HOA budget changed mid year; legal?

Check your documents and see what they say.

Did you ask the board why the actual expenses exceeded $4000 - for example, maybe the extra charges were due to the kickass winter most of the country had this year. Do you have more delinquencies that expected? And how did they change the budget - reduce or cut some services? Are they trying to change the amount of the assessment mid year (if that's the case, check your documents again to see if that's doable).

You say the budget is presented in November - are you talking about next year's budget or a recap of what went on this year? If it's the former, it would appear the budget was bound to change anyway because it's a new year and you have to anticipate the cost of living will increase and past history should help you in planning. That said, budgeting anything isn't precise because life happens.

The budget needs to be flexible and cutting back on reserve contributions is one way to keep within budget. The big question is whether there were less necessary things in the budget that could have been cut back on instead of cutting back on the reserves.

Do you maintain a budget at home? If you've budgeted $200 for trash removal, and three months into the year they raise the price, what is your answer to the trash company? "oh sorry sirs, but I've only budgeted $200, so you are SOL"? I don't think so, so why would you feel that the HOA Board of Directors has a different set of rules when it comes to a budget.

A budget is, in simple terms a living breathing document, one that even in normal circumstance will reflect some changes through out the year. From the dictionary:
Budget-[buhj-it]
1. an estimate, often itemized, of expected income and expense for a given period in the future.
2.a plan of operations based on such an estimate.
3.an itemized allotment of funds, time, etc., for a given period.
4.the total sum of money set aside or needed for a purpose:
the construction budget.

The important question for you to ask yourself is "why don't I have something better to do with my time than come up with worries or concerns that are built on irrational thought patterns on why the HOA Board does what it does"? Gheezzz...

Many homeowners do not know how to read a budget especially when Actual is thrown in...LOL

Our rules require a new budget to be presented at our Annual HOA meeting in November for projected spending for the next calendar year.
I've served 3 terms on the board and if we spent more than was projected, we explained it at the next annual meeting. I know that at time unexpected expenses occur, but they shouldn't be grounds to change the projected budget to make it look like the board was within what was projected. We own our roads and one year we had to pay for a relatively minor repair that was caused by old tree roots but exceeded our projections. We didn't meet what we had projected. It was explained at he annual meeting and was accepted as to why. I never liked that the board with 2 outgoing members had to make up a budget for the next board with 2 out of 6 new members to follow, but that's our rules.

I "may", and probably will, ask why at the next annual meeting but wanted to know if this is in any way proper, or any thoughts on the topic.

I'd like to know if this is normal or not normal and how to approach the issue without making it too controversial, if it can be.
I am not the worlds best diplomat and like to hear how other would or wouldn't approach the issue.
I find it hard just to type a short question so I may not clarify myself clearly in the original post. I don't check my e-am daily as most do. I just had to make 8 corrections on the prior line and more on this line due to physical issues which make my typing horrid, so try to understand that I just want opinions and how to deal with things without going into too much detail.

I still don't understand what the problem is. Part of preparing a budget calls for one to compare actual costs against projected figures. If they're higher, you find out why - maybe you underestimated what it should have been. That can happen, especially if you do repairs and find even more problems than you anticipated. That's why I don't understand your statement "I know that at times unexpected expenses occur, but they shouldn't be grounds to change the projected budget to make it look like the board was within what was projected." It's a PROJECTED budget, so nothing's been finalized yet. Get the story behind the numbers and then see where you are and where you might need to be.

You should already know this because you were on the board for three years. Since you'r talking about talking about next year's budget, did you look at budgeted vs. actual dollars from those years to identify trends? Did you present that to the board and ask if they did the same? Has anyone taken a look at certain line items that went over budget year after year to see what could be done, such as a change in contractors?

You asked how you should approach the issue and as my board's former treasurer, this is how we did it. It's a little different for us because we could increase assessments up to 5% over the current year without homeowner approval. In December, everyone gets a copy of the new budget (itemized), along with projections on how the current year might end, and then we publish the actual ending figures in the spring (also itemized). People aren't always crazy about what we tell them, but they understand how we got there. So you're going to have to man up and ask questions - if you do so without necessarily accusing anyone of incompetence, fraud, etc., you should be OK. If they don't want to explain anything, you have bigger problems - what is it Melissa always says - it's not just your money, it's everyone's money, so the Board should be candid with homeowners and show them the figures. If you don't like what you see, get on the board or offer to work with them.

I get the sense your problem is the assessments are about to go up and you don't like it, but you can't expect to pay for 2015 work with, say, 2013 dollars. For example when was this road work done? You can't expect to pay for 2015 work with, say, 2013 dollars. I believe asphalt is a byproduct of oil and you know how those prices have gone up and down (mostly up!) like an elevator. The costs of transporting everything from point A to B costs more and so contractors adjust their prices and pass it on to the customer. There have been increases in insurance, labor, etc., and all of that will play a role in what you actually pay.

You also didn't say if you've had an increases in delinquencies. If so, the number of dollars you actually have on hand is less than you anticipated, and if it's significantly less, you have hard decisions to make, such as delaying a project or transferring dollars from one line item (maybe they weren't needed in that area after all).

Finally, how much are you paying in assessments and what services do they cover besides the roads? I wouldn't be surprised if they're lower than where they really need to be. People always yell about "high assessments", but don't bother to look at the budget (all of it) to see what's being covered. If you want to keep assessments "low", the alternative is deferred maintenance, which only delays the inevitable or perhaps you need to make some areas homeowner responsibility instead of the association - which will likely require a change in the CCRs (and more money to consult an attorney to make sure you do it right)

Good Strategy. Depending on budget size, $4,000 may or may not be substantial to a greater budget. Obviously, the HOA board in question is being fairly transparent in the expense overage. While I wouldn't want to see a habit made of it, it's reasonable.

Back to my original response – what did the board say when you asked them about the $4000 difference - you did ask them first, didn’t you? Are roads the only thing your assessments pay for – if not, this $4K overage could be the result of other line items – did you check them? You have actual figures for 9 years – use them! If you don’t like what the board is proposing, come up with an alternative.

I understand your concern if the association has gone at least $4K over budget over the past few years, but is it possible the way you set the assessment amount is the problem? Basing it on the CPI may not be a good idea because it’s influenced by even more factors which are beyond the association’s control. You also said your budget has to be approved by a 2/3 majority of a quorum, but “this has never been done.” If you’re saying they haven’t increased at all, THAT could explain why you’re going $4K over budget every year – income simply isn’t keeping up with actual costs, and so you probably have no choice but to change the numbers as you get actual cost information.

Regarding your question as to whether it is proper to change a prospective budget mid-year – as others have said, you make your best guess based on past history. I would add projects you plan on undertaking next year. The key word here is “prospective” – if you found out in August that you won’t get a cost of living increase for 2015, wouldn’t you be looking at your household budget to see if any adjustments have to be made because your employer also said health care insurance is going up and that will affect your take home pay? Or would you wait until November?