Preparing next year's budget for your homeowners is one of the most important undertakings for the HOA board. Fiduciary responsibility is something you pledged to look after for your community and this is an area where that really comes into play. There are a few things the Board should consider for next year's Association budget.
Any HOA board has to sit and take a hard look at budgeting for its community. Homeowners association fees and assessments depend on how well things are budgeted. Let's look at some of the things HOA board members should consider, keeping in mind that these are not by any means comprehensive, but are some major areas to look at.
All contracts with outside parties should be reviewed
Examine the previous three years budgets
Review financial statements
Contact all utility companies
Ask about their anticipated rates for the coming year and figure this into the new budget.
Look at the most recent reserve fund study
Compute the new year's homeowner fees
The Association treasurer along with those serving on a budget committee should review all the figures and prepare a draft budget for the entire HOA board to consider, present to members, and approve.
One of the most important jobs you have as an HOA board member is to help out with each year's budget process. This is a necessary step in running the Association and part of your fiduciary duties as a board member.
How well the budget is prepared determines several vital things for your Association, mainly how much homeowners pay in fees/assessments and that the Association has the proper funds to operate and meet its responsibilities. Reserve funding is also affected by the budget. Take budget matters seriously and take your homeowners association into a great financial position.