Although temperatures are still very warm out there, the 2022 budget season is quickly approaching. And with all the uncertainty around Covid-19 and variants, the job market and work-wide supply chains, it is extremely important to ensure community association board members approve fiscally responsible 2022 budgets.
Which leads to the following question: What exact is a fiscally responsible budget? A fiscally responsible budget is one that considers the day-to-day necessary operating expenses while ensuring the reserves are properly funded for large-scale projects. Approving a fiscally responsible budget is not just about cutting expenses, it is also about ensuring the reserves are property funded and large-scale projects are identified, and desired completion dates are established. All too often, associations are stuck not having enough in the reserves for large scale projects because there has been little to no long-term planning. Capital planning must include setting desired completion dates and not just creating a wish list of projects.
As a result, let me share with you the key necessary steps to ensure a fiscally responsible 2022 budget:
The best way to ensure a successful 2022 for your community association is to make sure the association passes a fiscally responsible budget. The necessary steps to do so include: the board must ensure that there is proper preventative maintenance, long term planning, expense reduction and planned equipment replacement. Furthermore, there must be proper communication with the homeowners so that all the community members are involved and feel a part of the process of fiscal responsibility.