Annual Rept 2015.publisher. full report

Frenchman’s Creek, Inc. and Subsidiary Notes to Consolidated Financial Statements

Note 8.

Commitments (Continued)

Cable Contract: On March 12, 2010, the Association entered into a ten-year cable contract which will supply internet and cable ser- vices to the residents of the Association. The contract began in January 2011 at the rate of $130 monthly, per unit for service and $15 per unit per month for taxes and fees. The fee is adjustable by up to 4% per year commencing January 2013 with the final two years, January 1, 2019 and 2020, allowing only up to a 2% adjustment. On June 29, 2012, the Association and the cable/internet provider amended the agreement due to excessive interruptions in the con- tracted cable services. Under the amendment it was agreed that the operator will provide on-site technical staffing and discounted rates until the residences were upgraded. All upgrades were completed as of April 30, 2013.

For the years ended April 30, 2014 and 2013, the cable and internet service fees were approximately $1,124,000 and $624,000, re- spectively, related to the contract.

Employee Benefit Plans: The Association maintains a qualified deferred compensation plan under Section 401(k) of the Internal Rev- enue Code. Under the plan, eligible employees may elect to defer up to 15% of their salary, subject to Internal Revenue Service (“IRS”) limits. The plan allows for the Association to make discretionary contributions to eligible employees up to a maximum of 4% of their salary, subject to IRS limits. For the year ended April 30, 2014 and 2013, the Association contributed $221,166 and $215,477, respectively, to the plan. South Golf Course Improvement Project: On February 1, 2014, the membership approved improvements to the south golf course, estimated to cost $1,675,000, including a contingency of $150,000. The project will be funded by an allocation from the existing capi- tal fund. During 2007, the membership approved the renovation and expansion for the 19 th Hole restaurant. The renovation plan was funded through a $3,972 per member assessment. The members had the option to pay the assessment in four installments of $993 or $47 per month for a period of 10 years with interest at 6.5%. As of April 30, 2014 and 2013, the Association had collected $2,138,844 and $2,011,368, respectively of the $2,380,000 assessment. The unbilled portion of this assessment as of April 30, 2014 was $241,156. During 2010, the membership approved the renovation and expansion of the back of the house, with a total renovation cost of $2,400,000. Along with the renovation plan, the membership approved a $4,008 per member assessment. The members had three options to pay the assessment: in two equal installments of $2,004 payable in February and August 2010; or $2,004 payable in Feb- ruary 2010 and monthly installments of $17 commencing in February 2010 for 15 years with interest at 6.25%; or monthly install- ments of $34 commencing in February 2010 for 15 years with interest at 6.25%. As of April 30, 2014 and 2013, the Association had collected $1,383,826 and $1,353,392, respectively of the $2,400,792 assessment. The unbilled portion of this assessment as of April 30, 2014 was $1,016,966. Note 9. Capital Assessments

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