In any business, much of the decision-making process is based on the bottom line—is there more money coming in or going out? How do this year's profits compare with last year's? Are we getting the best deals from suppliers and vendors?
While homeowner associations aren't necessarily concerned with making huge profits, they are businesses, and all businesses want to operate in the most economical way possible and hopefully increase in value as time goes by. In order to maintain a high level of operating efficiency and increase the worth of your HOA, examination of the bottom line is crucial, just like it is with big businesses. Whether you are a board member, manager or shareholder, looking closely at your own HOAs spending habits and making efforts to decrease or eliminate a few classic "money drains" you can greatly reduce the amount it takes, monetarily speaking, to run your co-op or condo.
There are at least three major areas of spending in an HOA budget that, with a little investigation, offer many opportunities to "trim the fat." They are: energy and water, administration and purchasing.
Energy and Water
Most people are used to grumbling about the cost of gas these days. Bills seem to be a little higher every month, so if you are able to find ways money can be saved in this particular area, be prepared to be your HOA's hero. It's surprisingly easy to cut costs when it comes to energy, in fact. Peter Grech, a building superintendent with decades of experience under his belt and the president of the Superintendents Technical Association (STA) of New York City says examining fuel costs is really the first stop when looking to eliminate wasteful spending.
"In a lot of cases, equipment isn't running properly in a building's heating system, and that wastes huge amounts of money. If repairs do need to be made, it's important to do the job right the first time. If you have to add something or do more work later, that's more money you have to spend."