| The Manhattan Club Timeshare Association, Inc. |
| 2010 Timeshare Operating Budget |
Footnotes to Schedule BTimeshare operations commencing January 1, 2010.
INCOME $26,828,863Timeshare Charges are $1,911 for a Full One-Bedroom, $1,624 for an Executive Suite and $2,223 for Phase IV Masterpiece Penthouse Suites and $1,624 for the Phase V Metropolitan Suite as set forth in the Offering Plan. The budget is based on the number of Owners as of March 15, 2009 and projected new Owners through 2010 in Phases I, II, III, IV & V. This budget assumes the addition of the first segment of Phase V or 21 Metropolitan Suites on the second floor effective January 1, 2007. 2. Real Estate Taxes $ 2,883,808 Starting in August 1999, each Owner was assessed their pro rata share of the Real Estate Taxes. The rate for the 2010 tax period is $212 for a Full One-Bedroom and $151 for an Executive Suite. The city put through an increase for the tax year of 2008/2009. In addition to the 08/09 increase we are estimating an increase in 2010 and therefore an increase in per unit charges for Phases I thru IV and V. Real Estate taxes for the Phase IV units are $335 per unit week. Real Estate taxes for Phase V is $151 for a Metropolitan Suite. 3. Finance Charges & Late Fees $40,000 Owners who pay their Timeshare Charges late are charged a $25 late payment fee and assessed a finance charge on the unpaid balance.
4. Miscellaneous Income $2,657,534 Reflects the gross rental proceeds for unreserved use periods as provided by the Timeshare Documents, Food & Beverage Revenue from the Lounge operations, Telephone Revenue and Other revenue.
EXPENSES
1. Labor $ 14,232,256 The budgeted amount is based upon salaries and benefits for the following employees:
Union employee wages are in accordance with the current contract rate of the Hotel Trade Council of New York City and reflect a 3.5% increase.
2. Electricity $634,511 Electrical charges are based on 2008 and 2009 Con Edison electrical bills, plus 3.25% estimated increase for 2010 and includes Phases I, II, III, IV & V and the Clubhouse on the 26th Floor. The Second floor Sales Offices (downsized) are excluded. See Schedule and Exhibit C.
3. Water & Sewer $132,757 The budgeted amount is based on New York City Water charges & Sewer rents for 2008 and 2009 plus 7.16% estimated decrease for 2010 and includes Phases I, II, III, IV & V and the Clubhouse on the 26th Floor. The Second floor Sales Offices (downsized) are excluded. See Schedule and Exhibit C. 4. Heating $ 276,969 Con Edison provides the steam to operate the heating and domestic hot water systems. The budgeted amount is based on Con Edison steam bills for 2008 and 2009, plus 6.22% estimated increase for 2010, and includes Phases I, II, III, IV & V and the Clubhouse on the 26th Floor. The Second floor Sales offices (downsized) are excluded. See Schedule and Exhibit C.
5. Cable TV $ 100,155 Cable service is provided by RCN of New York and includes no increase for 2010.
6. Operating Supplies $ 2,028,355 Cost to supply rooms with soap, shampoo, coffee, popcorn, stationary and other miscellaneous items. Also, includes engineering department supplies, electric bulbs, cleaning supplies for housekeeping, cost of Food & Beverage and the cost of Telephone charges.
7. Repairs & Maintenance $331,956 Repairs to Phase I, II, III, IV & V, the Clubhouse on the 26th Floor and General Common Elements. No provision has been made to cover the cost of any major capital expenditure. The Second floor Sales offices (downsized) are excluded. See Schedule and Exhibit C.
8. Service Contracts $389,966
$ 389,966 9. Laundry Service $ 598,633 Cost of cleaning linen and towels on a daily basis.
10. Administrative Cost $1,404,134 Administrative cost includes the following: copier rentals, legal fees, audit fees, payroll processing fees, office supplies, postage, Bank charges, Credit card Fees, Office rent, long distance fees, telephone and beeper fees.
11. Insurance $243,000 Insurance is based on actual billings for 2008/2009, and includes Phase I, II, III, IV & V and the Clubhouse. Second floor Sales offices (downsized) are excluded. See Schedule and Exhibit C.
12. Management Fees $6,482,049 The management fee is based upon the management agreement and all amendments. The agreement reads as follows The Management Company shall provide the services required of it hereunder, for which services the Timeshare Association shall pay to the Management Company an annual Management fee of an amount equal to twenty percent (20%) of the total annual revenue of the Timeshare Association produced and/or collected by the Management Company for the account of the Timeshare Association (“Management Fee”).
13. Real Estate Taxes $2,883,808 2010 Real Estate taxes are based on the actual billings and assessment for New York City’s 2008/2009 tax year for Phases I, II, III, IV & V. An increase is anticipated based on review by our real estate tax billings
14. Replacement Reserve & Improvements $ 2,071,656 Cost to replace the; furniture, fixtures, appliances, mattresses, floor covering, and telephones in the Timeshare Units and Timeshare Common Elements. This will also establish a reserve fund that will be used to pay for future repairs to such items as the roof, building exterior, Elevators, HVAC and any other large maintenance expenses.
15. Reserve for Operations $ 0.00 This amount represents a contingency fund to be used should actual operating costs exceed budgeted costs.
16. Reserve for Bad Debts $ 600,000 This amount represents a reserve for Owners who will be delinquent in the payment of their Annual Timeshare Charges and Real Estate Taxes.
In the opinion of the Timeshare Budget Expert, the projected receipts are adequate to meet the expenses of the Timeshare Association for the year commencing January 1, 2010. The foregoing budget, however, is not intended and should not be taken as a guarantee. It is likely that the actual Timeshare Expenses for the 2010 calendar year operations will vary from the amounts shown in Schedule B. |