It’s that time of year again for the Property Owners Association (POA). No, not the holidays, it’s budget season! Most homeowner and property owner associations use the calendar year as their fiscal year, and now is the time of year where many managers are formulating their budgets for the upcoming year. As you can imagine, there is a lot of work that goes into preparing the Quail Creek annual budget. It’s a complex activity that has to start early so the budget can be reviewed by the finance committee. Once this is completed it will be submitted to the board for review and final approval prior to the beginning of the new fiscal year.
The finance committee will play an important role in the budget process as they work jointly with me and each department manager as we begin the first steps of creating a draft. As the general manager, I will be in charge of the following:
* Gathering all financial information—we’ll need to project expenses for the coming year. This could be bids for contracts, projections for utility or service increases, comparisons of past years’ budget trends, and many other details.
* Examining all sources of income—assessments, interest, and other types of miscellaneous income.
* Reviewing and factoring in bad debt and any potential write-offs.
* Creating a working draft by adjusting the expenses and income until they balance. This may be accomplished by foregoing certain expenses to avoid raising assessments. Or it may be necessary to raise assessments to cover increased expenses such as utilities and the annual minimum wage hikes.
* Presenting a final copy of the budget to the board of directors for approval.
As we prepare the association’s budget, considerations for the items above will be discussed as well as the unique elements of our association. Having current financials, comparative budgets, and a clear understanding of the operations will allow us to prepare the most accurate budget for the next fiscal year as possible. By reviewing all elements, both the finance committee and the board of directors will have an understanding of where the money is spent and why.
The budget approval will occur in November. Please watch your email for more information.