03 Dec It’s About More Than Assessments (Part 3)
Assessments fund everything from entry gate maintenance to the clubhouse roof. For the majority of associations, 2020 budget discussions have already begun. Managers are pulling 2018 actuals and 2019 trends, checking the reserve study and talking to board members as they create the next budget.
Most homeowners receive the year-end mailing and immediately look for one thing, what is the assessment going to be in 2020? And while that is important for your personal budget, it’s just as important to read through your budget document because that is going to tell you what is being done, what needs to be done and if the association board is doing enough to plan for the future of the community.
With a few simple steps, you can usually tell if the association is moving forward.
- What projects will the association be completing in the next 18 months?
- Look to the reserve study for that information.
- Has an unexpected expense caused a budget shortfall?
- This usually appears in the form of a special assessment.
- Are standard monthly expenses showing increase above normal inflation?
- It could be accurate or be showing the signs of a bigger problem.
Utility increases
Inflation applies to association expenses just like they do to each homeowner. If monthly operating expenses increase dramatically above what you’re spending in your own house, research a little more and find out why. It could be certain electronics are aging so repairs are more costly. But if the water bill is 40% higher than it was the previous year, you need to find out if a leak study has been conducted because that’s far about the normal increase.
Three simple steps will help you understand if the association budget is meeting the community expectations. It could also help you understand any changes to each homeowner’s contribution.
Assessments fund the common elements that every homeowner enjoys and a glimpse at the budget will help you understand how your money contributes to the environment you live in.