FOOTHILLS HOMEOWNERS ASSOCIATION FINANCIAL STATEMENTS BALANCE SHEET Years Ended December 31, ASSETS 2016 Current Assets Cash & Cash Equivalents Checking 532.07 Certificates of Deposit 43942.01 Savings 16819.81 Total Cash & Cash Equivalents 61293.89 Accounts receivable And total current other assets 12.47 TOTAL ASSETS 61306.36 LIABILITIES AND EQUITY Current Liabilities Other Current Liabilities Construction Deposit 1,000.00 Total Other Current Liabilities 1,000.00 Total Current Liabilities 1,000.00 Total Liabilities 1,000.00 Homeowners Equity Opening Bal Equity 32,860.13 Retained Earnings 31785.94 Net Income -4339.71 Total Homeowners Equity 60306.36 TOTAL LIABILITIES & HOMEOWNERS EQUITY 61306.36 1
The accompanying notes are an integral part of these financial statements. 2
FOOTHILLS HOMEOWNERS ASSOCIATION STATEMENT OF INCOME & EXPENSE Years Ended December 31, 2016 Income Escrow Processing Fee 255.00 Finance Charges 568.08 Homeowner Dues 49255.00 Interest Income 116.11 Total Income 50194.19 Operating Expenses Mailing Costs 206.41 Web Services 215.88 Irrigation 1561.52 Bank service fee 57.00 Bad debt expense.10 Community Activities 824.73 Electricity 611.78 HOA misc 10.00 Legal Fees 1110.00 Insurance 2121.00 Landscape / other 2353.60 Landscape Contract 35346.55 Lien Filing Fees 0.00 Newsletter 0.0 Office Supplies 691.47 Rent 748.00 Tax 0.00 Vandalism 1508.54 Water 7167.32 Total Expense 54533.90 Net Income -4339.71 3
The accompanying notes are an integral part of these financial statements. FOOTHILLS HOMEOWNERS ASSOCIATION STATEMENT OF CASH FLOWS Years Ended December 31, 2016 OPERATING ACTIVITIES Net Income or loss -2695.05 Adjustments to reconcile Net Income to net cash provided by operations: Accounts Receivable -1451.56 Accounts payable 0.00 Net cash provided by Operating Activities --4146.61 Net cash increase or decrease for period -4146.61 Cash at beginning of period 66630.50 Cash at end of period 62483.89 4
The accompanying notes are an integral part of these financial statements. 5
FOOTHILLS HOMEOWNERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS December 31, 2016 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Association The purpose of the Foothills Homeowners Association is to carry out the duties, obligations and responsibilities imposed by the Declaration of Covenants, Conditions and Restrictions of the Foothills subdivision of Snohomish County, Washington, to maintain the zoning of the subdivision as a single-family residential zone and to maintain residentially compatible zoning in the contiguous area. The Association was formed in 1997. There are a total 210 lots, of which, 210 lots have been completed as single family residences. Method of Accounting The Association prepares its financial statements on the cash basis of accounting. Revenues and related assets are recognized when received, and expenses are recognized when paid. Therefore, receivables and payables and accrued income and expenses which would be recognized under generally accepted accounting principles, and which may be material in amount, are not recognized in the accompanying financial statements. Membership Dues Dues are collected for the calendar year. In accordance with the cash basis method of accounting, five prepaid dues have been recorded. NOTE B OWNERS ASSESSMENTS Association members are subject to annual assessments to provide funds for the Association s operating expenses, maintenance, major repairs and replacements. Annual maintenance assessments to owners were $238 per lot in 2016. The annual budget and assessments of owners are determined by the board of directors and are approved by the owners. The Association retains excess operating funds at the end of the operating year, if any, for use in future operating periods. NOTE C IMPROVEMENTS, FUTURE MAJOR REPAIRS AND REPLACEMENTS Funds are being accumulated and reserved for improvements, major repairs and replacements out of the monthly assessments. This year we repired the park along Foothills RD. NOTE D PROPERTY AND EQUIPMENT Real property and common areas acquired from the developer and related improvements to such property are not recorded in the Association s financial statements because those properties: 6
a. are not used to generate significant cash flows on the basis of usage from members and nonmembers. b. Cannot be sold without a majority vote of the membership. Real property and common areas consist of parks, playground structures, and greenbelts. NOTE D CASH AND CERTIFICATE OF DEPOSIT BALANCES Cash and certificates of deposit for general operations and future major repairs and replacements. As of December 31, 2016, the cash and certificates of deposit balances were as follows: Union Bank Accounts Operating Reserves Total Checking 532.07-532.07 Reserve CD #1-12460.39 12460.39 Reserve CD #2-12460.39 12460.39 Reserve CD #3-19021.23 19021.23 Savings 16819.81-16819.81 17351.88 43942.01 61293.89 Cash listed as operating above is available for current operations and is not bound by any restriction or designation. Cash and certificates of deposit listed as reserves are designated for future major repairs and replacements and are generally not available for current operations. NOTE F INCOME TAXES The Association is a homeowners association in accordance with the Internal Revenue Code defined under Section 528 and, therefore, is not subject to tax on uniform assessments to members and other operating income. The Association is taxed at the rate of 30% on its nonexempt function income, which includes interest income. 7