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Budget

Index

Index

Service Charges

Budget

Reserve Funds

Budget

Budget for 2017-18

Explanation

The Management Company is mutually owned and non-profit making, so service charges are set just to cover expected costs as set out by property legal agreements, with property owners paying for the services from which they benefit. Specific points are:

  • Houses charges have decreased slightly again by 3.7% as Estate costs have reduced. Flats charges have increased on average by around the rate of inflation of 2.6%, with some blocks slightly lower and some slightly higher, except for three blocks needing unexpected repairs, which pushes the average increase up by about 1.1%. These are 130-133 Rectory Lane and 31-45 Church Lane needing roof work and 2-24 Limetree Walk needing sewer repair.
  • There have been significant increases in the cost of insurance because VAT now has to be included in the sum insured and the Government increased insurance premium tax again.
  • The Directors would not allow the cleaning contractor to increase costs above the rate of inflation and selected a new contractor, while they also renegotiated the gardening contract so that all usual costs were included and cost rises were capped. All ongoing contracts for services now limit increases to no more than the Government index of service sector pay (the contract with the accountant has to be negotiated annually, but it has also kept increases at or below this level).
  • Some of the service charges collected are put aside into reserves for periodic repairs, re-decoration and other work over more than one year as provided in legal agreements for properties on the Estate. This is the third year collecting reserves for the maintenance period 2015-20. Now the Estate is over 30 years old, more repairs and maintenance are needed and sufficient contingency for unexpected work has to be set aside to be able to loan to individual blocks and reduce fluctuations in charges.
  • As well as periodic repair and decoration, the budget for reserves includes replacing the remaining door entry systems (this year), electrical testing (due this year), insurance revaluation (which the 2016 AGM confirmed would be in 2019) and flat communal floor sealing. The electrician who fitted LED lamps in flat communal areas and rewired the fittings reported that they were reaching the end of their life and the health & safety inspector advises that standards now are higher than when the flats were built, requiring safety lighting and more electrical protection. An initial estimate to carry out this work around 2025 has been included, as the LED lamps are expected to last until then.

Budget

DescriptionY/E 2017 EstimateY/E 2018 EstimateEstateFlatsAccount Code
Maintenance
Repairs and maintenance£12,500£8,500£1,000£7,500GE16
Parking controlNot separate£680£680GE16
Door entry system£1,000£500£500SS01
Cleaning of flat common areas£14,048£14,112£14,112CL01
Bin store cleaning & rubbish removal£7,852£6,984£3,492£3,492RR01
Gardening£29,327£30,140£15,070£15,070GA01
Tree pruning£2,500£2,500£2,500GA04
Utilities
Electricity£5,212£5,200£2,340£2,860EL01
Professional fees
Legal and professional fees£750£500£500LP08
Managing Agent fees£42,789£43,902£8,780£35,122MF01
Accountancy fees£3,960£4,050£2,430£1,620AU01
Health and safety fees£984£998£200£798HS04
Management Company & sundry expenses£300£300£300LP06
Insurance
Buildings insurance£8,749£11,168£461£10,707IN02
Terrorism insurance£4,947£5,051£208£4,843IN05
D&O insurance£357£365£365IN08
Total estimated annual expenditure£135,275£134,950£38,326£96,624
Non-annual expenditure
Estate Reserve Fund collection£751£2,413£2,413RE01
Flats Common Reserve Fund collection£12,347£14,389£14,389RE01
Flats Reserve A collection£1,515£1,515£1,515RE01
Flats Reserve B collection£1,869£1,882£1,882RE01
Flats Reserve C collection£1,731£1,730£1,730RE01
Flats Reserve D collection£1,686£1,686£1,686RE01
Flats Reserve E collection£2,792£3,816£3,816RE01
Flats Reserve F collection£3,327£3,327£3,327RE01
Flats Reserve G collection£3,735£4,101£4,101RE01
Flats Reserve H collection£1,542£1,807£1,807RE01
Flats Reserve I collection£10,635£10,955£10,955RE01
Flats Reserve J collection£4,021£4,256£4,256RE01
Flats Reserve K collection£4,739£5,098£5,098RE01
Flats Reserve L collection£1,827£1,827£1,827RE01
Total estimated non-annual expenditure£52,517£58,802£2,413£56,389
Total
Total estimated expenditure£187,792£193,752£40,739£153,013

Where Your Money Goes

What service charges are spent on is illustrated in pie charts for freehold houses (and WHA) and leasehold flats in a document (PDF, 103kb) showing the breakdown.

Budget

Previous Budgets

Previous budgets can be found on the Documents page.

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© St Benedicts (Tooting) Management Company Limited - 11 June 2017