https://www.accuinc.com/wp-content/uploads/2017/03/accu001.jpg 6996 4912 James Phifer /wp-content/uploads/2016/09/ACCU-New-Logo-1.gif James Phifer2018-08-28 12:44:192018-08-28 13:49:04Budget Season is Here!
September is the start of “Budget Season” for those communities that have a fiscal year end of December 31. What to expect this year:
As reported in our August 2, 2018 pre-CCIOA communities can now veto the budget of the Association. For more information on that click here.
Considerations communities should make going into the 2019 year.
It is our opinion that if a community is not raising fees every year they should be, with some exceptions. Communities that are over budget in both their reserves and operating may not need a raise. But for approximately 95% of other associations, the community needs to be considering a raise year/year.
On the day of this post, the U.S. Inflation Rate History Forecast is reporting a 1.9% raise.
If the community is following their reserve study, then you’re doing great! However, if the reserve study received said it is underfunded it is imperative that the Board take it into consideration. The Reserve Study should have information regarding the options the Association has to make up those funds if necessary. Otherwise, consult your licensed ACCU community manager.
By following the Reserve Study the community through the Board can make decisions on what they want to be completed in 2019 while providing costs associated with completing these projects. Setting the expectations leading into 2019 will provide your manager and Board members with proper communication on what should be completed.
Looking at the most recent financial statement provided by ACCU, Inc. turn to the Budget Comparison Report. This document provides information that shows budget vs. expenses for the month and year-to-date (YTD). Looking at the expenses for the Association, the Board members will be able to see where they are over budget for the year. If the community is operating in the black and has fully funded reserves in 2018, the community can consider not raising fees. However, if the community is operating in the red, and/or has not funded reserves it is our recommendation to raise the fees in the community to meet expenses.