That’s right! It’s time to think about next year’s operating budget for your community association. Here are a few tips that will assist in getting you prepared!
1) Understand your Community.
Spend some time reviewing your association’s governing documents so you are aware of any specific budget requirements. Also, become familiar with the resident notice requirements so all owners are aware of the budget and how you plan to approve it.
2) Contact your Service Providers.
Don’t be surprised mid year! Get in touch with existing vendors to find out what their anticipated increases may be for the upcoming year. Examples of these operating items include contracts for landscaping, elevator maintenance, pest control, etc.
3) Evaluate your Historical Spend.
Contact local utility companies and review your past statements. Inquire about anticipated increases for next year. You can then compute the estimated annual expense. When budgeting certain utilities, it is important to plan for seasonal trends in utility usage.
4) Review your Reserve Study.
If you have one this is the perfect time to dust it off! Review your most recent reserve study so you can properly allocate planned expenses into your budget. The budgeted reserve contribution should be evaluated on an annual basis to determine if short- and long-term reserve funding goals are being met.
5) Allow for the Unexpected.
Be conservative with budgeting. Whether it’s emergency roof maintenance, a heavy winter season that requires additional snow removal, or a lawsuit that may be forthcoming, these are all things that can push your budget into the red.
This is a short list of items to consider when determining how much revenue is required to cover association costs. Once your expenses are determined and your surplus estimated, the board can calculate homeowner assessments based on your association billing cycle. Assessment increases should be carefully evaluated each budget season.
This discussion might not be a popular one, however, prudently approving increases when necessary will ensure sustained financial stability for your community.
Westward360 is here to help. For more information on how to more effectively manage your condo, townhome or home owner association contact us today. firstname.lastname@example.org