

Accounts payable 42,922 (32,835)

Deferred dues revenues (11,909) 10,909

Unredeemed gift certificates / golf credit book 1,964 2,244

Other current liabilities 14,734 28,601

Net cash provided by operating activities 492,030 $ 420,679 $

8



NOTES TO FINANCIAL STATEMENTS (See Independent Auditors’ Report)

1 - Significant Accounting Policies

Organization and nature of activities

The Crooked River Ranch Club and Maintenance Association (the Association) was

incorporated May 4, 1972 as a domestic not-for-profit corporation under the applicable laws of

the State of Oregon. Its members are property owners of Crooked River Ranch, an

unincorporated area in Oregon. The Association’s Board of Directors is the local governing and

reviewing authority for the Association’s activities. The development consists of 2,646

residential units and 6 commercial units on approximately 12,000 acres located in both Jefferson

and Deschutes counties. The Association owns, operates, and maintains the common properties

and facilities of the Association.

The Association also conducts unrelated business operations not originally included with the

incorporation of the Association. The unrelated activities include an 18-hole golf course and

pro shop, which serves members to the golf course and is open to the general public for

recreational use. The Association also leases common area real estate and structures to local

merchants and maintains a recreational vehicle park.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect certain reported

amounts and disclosures. Actual results could differ from those estimates.

Basis of accounting

The Association prepares its financial statements on the accrual basis.

Association equity represents the Association’s accumulated resources of cash and cash

equivalents, investment in land, buildings, and equipment net of liabilities. The Association

equity may be “designated” by the Board of Directors at any time. Board designated funds

were $1,092,466 and $988,721 for the years ending April 30, 2019 and 2018 respectively.

9



NOTES TO FINANCIAL STATEMENTS (See Independent Auditors’ Report)

1 - Significant Accounting Policies - continued

Revenue recognition

Revenues are reported as increases in unrestricted net assets unless use of the related assets is

limited by donor-imposed restrictions. There were no donor contributions for the years ended

April 30, 2019 and 2018.

Membership dues revenue are recognized when assessed and earned.

Expenses are reported as decreases in Association equity. Gains and losses on assets or

liabilities are reported as increases or decreases in Association equity unless explicit donor

stipulation or law restricts their use. Expirations of temporary restrictions on Association

equity are reported as equity released from restrictions. For the years ended April 30, 2019 and

2018 there were no donor restricted and law restricted gains and losses or liabilities.

Budgetary reporting

The budget is prepared for the Association and the individual respective departments on the

accrual basis of accounting and approved annually by the Board of Directors prior to the

commencement of a new operating year. Line item adjustments and modifications may occur

following the initial adoption of the budget by approved Board action which does not impact

the overall operating budget expectations as initially adopted.

Cash equivalents

The Association considers all liquid interest-earning investments with maturity of three to

eighteen months or less at the date of purchase to be cash equivalents.

Cash on hand and in banks 940,247 $ 910,632 $

Certificates of deposit 709,147 704,785

1,649,394 $ 1,615,417 $

10



NOTES TO FINANCIAL STATEMENTS - Continued (See Independent Auditors’ Report)


Dues receivable

Under the Association bylaws, the Board of Directors is authorized to assess dues to the

property owners for management, maintenance and improvements of the Ranch. Dues are as

assessed and payable semi-annually and the Association is authorized to file liens against the

real property of the owner for any unpaid dues assessed. Dues receivables are stated at the

amount management expect to collect from outstanding balances. Management provides for

probable uncollectible amounts through a charge to earnings and a credit to a valuation

allowance based on its assessment of the current status of individual accounts. Balances that

are still outstanding after management has used reasonable collection efforts are written off

through a charge to the valuation allowance and a credit to dues receivable. Any recoveries of

accounts previously deemed uncollectible are adjusted through current bad debt expense.

Inventories

Inventory, consisting of resale items in the golf pro shop and fuel inventory, are carried at the

lower of cost or market value with cost determined principally by use of the first-in, first-out

(FIFO) method.

Property and equipment

Property and equipment purchased is stated at historical cost, while contributed property is

stated at the fair market value of the property at the date of the contribution. Additions,

renewals, and betterments exceeding $5,000 are capitalized whereas expenditures for

maintenance and repairs are charged to expense as incurred. Gains and losses on the

disposition of fixed assets are recorded as income or loss at the difference between the gross

proceeds received and remaining net book value. Depreciation expense includes amortization

for equipment purchased with a capital lease. Depreciation and amortization are computed for

financial reporting purposes using the straight-line method over the estimated useful lives.

Management evaluated the Association’s property and equipment during the fiscal year ending

April 30, 2019. There were no impairment losses recorded for the respective year ends. The

property, equipment and improvements are tracked in-house using the QuickBooks Fixed Asset

Management accounting program. Depreciation expense is also calculated using accounting

software, over the estimated useful lives of such assets on a straight line basis.

11





Donated goods and services

The Association receives a substantial amount of services donated by its members and directors

in carrying out the Association’s community services and administration. No amounts have

been reflected in the financial statements for those services since they do not meet the criteria

for recognition under ASC 958-605-15, Accounting for Contributions Received and Contributions

Made.

Deferred dues revenue

Deferred dues revenue consists of Association and golf course membership dues collected in

the current period and which relate to the subsequent fiscal year of the Association. These are

included in other current liabilities.

Income taxes

The Association is exempt from income taxes under section 501(c)(4) of the Internal Revenue

Code. Therefore, no provision for federal income taxes on the income generated by the

Association’s activity has been recorded in the accompanying financial statements. In addition,

the Internal Revenue Service has determined that the Association is not a private foundation

within the meaning of Section 509(a) of the Internal Revenue Code. The Association also

operates a golf course and recreational vehicle park that generates rental and operating income.

For income tax purposes, this income is considered unrelated business income and may

generate income taxes. For the years ending April 30, 2019 and 2018, these activities did

generate taxable income due to a net operating income and, in turn, income taxes have been

reported and paid.

Departmental allocation of expenses

The cost of providing the Association’s various program and supporting services have been

summarized on a departmental basis. Accordingly, certain costs have been allocated among the

programs and supporting services based on estimates made by management.

12





Environmental costs

The Association may be subject to certain federal and state environmental laws and regulations

in connection with its various operating activities. Environment expenditures, if applicable, are

expensed or capitalized, as appropriate as they occur. Liabilities are generally recorded, on a

non-discounted basis, when assessments and/or remedial efforts are probable and the cost can

be reasonably estimated.

Compensated absences

The Association accrues a liability for accumulated vacation leave and paid time off. Vacation

earned can be carried over into the next year, but not more than one year’s accrual.

Accumulated vacation leave was $32,161 and $36,946 at April 30, 2019 and 2018, respectively.

This liability is included in other current liabilities.

Advertising costs

The Association expenses all non-direct advertising expenses as it is incurred. Advertising

expense was $26,841 and $27,638 for the years ended April 30, 2019 and 2018, respectively.

Post Retirement Benefit Plan

On January 1, 2008 the Association adopted a SIMPLE IRA Plan covering all of its employees.

The Association has agreed to match up to 3% of the employees’ salary reduction contributions.

The Association contributed $15,828 and $15,105 for the years ended April 30, 2019 and 2018,

respectively.

Date of Management’s Review

Subsequent events have been evaluated through July 31, 2019 which is the date the financial

statements were available to be issued.

13




2 - Dues Receivable

Aged dues receivable as of Less than Greater than

April 30, 2019 consisted of: one year old one year old Total

Dues receivable 84,601 $ 168,317 $ 252,918 $

Allowance for uncollectible dues - 91,241 91,241

Dues receivable, net 84,601 $ 77,076 $ 161,677 $

Aged dues receivable as of Less than Greater than

April 30, 2018 consisted of: one year old one year old Total

Dues receivable 108,593 $ 194,739 $ 303,332 $

Allowance for uncollectible dues - 104,369 104,369

Dues receivable, net 108,593 $ 90,370 $ 198,963 $

3 - Inventories 2019 2018

Inventories consist of the following:

Fuel inventory 4,730 $ 4,923 $

Pro Shop resale inventory 113,071 98,278

117,801 $ 103,201 $

14




4 - Property and Equipment

Accumulated Net Book

2019 Cost Depreciation Value

Land 447,049$ - $ 447,049$

Buildings, equipment and improvements -

Administration 390,409 360,890 29,519

Pool 305,245 223,977 81,268

Rentals 73,332 70,053 3,279

RV Park 417,719 207,491 210,228

Pro Shop 309,641 188,830 120,811

Golf Maintenance 2,716,558 2,418,249 298,309

General Maintenance 258,021 163,123 94,898

Alternative exit easement 451,036 - 451,036

Roads 1,014,646 605,283 409,363

6,383,656$ 4,237,896$ 2,145,760$

Accumulated Net Book

2018 Cost Depreciation Value

Land 447,049$ - $ 447,049$

Buildings, equipment and improvements -

Administration 390,409 355,571 34,838

Pool 263,095 221,480 41,615

Rentals 73,332 68,955 4,377

RV Park 356,693 193,868 162,825

Pro Shop 309,641 182,367 127,274

Golf Maintenance 2,684,169 2,371,988 312,181

General Maintenance 235,478 153,924 81,554

Roads 977,646 627,961 349,685

5,737,512$ 4,176,114$ 1,561,398$

Depreciation expense was $124,407 and $113,876 for the years ended April 30, 2019 and 2018,

respectively.

15



NOTES TO FINANCIAL STATEMENTS – Continued (See Independent Auditors’ Report)

5 - Lease Obligations

The Association leases office and maintenance equipment under four leases one of which

expires in May 2020. Aggregate minimum monthly payments under the leases are $6,296

through May 2020 and $993 through 2023.

Minimum lease payments as follows

for Years Ending

April 30,

2020 75,552$

2021 11,916

2022 11,916

2023 11,916

111,300$

6 - Long term debt 2019 2018

Note payable to Jefferson County for the construction

of an alternative exit off of Quail Road. Paid in annual

installments of $29,025 including interest at 2.49% per

annum, due January 31, 2029. 251,091$ -$

Less current portion 21,668 -

229,423 $ -$

16




6 - Long term debt - continued

Maturities of long-term debt are as follows

for the Years Ending

April 30,

2020 21,668$

2021 23,155

2022 23,599

2023 24,193

2024 24,801

Thereafter 133,675

251,091

Less current portion 21,668

Long-term portion 229,423$

7 - Concentration of Credit Risk

Financial instruments that potentially subject the Association to credit risk consist of cash and

cash equivalents. The Association’s policy is to place its cash and cash equivalents with high

credit quality financial institutions. The Association maintains its cash in bank deposit accounts

that, at times, may exceed the federally insured limits. The balances are insured by the Federal

Deposit Insurance Corporation up to $250,000 for both noninterest and interest bearing

accounts per financial institution. The Association’s uninsured cash balances were $9,247 and

$4,885 at April 30, 2019 and 2018, respectively. The Association has not experienced any losses

in interest bearing accounts and believes it is not exposed to any significant credit risk on cash.

Cash and cash equivalents are classified as investments that mature within three to eighteen

months or less at the time of purchase.

8 - Pending Litigation

The Association is involved in various legal actions arising in the normal course of business and

other incidences. In the opinion of management and legal counsel, the resolution of such

matters that may not be favorable to the Association will not have a material effect upon the

financial position of the Association due to insurance coverage in effect at the time of any

litigation.

17




9 - Future Major Repairs and Replacements of Common Property

It is implied in the Association’s by-laws that it is the responsibility of the Association for

maintaining the common areas, and define the extent of such common areas. The by-laws allow

the Board of Directors to include a provision in the annual budget for funding future repair and

replacement costs. The by-laws also allow the Board of Directors to levy special assessments

when existing funds are inadequate. Per Oregon Revised Statute (hereafter “ORS”) 94.783,

since the Association was organized prior to July 1, 1982 it is exempt from the required

provisions of ORS 94.595 “Reserve account for maintaining, repairing and replacing common property;

reserve study; maintenance plan”. The Board has conducted an informal internal study to estimate

the remaining useful lives and replacement costs of the real property common elements. Funds

are being budgeted based on the Board’s estimates of future needs for repairs and replacements.

Actual expenditures may vary from the estimated future expenditures and the variations may

be material. Therefore, amounts budgeted may not be adequate to meet all future needs for

major repairs and replacements.

10 - Alternative Exit Easement

The Association entered into an agreement with Deschutes County, Jefferson County and

Crooked River Ranch Special Road District for the construction, operation and maintenance of

the Quail Road Extension Project. The Association entered into an Oregon Transportation

Infrastructure Loan Repayment Agreement with Jefferson County in conjunction with said

agreement (See Note 6). The Association also expended $200,000 as part of the construction

agreement. The amounts are capitalized as a non-depreciable asset representing the easement

and right of way to which the Association benefits from the construction of the alternative exit.

11 - Change in Presentation

Certain amounts in the 2018 financial statements have been reclassified to conform to the 2019

presentation.

SUPPLEMENTARY FINANCIAL INFORMATION

19



STATEMENTS OF OPERATIONS BY DEPARTMENT (See Independent Auditors’ Report)

For the Year Ended April 30, 2019

Administration Golf RV Park Rentals Total

Revenues:

Membership dues 1,189,800 $ 203,841 $ -$ -$ 1,393,641$

Fee income 80,635 728,556 378,438 - 1,187,629

Merchandise sales 19,503 171,360 15,194 - 206,057

Rental income 5,346 3,883 - 51,023 60,252

Gain on Asset Sale 375)( - (375)

Interest income 6,157 - - - 6,157

Miscellaneous 13,924)( 5,032 117 466 (8,309)

Total revenues 1,287,142 1,112,672 393,749 51,489 2,845,052

Less cost of goods sold 8,130 105,143 4,149 - 117,422

Gross profit 1,279,012 1,007,529 389,600 51,489 2,727,630

Expenses:

Bank charges 10,167 14,288 8,006 - 32,461

Community relations 19,074 21,826 5,059 - 45,959

Cleaning 3,126 3,401 2,088 - 8,615

Interest 55 - - - 55

Legal services 29,295 - - - 29,295

Office and insurance 81,581 31,156 6,686 493 119,916

Personnel 496,397 596,772 86,239 2,502 1,181,910

Repair and maintenance 139,305 109,595 17,657 1,988 268,545

Road materials 196,052 4,893 1,891 - 202,836

Professional services 44,279 13,003 3,787 1,552 62,621

Federal, state and local taxes 13,508 27,649 21,941 8,097 71,195

Utilities 62,711 78,696 70,051 8,419 219,877

Operating leases - 63,630 - - 63,630

Depreciation 56,961 52,725 13,623 1,098 124,407

Total expenses 1,152,511 1,017,634 237,028 24,149 2,431,322

Net income from operations 126,501 $ 10,105)($ 152,572 $ 27,340 $ 296,308$

20



SCHEDULE OF OPERATIONS – ENTIRE RANCH

BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS - UNAUDITED)


Budget Variance

(unaudited) Actual (unaudited)

Revenues:

Membership dues 1,394,800 $ 1,393,641 $ 1,159)($

Fee income 1,202,750 1,187,629 15,121)(

Merchandise sales 225,000 206,057 18,943)(

Rental income 51,325 60,252 8,927

Interest income 1,200 6,157 4,957

Loss on disposition of assets - 375)( 375)(

Miscellaneous 8,750 8,309)( 17,059)(

Total revenues 2,883,825 2,845,052 38,773)(

Less cost of goods sold 135,450 117,422 18,028)(

Gross profit 2,748,375 2,727,630 20,745)(

Expenses:

Bank charges 26,500 32,461 5,961

Community relations 72,900 45,959 26,941)(

Cleaning 12,550 8,615 3,935)(

Interest expense - 55 55

Legal services 19,500 29,295 9,795

Office and insurance 130,597 119,916 10,681)(

Personnel 1,239,438 1,181,910 57,528)(

Repair and maintenance 354,580 268,545 86,035)(

Road materials 205,100 202,836 2,264)(

Professional services 72,985 62,621 10,364)(

Federal, state and local taxes 95,205 71,195 24,010)(

Utilities 206,803 219,877 13,074

Operating leases 63,630 63,630 -

Contingency - - -

Depreciation 121,500 124,407 2,907

Total expenses 2,621,288 2,431,322 189,966)(

Net income from operations 127,087 $ 296,308 $ 169,221 $

21



SCHEDULE OF HOMEOWNERS DUES COMPARED TO

ADMINISTRATION COSTS (NON-GAAP - UNAUDITED)


Homeowner Dues Compared to Administration Costs for the Year Ended April 30, 2019

Number of Billable Lots 2,644

Annual Dues 450$

Total Homeowner Dues 1,189,800$

Costs:

Administration 332,350$

Pool 56,480

Snack Shack 21,617

General Maintenance 209,763

Roads 532,301

Total Administration Costs 1,152,511$

Cost per Homeowner:

Administration 126$

Pool 21

Snack Shack 8

General Maintenance 79

Roads 201 435$

Dues exceeded expenses by: 15$

29%

5%

1%

18%

46%

Administration Pool Snack Shack General Maintenance Roads

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