Residents Budget Survey

Started by ThomasC2 • 8 replies • 1358 views

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ThomasC2 (Pennsylvania)
Posts: 26

Posted:

Does anyone know where I might obtain a templet of a Budget Survey to send out to our residents in advance of Budget preparation to solicit their input?
I've read this is a good tool to use to allow residents a say in the budget process.
Thanks in advance.
Tom

DonnaS (Tennessee)
Posts: 5,671

Posted:

Thomas,
I think that you are putting the cart before the horse. The Treasurer needs to have all of your association expenses, real and projected, and then call "Budget Workshops" That is an informal meeting. Set it up so that you go over each line item and let the residents who might be interested enough to show up, have an opportunity to ask their questions then.

A survey on such a matter as money, is going to be unusable for the most part. People who do not understand the expenses that are required to run an association, will want you to not spend money on anything that they don't understand. Sorting out a survey such as that could be frustrating.

Good for you tho, in wanting the owners to have input. That's the right thing to do. Good luck.
Donna

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

DonnaS,
Thank you for your reply. A rough draft of the budget has been done by our property manager. The only owner member of the board has asked me, (given my corporate experience with budgets) to sit in with the manager and he to take a look at the preliminary budget. I'm happy to do so but concerned about the fact that no other residents, (there are 49 families so far in this development), have been invited. I thought the survey would be a good way to get some input because I'm not sure there's a good feeling about opening the budget preparation sessions to all the residents, given, as you point out, all the mixed feelings and attitudes.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Yes, Thomas, It is a very good idea for someone like you, with your experience, to sit in on the budget process. Do that first with the P.M. because basically, they have all of the numbers and contracts. But, you must remember, that all of the residents are entitled to input too and should be open to sitting in on the process. The more involved that you let all of the owners be involved, the less complaining and problems you will have with anything that your B.O.D. does. That is why, we always do the workshop or workshops, whatever it takes to prepair a good budget. If you still feel that a survey would work right for your association, try it. But historically, alot of those surveys will not make it past the circular file.
I think basically, most Boards want to get some of these items done in 1 sitting, such as rule changes, amendments and other Association work. But it takes time to do it right and that time might include 2 or 3 meetings, open to the owners. Congrats for being interested. It's dedicated people like you that B.O.Ds adore. I am a V.P. of a 565 member association.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

ThomasC2: Are you a new community or one who has had prepared a budget for prior years? Do you have a Property Mgr. and Board Treasurer to assist in budget preparation?

Not sure if a budget survey would be the most effective means to seek resident input in preparing the budget for 2008. Many residents may not understand how budgets are prepared, and you may get more than 'you bargained for'. While the Board wants to be up front and clear with expenses incurred and those to be budgeted for the coming year, you also don't want to invite further problems.

Perhaps a different way to handle it might be to present the proposed budget based on line item expenses for the coming year, and also show a comparison of the present year's actual expenses (maybe up until mid-December since all bills will not be in or paid by that time, but you will have a fair idea of outstanding bills for 2007). This way 2008 would reflect if there is to be an increase/decrease in any one line item based on actual expenses from 2007. Once you have this 'statement comparison' it could be mailed to all residents for their review and questions in preparation for a scheduled community meeting when they will have an opportunity to vote for its approval. Of course, if you receive many phone calls with questions prior to the meeting, it would be a clear indication that residents are in need of further clarification on the budgeted expenses. Good Luck!

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

DonnaS,
Thanks again. I'll try to convince the powers that be to open up the process to other residents so we can arrive at a consensus.
Tom

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

PaulM,
Thank you as well for your input. Yes, we are a new HOA and this is our second budget prepared by the management Co. hired by the developer. We have only one owner member on the BOD and he clearly needs direction.
Arriving at the final numbers I see as no problem, even with our limited history. I'll just ask to see a copy of the statement of accounts through Sept, YTD and project the fixed expenses through Dec.
What concerns me most is the lack of experience demonstrated by not only the residents but our management co.
Secondly, and more important, is the amount of $ in our Reserve budget. If I read the proposed budget correctly, the begining balance in the Cash Reserve Budget for 2008 was $0.00, and the projected escrow from the residents for all of 2008 will accumulate to a grand total of $5,364.00.
I too, am new at this, but something tells me we should be increasing fees to up the Cash Reserves, or, at the very least, bring in someone to audit our budget for a professional opinion before it's too late.
Thoughts please.
Tom
P.S. Our fees per owner are $195.00 per/qtr

PaulM (Pennsylvania)
Posts: 1,347

Posted:

ThomasC2: There are a few things in your post to be cautious about. Mainly, since the developer has not turned over as yet, the Board in power is 'his' board, there to oversee 'his' interests. The one 'token' resident/board member is in the minority. The Management Company at this time is also the one the developer has chosen for the same reason, to ensure his interests.

You need to review your docs (declaration/bylaws) which refer to the transition. Also, review your state's 'Planned Community Act' or 'Condo Act' with regard to documents/facts the developer is, by law, bound to turn over to the new board. It is at this time when the residents are in control, that you will be able to objectively, based on actual expenses, increase (or decrease, but not likely) the quarterly assessment fee to cover all expenses, even allowing a percentage to go to Cash Reserve.

It is not unusual for a developer to lowball a budget, or to place the assessment fee at a low amount. It IS USUAL, then, for the first budget the resident board presents to be greater.

Your ally is your local municipal office land development authorities. To repeat, the developer posted a bond with them to ensure he would complete all projects for this community according to the plan and according to local codes and standards. Form a Committee Task Force to work with them on behalf of residents to ensure that the developer is doing all 'he said' he would do, and at acceptable code standards. It is this office that will ensure that he fulfills his promises, but they need to be aware and you need to push them to do it. They do give him a time period to complete and if something (curbing, streets, water basin, etc.) is not done right, they will have him redo it until it is.

This is a serious time in the life of your community and you must be diligent and proactive to minimize problems further down the community road. Good Luck to you and yours!

ThomasC2 (Pennsylvania)
Posts: 26

Posted:

PaulM,
Thank you so much for your incisive reply. It is easy to see you have more than just a lay understanding of HOA's and how they work. You not only grasped the scope of our situation, but inadvertently provided us with the answer to our gravest concern. To whom do we go for guidance and the protection of our interests?
While many in this community do not have professional backrounds, some that do, (who are new to community living) have early on sensed a "stacking of the deck"
in the developers favor. We realize, as you point out, that we are virtually powerless at this juncture and must go with the flow. However, armed now with the knowledge and gravity of our potential future situation, we know the best course upon which to embark.
Our HOA would be lucky indeed if we could contact someone with your knowledge personally to guide us through our future transition.
Best regards.
Tom

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