2025 budget explained
PRESIDENT'S COLUMN
by Janet Isom
GRF President
I would like to take this opportunity to update everyone regarding the recent passage of next year’s budget. In late summer, budget deliberations began with two rounds of scrutiny by the five GRF committees. This review took place after all GRF departments spent weeks evaluating their income and expenses to produce a more accurate financial forecast.
On Wednesday, October 30th, the Board was gratified to see a large number of GRF members attending the final budget meeting.
Following hundreds of hours negotiating cost cutting measures and identifying potential new income sources, the GRF board approved the 2025 budget.
As expected, taking into consideration the incredible rise in insurance and utility costs, coupled with inflation, there will be a $21.72 increase in our monthly GRF assessment, as of January 1st.
The 2025 budget also includes a freeze on new staff positions, unless approved by the Board, and automatic reviews of all vacated positions to decide if changes need to be made. The Board will also be undertaking a human resources benchmarking project this winter.
The Administration Committee will be researching comparable pay grades (focusing on Orange and Los Angeles County businesses), job titles, job descriptions and the complete benefits package we offer to recruit and retain qualified people to work for us.
The end goal is to assess both the number and kind of positions within the organization to determine optimal staffing, while ensuring we are competitive in the marketplace.
The Committee’s findings and recommendations will be brought to the entire Board for a vote at an open
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monthly meeting regarding any changes in staffing, compensation and benefits.
To offer some important context, I will touch on a few of the major cost drivers responsible for the monthly increases we are experiencing throughout our entire community.
GRF’s share of the insurance costs are increasing from the $933,682.20 allocated in the 2024 budget to what is now budgeted at $2,700,000 in 2025. That is an increase in premiums of $1,766,317.80 to provide the same coverage as last year. Despite an effort to control our insurance premiums, there is now a higher deductible as well, which has risen from $50,000 to $100,000 per insurance claim. It is always in our best interest to manage our risks as much as possible, which hopefully results in fewer claims.
The water bill is expected to increase by 30% this year, with a continuing increase for the next 3 to 4 years. As you may know, we only have one water meter for the entire Leisure World complex. So as diligently as the GRF Board works to not overwater the common areas, we are still at the mercy of residents as far as water usage goes.
Service Maintenance costs are also going up by 5% in 2025. With 62-year-old buildings, there is a lot of maintenance needed on Trust Property facilities and common areas to keep them up.
The next factor is our reserves, which is money we’ve set aside for long-term infrastructure projects, such as roofing and painting. There are also many more components included in our yearly reserve study that is produced by an independent company. We are currently about 78.5% funded, which puts us in a strong financial position that seriously lessens the possibility of a future special assessment. We have enough money saved in reserves to complete the projects for our Trust buildings and common areas that are due to be addressed.
I want to emphasize that we are not in dire financial straits. All of our bills are paid in a timely manner, including payroll, and GRF carries no debt. There will always be necessary maintenance and repair projects looming on the horizon, which require suitable funding to go forward.
It is the GRF Board’s fiduciary duty to perform our due diligence, while making prudent financial decisions for our community. With that being said, the 2025 GRF assessment will be $234.97 per apartment per month.
Assessments will generate about $18.6 million in revenue in 2025, and other revenue sources (from leases like Onsite Sales, Optum, etc., Trust Property Use Fees [formerly the Amenities Fee], newspaper advertising, sponsorships, and other sources) will generate about $8.8 million. Thus, 67% of GRF’s expenses are covered by assessments, with the remaining 33% being paid for by other income sources. We will continue to seek out new avenues for additional income to help offset our monthly assessments.
The GRF Board welcomes your suggestions and comments via email to GRFBoard@lwsb. com, dropped off with the front desk staff or into the overnight box on the far right of the Administration building.
