Guide to CHF Canada's budget form for SHRA co-ops by terrypete

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									Guide to CHF Canada’s budget form for SHRA co-ops

Introduction

What will the budget form do?

CHF Canada’s budget form will help you prepare your co-op’s annual operating
budget. It will:

•   calculate your annual subsidies (operating, property tax and RGI) for the budget year
•   give you the subsidy estimate form required by service managers 90 days before your
    budget year starts
•   set out your revenue and expenses for the budget year.


Overview of the budget form

The budget form is divided into a number of worksheets:

•   Co-op ID
•   Market rent index
•   Indexing
•   RGI subsidy
•   Total subsidy
•   Occupancy charges
•   Expenses
•   Total revenue
•   Non-shelter

What will you need to complete the budget form?

For the budget year that starts in 2008

You will need:

•      the Ontario Rent Increase Guideline (formerly known as the Rent Control
       Guideline) for 2008, which is 1.4%




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•   the market rent index for your district and for your type(s) of unit. This
    information is prepared by the Ministry but you will likely get it from your
    service manager.


•   the number of units in your co-op broken down by unit type and size

•   the proposed market housing charges for the budget year

•   the estimated number of vacant market units for the year

•   the number of market and RGI units for the budget year

•   the occupancy charge revenue you will collect from RGI households

•   the estimated non-rental revenue for the budget year

•   your benchmarks for
    • market vacancy loss
    • non-rental revenue
    • maintenance and administration
    • utilities (broken down into fuel, electricity and water)
    • insurance
    • capital reserve fund allocation
    • bad debt.

    You can get your benchmarks from the letter that was sent to you by the Ministry
    in the summer or early fall of 2005. If you requested a change to your benchmarks
    from the Ministry and were successful, use your updated benchmarks. Some co-
    ops may also have agreed to changes to their benchmarks with their service
    managers. In that case use those figures unless your service manager says not to.

    If your utility benchmark is not broken down ask your service manager for the
    individual figures for fuel (either natural gas or oil and other), electricity and
    water.

•   the indices to inflate each of your benchmark costs. This information is prepared
    by the Ministry but you will likely get it from your service manager. Note that
    your bad debt expense will be inflated by your market rent index so there is no
    cost index for it.

•   your total yearly mortgage payment for the budget year without sector support

•   your estimated property taxes for the budget year




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•      your estimated expenses for the budget year

•      your indexed benchmark rents for each type and size of unit from 2007. This
       figure is your benchmark rent for each size and type of unit indexed by the 2006
       MRI for the co-op. If you used the CHF Canada budget form for 2007, you can
       find these amounts on page 4 in column G.



Completing the budget form

These instructions for completing the budget form go line by line through the
spreadsheet. Where references and formulae are included on the spreadsheet, the written
instructions will refer you back to the budget form.

Using Excel

If you intend to complete the budget form tool using Excel, we have assumed that you
have a working knowledge of Excel. This Guide will not teach you how to use Excel.
You can download the budget form from the Ontario Region pages of the CHF Canada
website (www.chfcanada.coop).

If you are completing the form using Excel

•   save a copy before you work on it because the cells are not protected
•   the cells where you need to enter information are yellow, or shaded if you are
    working from a paper copy. The other cells are formulas and you must not enter
    anything in them. These cells will automatically be filled in as you enter information
    in the yellow cells. The only worksheet where there are no yellow cells is Occupancy
    Charges.
•   you may also find the line-by-line written instructions useful
•   if you find that the number of decimal places in the formula does not allow you to see
    the Market Rent Index clearly, change the formula to add decimal places.

If you are not familiar with Excel, we will mail you a copy that you can complete by
hand.


Page 1 - Co-op ID

Fill in the blanks with the information for your co-op.




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Page 2 - Market rent index

If your co-op has only one type of unit, complete Lines 1 and 2 otherwise, go to Line 4.
One type of units means that you have all apartments or all townhouses or all stacked
townhouses.

Line 1              Enter the Ontario Rent Increase Guideline (ORIG) for the budget
                    year as a decimal number. For example, if it is 1.4%, enter .014.

Line 2              Enter the market rent index (MRI) for your district and your unit
                    type. This information is prepared by the Ministry but you will likely
                    get it from your service manager. It could be the same or lower than
                    the ORIG. The MRI cannot be higher than the ORIG.

Line 3              This is the lesser of the ORIG and the MRI. It checks to make sure
                    that the service manager has not given you an MRI that is greater
                    than the ORIG.

If your co-op has more than one type of unit, complete Lines 4 to 19.

This section calculates the market rent index (MRI) for your co-op based on the weighted
average of the number of units of each type. Some service managers may use the same
MRI for townhouses and stacked units.

Lines 4 to 8        If you have apartments complete these lines.

Lines 9 to 13       If you have townhouses complete these lines.

Lines 14 to 18      If you have another type of unit complete these lines.

In each section, enter
• the number of units you have of this type
• the ORIG
• the MRI for your district for that type of unit.

Line 19             See spreadsheet. This cell calculates the weighted average of the
                    MRI’s for each unit type.

For all co-ops:

Line 20             See spreadsheet. This is the MRI for your co-op.

Line 21             See spreadsheet. This adds one to your market rent index. That
                    figure is used further on in the spreadsheet.




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Page 3 - Indexing

Indexed market vacancy loss

Line 22            See spreadsheet.

Line 23            In 2008, this will be your benchmark for market vacancy loss. For
                   the following years it will be the indexed benchmark vacancy loss
                   from the previous year. It can be found on Line 24 from the previous
                   year’s budget. Some service managers are using a cumulative (2
                   year) index for 2008.

Line 24            See spreadsheet.

Indexed benchmark operating costs

Lines 25 – 31

Column A           Enter the previous year’s indexed costs. For 2008, these are your
                   benchmark costs. For years after 2008, you can get these figures
                   from page 3 of the previous year’s budget form in column C.

Column B           Enter the index to inflate each of your benchmark costs. This
                   information is prepared by the Ministry but you will likely get it
                   from your service manager. Note that your bad debt expense will be
                   inflated by your market rent index so there is no cost index for it. For
                   2008 this may be a cumulative (2 year) index. If the index you
                   receive is a percentage, you will need to convert it to a decimal
                   number and then add one. For example, if you get an index for water
                   that is 2.3%, you would enter 1.023 in column B.

Column C           See spreadsheet.

Line 32            See spreadsheet.


Page 4 - RGI subsidy

Column A           Enter all the different sizes and types of units you have in your co-
                   op. For example, 2, 3 and 4 bedroom apartments. If you have fewer
                   unit types and sizes than rows, you will need to delete the
                   information in the unused rows if you are working in Excel. If you
                   have more unit types and sizes than rows, you will need to add rows.
                   When adding rows, make sure to copy the formulae.




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Column B            Enter the number of units of each size and type you have in your co-
                    op. Total the column.

Column C            Enter the market housing charges for the budget year for each size
                    and type of unit you have. Before you finalize your budget, you may
                    want to try different figures in this column.

Column D            See spreadsheet. Total the column.

Column E            Enter the previous year’s indexed benchmark rents for each size and
                    type of unit you have. In 2008, this will be your benchmark rents
                    inflated by the MRI for 2007. If you used the CHF Canada budget
                    form for 2007, you can find these amounts on page 4 in column G.
                    For years after 2008, you can use the figures from page 4 column G
                    of the previous year’s budget form.

Column F            See spreadsheet.

Column G            See spreadsheet.

Column H            See spreadsheet. Total the column.

Column I            Enter the number of RGI units that you expect to have for the budget
                    year for each size and type of unit in the co-op. Total the column.

Column J            See spreadsheet. Total the column.

Column K            See spreadsheet. Total the column

Line 33             See spreadsheet.

Line 34             Enter the total amount of RGI housing charges that you expect to
                    charge members in the budget year.

Line 35             See spreadsheet.



Page 5 - Total subsidy

This worksheet can be used to submit your subsidy estimate for the budget year to your
service manager.

Line 36             See spreadsheet.




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Line 37             Enter your total yearly mortgage payment for the budget year
                    without sector support.

Lines 38 - 40       See spreadsheet.

Line 41             Enter your benchmark for non-rental revenue.

Lines 42 and 43     See spreadsheet.

Line 44             Enter the amount of property taxes for the budget year.

Line 45             If you are receiving extra subsidy from your service manager in the
                    budget year, enter that amount here.

Lines 46 – 55       See spreadsheet.


Page 6 – Occupancy charges

Excel will complete this page. These notes are to help you check that the information is
correct and as a guide for those completing the form by hand.

In the column “Unit Type”, enter the same information that you put in column A on page
4, for both the RGI and Market classification.

Lines 56 – 62       In the column “Number of units (a)”, for the RGI classification, enter
                    the same information that you put in column I on page 4.

Line 63             See spreadsheet. Make sure this number matches the total of column
                    I on page 4.

Lines 64 – 70       In the column “Number of units (a)”, for the Market classification,
                    enter the number of market units that you expect to have for the
                    budget year for each size and type of unit in the co-op.

Line 71             See spreadsheet.

Line 72             See spreadsheet. This should be the total number of units in the
                    co-op.

Line 73             See spreadsheet.

Lines 74 – 80       Use the formula shown at the top of the column “Total Annual
                    Occupancy Charge”, a x b x 12, to complete Lines 74 to 80.

Lines 81 and 82     See spreadsheet.


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Page 7 – Expenses

Lines 83 – 92     Enter your budgeted maintenance expenses in these lines according
                  to the labels.

Line 93           See spreadsheet.

Lines 94 – 96     Enter your budgeted utility expenses in these lines according to the
                  labels.

Line 97           See spreadsheet.

Lines 98 – 101    Enter your budgeted administration expenses in these lines according
                  to the labels.


Lines 103 – 105   Enter your budgeted costs for insurance, bad debts and contingency
                  in these lines.

Lines 106 - 110   See spreadsheet.


Line 111          Enter your budgeted amount for transfers to other funds.

Line 112          See spreadsheet.


Page 8 – Total revenue

Lines 113 - 116   See spreadsheet.

Line 117          Enter your estimated amount for vacancy loss for the budget year.
                  This amount should include RGI vacancy loss that will not be
                  covered by your service manager.

Line 118          See spreadsheet.

Line 119          Enter your estimated amount of revenue from parking and laundry
                  for the budget year.

Line 120          Enter your estimated amount of interest income for the budget year.
                  This does not include any interested earned on your capital reserve
                  fund.



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Line 121            Enter your estimated amount of other income for the budget year.

Line 122            See spreadsheet.

Line 123            Enter the estimated amount for gifts and donations that you will
                    receive in the budget year. For most co-ops this amount will be zero.

Line 124            See spreadsheet.

Line 125            Enter the estimate for the amount by which (if any) the sector
                    support levies you collect from each household every month will
                    exceed the sector support portion of your mortgage payments for the
                    budget year.

Lines 126 - 132     See spreadsheet.


Page 9 – Non-shelter

If your co-op does not have non-shelter revenue or expenses you do not need to complete
this worksheet. An example of non-shelter revenue is money you earn from renting out a
store in your co-op.

Line 133            Enter the amount you expect to collect in rent for the budget year
                    from commercial tenants.

Lines 134 and 135 Enter the amount of any other revenue you expect to earn in the
                  budget year from non-shelter sources.

Line 136            See spreadsheet.

Lines 137 – 142     Enter the budgeted non-shelter expenses in these lines according to
                    the labels.

Line 143            See spreadsheet.

Line 144 and 145    If a portion of your mortgage covers non-shelter space in your co-op,
                    enter the amount of interest you will pay and the amount of principal
                    you will repay in the budget year.

Lines 147 and 148 See spreadsheet.




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For budget years that start after 2008

For fiscal years starting in 2009 and after, you can use the same form using the relevant
indices for the budget year. You will need to refer to information on the completed form
for the prior year.




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