Eight Ways to Save Money in Your Community

HOA Finance

All of us – board members, homeowners, managers – like to save money. Just as the green movement encourages us to save energy, today’s economy makes conserving financial resources especially important. Every dollar that is saved ultimately reduces pressure to increase fees in the future. There are many ways to conserve a community association’s financial resources. Some are large, some are small, but they all add up and can make a substantial difference. Here are some real life examples:

  • Go Out For Bids: One of the best ways to save money is to get competitive bids. Sure, it takes work to develop specifications and obtain apples-to-apples proposals, but it can save thousands of dollars. Working with a trash removal consolidator can result in an incredible savings for some communities because it can solicit trash removal bids and negotiate favorable contracts.
  • Insurance: An American Agency System agent can be a great resource when it’s time to renew an insurance policy, especially when you also include Direct Writers such as Allstate and State Farm in the bid process. Consider a higher deductible as a way to reduce premiums. When handling an insurance claim, try to get the homeowner’s carrier to cover as much as possible. It takes diligence but can save an association thousands of dollars.
  • Utilities: Check your phone bill for unwanted or unneeded charges and get rid of them. Look for ways to reduce your electric bills – are you erroneously being charged sales tax? Some states eliminated sales tax on residential electricity consumption, but your carrier may have overlooked removing the monthly fee. You may now be due thousands of dollars in reimbursement and a reduction in your monthly bill. If you have outdoor lights on a separate circuit, you may be eligible for a lower rate on them because they are not used during peak demand hours. And if you have a swimming pool and/or irrigation system, check to see if you are paying for sewer charges on the water consumed. You shouldn’t have to – the water doesn’t go into a sanitary sewer. You may be able to get a substantial refund and save money in the future as well.
  • Use Quality Materials: Sometimes you need to spend a little more money in the short term to save even more in the long run. PVC fences may give you more bang for your buck than wooden fences that need to be painted periodically and may not last as long. The same is true for PVC trim and fiber cement siding (such as HardiePlank).
  • Use Quality Contractors: We’ve all heard the expression “penny wise and pound foolish.” It’s not a cliché for nothing. Going with the lowest bidder doesn’t always make sense if there is a substantial difference in the quality of contractors. Sometimes it pays off in the long run to go with a vendor that is more expensive at the front end.
  • Make Sure You Get What You Pay For: Inspect work to verify that it has been done properly. A piece of siding that is replaced but not primed on all six sides and painted doesn’t look good and isn’t going to last as long. Check invoices. Have you been overcharged because of a mathematical error? I saved $5,000 for an association when I caught a mistake on a contractor’s invoice. Are you being charged sales tax on labor? You probably shouldn’t be in most states.
  • Stretch Out Your Dollars: Just because the reserve study says on paper that the pool cover should be replaced, don’t assume it’s true. Inspect it. Does it have another year or two of life left in it? The same can go for roofs and many other physical components of a community association.
  • Other Ways To Save: Consolidate work orders to a single vendor and reduce the amount of trip charges. Pay bills on time and avoid late charges. Use e-mail instead of the USPS, which is slower and certainly more expensive. Cut down on long distance bills by using e-mail more or switching to free long distance calls.

Now it’s your turn: can you think of more ways to save money for your community association?
Stewart Wise, PCAM®
Assistant Vice President
Community Group
Richmond, VA
This article is provided by Associa.