Budget Committees

Joyce,

I’m the Vice President and it’s state in our by-laws that it
is the treasures responsibility to inform the other board members of the association’s finacials. Our treasure has been busy figuring out this year’s budget.

I can’t imagine you could get enough volunteers to do the job properly. If so then that would be great.

Chuck W.

Joyce, as per our Management Agreement we draft all budgets for all of the HOAs we manage. The Board reviews, modifies as desired and approves the budgets. We provide these budgets to all owners with the notice of the Annual meeting. The members vote to ratify the budgets at the Annual meeting.

Usually the By-laws assign the Treasurer the responsibility for budgets. However, the By-laws usually allow assignment of officer's duties to someone else. For example in addition to preparing budgets we usually record minutes and sometimes chair meetings.

We've appointed our entire seven person board of directors along with an outside source to be our budget committee, we've reviewed all last years bills, gotten estimates for next year, done our planning, and added some improvements along with allowing money to be set back in a long term fund. We've been working twice a month since June and will finish late this month. Good Luck but I would recommend if you can afford to let the management company or an outside bookkeeper work with your committee and prepare the budget for your committee to review.

Dear Joyce: Do you use a Management Company ? If yes then demand they use TOPS Software period. Set up a community web site, allowing the Treas access to everyones account in the hoa or condo association. As well as all other portions of TOPS. If you selfmanage get someone to sell you TOPS its not cheap but if you ever go to court you will win if it has to do with money.

I am a 1 man band for Budgets/ I get my new HOA bought lap top computer turn on CSI Miami on my tele and 6 hours later my budget is done. Then I send it to my management company and they try to over-ride me( Its called Power Play) I hold my ground then I give it to the Board in Sept. That gives them a month to study it. At the Oct meeting we duke it out verbally then vote on it after any changes. We mail it out by Nov 14 and we comply with Florida Law that states 30 days written warning to all members prior to the end of the year. We also post it on the community web site. Along with the minutes of every board meeting we have ever had.

The key ingredient is TOPS software and your treas to stay in that position. We in jest call the 3 of us President for life, Treas for life, and Secretary for life. We have been together for 6 years as a team we argue but we always see eye to eye on money.

PS our docs do not allow us to raise our monthly assessments more than 15 percent per year. getting a special assment requires 75 percent approval, our docs require 90 percent approval to change them ( Written by Lennar)so we are boxed in preety tight but this year we are buying a new clubhouse it took us 8 years to build our sprinkler master system but we get things done, in addition we are installing new entrance monuments this year also.

I hope this helps send me a email if you need anything else concerning budgets/financials. By the way the web site is tops.com They have a quaterly newsleter also.

Hi Joyce:

I work for a master-planned community, budget of about $1.4M. We have a budget committee that drafts a budget and then presents it to the board; comes back to budget committee with questions/recommendations from the board to get re-worked, then back to the board for approval.

In the MC I used to work for, we had one person who drafted budgets for all our communities. He then sent the draft budget to each community's manager to review and send back with comments; then, back to the community's manager to send the final draft to the board; board worked it over, sent it back, budget guy worked it over one last time and sent it to the board for approval.

The good thing about having one guy doing all those budgets was the time element in finding out such things as how much the water board was raising rates, and such things as that, which then applied to multiple budgets - it saved a lot of time to have one person who gathered all that information. The bad thing about it was that he was doing over 200 budgets and you got your draft when he got around to getting it done...which might delay a particular community's budget by an unhealthy chunk of time. From the boss's perspective, he had a bunch of managers who didn't know how to start drafting a budget, and therefore weren't as valuable in the marketplace... I usually got more involved in the budget process than most of my fellow managers, to make sure that I understood exactly why any recommendation was being made.

By the way, in some communities, the budget process includes asking the board for a "wish list" of optional items to include; I believe that good budgeting includes a line for attorney expenses and insurance deductibles that you might not spend every year but build up over time, as well as some contingency funds and possibly (if you live in snow-prone areas and have responsibility for snow removal) a snow removal fund with some excess funds from previous years, so that you don't need a special assessment in March to make it through the rest of your year... just a few thoughts.

J. Patrick Moore, CMCA

I am a member of our association's finance committee. We have 7 members. We prepare the draft budget for presentation to the board. We consult with the management company and with the other standing committees. We are in the best position to draft the budget since we review each month's financial statements, general ledger transactions and review the financial information in all contract proposals. Although this is a lot of work, we have found it to be a successful approach.