Posted by IKO Community Management on June 7, 2018 at 9:00 AM
If you're looking to plan a summer community event for your homeowners association or community, you need to save a little money. Here's a list of small budget tips for HOA communities:
Plan ahead. It can get tricky to plan a community pool maintenance visit in the middle of swim season or while your HOA board has more pressing matters, but if you get the chance to set aside some time, your HOA budget will thank you for it.
Because HOAs have limited budgets and resources, this tactic allows board members to think about future needs, work in phases, stick to the budget, and focus on small projects first. Planning allows your HOA board to consider everything and work the most efficiently.
Make a list of all monthly expenses. Ask part of the planning phase, calculate what the community spends on utilities, maintenance and upkeep, and other necessary expenditures.
Once you figure out your monthly expenses, decide where it's best to cut back and save for a bigger project. This financial improvement method gives your HOA budget more money to put into your reserve account and toward paying off lingering expenses.
Landscape on a budget. IKO Community Management offers plenty of landscaping tips for HOA communities that are on a budget:
- Clean it up. Rake leaves in early spring, power wash the building exteriors, and manicure the hedges.
- Get a tarp. Use a tarp to move lightweight bulky leaves, weeds, and brush. Use it to hold soil when digging a hole (to keep the grass clean) and to cover plants in the back of the truck when driving to and from the nursery.
- Maintain focal points. Put most of your effort into common areas. Find something different that engages people like a texture or color.
- Use starter fertilizer. Starter fertilizers with low nitrogen, more phosphorus, and mycorrhizae-beneficial fungi provide a boost to new plantings.
- Choose between bulk and bagged mulch. Buy bulk when it can be dumped on the spot where it’ll be spread. Buy bagged if it must be moved again after delivery.
- Consolidate annuals in pots or beds at high-visibility locations to receive maximum impact and lower the cost.
- Easily mow common areas. Group plants into well-mulched beds and islands to avoid mowing and trimming around each individual plant.
- Add a sitting area. For a modern touch to common areas, add a metal bench or fun patio chairs.
- Recycle grass clippings. "Use a mulching mower instead of bagging and dumping grass clippings to cut fertilizer requirements by 30 percent," according to HGTV.
- Consider hardscaping. Because of pet policy and roaming children, consider hardscaping, which strategically uses pebbles, gravel, and bricks among greenery.
- Have a maintenance checklist or hire a landscaping company for year-round maintenance.
Designate an emergency fund. Establishing an emergency fund is a smart component to HOA financial management. Doing so helps avoid raising HOA fees, being petty about HOA fines, and imposing special assessments if a surprise expenditure arises.
It's important to keep this emergency account fully funded at all times in the event that a surprise expenditure comes up. When you do use these emergency funds, work on rebuilding the account immediately.
Control delinquencies. According to FirstService Residential, “Delinquencies come with the territory when you live in an HOA. When you’re preparing the budget...consider anticipated delinquencies as bad debt expenses. A tough approach to collections—and consistency in charging late fees—[minimizes] delinquencies.
However, it’s highly unlikely that you can get rid of them all together. Just keep in mind that an excessive number of receivables can put your community at risk in terms of basic services.”
For more information about proper HOA financial management and budgeting tips, download IKO Community Management’s Guide To Financial Management:
Topics: HOA Board