As annual and quarterly budgets come up for review, HOAs across the state are looking to cut costs anywhere and everywhere they can. But how much more “fat” can be trimmed from budgets that already look stripped to the bone? Happily, there are hidden savings to be found, if you know where to look and are willing to make some changes here and there.
Sweat the Small Stuff
Many times the simplest of cost savings measures are the ones most often overlooked. However these measures can yield some substantial cost savings over the long haul and in the short term.
Case in point: simply using power strips can yield savings of 10 percent per year on energy costs. Likewise, replacing a quarter of the lights in a condominium's high-traffic areas with compact fluorescent or LED bulbs can save double-digit percentages on lighting expenses, according to Ed Corless, who is the vice president of Lifestyle Services for Wentworth Property Group.
“Replacing light bulbs with CFL or LED bulbs can bring significant savings to an association,” he says. “The use of this type of bulb can reduce electricity costs by 60 to 75 percent, and is more environmentally responsible because of the reduction of mercury entering the environment. And from a pure usage point of view, you can save by [installing] lighting controls in areas of the community that are no often used—like closets, bathrooms and storage areas.”
Corless points out other modest measures that can yield savings, such as turning down the thermostat or using weatherstripping to repair drafty windows and doors. Another item that may seem small or inconsequential are legal fees, says David Ferullo, a senior audit partner with The Curchin Group LLC in Red Bank. And he's not talking about the big bucks HOAs may shell out for full-blown lawsuits. "Your legal costs go up in this economy because of collection efforts," he says. "Nobody can do anything about that at this point because of the number of potential foreclosures, but they do need to stay on top of their delinquent receivables for the simple reason that it will cost them a lot in legal fees," he says. Stay on top of it to minimize future losses, he adds.