OUTDOOR RESORTS/PALM SPRINGS OWNERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019
NOTE 1: OWNERS' ASSESSMENTS Monthly assessments to owners were $394 for the year ended June 30, 2020 and $383 for the year ended June 30, 2019. Of those amounts, $89 in 2020 and 2019 were designated to the replacement fund, and $6 in 2020 and $3 in 2019 were designated to the capital improvement fund. The annual budget and owner's assessments are determined by the Board of Directors. The Association retains excess operating funds at the end of the operating year, if any, for use in future operating periods. NOTE 2: COMMON AREA PROPERTY On June 30, 2020 and 2019 the Association held title to common real property consisting of 137 acres of land, roads, clubhouses, golf course, tennis courts, maintenance building, pools, spas, and lakes. The Association is responsible for preserving and maintaining the properties and may not dispose of them. In conformity with industry practice, the Association's common property is not recognized as assets.
NOTE 3: PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30, 2020 and 2019: 2020
2019
La Palma equipment and fixtures El Saguaro equipment and fixtures Pool, tennis and golf course equipment
$ 190,884
$ 190,884
154,920 131,690 140,372 97,766
156,389 131,690 140,372 97,766
Cafe improvements Security improvements Vehicles and golf carts
729,613 464,858 1,910,103 (1,562,868)
565,080 480 757 1,762,938 (1,525,598)
Other equipment and fixtures
Less: Accumulated depreciation
$ 34Z 235
$ 23Z340
NOTE 4: FUTURE MAJOR REPAIRS AND REPLACEMENTS
The Association's governing documents require that funds be accumulated for future major repairs and replacements. Accumulated funds are held in separate savings accounts and are generally not available for expenditures for normal operations. The Board of Directors engaged an outside consultant to conduct a study in May 2020 to estimate the remaining useful lives and the replacement costs of the components of common property. The study is based on current estimated replacement costs. Funding requirements consider an annual inflation rate of 3.0 percent and interest of 1.0 percent, before taxes, on amounts funded for future major repairs and replacements. The table included on page 12 in the unaudited supplementary information on future major repairs and replacements is based on the study.
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