It's springtime, and the annual budget process for associations is quickly approaching. To avoid financial surprises, budgets should be as realistic as possible. With that in mind, one of the main goals of the budget process should be smooth, incremental increases in maintenance fees. That being said, maintenance fees should be the last item to calculate—not the first.
When preparing the upcoming budget for your HOA, don’t forget to consider the following:
Prior Year Operating Results
• This is a line item which should always be considered and included in the budget, but which is often overlooked.
• Could very well 'balance' your budget—or create a problem
• If a prior year surplus is available, then include a projected amount for “use of prior year surplus” in budgeted revenues, or ”prior year deficit recovery” in budgeted expenses.