hello I have an assignment due on Wednesday.

its for managerial accounting, could someone work on it pls?

Figure I Island Homeowners Associution, Inc. 'f::,::ii;i1,";i]:r:lJ?:':,':i;i:,, J!:,r;::7!,x';:;:;i[:;fl"";;,f proper$'values" Article II, IlYluws of Figure I H omeownersAssociution,I nc. Mi k e P o w e l l , Pre s i d e n to f t he Fi gure 8 H omeow ners A ssoci ati on. l eft the hom eo w n e rs m e e ti n g c o n fu s e d . The meeti ng w as i ntended to be i nformati ve and detai l t he lon g -ra n g e p l a n a d o p te d b y th e H orneow ners A ssoci ati on to preserve the i sl and. Instead, it turned into a war of words between properly owners. lt was common knowledgethat Figure 8 Island desperatelyneededbeach on the oceanside and canaldredgingon the sound restoration(calledrenourishment) side. And. while the homeownersof the islandwantedthe restorationprocessto begin as could be reachedas to who would bearthe costs. Mike soonas possible,little consensus powell thought the HomeownersBoard of Directorspresenteda fair and equitablecostallocationscheme.The homeownersthoughtdifferently. THE ISLANI) Figure 8 lsland is a 4.5 mile long barrierislandlocatedapproxirnately9 miles northeastof Wilrnington,Nofth Carolina. The private,very exclusiveresortislandvaries in width fiorn 550 to 1,250feet and is borderedby the Atlantic Oceanon the sotrtheast side and the Middle SoundChannelon the northwestside. Chronicbeacherosionhas plaguedthe beachfronton the southernportionof the island. A map ol-the barrierisland i s p r o v i d e di n E x h i b i t l . The southoceanbeachhasexperiencedenoughbeacherosionto deem the propertieslocatedthereendangered.The southsound-sidewatershaveexperienced significantshoaling,which hasmadethe Middle SoundChannelnearly impassableby small boats,exceptat high tide, affectingthe boating and water-recreationuse by property owners. As a result,many sound-sidewaterfront propertyowners have requestedthat the channelbe dredgedto removethe shoaling. Without beachrenourishment and dredgingchannelmaintenance, the islandwill likely suffer seriousdamageduring future storms. Additionally,the increasedthreatof hurricanesto the Atlantic coastlinereinforcesthe immediateneedfor action. Developmenton Figure8 Islandbeganin 1965. As of January1994,the property tax listingsnoted568 total propertieson the island. Of this total,271 propertieswere developedand 297 propertieswere undeveloped(Table l). All lots,both developedand undeveloped,are singlefamily residentialproperties.The rnajorityof lromeson the islandare vacationresidences belongingto affluentand often high-profilepeople. AII lot ownerspay equalannualamountsfor requiredmembershipin the HomeownersAssociation.The HomeownersAssociationdoesnot chargeduesbasedolr propertydeveloplnentstatus,property value, or lot size. Homeownerdues are fbr the purposeof coveringthe cost of operations.maintenanceand capitalirnprovements to the island. No percentage of homeownerduesare reservedto cover environmental contingencieslike beachrestorationor channeldredging. The HomeownersAssociationhasa numberof subcofflrllittees to assistthe Board of Directorsin maintainingthe welfareof the islandcommunity. The Long Range PlanningCommitteecontractedwith environmentalensineersin Octoberof 1993to threatening the islandandto reviewtheendangered shoreline andshoalingchannels proposea solution. PLAT{ FEASIBILITY AND ENVTRONMENTAL ISSUES was andbeachrestoration A studyof the feasibilityof channelmaintenance by consultants, Dr. WilliamClearyandDr. PaulHosier.In May of 1994, underlaken Drs.ClearyandHosierprovidedan extensive reportto the Boardof Directorsdetailing proiect. theenvironmental consequences of undertaking a beachrenourishing processfor maintainingthe island. PhaseI The reportoutlineda three-phase includedchanneldredgingfrom Middle SoundChannelwith relocationof the dredged sandto the southernoceansideof the island. This sandrelocationwould reestablishthe beachwidth to 1990conditions.PhaseII calledfor channelmaintenanceand shoreline nourishmentfor the northernportion of the island. The sandsourcefor beach replenishmentin PhaseII would come from the dredgingof nearbyRich's Inlet. Phase III proposedcontinuedchannelmaintenanceof the Middle SoundChanneland dune reconstructionin order to further fisht erosion. PhaseI, being the most urgent,was presentedin greatdetail by Dr. Cleary and Dr. Hosier. The environmentalconcernsresultingfrom the implementationof PhaseI includeddisturbingcoastalwetlands,interferencewith turtle nestingactivities,and water quality. In orderto avoid degradingwildlife in the wetlands,no dredgingor filling would take place in tidal wetlands. To avoid interferencewith the nestingactivitiesof the endangeredloggerheadturtle, no beachrenourishmentwould take place betweenMay l" and November l5th. Water quality changesresultingfrom dredgingwould be addressed throughbulldozinga dike. This dike would providea channelfor the water running over the newly dredgedmaterial. Thus the channelwill force "dredged" water to enterthe oceanat one location insteadof enterinethe oceanover a wide area. With thesestipulationsin place,the reportconcludedthat no significantlong term changesin wildlife feeding,nesting,or other habitatwere expectedto occur as a resultof activitiesof PhaseI. A detailedanalysisof PhasesII and the dredgingand renourishment upon completionof PhaseI. III planswere to be addressed PHASE I andchanneldredgingfor the southernpartof To implementthe beachrestoration in Exhibitl. DistrictA the island,the islandwasbrokenintofour districtsas indicated of the island.Thisdistrictneededimmediate includedall lotson the southoceanside lots. DistrictB includedall lotson the north to saveendansered beachrenourishment of the island.DistrictC includedwaterfrontlotson the southsoundside. The oceanside sandlocatedin the MiddleSoundChannelin frontof theselotswouldbe dredgedto providebeachsandfor DistrictA. DistrictD includedlotson the northsoundsideas well asall inlandlotsalsolocatedat the northernendof the island. The detailsof PhaseI dredgingand beachmaintenancefollow: Approximatelv 550,000cubic yards of sand will be removed.fro* 5,176Jbet of the Midclle Sound Channel behind Figure B Island using a hydraulic pipeline dredge v,ith heoc:h disposal. Sand removed-fro* Middle Sound Channel will be discharged ctlong a 9,7A0 .foot section of the lots located in District A of the island. The sand will be clepositedto prot,ide an equilibrated berm of 55 feet. Removal of'sand will widen the Middle Sound Channel to 300.feet./br approximutely 3,600./betalong the norlhern portion oJ'thechannel, thenwidening to 900./betv,ilh an I,B00.foot section nearest Mason's Inlet. The channel will be dredgetl to a depth vcn'y'ing .from 9.7.feetat the south end to 9.3.feetat the northern terminus of the channel. These and$ 1,250,000. for thisprojectwerebetween$750,000 Thecostestimates estimates assumed that550,000cubicyardsof sandwouldbe pumpedat a costof cost andcontingency between$1.20and$2.00percubicyardandthatthe administration wouldbe between estimates $90,000and$ I 50.000. The homeownersof Figure 8 Island expectto accruethe following benefitsfrorn t h e c o m p l e t i o no f P h a s eI : . l5 developedand undevelopedendangeredlots will receiveextendedlifespan . will provideadditionaltime beforemajor dune reconstructionis Beachrenourishment necessary . The recreationalpotentialof both the oceanbeachand Middle SoundChannelwill be enhanced . The possibilityof overwashingand threatof erosionto the singleaccesscorridorto the island,BeachRoad South,will be reduced . with hurricanesand nor'eastersshouldbe reduced. The damageassociated THE MEETING Mike Powell, excitedaboutthe resultsof the 8-month long study, looked forward to sharingthe news with the propertyowners of island. Propertyowners from each district, understandingthe long-terminterestsof the islandwere at stake,attendeda specialmeetingcalledby the HomeownersAssociation.Propertyownerswere given a proposal on how thecostwouldbe divideduponarrivalat the meeting(Tables2,3. and 4). ASSOCIATIONPRE,SIDENT): MrKE pOWEr,L(HOMEOWNE,R 'I'he boardof of Figure8 Island. Welcomeeveryoneto this specialmeetingof the homeowners thata planto savethe southempartof the islandis feasibleandhas to finallyannounce directorsis pleased thankDr. ClearyandDr. Hosierfor their beenapproved.On behalfof the island.I would like to especially project. to this extensive contributions the costsof renourishingthe south you receivedasyou walkedin describes The proposedassessment to portionof the MiddleSoundChannel.It is impossible beachanddredgingthe southern oceanside pinpointan exactamount,but the projectwill costbetween$750,000and$ I ,125.000to complete. LOT OWNER): DEVE,LOPED ROGERMCDONALD(ENDANGERE,D actttaltotal cost. properlieswill bear l0% of the pro-iects It looksto me like the ownersof endangered in additionto payinga portionof the remaining90%. MIKE POWE,LL: Roger,that is absolutelyright. The Boardof Directorsis awarethat numeroussmall,privatelyfunded takenplaceon the island.Thoseproiectswere havesuccessfully canaldredgingsandbeachrestorations given the sizeof the projectat hand,it would not be paid for by the individualpropertyowners.However, property. As a result,ownersof propertiesin project of endangered the owners to the whole fair to charge for a portionof the projectcosts. immediatedangerwill only be directlyresponsible OW N E R ): J E F FB AK ER (D IS T R IC TB PR O P ER TY So thewholeislandis equallydividingthe remainingcostsof the projectequally? M I K E P O W E ,L L : all lot ownerswill pay the sameamountto coverthe remainingcostsof As statedin the assessment, Associationis the samefixed annualamountfor all properly Homeowners project. in the Membership the arisethat will affectthe goodof the island,the Boardof Directorstbelsit owners. So,when majorpro.iects just like homeowner dues. shouldbe charged J I M A L F O R D(D IS T R IC TD , M ID D L E S OU N DS ID E ): It looksto me like the dredgingof the channelin front of DistrictC is reallygoingto allow better passage for watercraftsin that areaandwill maketheir lots much moreuseable.If it doesnot do that fbr who is directlybenefiting me, my benefitis only indirect.Why am I payingthe sameamountassomeone from this whole project? JOHN AIMES (DISTRICTD, INTERIORLOT): is doingnothingfor me,and I'm not payinganything.I receiveno directbenefitat all. This pro.iect Listen,everyonetakesa risk whentheybuy an islandproperty.Whenyou pay ntorefor a beachfront property,you get to enjoythe view andthe beach. But the tradeoff is the potentialfbr erosion,and if you can't pay fbr the upkeepof your own property,you shouldn'tlive on an island. M I K E P OW E L L : John,havingnice beachfrontpropertyaroundyou stabilizesthe valueof your property. Plus,if beachfrontpropertywashedaway,you'd be next in line for the erosion. J O HNA IM ES : That may be true,but the valueof my homeand lot would go up dramaticallyby assuminga lotsyou'rereallyholdingbackthevalueof my property. position.So,by savingendangered beachfront the valueof my property! You shouldbe payingme for decreasing S T E P H AN IEMA R T Y N (D IS T R IC TC ): properlyvalues.Reflectedin the I think Johnis takingthis a bit far, but doeshavea pointconcerning for the particularproperly. Location. valueof everypropertyon this islandarethe characteristics development status,andsizeareall built intothe valueof the properly.Why don't we allocateandassess the costsof this projectbasedon the relativepropertyvalueof eachproperlyon the island?That way a small interiorlot would not pay as muchasa largebeachfrontproperty. CHRISSYOLSON (DISTRICTA, NOT ENDANGERE,D): I think you havea pointStephanie.But I'll do you onebetter.I know thiswholeprojectis really savingthe valueof my propertyin the long run. I really feel bad for Roger,and I know that rny property Believeit or not,r.veare'all properties areabandoned. wouldbe the nextin line if allthe endangered receivingbenefitsfrom this project.I realizemy properlywill receivemorebenefitthan,say,an interior to allocatethe proiectcostsbasedon benefitsreceived. lot. I think a schemecouldbe developed DistrictA couldbe weightedat 5 timespropertyvaluewhen allocatingcosts. Sarrdwill be rnovedtcr providea 55 fbot bermin front of mostof the DistrictA properties.Thesepropertiesare,thus,receiving benefitof the project. the largestpropertyvalueprotectionand recreational 'Ihis District B, on the northcoastof the island,could be weightedat twice the propertyvalue. programsbenefitoceanfront propertyvaluemorethan others. recognizes the fact that beachrenourishment programsof this sizervill be born Further,a precedentis beingsetthat any futurebeachrenourishment proportionately ntoreby oceanfront lots. DistrictC couldalsobe weightedat twice the propeftyvalue. As a resultof this particularproject, Middle Soundsidewaterfiontlots will receiveimprovedboatwateraccessand protectionof current thattheselotsbearmorecostthannon-SouthMiddleSoundaccess boatingprivileges.lt is appropriate lots. properlyvalues.TheseIotsreceiveindirect DistrictD propertiescouldremainweightedat assessed of properlyvalues. throughmaintenance benefitfrom renourishment J O HNA IME S: I'm still not paying. All thistalk aboutpayingbasedon futurebenefitsis absurd.Horvcanyou talk thatcouldwipe this place aboutfuturebenefitson a barrierislandlike this? We aresubjectto hurricanes at all is presentpropertyvalueand... out tomorrow.The only validmeasure J E F FB A K E R : John,you'reso selfish.I thinkwe couldall chip in andpayequally... S T E P H A N IEM AR T YN : propertyvaluesaresetin stone.(Table5) Let'sjust usea Don't be ridiculous.Ourtax assessed numberwe know we can'targueabout... CHRI S SYO L S O N : Everyoneis actinglike this islandwon't be heretomorrow.Therewill be futurebenefitsassociated this island,right Mike? to preserve Association with this project.It's thejob of the Homeowners MIKE POWELL: anothermeetingfor May -lI'r. The We will haveto meeton this issueat anothertime. Let's schedule way to pay'for this Boardof Directorswill try to considerthe pointsyou'vebroughtup to find an equitable project. The Homeowners'Associationis strugglingwith which cost methodto usewhen allocatingcoststo individualpropeftyowners. Their debatecentersaroundwhich policy is the "fairest" to all parties. Certainly,no true cost allocationis absolutelycorrect. a numberof alternatives however,the argumentsat the homeowners'meetingaddresses fbr allocatingthe project costs. A basicallocationis proposedby the HomeownersAssociation.Their proposal tenallocatescost usingthe numberof lots on the island: Endangeredlots are assessed percentfor the total estimatedcost basedon historicalprecedentwith eachother lot assessedan equal shareof the estimatedtotal cost after the initial direct chargeto endangeredproperties.The resultsof thesecalculationsare presentedin Table 4. The secondallocation,proposedat the meeting,focuseson relative property values. This proposalwould allocatecostto individualpropertyownersbasedon of value that are proportionalto property unbiasedand straightforwardtax assessments marketvalues. The valuesgiven in the casereflectdistrictvalues,and from thesedistrict values,an averagelot valuecan be derived. Table 6 providesan exampleof this allocationschemefor the endangeredlots. to matchcostwith at themeeting.attempts alsoproposed Thethirdallocation, benefit.This proposalcallsfor the costto be allocatedto eachlot in proportionto the benefitseachlot will realizeovertime. Weightingfactorsareproposedin the estimated caseto adjustrelativesalesvaluesto reflectrelativebenefitsreceivedfrom the dredging project. arrdreplenishment Assignment Questions l. What is the averagecost to each propertyowner in Districts A. B, C, and D if by Ms. Martyn basedon relativepropertyvaluesassuggested costsareallocated lotsprovidedin (usetheallocation of I \\oh of thetotalcostto theendangered Table6). 2. What is the averagecostto eachproperlyownerin DistrictsA, B, C, and D if costsare allocatedbasedon relative benefitsreceivedas suggestedby Ms. Olson (use the allocationof I 0o/oof the total cost to the endangeredlots provided in Table 6). 3. Supposepropertyvaluesfor the participantsattendingthe meetingwere as follows: Name District& Location A s s e s s e dV a l u e RogerMcDonald ChrissyOlson Jeff Baker StephanieMartyn Jim Alford JohnAirnes lot, DistrictA Endangered DistrictA Not endangered, DistrictB DistrictC lot, DistrictD Sound-front Interiorlot. DistrictD $430,000 270.000 370,000 190,000 212,000 160.000 H o w m u c h w i l l e a c h o f th e se ow ners pay usi ng each of the three cost al l ocati on rn e th o d s ? 4. do you believeis the best?Why? Whichis Whichof thethreecostallocations the mostfair? Why? 5. policyof Association's aboutthe Homeowner suggest Whatdoesthisanalysis chargingequalannualduesfor eachlot? Is this policy equitable?Why or why not] How do annualduesdiffer from the costsof the dredgingand replenishrnent pro.ject? 6" How would you respondto eachproposalif you were a propertyowner? 7, Can you suggestan alternativeproposalthat would bettermeetthe obiectivesof a fair allocationto eachpropertyowner? r0 s, m f F-{ U Fd: fil mil f'* U} ftr|rf ft h*{ ( H fl E ,Y: q *{ {.i *J f,t ,ffi H - F x nn. ils ilfirni Fpl\\ r TN "\\d ,ffi! :rfd iffi ,T nl F! .rt{ 14 r n h#c H t&I .il1 Li' U d E E s .[*,c ,il * -!. f,l "{ *l F" FiLi { r-l N |*i F-""".. h.J ,r il, \\# ffi TL *"{ F. { " t \\J H nl F{ F,' rfi, Fil hrri TABLE1 FIGURE8 ISLANDPROPERTIES Total Numberof Properties Developed Undeveloped Propedies 103 42 61 125 70 55 197 98 99 143 87 56 District A (Southoceanside)** B (Northoceanside) C (SouthMiddleSoundside) D (NorthMiddleSoundsideand interiorlots) 568 297 271 **Southoceansidecontains15 endangered properties = 8 lots Endangered Developed = 7 lots Endanqered Undeveloped TABLE 2 LOTS OF 1O%OF TOTALCOSTTO ENDANGERED ALLOCATION LOW ESTIMATE- $75O.OOO TotalCost '10%Allocation Lots # Endangered Lot DirectCostTo EachEndangered - $1.250.000 H|GHESTTMATE TotalCost 10%Allocation Lots # Endangered Lot DirectCostTo EachEndangered Developed Lots 15 Developed Lots 15 Undeveloped Lots 8 Undeveloped Lots Totals $750,000 $75,000 15 $5,000 Totals $1,250,000 $125,000 8 $8,333 TABLE3 . BASEDON NUMBEROF LOTS COSTALLOCATION REMAINING LOW ESTIMATE $750,000 DistrictA DistrictB DistrictC DistrictD Total Total# of Lots 103 125 197 143 o' Allocation 18.13o/o 22.01% 34.68% 25.18% 568 100 00% Costto Allocate $675,000 $675,000 $675,000 s675000 Totalcostto EachDistrict $122,403 $148,548 $234,111 $169,938 CostPer LaJ $ 1, 18 8 $ 1, 18 8 $1,8 18 $ 1, 1B B $675,000 PlusDirectAllocation to DistrictA TOTALPROJECTCOST $75,000 $750,000 H I G HE S T I M A T E $1,250,000 DistrictA DistrictB DistrictC DistrictD Total Total# of Lots 103 125 197 143 o' Allocation 18.13% 22 01% 34 68% 25.18% 568 100 00% Costto Allocate $1,125,000 $1,125,000 $1,125,000 $1,125,000 Totalcostto FachDistrict $204,005 $247,579 $390,8 15 $283,231 $1,125,000 PlusDirectAllocation toDistrictA@ TOTALPROJECTCOST $1,250,000 CostPer Lof $1,981 $1,981 $1,981 $1,981 Table4 OWNERSBY DISTRICT TO PROPERTY Average Lot PROJECTCOST ro $1,250,000 $75o,ooo $750.000 $ 6 , 18 8 $ 1, 18 8 $ 1, 1B B $ 1, 18 8 $ 1, 1B B fl D I S T R I CA T - ENDANGERED A DISTRICT B DISTRICT C DISTRICT D DISTRICT s1,250,000 $10,314 $1,981 $1,981 $1,981 $1,981 - TABLE5 ASSESSEDPROPERTYTAX VALUES ffi PropertyValues Lots Developed DistrictA EndangeredLots OtherLots TotalValueDistrictA DistrictB DistrictC DistrictD $ Lots Undeveloped TotalAssessed PropertyValue 2,585,246 $ 17,127,254 19,712,500 18,909,200 21,122,690 1 3 , 8 3,15 1 0 1,164,987 5,824,933 6,989,920 10,805,000 7,463,460 6,635,000 $ 3,750,233 22,952,187 26.702,420 29,714,200 2 8 , 5 8 6 ,510 20,466,510 9 0 , 7 0 3 ,514 $ 3 7, 7 1 8 , 3 1 3 $ 132,171,700 TABLE6 LOTS ALLOCATION OF 1O%OF TOTALCOSTTO ENDANGERED TotalPropertyValueDistrictA # Lots AverageValuePer Lot Lots # Endangered Lots(Table5) Valueof Endangered Lots AverageValuePer Endangered Lot % ValuePer Endangered Low Estimatefor Allocation 1A%of LowCostEstimate HighEstimatefor Allocation 10%of HighCostEstimate Total Lots $26,702,420 103 $259,247 15 $3,750,233 $250,016 Average DevelopedLots $19,7'12,500 61 $ 3 2 3 , 51 6 B $2,585,246 $ 3 2 3 , 51 6 68 9% Average UndevelopedLots $6,989,920 42 $166,427 7 1164987 166427 31.1o/o $750,000 $75,000 $1,250,000 $125,000 Based on Average Value of All Endangered Lots Low Cost Estimate$750,000:Allocationof $75,000(10%) CostAllocatedAs a Percentof AverageEndageredLotValut Lot DirectCostTo EachEndangered 2 00% $5,000 Allocationof $125,000(10%) High Cost Estimate$1,250,000: CostAllocatedAs a Percentof AverageEndageredLotValut Lot DirectCostTo EachEndangered 3 33% $8,333 Basedon RelativeValueof Developedversus UndevelopedLots Low Cost Estimate Allocation of $75,000Low ProjectCost Per Lot Allocation High Cost Estimate of $125,000Low ProjectCost Allocation Per Lot Allocation DevelopedLots $51,702 $6,463 UndevelopedLots $23,298 $3.328 $ 8 6 , 17 0 $10,771 $38,830 $5,547