Budget Prep in your Community
Are you getting ready for your association's budget season?
Are you skeptical of past practices and willing to be involved in this year's process?
The budget preparation process should be transparent and involve those that want to understand how the final budget came about. Do you want to be part of the Finance Committee or simply attend meetings? Does your association have a Finance Committee?
Every association can differ greatly and owners would be wise to participate in some way. It doesn't help anyone to hear the complaints in late October once the "proposed" budget becomes the "approved" budget. Ask questions now and maybe get a timeline from the board as to how they expect to perform the process. Will your board and Finance Committee have two, three, or six meetings before the mandated mailout?
If you will be participating, it's best to get some informational resources ready. If you have these, you'll be able to refer to them at the numerous meetings and make notes as necessary. This is assuming, you will be thoroughly involved as a concerned owner. If you simply want to get your feet wet in this process, attend the meetings and derive your own conclusions.
Some of the basic documents that are most helpful in the process of preparing the proposed budget are:
Income / Expense Financial Statement (profit-loss)
Approved Budget for current year
Contract Summary Sheet
List of Projects in-progress
List of desired Capital Improvements
Expected increases in contracts and utilities
Expected increase rates for insurance premium renewals
Required Building Code repairs/ upgrades
Milestone Inspection estimates
BDA Testing estimates
Structural Integrity Reserve Study expenses
If you have the items above, you should be able to understand how the new budget was derived. You'll have to understand the Board's duty is not to save you money but to protect the association within their fiduciary duty to budget properly.