Financial

Jupiter Bay is a multicondominium association comprised of eight individual associations:

East A-D -- 4 Buildings, 135 Units	Villas -- 4 Buildings, 32 Units
West A -- 1 Building, 32 Units	West B -- 1 Building, 32 Units
West C -- 1 Building, 32 Units	West D -- 1 Building, 32 Units
West E -- 1 Building, 32 Units	West F -- 1 Building, 32 Units

All eight associations share a common Community area containing a lake, waterfall, two swimming pools, two tennis courts, sidewalks, parking lots, roadways, bocce ball court and landscaped grounds.

Separate accounting records, both operating and reserves, are maintained for each of the eight associations.

Common Expenses (15 Accounts) *

Annual Condo Fees	Equipment Rental & Supplies	Professional Fees -- Legal, Auditing & Accounting
Office Supplies	Lake/Irrigation Maintenance	Pool, Tennis & Bocce Ball Court
Board Expense	General (Common) Insurance	Maintenance & Janitorial Supplies
Payroll	Landscape Contract/Services	Telephone (Office & Pools)
Security Contacts	Common Repair & Maintenance	General (Common) Insurance

*Each Unit Pays 1/359

Individual Building Expenses

Building Expense Item	Expense Allocation
License/Fire Inspection Fee	By Individual Building
Utilities	1/359 (except Elevator Phones)
Property Insurance	By Insured Value
Wind Insurance	By Building Premium
Fire Sprinklers, Lines & Pumps	By Individual Building
Elevator Repair & Maintenance	10% for each of the 10 Elevators
Generator, Alarms & Life Safety	By Individual Building
Pest Control	1/359 (except Hewlett Rodent Control)
Trash Removal/Recycle	1/359
Building Repair & Maintenance	By Individual Building

Here's  detail on the 10 expenses that are split, in differing amounts, to the 8 individual associations:

1. License/Fire Inspection Fees – These fees are charged directly to the applicable association/building. They vary because of the different fire protection systems described above.

2. Utilities – With the exception of elevator phones, all utility (water, sewerage, electricity, cable TV/Internet, and pool/office phones) expenses are allocated evenly (1/359th) to each unit. Elevator phones are charged to those associations/buildings with elevators.

3. Property Insurance – Property insurance premiums are split based on the insured value of the building(s). For the 2/2021 to 2/2022 insurance period, 42.23% of the building property insurance budget was allocated to the East, with 6.80% to the Villas, and 8.15% to each of the 6 West associations/buildings.  The remaining 2.07%, which was for common structures insurance, was split evenly among each individual condo unit.

4. Wind Insurance – The 4 East buildings are less prone to wind damage and therefore have lower per unit wind insurance costs ($43.37 per month versus $74.37 per month for the Villas and $89.16 per month for the West). Wind insurance premiums are charged to the individual 8 associations based on the premium amount. For the 2/2021 to 2/2022 insurance period, 21.84% of the building wind insurance budget was allocated to the East, with 8.88% to the Villas, and 10.64% to each of the 6 West associations/buildings. The remaining 5.41%, which was for common structures insurance, was split evenly among each individual condo unit.

5. Fire Protection – The three 5-story East buildings have fire sprinklers in each unit, the West buildings have fire sprinklers only in the attics, and the Villas have no fire sprinklers. Half of the West pump house equipment is used to deliver high-pressure sprinkler water to the West Buildings and restaurant; whereas, the East has its own fire sprinkler pump house adjacent to the East B building. All buildings have fire extinguishers. Fire protection expenses vary based on equipment testing, maintenance, and replacement costs. Due to its extensive fire protection systems, the East usually pays more for fire protection (25% to 45% of the total fire protection expense).

6. Elevator Repair & Maintenance – The monthly elevator service contract charge is split evening among the 10 elevator locations (4 for the East and one for each West building). Charges not covered by the contract are charged to the building requiring the repair.

7. East Generator Repair & Maintenance – Only the East has an emergency electric generator and receives all related charges.

8. Pest Control – The East and West/Villas have separate rodent control contracts with Hewlett that are directly charged.  Costs for the general pest control contract with Global are divided 1/359.

9. Trash Removal/Recycle – Expenses are allocated evenly (1/359th) to each unit.

10. Building Repair & Maintenance – All building repair and maintenance expenses are charged to the association/building incurring the expense.

Florida statutes require expenses to be properly allocated to the associations incurring the costs.

This website's developer, Paul St.Clair, wrote Jupiter Bay's original Financial Policy in 2009. In 2014, Paul was asked by the then current president to update the policy to conform to current statutes, code and procedures.  This task was initially completed in February, 2014; and afterwards eight policy drafts were developed, sent to Board members, and reviewed with Jupiter Bay's Treasurer and bookkeeping staff. The updated version, which extensively references the Association's Condominium Documents and Florida statutes, was approved by the Board of Directors at the May 20th 2014 Board Meeting. The following additional updates to the 2014 version of the Association’s Financial Policy were approved by the Board at a 10/21/15 Board Meeting: Clarification of multi-condominium Association and commingling of funds (Paragraphs 3 & 4). Changing Peachtree Sage 50 accounting software to QuickBooks (Paragraph 5). Adding “bonds” to the reserve investment options (Paragraph 7). Adding “unit’s exterior door” to the list of limited common elements (Paragraph 8, Section 2). Listing of all of the individual reserve items included within the common and building reserve schedule categories (Paragraph 9). Deleting “adjusting journal entries” from the monthly financial report contents (Paragraph 10). The adjacent column is the Table of Contents from the Association's current Financial Policy. A complete copy is available to unit owners on the Association's Website: Jupiter Bay Condo Association.

Table of Contents: Condominium Association Responsibilities Basis of Accounting Commingling of Funds Accounting Records Management Operating Funds Reserve Funds Operating Expenses Reserve Schedule Monthly Financial Reporting Annual Audited Financial Report Member Assessments Special Assessments Owner Delinquencies Liens & Foreclosures Transfer Fees Insurance Accounts Payable Recurring Expenses Non-Recurring Expenses Association Credit Cards Staff Salaries & Benefits Annual Budget Budget Meetings Levying of Fines Association Tenants Accounting Records Retention

Reserve Expense Rules

• Condominiums must have reserve accounts for Roof Replacement, Building Painting & Pavement Resurfacing.
• Reserve accounts are required for any item for which deferred maintenance expense or replacement cost exceeds $10,000.
• Reserve accounts must be fully funded at same frequency as assessment collections (i.e., quarterly).
• Use of Reserve funds for other than originally intended use requires owner approval.
• Membership has the right to annually vote to not fund reserves or to pool reserves. Pooled reserves do not require 100% funding of components.
• General or contingency reserves are not classified as reserves and must be in the operating budget.

Jupiter Bay Reserve Accounts

Common Community	Building
Restoration – Bridge, Sidewalks, Tennis Court, Bocce Ball Court & Entry Monuments	Building Restoration/Spalling – Exterior Walls, Balconies, Doors, Stairs/Walkways & Railings
East & West Pools and Spa – Resurface, Deck, Equipment & Furniture	Elevators (Refurbishment & Replacement) – all Buildings except Villas
Irrigation – Wells, Pumps & Pipes	Building Repainting – Exterior Sealing & Repainting
Paving & Sealcoating – Parking Lots & Roadways including Lighting	Roof Repair & Replacement
Restoration General – Buildings (Pool Cabanas, Pump House, Sewer Drains & Maintenance Shed) and Fences	Generator, Water Pumps & Life Safety – Fire Pump Stations (East & West), Fire Alarm Equipment, Booster Pumps & East Generator

In condominium association financial accounting, there is oftentimes confusion between the terms Cash Balance and Fund Balance. As a not-for-profit corporation, the Association uses Fund Accounting, which emphasizes how money is spent rather than profitability, and it requires that operating and replacement funds (reserves) be classified separately. Also, Accrual Accounting is used, rather than Cash Basis, for tracking and recording income and expenses.  This means that income exists when owner invoices are generated, and expenses exist when vendor bills are entered into the Association’s accounting software.

Cash Balance is a point-in-time value based primarily on:

• Cash-on hand (e.g., petty cash)
• + Receivables (money invoiced and not yet received)
• -  Payables (bills received but not yet paid)

Because of separate accounting for operating funds and reserves, a “due to/due from” account is included showing money owed to the Operating Account from the Reserve Account.

Cash Balance is a lot like an individual’s checking account, where the daily balance fluctuates day-by-day as income is posted and checks are written. For example, the Association’s financial reports showed a $-94,337 cash balance in December 2018 and a $229,064 cash balance in January 2019. Consequently, Cash Balance, as posted on a monthly financial report, is a rather meaningless figure for determining the financial strength of an organization. This number is more suspect for two reasons:

• Although we generally wait until the 15th of the following month to produce the financial report for the prior month end, new transactions frequently trickle in past the cutoff date, and
• The December monthly financial report does not reflect the auditor’s yearend adjusting journal entries.

On the other hand, Fund Balance is a very precise audited number. It can be calculated for the current year’s Operating Fund as Revenues minus Expenses. According to the Auditor’s Report, this figure for the year ending December 31, 2018 is $-1,110. Counting all prior years, the Association’s fund balance was $-74,855, the number that I report. From a balance sheet perspective, this same number results from the calculation of total Assets minus total Liabilities.

Accountants caution that Cash Balance is different than Fund Balance. They say that “Cash is a current liquid asset while Fund is a liability which may be current or non-current and doesn’t have to be liquid.” However, the association’s accurate financial position comes from the Fund Balance line of the Auditor’s Annual Report and not from any point-in-time available cash figure from an imprecise monthly financial report. Fund Balance reflects the Association’s true net financial position, which provides an accurate Cash Balance. Fund Balance tells how much money is being borrowed from future assessments.