Instead of a modest positive net revenue, adjustments for online services (ex. PayPal fees) caused a modest negative net revenue for January.
Currently, a budget has not been officially submitted for FY2013. There is a budget draft in progress, which outlines projected income and expenses. There are three reasons for this.
The first is that the Metropolitan is now charging tenants separately for water utility. We would like to obtain at least a few data points before committing a number to a new and variable line item expense.
The second is that we don’t have a clear picture of projected income from classes. We have mixed data that indicates that it’s possible the class revenue is key to operations.
The third is that our insurance expense may increase, since we must obtain additional insurance to cover the costs of growth.
The plan is to officially submit a budget at the end of Q1, after more data is obtained and the budget draft reflects reality accurately. It is just short of complete certainty to expect a budget that is balanced. What we are planning for is our expected net revenue, for our first fiscal goal of building a reserve of 3mo of operating expenses. We are expected to meet that goal in early Q2 if current trends continue.
At February’s end, our reserves grew from 1.51mo of operating expenses to 2.85mo. In part, as the big repair expense normalizes over the year and the membership continues to grow, our reserves grow. Even though our expenses grow, the new revenue stream of the classes helped to allow the reserve to expand. Additionally, member annual payments were made, which contributed most to the dramatic jump.
This month we fell just short of our expenses, in particular, due to an increase in power costs. We continue to be short from certain members. The Freeside BOD has drafted a plan to address the issue of past due payments, which includes late fees, and will be implementing this policy after voting on it.
It is becoming apparent that class revenue is critical to sustaining operations, in the long term.
The expenses were more or less in line with the month previous, with the notable exception of the power bill doubling.
We added 3 new members this month, with 4 pending memberships. The trend of growth from FY2012 Q2 continues.
However, we lost 2 members this month, so our total membership is at 35.