There are many things to consider when preparing for budget season. Here are some steps that may assist your Board in the process:
- Don’t delay – Start the process as early as possible so that you don’t miss items that could significantly impact your budget. Now is the perfect time to start preparations if your budget starts January 1.
- It is a monotonous task, but a vital one. In this day and age, assessments will more than likely have to increase due to increases in insurance, utilities, and that never ending “wish list.” Have a budget plan. Look at the goals for the community. What does the Board want to achieve?
- Review past budgets and the final year performance. If you overspent more years than not, obviously you need to make some changes.
- Pet projects don’t always make the cut. Be realistic about what can be achieved.
- Go over all contracts. You should have a spreadsheet of all contracts with expiration dates, whether they are auto renewed unless you send a cancellation notice, what is the cancellation timeline, does auto-renew have an increase and how much.
- Ensure you are funding enough for your reserves.
- Get a Reserve Study, or at least an updated Reserve Study to ensure you have accurate numbers.
- Have a well-funded maintenance program. The disasters of the recent past is an indication of just how important it is to keep up even the most mundane maintenance. Proper maintenance may help delay some of the replacement items in your reserve study.
by Diana Quigley, Education and Change Management Manager, Campbell Property Management