As the 2012 federal legislative fiasco over the debt ceiling—as well as any number of other spending bills proposed since then—demonstrated, balancing a budget can be like pulling teeth. Balancing a condo or HOA community's budget can sometimes seem just as arduous—the task can be incredibly difficult because there are so many moving parts. Making sure that a building or association isn’t wasting money is even harder but budgeting a necessary part of running and managing a building.
In the case of a co-op, a condo or an HOA, cutting costs is one sure way to bring a runaway budget under control but cost-cutting comes with, well, costs. Cut too deep, and not only may a board face backlash from residents if services and amenities are reduced, but they may find themselves in an even tougher spot if maintenance issues are left unaddressed and lead to bigger expenses down the road.
There are ways that co-op, condo and HOA administrators can reduce waste and save money without neglecting necessary maintenance and services, however––it's just a matter of working smarter and consulting the right professionals.
The first thing to do when taking a critical look at cost-cutting is to make sure that your building community or HOA is getting the best prices from the various companies and vendors you do business with. This is most effectively achieved by soliciting a minimum of three bids for any given contract, says Bruce Feldman, a partner with Feldman Sablosky Massoni & Co. based in Monroe Township, which handles accounting, auditing, taxes and advisory services for more than 250 condo and HOA communities.
But, he says, while condo boards should always look for inexpensive options, they should always make sure those options are the best ones—or else they will be spending a little today to spend more later. “I emphasize that the cheapest isn’t always the best,” Feldman says. “One has to do some research with regard to vendors—especially with the vendors who do repairs.”