Collecting Assessments Community Associations Community Repairs HOA HOA Annual Meetings

Holy cow! I can’t believe it is time to begin preparing next year’s budget. Where to start? The first item of business is to retrieve the financial information for the last year and determine what the association spent this year. Look at the trend for the expenses. Are you spending more or less money than you allotted in any particular area? What are your common area amenities? Do you need to update your reserve study or do you need to have a new one? Are there any capital improvements that are planned for the upcoming year?
Let’s look at some of the items you need to review.
Are you gated? What if your gate is damaged by an unknown source? You have insurance, but what about the deductible? Do you have a budget for that? Are you doing any street repairs? Do you have cracks in the surface of the streets? To help them last longer you may want to have the cracks filled and a resurfacing done. You need to look at all of the items that the association owns and determine if you are going to need to make any repairs this year. You may want to get an estimate from a contractor to give you a ballpark estimate for your budget.
What about utilities, in our communities? One of our associations was hit with a 30 percent increase in water and sewer rates because the city wanted to reduce community associations’ overall consumption. Will this happen to you? Check with your utility companies (water, gas and electric) to find out if they are expecting to impose a rate increase in 2012. Is your community going green? Some cities now require multi-family units to recycle. Do you have that in place? How much extra will that cost and what are the fuel surcharges associated with garbage collection? I’ve seen charges in excess of 15 percent.
Do you have any delinquencies? Will you write off any bad debt due to foreclosures? What attorney fees will you pay to collect the delinquency?
In condominium/townhome associations, you have even more to plan for. You need to maintain the roofs, building exterior, carports, garages and pool. Do you have an elevator? Do you need to have a yearly pool permit ? Is it time to update your landscaping or signs? Do you have trash service that is paid by the association? Are those costs going increasing due to fuel charges? Boilers – do you have those maintained every year? Do you have a termite inspection done yearly? What about snow and ice removal?
Do you have employees? Will they get a raise this year?  What about a bonus? Do you pay their health insurance? Do they get a vacation? Do you hire someone to replace them during planned absences? Will any of these costs increase?
What about education for your board members? You should plan for each new board member to attend at least one educational workshop such as Community Associations Institute’s “Essentials in Community Associations Operations” or the “Advanced Essentials “class. Are they a member of CAI (www.caionline.org)? Will the Association pay for their membership? We strongly encourage every board to join this organization because it is the only national entity that focuses on board member and manager education in community association best practices.
Keep in mind the idea “over estimate your expenses and under estimate your  income.” If you do that, you can usually be prepared for the unexpected.
Provided by AssociationTimes.
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