This month, I’d like to provide you with operating data from the Alumni Corp.
Back in 1994, a mortgage for $398,000 was taken out for a comprehensive property rehabilitation. So, it’s been 25 years since the House has seen overall major improvements. Ideally, funds should have been raised prior to the work, as the debt service on the loan drained annual cash flow.
This became a bigger problem as other structural needs (roof, bathrooms) reached the end of their expected lives. The roof is over 25 years old and the bathrooms date back to 1981! Michael Park’s list from the last Alumni Board meeting is provided in this month’s eLetter. Where we stand currently is: the 1994 mortgage is paid off! A number of larger projects need to be addressed over the next 5 years.
From an annual operating standpoint: There is about $113,000 in income per year. Property taxes are $18,000. Insurance is $12,000. Utilities, maintenance, accounting fees, etc. total $30,000. Alumni communications $17,000. That total is $77,000. The paid off mortgage WAS $36,000—so, that WAS breakeven to $113,000. Your Alumni donations have been what has allowed for smaller annual improvements and equipment replacement.
Some years, no improvements were done, as funds were accumulated for larger pressing needs. The recent replacement of the 1979 boiler system is a case in point. Over the most recent years, the Alumni Board completed needed repairs and improvements with a triage approach. As homeowners, you know that can only take you so far. The House has some major needs and those need to be addressed now.
The important thing to note is that with the 1994 mortgage paid off, the Alumni Corp has about $30,000 per year in additional cash flow. The Alumni Board is using 30k for its budget estimates and retaining 6k as a reserve for subsequent years/projects. Given the needs, however, that can only supplement the outlays.
What I ask of you is this: Do not repeat the past and go down the mortgage road again. The Alumni Board has discussed the possibility of executing a 5-year note IF and only IF donations do not meet an annual project need. This motion has been tabled until the Winter 2021 meeting (January 2021). Become more involved, personally, financially—-ideally—-both and let’s get our Grand Old House what she needs—-ahead of her 100th birthday.
In ZAX,
T.