How the Budget Committee Works

The budget committee comprises members of our community association, which enables residents to have a say in how their money is spent. How does the budget committee work and who serves on it? 

The Treasurer’s and Accountant’s Roles

It makes sense for the board treasurer to chair the budget committee. As chair, it’s the treasurer’s job to keep everyone on track as the budget is prepared. The treasurer also presents the budget for approval to the board and members. If the association works with an accountant, he or she may offer consulting, but the accountant really has no significant role in the process of devising the budget.

Who Should Be on the Committee?

The owners who serve on the budget committee should represent a cross-section of the community. Of course, if there are members willing to serve who have expertise in areas such as insurance, that’s even better. When it comes to size, a good general guideline is that the committee shouldn’t be so large that it becomes unwieldy.

What the Committee Does

The treasurer will make sure that all committee members understand the three basic components of the budget:

1. Funds needed for daily operation of the community, such as common electricity and water, grounds maintenance, management, insurance, and general maintenance. These expenses are either contractual or can be reasonably estimated based on experience. An important consideration when looking at items in the operating budget is the expectations of the community—for example, do members want a landscaper who is a “blow, mow, and go” type, or do they want a landscaper who provides a higher level of service? Obviously, the latter requires more of an investment.

2. Funds needed to maintain our reserves at sufficient levels. Reserve funds provide money for the repair and replacement of the community’s assets—such as the pool, roofs, pavement, etc.

3. Funds for additions or enhancements to the existing property. This is a function of what members of the community want and are willing to pay for. The community should provide input and approval for this component.

Armed with this knowledge, the committee will estimate total expenses for the coming year and compare that sum to the association’s potential revenue (assessments, interest on investments, concession income, and so on). If expenses are greater than revenue, the committee will look for ways to lower expenses without compromising service. If that doesn’t balance the budget, the committee may have to make a tough decision—whether to increase assessments or levy a one-time special assessment.

Its not always an easy job - but its absolutely essential to the health and longevity of your association. Homeowners always want to know where their money (or dues) are being spent. Serving on the budget committee can be a very eye opening experience!

Sounds Like A Good Idea

Noise is a concern for every resident and because you live in a community, it’s important to understand that some degree of noise is to be expected. At the same time, residents need to consider the consequences of their noisy behavior. To keep everyone happy and maintain civility among neighbors, the following are a few steps that you can take to reduce or eliminate annoying noise (and if everyone follows these guidelines, your community will be a much happier (and more peaceful) place!):

            Be kind and respectful. A little common courtesy makes a big difference. Keep your music and television at reasonable levels, do your vacuuming before bedtime, and before remodeling, check with the manager about acceptable hours and days of the week that work can be done. If you put in hardwood or tile flooring, use a sound-reducing underlayment. Move your noisy appliance away from walls and put sound-absorbing material underneath before your neighbors complain.

            Keep a log. If you’re disturbed by a noise problem, note the times and the nature of the noise. Ask the manager to listen and verify the noise as well. There may be a pattern in the noise that can be adjusted.

            Visit your neighbor. If your neighbor is the source of the noise, try a friendly chat. Sometimes people just don’t realize how noise is affecting others. People are usually considerate once they realize they’re disturbing others. And, if your neighbor knocks on your door, listen politely and be willing to made changes to reduce your own noise.

            Contact the manager. If a polite request doesn’t change your neighbor’s noisiness, it may be time to ask the manager for help.  Have your noise log ready, including attempts to solve the problem yourself.

Reducing noise sounds like a good idea. A quiet, peaceful community, relatively speaking, is a happy community.

Community Association 101

Even though so many people live in an association, you might be surprised by how many of those neighbors—owners and renters alike—don’t really understand the fundamental nature of common-interest communities. And we know that many others, including the media and government officials, lack a true understanding of the community association (or condominium) concept.

Community Associations Institute (CAI), a national membership organization that represents the best interests of common-interest communities, developed 10 basic principles that answer three essential questions: What is the basic function of a community association? What are the essential obligations and expectations of homeowners? What are the core principles that should guide association leaders?

 

Lets take a look:

1. Associations ensure that the collective rights and interests of homeowners are respected and preserved.

2. Associations are the most local form of representative democracy, with leaders elected by their neighbors to govern in the best interest of all residents.

3. Associations provide services and amenities to residents, protect property values and meet the established expectations of homeowners.

4. Associations succeed when they cultivate a true sense of community, active homeowner involvement and a culture of building consensus.

5. Association homeowners have the right to elect their community leaders and to use the democratic process to determine the policies that will protect their investments.

6. Association homeowners choose where to live and accept a contractual responsibility to abide by established policies and meet their financial obligations to the association.

7. Association leaders protect the community’s financial health by using established management practices and sound business principles.

8. Association leaders have a legal and ethical obligation to adhere to the association’s governing documents and abide by all applicable laws.

9. Association leaders seek an effective balance between the preferences of individual residents and the collective rights of homeowners.

10. Association leaders and residents should be reasonable, flexible and open to the possibility—and benefits—of compromise.

Fundamentals can be downloaded at www.caionline.org/governance/fundamentals.pdf. For more information about Community Associations Institute, go to www.caionline.org.